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<P STYLE="margin-top: 0; text-align: center; margin-bottom: 0">&nbsp;</P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT"><DIV STYLE="font-size: 1pt; border-top: Black 2pt solid; border-bottom: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="margin-top: 0; text-align: center; margin-bottom: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>UNITED STATES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>WASHINGTON, D.C. 20549</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>FORM 10-Q</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(Mark One)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Courier; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">x</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 90%; border-collapse: collapse; margin-left: 0.25in">
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="width: 12%; font: 10pt Courier New, Courier, Monospace; padding-left: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">For the Quarterly period ended </FONT>&nbsp;&nbsp;</TD>
    <TD NOWRAP STYLE="width: 35%; border-bottom: Black 1pt solid; font: 10pt Courier New, Courier, Monospace; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">September 30, 2018</FONT></TD>
    <TD NOWRAP STYLE="width: 53%; font: 10pt Courier New, Courier, Monospace">&nbsp;</TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">OR</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Courier; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&uml;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">For the transition period from ______________________________
to ______________________________</P>

<P STYLE="font: 10pt Courier; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">Commission file number <U>1-7865</U></P>

<P STYLE="font: 10pt Courier; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 80%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; font: 10pt Courier New, Courier, Monospace; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><U>HMG/COURTLAND
    PROPERTIES, INC.</U></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font: 10pt Courier New, Courier, Monospace; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">(Exact name of small business issuer as specified in its charter)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; font-family: Courier New, Courier, Monospace; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><U>Delaware</U></FONT></TD>
    <TD STYLE="width: 50%; font-family: Courier New, Courier, Monospace; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><U>59-1914299</U></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">(State or other jurisdiction of</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">(I.R.S. Employer</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">incorporation or organization)</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Identification No.)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 80%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="width: 100%; font-family: Courier New, Courier, Monospace; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><U>1870
    S. Bayshore Drive, Coconut Grove, Florida 33133</U></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="font-family: Courier New, Courier, Monospace; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">(Address
    of principal executive offices) (Zip Code)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 50%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="width: 100%; font-family: Courier New, Courier, Monospace; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><U>305-854-6803</U></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="font-family: Courier New, Courier, Monospace; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">(Registrant's telephone number, including area code)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 50%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="width: 100%; font-family: Courier New, Courier, Monospace; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><U>Not
    Applicable</U></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="font-family: Courier New, Courier, Monospace; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">(Former name, former address and former fiscal year, if changed since last report)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate by check mark whether the issuer
(1) has filed all reports required to be filed by Sections 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.</P>

<P STYLE="font: 10pt Courier; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Yes
</FONT><FONT STYLE="font-family: Wingdings">x</FONT> <FONT STYLE="font-family: Times New Roman, Times, Serif">No </FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT></P>

<P STYLE="font: 10pt Courier; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule&nbsp;405 of Regulation&nbsp;S-T (&sect;232.405 of this chapter) during the preceding 12&nbsp;months
(or for such shorter period that the registrant was required to submit and post such files).</P>

<P STYLE="font: 10pt Courier; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Yes
</FONT><FONT STYLE="font-family: Wingdings">x</FONT> <FONT STYLE="font-family: Times New Roman, Times, Serif">No </FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions
of &ldquo;large accelerated filer,&rdquo; &ldquo;accelerated filer,&rdquo; &ldquo;smaller reporting company,&rdquo; and &ldquo;emerging
growth company&rdquo; in Rule 12b-2 of the Exchange Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="width: 25%; font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Large
    accelerated filer&nbsp;&nbsp;</FONT><FONT STYLE="font-family: Wingdings; font-size: 10pt">&uml;</FONT></TD>
    <TD NOWRAP STYLE="width: 25%; font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accelerated
    filer </FONT><FONT STYLE="font-family: Wingdings; font-size: 10pt">&uml;</FONT></TD>
    <TD NOWRAP STYLE="width: 25%; font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Non-accelerated
    filer </FONT><FONT STYLE="font-family: Wingdings; font-size: 10pt">&uml;</FONT></TD>
    <TD NOWRAP STYLE="width: 25%; font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Smaller
    reporting company </FONT><FONT STYLE="font-family: Wingdings; font-size: 10pt">x</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="font-family: Courier New, Courier, Monospace"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="font-family: Courier New, Courier, Monospace"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="font-family: Courier New, Courier, Monospace"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="font-family: Courier New, Courier, Monospace"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Emerging
    growth company </FONT><FONT STYLE="font-family: Wingdings; font-size: 10pt">&uml;</FONT></TD>
    <TD NOWRAP STYLE="font-family: Courier New, Courier, Monospace"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(Do
    not check if a smaller reporting company)</FONT></TD>
    <TD NOWRAP STYLE="font-family: Courier New, Courier, Monospace"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Courier; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">Indicate by check mark whether
the registrant is a shell company (as defined in Rule 12b-2 of the exchange Act). &nbsp; Yes </FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;
No </FONT><FONT STYLE="font-family: Wingdings">x</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">APPLICABLE ONLY TO CORPORATE ISSUERS:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">State the number of shares outstanding
of each of the issuer's classes of common equity, as of the latest practicable date. 1,013,292 Common shares were outstanding as
of November 14, 2018.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>HMG/COURTLAND PROPERTIES, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Index</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 10%; font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="width: 80%; font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="width: 10%; font-family: Courier New, Courier, Monospace; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>PAGE</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: center; border-bottom: Black 1pt solid; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>NUMBER</B></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">PART I.</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Condensed Consolidated Financial Information</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Item 1.</U> Financial Statements</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace"><A HREF="#hmg_001"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Condensed Consolidated Balance Sheets as of September 30, 2018 (Unaudited) and December 31, 2017</FONT></A></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: center; vertical-align: bottom"><A HREF="#hmg_001"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1</FONT></A></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace"><A HREF="#hmg_002"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Condensed Consolidated Statements of Income for the Three and nine Months Ended September 30, 2018 and 2017 (Unaudited)</FONT></A></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: center; vertical-align: bottom"><A HREF="#hmg_002"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2</FONT></A></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace"><A HREF="#hmg_003"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2018 and 2017 (Unaudited)</FONT></A></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: center; vertical-align: bottom"><A HREF="#hmg_003"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3</FONT></A></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace"><A HREF="#hmg_004"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notes to Condensed Consolidated Financial Statements (Unaudited)</FONT></A></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: center; vertical-align: bottom"><A HREF="#hmg_004"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4</FONT></A></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace"><A HREF="#hmg_005"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Item 2.</U> Management's Discussion and Analysis of Financial Condition and Results of Operations</FONT></A></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: center; vertical-align: bottom"><A HREF="#hmg_005"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10</FONT></A></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace"><A HREF="#hmg_006"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Item 3.</U> Quantitative and Qualitative Disclosures About Market Risk</FONT></A></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: center; vertical-align: bottom"><A HREF="#hmg_006"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">11</FONT></A></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace"><A HREF="#hmg_007"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Item 4.</U> Controls and Procedures</FONT></A></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: center; vertical-align: bottom"><A HREF="#hmg_007"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">11</FONT></A></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Courier New, Courier, Monospace"><A HREF="#hmg_008"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">PART II.</FONT></A></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace"><A HREF="#hmg_008"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other Information</FONT></A></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace"><A HREF="#hmg_009"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Item 1.</U> Legal Proceedings</FONT></A></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: center; vertical-align: bottom"><A HREF="#hmg_009"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">12</FONT></A></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace"><A HREF="#hmg_010"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Item 2.</U> Unregistered Sales of Equity Securities and Use of Proceeds</FONT></A></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: center; vertical-align: bottom"><A HREF="#hmg_010"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">12</FONT></A></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace"><A HREF="#hmg_011"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Item 3.</U> Defaults Upon Senior Securities</FONT></A></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: center; vertical-align: bottom"><A HREF="#hmg_011"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">12</FONT></A></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace"><A HREF="#hmg_012"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Item 4.</U> Mine Safety Disclosures</FONT></A></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: center; vertical-align: bottom"><A HREF="#hmg_012"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">12</FONT></A></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace"><A HREF="#hmg_013"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Item 5.</U> Other Information</FONT></A></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: center; vertical-align: bottom"><A HREF="#hmg_013"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">12</FONT></A></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace"><A HREF="#hmg_014"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Item 6.</U> Exhibits</FONT></A></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: center; vertical-align: bottom"><A HREF="#hmg_014"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">12</FONT></A></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD COLSPAN="2" STYLE="font-family: Courier New, Courier, Monospace; padding-left: 40pt"><A HREF="#hmg_015"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Signatures</FONT></A></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: center; vertical-align: bottom"><A HREF="#hmg_015"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">13</FONT></A></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Cautionary Statement</U>. This Form
10-Q contains certain statements relating to future results of the Company that are considered &quot;forward-looking statements&quot;
within the meaning of the Private Litigation Reform Act of 1995. Actual results may differ materially from those expressed or implied
as a result of certain risks and uncertainties, including, but not limited to, changes in political and economic conditions; interest
rate fluctuation; competitive pricing pressures within the Company's market; equity and fixed income market fluctuation; technological
change; changes in law; changes in fiscal, monetary, regulatory and tax policies; monetary fluctuations as well as other risks
and uncertainties detailed elsewhere in this Form 10-Q or from time-to-time in the filings of the Company with the Securities and
Exchange Commission. Such forward-looking statements speak only as of the date on which such statements are made, and the Company
undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such
statement is made or to reflect the occurrence of unanticipated events.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; font-family: Courier New, Courier, Monospace"><A NAME="hmg_001"></A><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>HMG/COURTLAND PROPERTIES, INC.&nbsp;&nbsp;AND SUBSIDIARIES</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: black 1pt solid; font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>CONDENSED CONSOLIDATED BALANCE SHEETS</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Courier; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Courier New, Courier, Monospace">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="font-family: Times New Roman, Times, Serif; text-align: center">September 30,</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="font-family: Times New Roman, Times, Serif; text-align: center">December 31,</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="font-family: Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">2018</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="font-family: Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">2017</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="font-family: Times New Roman, Times, Serif; text-align: center">(UNAUDITED)</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="font-family: Times New Roman, Times, Serif; text-align: center"></TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman, Times, Serif">ASSETS</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">Investment properties, net of accumulated depreciation:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; font-family: Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 9pt">Office building and other commercial property</TD><TD STYLE="width: 1%; font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 12%; border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: right">872,013</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 12%; border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: right">857,464</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">Total investment properties, net</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">872,013</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">857,464</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">Cash and cash equivalents</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">19,345,270</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">5,223,995</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">Investments in marketable securities</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">5,115,161</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">4,549,745</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">Other investments</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">5,900,713</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">6,412,120</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">Investment in affiliate</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">1,640,491</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">1,757,607</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">Loans, notes and other receivables</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">1,029,655</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">1,561,750</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">Investment in residential real estate partnership</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">99,186</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">1,685,978</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">Other assets</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: right">302,141</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: right">108,020</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">TOTAL ASSETS</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-family: Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Times New Roman, Times, Serif; text-align: right">34,304,630</TD><TD STYLE="padding-bottom: 2.5pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-family: Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Times New Roman, Times, Serif; text-align: right">22,156,679</TD><TD STYLE="padding-bottom: 2.5pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman, Times, Serif">LIABILITIES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">Margin payable</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">9,992,478</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">267,198</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">Accounts payable, accrued expenses and other liabilities</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">438,813</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">119,171</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">Amounts due to Adviser for incentive fee</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">108,210</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">43,279</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">Note payable to affiliate</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">1,340,000</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">1,550,000</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">Deferred income taxes payable</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: right">144,264</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: right">84,153</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">TOTAL LIABILITIES</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Times New Roman, Times, Serif; text-align: right">12,023,765</TD><TD STYLE="padding-bottom: 2.5pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Times New Roman, Times, Serif; text-align: right">2,063,801</TD><TD STYLE="padding-bottom: 2.5pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">STOCKHOLDERS' EQUITY</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">Excess common stock, $1 par value; 100,000 shares authorized: no shares issued</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman, Times, Serif; padding-left: 10pt; text-indent: -10pt">Common stock, $1 par value; 1,050,000 shares authorized, 1,046,393 and 1,035,493 shares issued as of September 30, 2018 and December 31, 2017, respectively</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">1,046,393</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">1,035,493</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">Additional paid-in capital</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">24,157,986</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">24,076,991</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">Less: Treasury shares at cost 33,101 shares</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">(340,281</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">(340,281</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">Undistributed gains from sales of properties, net of losses</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">55,149,410</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">52,208,753</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">Undistributed losses from operations</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: right">(57,979,565</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif; text-align: left">)</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: right">(57,120,990</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">Total stockholders' equity</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">22,033,943</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">19,859,966</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">Noncontrolling interest</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: right">246,922</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: right">232,912</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">TOTAL EQUITY</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: right">22,280,865</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: right">20,092,878</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">TOTAL LIABILITIES AND EQUITY</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-family: Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Times New Roman, Times, Serif; text-align: right">34,304,630</TD><TD STYLE="padding-bottom: 2.5pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-family: Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Times New Roman, Times, Serif; text-align: right">22,156,679</TD><TD STYLE="padding-bottom: 2.5pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Courier; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>See notes to the condensed consolidated financial statements</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B><A NAME="hmg_002"></A>HMG/COURTLAND PROPERTIES, INC.&nbsp;&nbsp;AND SUBSIDIARIES</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: black 1pt solid; font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>CONDENSED CONSOLIDATED <FONT STYLE="font-size: 10pt">STATEMENTS OF INCOME (UNAUDITED)</FONT></B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD NOWRAP COLSPAN="6" STYLE="font-weight: bold; text-align: center">For the three months ended</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD NOWRAP COLSPAN="6" STYLE="font-weight: bold; text-align: center">For the nine months ended</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD NOWRAP COLSPAN="6" STYLE="font-weight: bold; text-align: center">September 30,</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD NOWRAP COLSPAN="6" STYLE="font-weight: bold; text-align: center">September 30,</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: center">REVENUES</TD><TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: left">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace; text-align: right">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace; text-align: left">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: left">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace; text-align: right">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace; text-align: left">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: left">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace; text-align: right">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace; text-align: left">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: left">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace; text-align: right">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 52%; text-align: left; padding-bottom: 1pt">Real estate rentals and related revenue</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid">18,092</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid">16,030</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid">54,275</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid">51,870</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: center">EXPENSES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Operating expenses:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Rental and other properties</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">343,196</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">34,042</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">382,916</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">88,402</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9pt">Adviser's base fee</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">165,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">165,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">495,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">495,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">General and administrative</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">92,540</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">117,950</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">212,682</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">235,454</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9pt">Professional fees and expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,527</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,696</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">134,819</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">129,869</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Directors' fees and expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17,452</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21,809</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">57,817</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">58,299</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9pt">Depreciation and amortization</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,849</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,849</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,548</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,548</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Interest expense</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">19,032</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">18,335</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">68,262</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">49,888</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 27pt; padding-bottom: 1pt">Total expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">654,596</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">383,681</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">1,363,044</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">1,068,460</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Loss before other income, income taxes and gain on sale of real estate</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(636,504</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(367,651</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(1,308,769</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(1,016,590</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Net realized and unrealized gains from investments in marketable securities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,829</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,418</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26,291</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">241,071</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Equity loss from operations of residential real estate partnership</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(14,103</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(143,890</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(166,619</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Net income from other investments</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">80,208</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">79,824</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">370,616</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">428,029</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Interest, dividend and other income</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">82,756</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">109,378</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">271,298</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">373,260</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 0.5in; padding-bottom: 1pt">Total other income</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">164,793</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">185,517</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">524,315</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">875,741</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Loss before taxes and gain on sale of real estate</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(471,711</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(182,134</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(784,454</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(140,849</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Provision for income taxes</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(26,532</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(60,111</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Net loss before gain on sale of real estate</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(498,243</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(182,134</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(844,565</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(140,849</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: left">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace; text-align: right">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace; text-align: left">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: left">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace; text-align: right">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace; text-align: left">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: left">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace; text-align: right">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace; text-align: left">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: left">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace; text-align: right">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Gain on sale of real estate, net</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">5,473,887</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Net (loss) income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(498,243</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(182,134</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,629,322</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(140,849</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: left">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace; text-align: right">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace; text-align: left">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: left">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace; text-align: right">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace; text-align: left">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: left">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace; text-align: right">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace; text-align: left">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: left">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace; text-align: right">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">(Gain) loss from non-controlling interest</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(3,097</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(5</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(14,010</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(9,936</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">Net (loss) income attributable to the company</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(501,340</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(182,139</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">4,615,312</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(150,785</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 2.5pt">Weighted average common shares outstanding-basic and diluted</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,013,292</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,002,392</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,011,349</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,002,392</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Net (loss) income per common share:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 0.25in">Basic and diluted net (loss) income per share</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.49</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.18</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">4.56</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.15</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>See notes to the condensed consolidated financial statements</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 100%; font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><A NAME="hmg_003"></A>HMG/COURTLAND PROPERTIES, INC. &nbsp;AND SUBSIDIARIES</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Courier; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD NOWRAP COLSPAN="6" STYLE="font-weight: bold; text-align: center">For the nine months ended<BR>
September 30,</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">CASH FLOWS FROM OPERATING ACTIVITIES:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 70%; text-align: left; padding-left: 9pt">Net income (loss) attributable to the Company</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">4,615,312</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(150,785</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 0.25in; text-indent: -0.125in">Adjustments to reconcile net income (loss) attributable to the Company to net cash used in operating activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.25in">Depreciation expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,548</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,548</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 0.25in">Net income from other investments, excluding impairment losses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(370,616</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(428,029</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.25in">Equity (gain) on sale of property in residential real estate partnership</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,473,887</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 0.25in">Equity loss from operations of residential real estate partnership</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">143,890</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">166,619</TD><TD STYLE="text-align: left"></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.25in">Net gains from investments in marketable securities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(26,291</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(241,071</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 0.25in">Net gain attributable to non-controlling interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,010</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,936</TD><TD STYLE="text-align: left"></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.25in">Gain on sale of property</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><P STYLE="margin: 0pt 0">(10,970</P>


</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 0.25in">Deferred income tax expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">60,111</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.25in">Changes in assets and liabilities:</TD><TD STYLE="color: #00B050">&nbsp;</TD>
    <TD STYLE="color: #00B050; text-align: left">&nbsp;</TD><TD STYLE="color: #00B050; text-align: right"></TD><TD STYLE="color: #00B050; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 27pt">Other assets and other receivables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(137,058</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">122,652</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 27pt">Accounts payable, accrued expenses and other liabilities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><P STYLE="margin: 0pt 0">(223,636</P>


</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">18,829</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Total adjustments</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(6,001,929</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(350,486</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Net cash used in operating activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,386,617</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(501,271</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">CASH FLOWS FROM INVESTING ACTIVITIES:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9pt">Net proceeds from sales and redemptions of securities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,140,259</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,610,942</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Investments in marketable securities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,379,385</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,721,948</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9pt">Distribution from investment in residential real estate partnership</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,525,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">130,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Distributions from other investments</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,560,667</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,173,232</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9pt">Contributions to other investments</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,079,783</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,686,552</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Proceeds from collections of mortgage loans and notes receivables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">500,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">78,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9pt">Distribution from affiliate</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">193,286</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">193,286</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Proceeds from sale of property</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">37,327</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Purchases and improvements of properties</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(26,097</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(26,508</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Net cash provided by investing activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">8,433,947</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,787,779</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">CASH FLOWS FROM FINANCING ACTIVITIES:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9pt">Margin borrowings</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,725,280</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,607</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Dividend paid</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,533,230</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(501,196</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9pt">Repayment of note payable to affiliate</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(210,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(50,000</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Proceeds from stock options exercised</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">91,895</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Net cash provided by (used in) financing activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">7,073,945</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(531,589</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: left">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace; text-align: right">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace; text-align: left">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: left">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace; text-align: right">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9pt">Net increase (decrease) in cash and cash equivalents</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,121,275</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,754,919</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Cash and cash equivalents at beginning of the period</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">5,223,995</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">3,019,463</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9pt; padding-bottom: 2.5pt">Cash and cash equivalents at end of the period</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">19,345,270</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">4,774,382</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt; padding-bottom: 2.5pt">Cash paid during the period for interest</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">68,000</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">50,000</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 9pt; padding-bottom: 2.5pt">Cash paid during the period for income taxes</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">-</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">3,000</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>See notes to the condensed consolidated financial statements</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B><A NAME="hmg_004"></A>HMG/COURTLAND PROPERTIES, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>(Unaudited)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>1. <U>CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In the opinion of the Company, the accompanying unaudited condensed
consolidated financial statements prepared in accordance with instructions for Form 10-Q, include all adjustments (consisting only
of normal recurring accruals) which are necessary for a fair presentation of the results for the periods presented. Certain information
and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles
generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed consolidated
financial statements be read in conjunction with the Company's Annual Report for the year ended December 31, 2017. The balance
sheet as of December 31, 2017 was derived from audited consolidated financial statements as of that date. The results of operations
for the three and nine months ended September 30, 2018 are not necessarily indicative of the results to be expected for future
periods or the full year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The condensed consolidated financial statements include the
accounts of HMG/Courtland Properties, Inc. (the &quot;Company&quot;) and entities in which the Company owns a majority voting interest
or controlling financial interest. All material transactions and balances with consolidated and unconsolidated entities have been
eliminated in consolidation or as required under the equity method.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>2. <U>RECENT ACCOUNTING PRONOUNCEMENTS</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Refer to the consolidated financial statements and footnotes
thereto included in the HMG/Courtland Properties, Inc. Annual Report on Form 10-K for the year ended December 31, 2017 for recent
accounting pronouncements. The Company does not believe that any recently issued, but not yet effective accounting standards, if
currently adopted, will have a material effect on the Company&rsquo;s consolidated financial position, results of operations and
cash flows.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts
with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer
of promised goods or services to customers when it satisfies performance obligations. In February 2017, the FASB issued ASU No.
2017-05, Other Income: Gains and Losses from the Derecognition of Nonfinancial Assets, which amends ASC Topic 610-20. ASU No. 2017-05
provides guidance on how entities recognize sales, including partial sales, of nonfinancial assets (and in-substance nonfinancial
assets) to non-customers. ASU No. 2017-05 requires the seller to recognize a full gain or loss in a partial sale of nonfinancial
assets, to the extent control is not retained. Any noncontrolling interest retained by the seller would, accordingly, be measured
at fair value. This guidance became effective January 1, 2018 and did not have a material impact on the Company&rsquo;s consolidated
financial statements.</P>

<P STYLE="font: 10pt Courier; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In June 2018, the FASB issued ASU 2018-07, &ldquo;Compensation
&ndash; Stock Compensation (Topic 718).&rdquo; ASU 2018-07 simplifies the accounting for nonemployee stock-based payment transactions.
This ASU is effective for public entities for interim and annual reporting periods beginning after December 15, 2018, and early
application is permitted. The Company has evaluated the potential impact of this guidance and does not believe it will have a material
impact on the Company&rsquo;s consolidated financial statements.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>3. <U>INVESTMENTS IN MARKETABLE SECURITIES</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Investments in marketable securities consist primarily of large
capital corporate equity and debt securities in varying industries or issued by government agencies with readily determinable fair
values. These securities are stated at market value, as determined by the most recent traded price of each security at the balance
sheet date. Consistent with the Company's overall current investment objectives and activities, its entire marketable securities
portfolio is classified as trading. Accordingly, all unrealized gains (losses) on this portfolio are recorded in the condensed
consolidated statements of income. Included in investments in marketable securities is approximately $3.10 million and $2.96 million
of large capital real estate investment trusts (REITs) as of September 30, 2018 and December 31, 2017, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 49.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Approximate net realized and unrealized gain (loss) from investments
in marketable securities for the three and nine months ended September 30, 2018 and 2017 is approximately as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-family: Courier New, Courier, Monospace; text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="6" STYLE="text-align: center; border-bottom: Black 1pt solid">Three months ended<BR> September 30,</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="6" STYLE="text-align: center; border-bottom: Black 1pt solid">Nine months ended<BR> September 30,</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Description</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">2018</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">2017</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">2018</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">2017</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 48%; text-align: left">Net realized gain  from sales of securities</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">39,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">115,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">35,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">26,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Unrealized net (loss) gain in trading securities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(37,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(105,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(9,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">215,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">Total net gain from investments in marketable securities</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">10,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">26,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">241,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">For the three months ended September 30, 2018, net
realized gain from sales of marketable securities was approximately $39,000 of which approximately $44,000 consisted of gross
gains and $5,000 of gross losses. For the nine months ended September 30, 2018, net realized gain from sales of marketable
securities was approximately $35,000 and consisted of approximately $68,000 of gross gains net of $33,000 of gross
losses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">For the three months ended September 30, 2017, net realized
gain from sales of marketable securities was approximately $115,000 and consisted of approximately $220,000 of gross gains and
$105,000 of gross losses. For the nine months ended September 30, 2017, net realized gains from sales of marketable securities
was approximately $26,000 and consisted of approximately $313,000 of gross gains net of $287,000 of gross losses.</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Investment gains and losses on marketable securities may fluctuate
significantly from period to period in the future and could have a significant impact on the Company's net earnings. However, the
amount of investment gains or losses on marketable securities for any given period has no predictive value and variations in amount
from period to period have no practical analytical value.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>4. <U>INVESTMENT IN REAL ESTATE PARTNERSHIP</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As previously reported on Form 8-K dated February 20, 2018,
JY-TV Associates, LLC, a Florida limited liability company (&ldquo;JY-TV&rdquo;) (&ldquo;Seller&rdquo;) an entity one-third owned
by HMG, completed the sale of its multi-family residential apartments located in Orlando, Florida pursuant to the previously reported
Agreement of Sale (the &ldquo;Agreement&rdquo;) to Murano 240, LLC (as per an Assignment and Assumption of Agreement of Sale with
Cardone Real Estate Acquisitions, LLC), a Delaware limited liability company, an unrelated entity (&ldquo;Purchaser&rdquo;). The
final sales price was $50,150,000 and the sales proceeds were received in cash and payment of outstanding debt. The gain on the
sale to HMG  was approximately $5.5 million, net of the incentive fee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">For the nine months ended September 30, 2018 JY-TV reported net income of approximately $17.9 million,
which includes approximately $18.2 million in gain on sale of property, depreciation and amortization expense of $402,000, interest
expense of $159,000, write-off of certain prepaid and other assets upon the sale of property of approximately $147,000 and other
net operating revenues. The Company&rsquo;s portion of JY-TV&rsquo;s net income is approximately $5.9 million ($144,000 of loss
from operations and $6.1 million in gain on sale of property (before the $608,000 incentive fee). JY-TV made distributions totaling
$21.75 million in February 2018. The Company&rsquo;s portion of those distributions was $7.25 million. In June 2018 JY-TV made
another distribution of $825,000, of which the Company&rsquo;s portion was $275,000. Final accounting and distribution from JY-TV
is expected before the end of fiscal 2018.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">For the nine months ended September 30, 2017 JY-TV reported
a net loss of approximately $457,000, which includes depreciation and amortization expense of $777,000 and interest expense of
$573,000. The Company&rsquo;s portion of that loss is approximately $153,000. In March 2017, JY-TV distributed $390,000 to its
members. The Company&rsquo;s portion of that distribution was $130,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>5. <U>OTHER INVESTMENTS</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As of September 30, 2018, the Company&rsquo;s portfolio of other
investments had an aggregate carrying value of approximately $5.9 million and we have committed to fund additional amounts of approximately
$1.2 million as required by agreements with the investees. The carrying value of these investments is equal to contributions less
distributions received and loss valuation adjustments, if any.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">During the nine months ended September 30, 2018, we made cash
contributions to other investments of approximately $1.08 million, consisting of $455,000 in follow on existing investment commitments
and $625,000 in four new investments, as follows: $200,000 in a partnership developing real estate in Orlando, Florida, $300,000
in a stock fund investing in pharmaceuticals and related industries, and a total of $125,000 in the second funds of two existing
investees owning diversified businesses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">During the nine months ended September 30, 2018, we received
cash distributions from other investments of approximately $1.59 million. These distributions included approximately $475,000 (net
of 10% holdback pending year end audit of partnership) received in June 2018 from the redemption of an investment in a partnership
owning investment contracts which resulted in a loss of less than $1,000, $404,000 from one investment in a partnership owning
rental apartments in San Antonio, Texas which were sold in March 2018 at a gain to the Company of approximately $105,000, and approximately
$141,000 in distributions from an on-going investment in a power and energy partnership. The other distributions were primarily
from real estate and related investments. Also, in the first quarter of 2018 the Company&rsquo;s investments in two private banks
experienced mergers with publicly traded larger banks and we received stock in those publicly traded banks plus approximately $34,000
in cash. The cash portion was recorded as gain from other investments. The bank securities we received from the mergers are being
held in our marketable securities portfolio at the carrying value equal to our original investment in the private banks (with an
unrealized gain of approximately $182,000 as of September 30, 2018).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Net income from other investments for the three and nine months
ended September 30, 2018 and 2017, is approximately as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-family: Courier New, Courier, Monospace; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="6" STYLE="text-align: center; border-bottom: Black 1pt solid">Three months ended<BR> September 30,</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="6" STYLE="text-align: center; border-bottom: Black 1pt solid">Nine months ended<BR> September 30,</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Description</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">2018</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">2017</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">2018</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">2017</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 48%; text-align: left">Partnerships owning real estate and related</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">26,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">59,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">191,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">187,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Partnerships owning diversified businesses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">29,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">70,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">196,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Other (bank stocks)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-family: Courier New, Courier, Monospace; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="font-family: Courier New, Courier, Monospace; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">34,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-family: Courier New, Courier, Monospace; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="font-family: Courier New, Courier, Monospace; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Income from investment
    in 49% owned affiliate (T.G.I.F. Texas, Inc.)</FONT></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">25,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">4,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">76,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">45,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">Total net income from other investments</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">80,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">80,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">371,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">428,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following tables present approximate gross unrealized losses
and fair values for those investments that were in an unrealized loss position as of September 30, 2018 and December&nbsp;31, 2017,
aggregated by investment category and the length of time that investments have been in a continuous loss position:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="22" STYLE="text-align: center; border-bottom: Black 1pt solid">As of September&nbsp;30, 2018</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="6" STYLE="text-align: center; border-bottom: Black 1pt solid">12 Months or Less</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="6" STYLE="text-align: center; border-bottom: Black 1pt solid">Greater than 12 Months</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="6" STYLE="text-align: center; border-bottom: Black 1pt solid">Total</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid">Investment&nbsp;Description</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">Fair Value</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">Unrealized<BR> Loss</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">Fair Value</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">Unrealized<BR> Loss</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">Fair Value</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">Unrealized<BR> Loss</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 46%; text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 8.65pt">Partnerships owning investments in technology related industries</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 6%; border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 6%; border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 6%; border-bottom: Black 1pt solid; text-align: right">121,487</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 6%; border-bottom: Black 1pt solid; text-align: right">(28,402</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 6%; border-bottom: Black 1pt solid; text-align: right">121,487</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 6%; border-bottom: Black 1pt solid; text-align: right">(28,402</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; text-indent: -8.65pt; padding-left: 8.65pt">Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">121,487</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(28,402</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">121,487</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(28,402</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Courier; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Courier; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="22" STYLE="text-align: center; border-bottom: Black 1pt solid">As of December&nbsp;31, 2017</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="6" STYLE="text-align: center; border-bottom: Black 1pt solid">12 Months or Less</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="6" STYLE="text-align: center; border-bottom: Black 1pt solid">Greater than 12 Months</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="6" STYLE="text-align: center; border-bottom: Black 1pt solid">Total</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid">Investment&nbsp;Description</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">Fair Value</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">Unrealized<BR> Loss</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">Fair Value</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">Unrealized<BR> Loss</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">Fair Value</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">Unrealized<BR> Loss</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 46%; text-align: left; padding-bottom: 1pt; text-indent: -8.65pt; padding-left: 8.65pt">Partnerships owning investments in technology related industries</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 6%; border-bottom: Black 1pt solid; text-align: right">138,000</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 6%; border-bottom: Black 1pt solid; text-align: right">(24,000</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 6%; border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 6%; border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 6%; border-bottom: Black 1pt solid; text-align: right">138,000</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 6%; border-bottom: Black 1pt solid; text-align: right">(24,000</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; text-indent: -8.65pt; padding-left: 8.65pt">Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">138,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(24,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">138,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(24,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
</TABLE>



<P STYLE="font: 10pt Courier; margin: 0pt 0"></P>

<P STYLE="font: 10pt Courier; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">When evaluating the investments for other-than-temporary impairment,
the Company reviews factors such as the length of time and extent to which fair value has been below cost basis, the financial
condition of the issuer and any changes thereto, and the Company&rsquo;s intent to sell, or whether it is more likely than not
it will be required to sell, the investment before recovery of the investment&rsquo;s amortized cost basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">There were no impairment valuation adjustments for the three
and nine months ended September 30, 2018 and 2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>6. FAIR VALUE OF FINANCIAL INSTRUMENTS</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In accordance with ASC Topic 820, the Company measures cash
and cash equivalents and marketable debt and equity securities at fair value on a recurring basis. Other investments are measured
at fair value on a nonrecurring basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following are the major categories of assets and liabilities
measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017, using quoted prices in active markets
for identical assets (Level 1) and significant other observable inputs (Level 2). For the periods presented, there were no major
assets measured at fair value on a recurring basis where significant unobservable inputs were used (Level 3):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Assets and liabilities measured at fair value on a recurring
basis are summarized below:</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Courier New, Courier, Monospace">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="14" STYLE="font-family: Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Fair&nbsp;value&nbsp;measurement&nbsp;at&nbsp;reporting&nbsp;date&nbsp;using</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-family: Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Description</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="font-family: Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Total<BR> September 30,<BR> 2018</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="font-family: Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Quoted&nbsp;Prices&nbsp;in&nbsp;Active<BR> Markets&nbsp;for&nbsp;Identical&nbsp;Assets<BR> (Level 1)</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="font-family: Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Significant&nbsp;Other<BR> Observable&nbsp;Inputs<BR> (Level 2)</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="font-family: Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Significant<BR> Unobservable&nbsp;Inputs<BR> (Level 3)</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman, Times, Serif">Assets:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left; padding-left: 0.125in">Cash equivalents:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 40%; font-family: Times New Roman, Times, Serif; text-align: left; padding-left: 0.25in">Time deposits</TD><TD STYLE="width: 1%; font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font-family: Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 12%; font-family: Times New Roman, Times, Serif; text-align: right">50,000</TD><TD STYLE="width: 1%; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font-family: Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 12%; font-family: Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="width: 1%; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font-family: Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 12%; font-family: Times New Roman, Times, Serif; text-align: right">50,000</TD><TD STYLE="width: 1%; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font-family: Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 12%; font-family: Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="width: 1%; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left; padding-left: 0.25in">Money market mutual funds</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">1,449,000</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">1,449,000</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left; padding-left: 0.25in">US T-Bills</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">17,448,000</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">17,448,000</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">-</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left; padding-left: 0.25in">Marketable securities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left; padding-left: 0.25in">Corporate debt securities</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">533,000</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">533,000</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 0.25in">Marketable equity securities</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: right">4,582,000</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: right">4,582,000</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Total assets</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-family: Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Times New Roman, Times, Serif; text-align: right">24,062,000</TD><TD STYLE="padding-bottom: 2.5pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-family: Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Times New Roman, Times, Serif; text-align: right">23,479,000</TD><TD STYLE="padding-bottom: 2.5pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-family: Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Times New Roman, Times, Serif; text-align: right">583,000</TD><TD STYLE="padding-bottom: 2.5pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-family: Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Courier; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Courier New, Courier, Monospace">
<TR STYLE="vertical-align: bottom; font-family: Times New Roman, Times, Serif">
    <TD NOWRAP STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD NOWRAP COLSPAN="14" STYLE="text-align: center; border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif">Fair&nbsp;value&nbsp;measurement&nbsp;at&nbsp;reporting&nbsp;date&nbsp;using</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; font-family: Times New Roman, Times, Serif">
    <TD NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif">Description</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif">Total<BR STYLE="font-family: Times New Roman, Times, Serif"> December 31,<BR STYLE="font-family: Times New Roman, Times, Serif"> 2017</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif">Quoted&nbsp;Prices&nbsp;in&nbsp;Active<BR STYLE="font-family: Times New Roman, Times, Serif"> Markets&nbsp;for&nbsp;Identical&nbsp;Assets<BR STYLE="font-family: Times New Roman, Times, Serif"> (Level 1)</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif">Significant&nbsp;Other<BR STYLE="font-family: Times New Roman, Times, Serif"> Observable&nbsp;Inputs<BR STYLE="font-family: Times New Roman, Times, Serif"> (Level 2)</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif">Significant<BR STYLE="font-family: Times New Roman, Times, Serif"> Unobservable&nbsp;Inputs<BR STYLE="font-family: Times New Roman, Times, Serif"> (Level 3)</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255); font-family: Times New Roman, Times, Serif">
    <TD STYLE="font-family: Times New Roman, Times, Serif">Assets:</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White; font-family: Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-left: 0.125in; font-family: Times New Roman, Times, Serif">Cash equivalents:</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255); font-family: Times New Roman, Times, Serif">
    <TD STYLE="width: 40%; text-align: left; padding-left: 0.125in; font-family: Times New Roman, Times, Serif">Time deposits</TD><TD STYLE="width: 1%; font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; font-family: Times New Roman, Times, Serif">$</TD><TD STYLE="width: 12%; text-align: right; font-family: Times New Roman, Times, Serif">352,000</TD><TD STYLE="width: 1%; text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="width: 1%; font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; font-family: Times New Roman, Times, Serif">$</TD><TD STYLE="width: 12%; text-align: right; font-family: Times New Roman, Times, Serif">-</TD><TD STYLE="width: 1%; text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="width: 1%; font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; font-family: Times New Roman, Times, Serif">$</TD><TD STYLE="width: 12%; text-align: right; font-family: Times New Roman, Times, Serif">352,000</TD><TD STYLE="width: 1%; text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="width: 1%; font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; font-family: Times New Roman, Times, Serif">$</TD><TD STYLE="width: 12%; text-align: right; font-family: Times New Roman, Times, Serif">-</TD><TD STYLE="width: 1%; text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White; font-family: Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-left: 0.125in; font-family: Times New Roman, Times, Serif">Money market mutual funds</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif">1,633,000</TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif">1,633,000</TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif">-</TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif">-</TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255); font-family: Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-left: 0.125in; font-family: Times New Roman, Times, Serif">US T-Bills</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif">2,935,000</TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif">2,935,000</TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif">-</TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif">-</TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White; font-family: Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-left: 0.125in; font-family: Times New Roman, Times, Serif">Marketable securities:</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255); font-family: Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-left: 0.125in; font-family: Times New Roman, Times, Serif">Corporate debt securities</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif">517,000</TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif">-</TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif">517,000</TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: right; font-family: Times New Roman, Times, Serif">-</TD><TD STYLE="text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White; font-family: Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 0.125in; font-family: Times New Roman, Times, Serif">Marketable equity securities</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right; font-family: Times New Roman, Times, Serif">4,033,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right; font-family: Times New Roman, Times, Serif">4,033,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right; font-family: Times New Roman, Times, Serif">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right; font-family: Times New Roman, Times, Serif">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255); font-family: Times New Roman, Times, Serif">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; font-family: Times New Roman, Times, Serif">Total assets</TD><TD STYLE="padding-bottom: 2.5pt; font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left; font-family: Times New Roman, Times, Serif">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right; font-family: Times New Roman, Times, Serif">9,470,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left; font-family: Times New Roman, Times, Serif">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right; font-family: Times New Roman, Times, Serif">8,601,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left; font-family: Times New Roman, Times, Serif">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right; font-family: Times New Roman, Times, Serif">869,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left; font-family: Times New Roman, Times, Serif">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right; font-family: Times New Roman, Times, Serif">-</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left; font-family: Times New Roman, Times, Serif">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Carrying amount is the estimated fair value for corporate debt
securities and time deposits based on a market-based approach using observable (Level 2) inputs such as prices of similar assets
in active markets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>7. <U>INCOME TAXES</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company as a qualifying real estate investment trust (&ldquo;REIT&rdquo;)
distributes its taxable ordinary income to stockholders in conformity with requirements of the Internal Revenue Code and is not
required to report deferred items due to its ability to distribute all taxable income. In addition, net operating losses can be
carried forward to reduce future taxable income but cannot be carried back.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company&rsquo;s 95%-owned taxable REIT subsidiary, CII,
files a separate income tax return and its operations are not included in the REIT&rsquo;s income tax return.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Distributed capital gains on sales of real estate as they relate
to REIT activities are not subject to taxes; however, undistributed capital gains may be subject to corporate tax.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In March 2018, the Company paid a cash dividend of approximately
$2.5 million (or $2.50 per share) to shareholders of record as of March 21, 2018. The dividend was a capital gain distribution
to shareholders. No dividends were declared for the year ended December 31, 2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In January 2017, the Company paid a cash dividend of approximately
$501,000 (or $.50 per share) to shareholders of record as of December 29, 2016. The dividend was a return of capital to shareholders.
No dividends were declared for the year ended December 31, 2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The deferred income taxes are recognized for the tax consequences
of &ldquo;temporary differences&rdquo; by applying enacted statutory tax rates applicable to future years to differences between
the financial statement carrying amounts and the tax basis of existing assets and liabilities. The effect on deferred income taxes
of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred taxes only pertain to
CII. As of September 30, 2018, and December 31, 2017, the Company has recorded a net deferred tax liability of approximately $144,000
and $84,000, respectively, primarily as a result of timing differences associated with the carrying value of the investment in
affiliate (TGIF) and other investments. CII&rsquo;s NOL carryover to 2018 is approximately $1.1 million, the estimated tax benefits
of which have been fully reserved due to CII historically having tax losses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The provision for income taxes in the consolidated statements
of comprehensive income consists&nbsp;approximately of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 85%; font: 10pt Courier New, Courier, Monospace">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-family: Times New Roman, Times, Serif; border-bottom: Black 1pt solid">Nine months ended September 30,</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="font-family: Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">2018</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="font-family: Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">2017</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman, Times, Serif">Current:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman, Times, Serif">Federal</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">State</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman, Times, Serif">Deferred:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 70%; font-family: Times New Roman, Times, Serif">Federal</TD><TD STYLE="width: 1%; font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font-family: Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 12%; font-family: Times New Roman, Times, Serif; text-align: right">43,000</TD><TD STYLE="width: 1%; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font-family: Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 12%; font-family: Times New Roman, Times, Serif; text-align: right">34,000</TD><TD STYLE="width: 1%; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">State</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: right">10,000</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: right">4,000</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">53,000</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">38,000</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left; padding-bottom: 2.5pt">Increased (decreased) valuation allowance</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Times New Roman, Times, Serif; text-align: right">7,000</TD><TD STYLE="padding-bottom: 2.5pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Times New Roman, Times, Serif; text-align: right">(38,000</TD><TD STYLE="padding-bottom: 2.5pt; font-family: Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 2.5pt">Total</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-family: Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Times New Roman, Times, Serif; text-align: right">60,000</TD><TD STYLE="padding-bottom: 2.5pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-family: Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>8. <U>STOCK OPTIONS</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In January and March 2018 three directors
and one officer exercised options to purchase a total of 10,900 shares at $9.31 per share (options to purchase 1,600 shares by
one director were exchanged for new options via Stock Option Agreement re-load provision). Stock based compensation expense is
recognized using the fair-value method for all awards. During the nine months ended September 30, 2018 there were no options granted,
expired or forfeited.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table summarizes stock option
activity during the nine months ended September 30, 2018:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 88%; font: 10pt Courier New, Courier, Monospace">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD>&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="font-family: Times New Roman, Times, Serif; text-align: center; vertical-align: middle">Weighted</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD>&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="font-family: Times New Roman, Times, Serif; text-align: center; vertical-align: middle">Average</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="font-family: Times New Roman, Times, Serif; text-align: center; vertical-align: top">Options</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="font-family: Times New Roman, Times, Serif; text-align: center; vertical-align: middle">Exercise</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="font-family: Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid; vertical-align: top">Outstanding</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="font-family: Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid; vertical-align: middle">Price</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">Outstanding at January 1, 2018</TD><TD STYLE="width: 1%; font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: right">12,500</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 12%; border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: right">9.31</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">Exercised (including 1,600 shares exchanged via re-load option)</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">12,500</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">9.31</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman, Times, Serif">Forfeited</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">Expired unexercised</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">Granted (via re-load option)</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: right">1,600</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-family: Times New Roman, Times, Serif; text-align: right">15.30</TD><TD STYLE="padding-bottom: 1pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 2.5pt">Outstanding at September 30, 2018</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Times New Roman, Times, Serif; text-align: right">1,600</TD><TD STYLE="padding-bottom: 2.5pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font-family: Times New Roman, Times, Serif; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-family: Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-family: Times New Roman, Times, Serif; text-align: right">15.30</TD><TD STYLE="padding-bottom: 2.5pt; font-family: Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table summarizes information
concerning outstanding and exercisable options as of September 30, 2018:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: middle">Number of<BR> securities to be<BR> issued upon<BR> exercise of<BR> outstanding options</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">Weighted-average<BR> exercise price of<BR> outstanding options</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">Number of securities<BR> remaining available for future<BR> issuance under equity<BR> compensation plans</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 55%; text-align: left">Equity compensation plan approved by shareholders</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">1,600</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">15.30</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">47,608</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Equity compensation plan not approved by shareholders</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 2.5pt">Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,600</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">15.30</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">47,608</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of September 30, 2018, the stock options
outstanding and exercisable had no intrinsic value.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>9. <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>SUBSEQUENT
EVENT</U></FONT></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In May 2018, the Company received a Determination of Eligibility
under the Brownfields Reuse and Liability Limitation Act (BRELLA) related to environmental remediation of the Company&rsquo;s 6-acre
property located in Montpelier, Vermont (&ldquo;the remediation plan&rdquo;). Under BRELLA we will receive a Certificate of Completion
upon performance of all actions required under the approved corrective action plan developed for the property. Statutory liability
protections become effective upon issuance of the Certificate of Completion. Forbearance from state enforcement action is in effect
during the BRELLA provided that all required activities are being implemented in good faith.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="margin: 0pt 0">On October 17, 2018, the Company received approval from the Vermont Department Environmental Conservation
(VTDEC) of its corrective action plan relating to the remediation plan. The estimated costs to remediate the property is $458,000.
The Company owns approximately 70% of the property and we have recorded as expense our portion, $319,000, of the anticipated remediation
costs as of September 30, 2018. The remediation work is expected to begin in the fourth quarter of 2018 with completion sometime
in 2019.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.5in; font-family: Courier New, Courier, Monospace; text-align: justify"><A NAME="hmg_005"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Item 2.</B></FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Management's Discussion and Analysis of Financial Condition and Results of Operations</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>RESULTS OF OPERATIONS</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company reported a net loss of approximately $501,000 ($0.49
per share) for the three months ended September 30, 2018, and net income of approximately $4.61 million ($4.56 per share) for the
nine months ended September 30, 2018. For the three and nine months ended September 30, 2017, we reported net losses of $182,000
($0.18 per share) and $151,000 ($0.15 per share), respectively.</P>

<P STYLE="font: 10pt Courier; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>REVENUES AND OTHER INCOME</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Rentals and related revenues for the three and nine months ended
September 30, 2018 were approximately $18,000 and $54,000, respectively and primarily consists of rent from the Advisor to CII
for its corporate office. For the three and nine months ended September 30, 2017 rental and related revenues were $16,000 and $52,000,
respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Net realized and unrealized gain from investments in marketable
securities:</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Net realized gain from investments in marketable securities
for the three and nine months ended September 30, 2018 was approximately $39,000 and $35,000, respectively. Net realized gain from
investments in marketable securities for the three and nine months ended September 30, 2017 was approximately $115,000 and $26,000,
respectively. Unrealized net (loss) from investments in marketable securities for the three and nine months ended September 30,
2018 was approximately ($37,000) and ($9,000), respectively. Unrealized net (loss) gain from investments in marketable securities
for the three and nine months ended September 30, 2017 was approximately (105,000) and $215,000, respectively. For further details
refer to Note 3 to Condensed Consolidated Financial Statements (unaudited).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Equity loss in residential real estate partnership:</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Equity loss from operations in residential real estate partnership
for the nine months ended September 30, 2018 was approximately $144,000. Equity loss from operations in residential real estate
partnership for the nine months ended September 30, 2017 was approximately $14,000 and $167,000, respectively. For further details,
refer to Note 4 to Condensed Consolidated Financial Statements (unaudited).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Net income from other investments:</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Net income from other investments for the three and nine months
ended September 30, 2018 was approximately $80,000 and $371,000, respectively. Net income from other investments for the three
and nine months ended September 30, 2017 was approximately $80,000 and $428,000, respectively. For further details refer to Note
5 to Condensed Consolidated Financial Statements (unaudited).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Interest, dividend and other income:</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Interest, dividend and other income for the three and nine months
ended September 30, 2018 was approximately $83,000 and $271,000, respectively. Interest, dividend and other income for the three
and nine months ended September 30, 2017 was approximately $109,000 and $373,000, respectively. The decreases in the three and
nine-month comparable periods was primarily due to decreased dividend income, offset partially by increase in interest income from
T-bills.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>EXPENSES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Rental and other properties operating expenses
for the three and nine months ended September 30, 2018 as compared with the same periods in 2017 increased by $309,000 (908%) and
$294,000 (333%), respectively. The increases were primarily the result of $319,000 in estimated environmental remediation costs
relating the Company&rsquo;s property located in Montpelier, Vermont. For further details refer to Note 9 to Condensed Consolidated
Financial Statements (unaudited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">General and administrative expenses for
the three and nine months ended September 30, 2018 as compared with the same periods in 2017 decreased by $25,000 (22%) and $23,000
(10%), respectively. The decreases were primarily attributable to decreased travel, dues and subscriptions expenses relating to
Courtland Investments, Inc. of approximately $46,000, partially offset by increased costs relating to a proposed real estate venture
in Orlando which was not pursued and the related deposits were written off.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Interest expense for the nine months ended
September 30, 2018 as compared with the same period in 2017 increased by approximately $18,000 (37%). The increase was primarily
due to increased margin borrowings and increased interest rates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>EFFECT OF INFLATION:</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Inflation affects the costs of holding the Company's investments.
Increased inflation would decrease the purchasing power of our mainly liquid investments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>LIQUIDITY, CAPITAL EXPENDITURE REQUIREMENTS AND CAPITAL
RESOURCES</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company's material commitments primarily consist of a note
payable to the Company&rsquo;s 49% owned affiliate, T.G.I.F. Texas, Inc. (&ldquo;TGIF&rdquo;) of approximately $1.34 million due
on demand and contributions committed to other investments of approximately $1.2 million due upon demand. The $9.99 million in
margin is primarily related to the purchase of US T-bills at quarter end. The T-bills were sold in October 2018 and the related
margin was repaid. The purchase of T-bills at quarter end is for the purposes of qualifying for the REIT asset test. The funds
necessary to meet the other obligations are expected from the proceeds from the sales of investments, distributions from investments
and available cash.</P>

<P STYLE="font: 10pt Courier; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>MATERIAL COMPONENTS OF CASH FLOWS</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">For the nine months ended September 30, 2018, net cash used
in operating activities was approximately $1.4 million, primarily consisting of operating expenses and $500,000 partial payment
of the incentive fee due to the Advisor.</P>

<P STYLE="font: 10pt Courier; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">For the nine months ended September 30, 2018, net cash provided
by investing activities was approximately $8.43 million. This consisted primarily of distributions from investment in residential
real estate partnership of $7.525 million (mainly from the sales proceeds of the Orlando, Florida property), net proceeds from
redemptions of marketable securities of $1.14 million, distributions from other investments of $1.56 million, proceeds from collection
of mortgage loan receivable of $500,000 and distribution from affiliate of $193,000. These sources of funds were partially offset
by uses of cash consisting primarily of $1.38 million in purchases of marketable securities and $1.08 million of contributions
to other investments.</P>

<P STYLE="font: 10pt Courier; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">For the nine months ended September 30, 2018, net cash provided
by financing activities was approximately $7.07 million, consisting of margin borrowings of $9.73 million and $92,000 of proceeds
from stock options exercised. These sources of funds were partially offset by a dividend payment of $2.53 million and repayment
of note payable to affiliate of $210,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><A NAME="hmg_006"></A>Item 3. Quantitative and Qualitative Disclosures about Market
Risk</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Not applicable</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><A NAME="hmg_007"></A>Item 4. Controls and Procedures</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(a)</TD><TD>Evaluation of Disclosure Controls and Procedures.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our Chief Executive Officer and Chief Financial Officer, after
evaluating the effectiveness of our disclosure controls and procedures (as defined in the Securities Exchange Act Rules 13a-15(e)
and 15d-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q have concluded that, based on such evaluation,
our disclosure controls and procedures were effective and designed to ensure that material information relating to us and our consolidated
subsidiaries, which we are required to disclose in the reports we file or submit under the Securities Exchange Act of 1934, was
made known to them by others within those entities and reported within the time periods specified in the SEC's rules and forms.</P>

<P STYLE="font: 10pt Courier; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(b)</TD><TD>Changes in Internal Control Over Financial Reporting.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-size: 10pt">There were no changes in the Company's
internal controls over financial reporting identified in connection with the evaluation of such internal control over financial
reporting that occurred during our last fiscal quarter which have materially affected, or reasonably likely to materially affect,
our internal control over financial reporting</FONT><FONT STYLE="color: blue">.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><A NAME="hmg_008"></A>PART II. OTHER INFORMATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B><U><A NAME="hmg_009"></A>Item&nbsp;1.</U></B></TD><TD STYLE="text-align: justify"><B><U>Legal Proceedings:</U></B> None</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B><U><A NAME="hmg_010"></A>Item&nbsp;2.</U></B></TD><TD STYLE="text-align: justify"><B><U>Unregistered Sales of Equity Securities and Use
of Proceeds:</U></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As previously reported, we have one current program to repurchase
up to $600,000 of outstanding shares of our common stock from time to time in the open market at prevailing market prices or in
privately negotiated transactions. This program was approved by our Board of Directors on June 30, 2016 and expires on June 29,
2021. As of September 30, 2018, the maximum dollar value of shares that may yet be purchased under the program is $259,719. During
the nine months ended September 30, 2018 there were no shares purchased as part of this publicly announced program.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B><U><A NAME="hmg_011"></A>Item&nbsp;3.</U></B></TD><TD STYLE="text-align: justify"><B><U>Defaults Upon Senior Securities:</U></B> None.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B><U><A NAME="hmg_012"></A>Item&nbsp;4.</U></B></TD><TD STYLE="text-align: justify"><B><U>Mine Safety Disclosures: </U></B>Not applicable.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B><U><A NAME="hmg_013"></A>Item&nbsp;5.</U></B></TD><TD STYLE="text-align: justify"><B><U>Other Information:</U></B> None</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><B><U><A NAME="hmg_014"></A>Item&nbsp;6.</U></B></TD><TD STYLE="text-align: justify"><B><U>Exhibits:</U></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">(a) Certifications pursuant to 18 USC Section 1350-Sarbanes-Oxley
Act of 2002. Filed herewith.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><A NAME="hmg_015"></A>SIGNATURES</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 59%; font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="width: 41%; font-family: Courier New, Courier, Monospace; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">HMG/COURTLAND
    PROPERTIES, INC.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 59%; font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="width: 41%; border-bottom: Black 1pt solid; font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/
    Maurice Wiener</FONT></TD>
    </TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dated: November 14, 2018 </FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT><FONT STYLE="font: 10pt Times New Roman, Times, Serif">CEO and President</FONT></TD>
    </TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace"></TD>
    </TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 59%; font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dated: November 14, 2018 </FONT></TD>
    <TD STYLE="width: 41%; border-bottom: Black 1pt solid; font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/
    Carlos     Camarotti</FONT></TD>
    </TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">CFO and Vice President</FONT></TD>
    </TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>


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</HTML>
[{"type": "10-Q", "sequence": "1", "filename": "10q.htm", "description": "10-Q", "secsgml_size_bytes": 256449}]
{"company-data": {"conformed-name": "HMG COURTLAND PROPERTIES INC", "cik": "0000311817", "assigned-sic": "6798", "irs-number": "591914299", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "001-07865", "film-number": "181181316"}, "business-address": {"street1": "1870 S BAYSHORE DRIVE", "city": "COCONUT GROVE", "state": "FL", "zip": "33133", "phone": "305-854-6803"}, "mail-address": {"street1": "1870 S BAYSHORE DRIVE", "street2": "1870 S BAYSHORE DRIVE", "city": "COCONUT GROVE", "state": "FL", "zip": "33133"}, "former-company": [{"former-conformed-name": "HMG PROPERTY INVESTORS INC", "date-changed": "19880215"}, {"former-conformed-name": "HOSPITAL MORTGAGE GROUP INC", "date-changed": "19810818"}]}
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly period ended
September 30, 2018
OR
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________________________
to ______________________________
Commission file number
1-7865
HMG/COURTLAND
    PROPERTIES, INC.
(Exact name of small business issuer as specified in its charter)
Delaware
59-1914299
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
1870
    S. Bayshore Drive, Coconut Grove, Florida 33133
(Address
    of principal executive offices) (Zip Code)
305-854-6803
(Registrant's telephone number, including area code)
Not
    Applicable
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the issuer
(1) has filed all reports required to be filed by Sections 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes
x
No
¨
Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files).
Yes
x
No
¨
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions
of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging
growth company" in Rule 12b-2 of the Exchange Act.
Large
    accelerated filer
¨
Accelerated
    filer
¨
Non-accelerated
    filer
¨
Smaller
    reporting company
x
Emerging
    growth company
¨
(Do
    not check if a smaller reporting company)
Indicate by check mark whether
the registrant is a shell company (as defined in Rule 12b-2 of the exchange Act).   Yes
¨
No
x
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding
of each of the issuer's classes of common equity, as of the latest practicable date. 1,013,292 Common shares were outstanding as
of November 14, 2018.
HMG/COURTLAND PROPERTIES, INC.
Index
PAGE
NUMBER
PART I.
Condensed Consolidated Financial Information
Item 1.
Financial Statements
Condensed Consolidated Balance Sheets as of September 30, 2018 (Unaudited) and December 31, 2017
1
Condensed Consolidated Statements of Income for the Three and nine Months Ended September 30, 2018 and 2017 (Unaudited)
2
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2018 and 2017 (Unaudited)
3
Notes to Condensed Consolidated Financial Statements (Unaudited)
4
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
10
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
11
Item 4.
Controls and Procedures
11
PART II.
Other Information
Item 1.
Legal Proceedings
12
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
12
Item 3.
Defaults Upon Senior Securities
12
Item 4.
Mine Safety Disclosures
12
Item 5.
Other Information
12
Item 6.
Exhibits
12
Signatures
13
Cautionary Statement
. This Form
10-Q contains certain statements relating to future results of the Company that are considered "forward-looking statements"
within the meaning of the Private Litigation Reform Act of 1995. Actual results may differ materially from those expressed or implied
as a result of certain risks and uncertainties, including, but not limited to, changes in political and economic conditions; interest
rate fluctuation; competitive pricing pressures within the Company's market; equity and fixed income market fluctuation; technological
change; changes in law; changes in fiscal, monetary, regulatory and tax policies; monetary fluctuations as well as other risks
and uncertainties detailed elsewhere in this Form 10-Q or from time-to-time in the filings of the Company with the Securities and
Exchange Commission. Such forward-looking statements speak only as of the date on which such statements are made, and the Company
undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such
statement is made or to reflect the occurrence of unanticipated events.
HMG/COURTLAND PROPERTIES, INC.  AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30,
December 31,
2018
2017
(UNAUDITED)
ASSETS
Investment properties, net of accumulated depreciation:
Office building and other commercial property
$
872,013
$
857,464
Total investment properties, net
872,013
857,464
Cash and cash equivalents
19,345,270
5,223,995
Investments in marketable securities
5,115,161
4,549,745
Other investments
5,900,713
6,412,120
Investment in affiliate
1,640,491
1,757,607
Loans, notes and other receivables
1,029,655
1,561,750
Investment in residential real estate partnership
99,186
1,685,978
Other assets
302,141
108,020
TOTAL ASSETS
$
34,304,630
$
22,156,679
LIABILITIES
Margin payable
$
9,992,478
$
267,198
Accounts payable, accrued expenses and other liabilities
438,813
119,171
Amounts due to Adviser for incentive fee
108,210
43,279
Note payable to affiliate
1,340,000
1,550,000
Deferred income taxes payable
144,264
84,153
TOTAL LIABILITIES
12,023,765
2,063,801
STOCKHOLDERS' EQUITY
Excess common stock, $1 par value; 100,000 shares authorized: no shares issued
-
-
Common stock, $1 par value; 1,050,000 shares authorized, 1,046,393 and 1,035,493 shares issued as of September 30, 2018 and December 31, 2017, respectively
1,046,393
1,035,493
Additional paid-in capital
24,157,986
24,076,991
Less: Treasury shares at cost 33,101 shares
(340,281
)
(340,281
)
Undistributed gains from sales of properties, net of losses
55,149,410
52,208,753
Undistributed losses from operations
(57,979,565
)
(57,120,990
)
Total stockholders' equity
22,033,943
19,859,966
Noncontrolling interest
246,922
232,912
TOTAL EQUITY
22,280,865
20,092,878
TOTAL LIABILITIES AND EQUITY
$
34,304,630
$
22,156,679
See notes to the condensed consolidated financial statements
1
HMG/COURTLAND PROPERTIES, INC.  AND SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME (UNAUDITED)
For the three months ended
For the nine months ended
September 30,
September 30,
2018
2017
2018
2017
REVENUES
Real estate rentals and related revenue
$
18,092
$
16,030
$
54,275
$
51,870
EXPENSES
Operating expenses:
Rental and other properties
343,196
34,042
382,916
88,402
Adviser's base fee
165,000
165,000
495,000
495,000
General and administrative
92,540
117,950
212,682
235,454
Professional fees and expenses
13,527
22,696
134,819
129,869
Directors' fees and expenses
17,452
21,809
57,817
58,299
Depreciation and amortization
3,849
3,849
11,548
11,548
Interest expense
19,032
18,335
68,262
49,888
Total expenses
654,596
383,681
1,363,044
1,068,460
Loss before other income, income taxes and gain on sale of real estate
(636,504
)
(367,651
)
(1,308,769
)
(1,016,590
)
Net realized and unrealized gains from investments in marketable securities
1,829
10,418
26,291
241,071
Equity loss from operations of residential real estate partnership
-
(14,103
)
(143,890
)
(166,619
)
Net income from other investments
80,208
79,824
370,616
428,029
Interest, dividend and other income
82,756
109,378
271,298
373,260
Total other income
164,793
185,517
524,315
875,741
Loss before taxes and gain on sale of real estate
(471,711
)
(182,134
)
(784,454
)
(140,849
)
Provision for income taxes
(26,532
)
-
(60,111
)
-
Net loss before gain on sale of real estate
(498,243
)
(182,134
)
(844,565
)
(140,849
)
Gain on sale of real estate, net
-
-
5,473,887
-
Net (loss) income
(498,243
)
(182,134
)
4,629,322
(140,849
)
(Gain) loss from non-controlling interest
(3,097
)
(5
)
(14,010
)
(9,936
)
Net (loss) income attributable to the company
$
(501,340
)
$
(182,139
)
$
4,615,312
$
(150,785
)
Weighted average common shares outstanding-basic and diluted
1,013,292
1,002,392
1,011,349
1,002,392
Net (loss) income per common share:
Basic and diluted net (loss) income per share
$
(0.49
)
$
(0.18
)
$
4.56
$
(0.15
)
See notes to the condensed consolidated financial statements
2
HMG/COURTLAND PROPERTIES, INC.  AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the nine months ended
September 30,
2018
2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) attributable to the Company
$
4,615,312
$
(150,785
)
Adjustments to reconcile net income (loss) attributable to the Company to net cash used in operating activities:
Depreciation expense
11,548
11,548
Net income from other investments, excluding impairment losses
(370,616
)
(428,029
)
Equity (gain) on sale of property in residential real estate partnership
(5,473,887
)
-
Equity loss from operations of residential real estate partnership
143,890
166,619
Net gains from investments in marketable securities
(26,291
)
(241,071
)
Net gain attributable to non-controlling interest
14,010
9,936
Gain on sale of property
-
(10,970
)
Deferred income tax expense
60,111
-
Changes in assets and liabilities:
Other assets and other receivables
(137,058
)
122,652
Accounts payable, accrued expenses and other liabilities
(223,636
)
18,829
Total adjustments
(6,001,929
)
(350,486
)
Net cash used in operating activities
(1,386,617
)
(501,271
)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net proceeds from sales and redemptions of securities
1,140,259
5,610,942
Investments in marketable securities
(1,379,385
)
(2,721,948
)
Distribution from investment in residential real estate partnership
7,525,000
130,000
Distributions from other investments
1,560,667
1,173,232
Contributions to other investments
(1,079,783
)
(1,686,552
)
Proceeds from collections of mortgage loans and notes receivables
500,000
78,000
Distribution from affiliate
193,286
193,286
Proceeds from sale of property
-
37,327
Purchases and improvements of properties
(26,097
)
(26,508
)
Net cash provided by investing activities
8,433,947
2,787,779
CASH FLOWS FROM FINANCING ACTIVITIES:
Margin borrowings
9,725,280
19,607
Dividend paid
(2,533,230
)
(501,196
)
Repayment of note payable to affiliate
(210,000
)
(50,000
)
Proceeds from stock options exercised
91,895
-
Net cash provided by (used in) financing activities
7,073,945
(531,589
)
Net increase (decrease) in cash and cash equivalents
14,121,275
1,754,919
Cash and cash equivalents at beginning of the period
5,223,995
3,019,463
Cash and cash equivalents at end of the period
$
19,345,270
$
4,774,382
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest
$
68,000
$
50,000
Cash paid during the period for income taxes
$
-
$
3,000
See notes to the condensed consolidated financial statements
3
HMG/COURTLAND PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Unaudited)
1.
CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
In the opinion of the Company, the accompanying unaudited condensed
consolidated financial statements prepared in accordance with instructions for Form 10-Q, include all adjustments (consisting only
of normal recurring accruals) which are necessary for a fair presentation of the results for the periods presented. Certain information
and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles
generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed consolidated
financial statements be read in conjunction with the Company's Annual Report for the year ended December 31, 2017. The balance
sheet as of December 31, 2017 was derived from audited consolidated financial statements as of that date. The results of operations
for the three and nine months ended September 30, 2018 are not necessarily indicative of the results to be expected for future
periods or the full year.
The condensed consolidated financial statements include the
accounts of HMG/Courtland Properties, Inc. (the "Company") and entities in which the Company owns a majority voting interest
or controlling financial interest. All material transactions and balances with consolidated and unconsolidated entities have been
eliminated in consolidation or as required under the equity method.
2.
RECENT ACCOUNTING PRONOUNCEMENTS
Refer to the consolidated financial statements and footnotes
thereto included in the HMG/Courtland Properties, Inc. Annual Report on Form 10-K for the year ended December 31, 2017 for recent
accounting pronouncements. The Company does not believe that any recently issued, but not yet effective accounting standards, if
currently adopted, will have a material effect on the Company's consolidated financial position, results of operations and
cash flows.
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts
with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer
of promised goods or services to customers when it satisfies performance obligations. In February 2017, the FASB issued ASU No.
2017-05, Other Income: Gains and Losses from the Derecognition of Nonfinancial Assets, which amends ASC Topic 610-20. ASU No. 2017-05
provides guidance on how entities recognize sales, including partial sales, of nonfinancial assets (and in-substance nonfinancial
assets) to non-customers. ASU No. 2017-05 requires the seller to recognize a full gain or loss in a partial sale of nonfinancial
assets, to the extent control is not retained. Any noncontrolling interest retained by the seller would, accordingly, be measured
at fair value. This guidance became effective January 1, 2018 and did not have a material impact on the Company's consolidated
financial statements.
In June 2018, the FASB issued ASU 2018-07, "Compensation
– Stock Compensation (Topic 718)." ASU 2018-07 simplifies the accounting for nonemployee stock-based payment transactions.
This ASU is effective for public entities for interim and annual reporting periods beginning after December 15, 2018, and early
application is permitted. The Company has evaluated the potential impact of this guidance and does not believe it will have a material
impact on the Company's consolidated financial statements.
3.
INVESTMENTS IN MARKETABLE SECURITIES
Investments in marketable securities consist primarily of large
capital corporate equity and debt securities in varying industries or issued by government agencies with readily determinable fair
values. These securities are stated at market value, as determined by the most recent traded price of each security at the balance
sheet date. Consistent with the Company's overall current investment objectives and activities, its entire marketable securities
portfolio is classified as trading. Accordingly, all unrealized gains (losses) on this portfolio are recorded in the condensed
consolidated statements of income. Included in investments in marketable securities is approximately $3.10 million and $2.96 million
of large capital real estate investment trusts (REITs) as of September 30, 2018 and December 31, 2017, respectively.
Approximate net realized and unrealized gain (loss) from investments
in marketable securities for the three and nine months ended September 30, 2018 and 2017 is approximately as follows:
Three months ended
September 30,
Nine months ended
September 30,
Description
2018
2017
2018
2017
Net realized gain  from sales of securities
$
39,000
$
115,000
$
35,000
$
26,000
Unrealized net (loss) gain in trading securities
(37,000
)
(105,000
)
(9,000
)
215,000
Total net gain from investments in marketable securities
$
2,000
$
10,000
$
26,000
$
241,000
For the three months ended September 30, 2018, net
realized gain from sales of marketable securities was approximately $39,000 of which approximately $44,000 consisted of gross
gains and $5,000 of gross losses. For the nine months ended September 30, 2018, net realized gain from sales of marketable
securities was approximately $35,000 and consisted of approximately $68,000 of gross gains net of $33,000 of gross
losses.
For the three months ended September 30, 2017, net realized
gain from sales of marketable securities was approximately $115,000 and consisted of approximately $220,000 of gross gains and
$105,000 of gross losses. For the nine months ended September 30, 2017, net realized gains from sales of marketable securities
was approximately $26,000 and consisted of approximately $313,000 of gross gains net of $287,000 of gross losses.
4
Investment gains and losses on marketable securities may fluctuate
significantly from period to period in the future and could have a significant impact on the Company's net earnings. However, the
amount of investment gains or losses on marketable securities for any given period has no predictive value and variations in amount
from period to period have no practical analytical value.
4.
INVESTMENT IN REAL ESTATE PARTNERSHIP
As previously reported on Form 8-K dated February 20, 2018,
JY-TV Associates, LLC, a Florida limited liability company ("JY-TV") ("Seller") an entity one-third owned
by HMG, completed the sale of its multi-family residential apartments located in Orlando, Florida pursuant to the previously reported
Agreement of Sale (the "Agreement") to Murano 240, LLC (as per an Assignment and Assumption of Agreement of Sale with
Cardone Real Estate Acquisitions, LLC), a Delaware limited liability company, an unrelated entity ("Purchaser"). The
final sales price was $50,150,000 and the sales proceeds were received in cash and payment of outstanding debt. The gain on the
sale to HMG  was approximately $5.5 million, net of the incentive fee.
For the nine months ended September 30, 2018 JY-TV reported net income of approximately $17.9 million,
which includes approximately $18.2 million in gain on sale of property, depreciation and amortization expense of $402,000, interest
expense of $159,000, write-off of certain prepaid and other assets upon the sale of property of approximately $147,000 and other
net operating revenues. The Company's portion of JY-TV's net income is approximately $5.9 million ($144,000 of loss
from operations and $6.1 million in gain on sale of property (before the $608,000 incentive fee). JY-TV made distributions totaling
$21.75 million in February 2018. The Company's portion of those distributions was $7.25 million. In June 2018 JY-TV made
another distribution of $825,000, of which the Company's portion was $275,000. Final accounting and distribution from JY-TV
is expected before the end of fiscal 2018.
For the nine months ended September 30, 2017 JY-TV reported
a net loss of approximately $457,000, which includes depreciation and amortization expense of $777,000 and interest expense of
$573,000. The Company's portion of that loss is approximately $153,000. In March 2017, JY-TV distributed $390,000 to its
members. The Company's portion of that distribution was $130,000.
5.
OTHER INVESTMENTS
As of September 30, 2018, the Company's portfolio of other
investments had an aggregate carrying value of approximately $5.9 million and we have committed to fund additional amounts of approximately
$1.2 million as required by agreements with the investees. The carrying value of these investments is equal to contributions less
distributions received and loss valuation adjustments, if any.
During the nine months ended September 30, 2018, we made cash
contributions to other investments of approximately $1.08 million, consisting of $455,000 in follow on existing investment commitments
and $625,000 in four new investments, as follows: $200,000 in a partnership developing real estate in Orlando, Florida, $300,000
in a stock fund investing in pharmaceuticals and related industries, and a total of $125,000 in the second funds of two existing
investees owning diversified businesses.
During the nine months ended September 30, 2018, we received
cash distributions from other investments of approximately $1.59 million. These distributions included approximately $475,000 (net
of 10% holdback pending year end audit of partnership) received in June 2018 from the redemption of an investment in a partnership
owning investment contracts which resulted in a loss of less than $1,000, $404,000 from one investment in a partnership owning
rental apartments in San Antonio, Texas which were sold in March 2018 at a gain to the Company of approximately $105,000, and approximately
$141,000 in distributions from an on-going investment in a power and energy partnership. The other distributions were primarily
from real estate and related investments. Also, in the first quarter of 2018 the Company's investments in two private banks
experienced mergers with publicly traded larger banks and we received stock in those publicly traded banks plus approximately $34,000
in cash. The cash portion was recorded as gain from other investments. The bank securities we received from the mergers are being
held in our marketable securities portfolio at the carrying value equal to our original investment in the private banks (with an
unrealized gain of approximately $182,000 as of September 30, 2018).
5
Net income from other investments for the three and nine months
ended September 30, 2018 and 2017, is approximately as follows:
Three months ended
September 30,
Nine months ended
September 30,
Description
2018
2017
2018
2017
Partnerships owning real estate and related
$
26,000
$
59,000
$
191,000
$
187,000
Partnerships owning diversified businesses
29,000
17,000
70,000
196,000
Other (bank stocks)
-
-
34,000
-
Income from investment
    in 49% owned affiliate (T.G.I.F. Texas, Inc.)
25,000
4,000
76,000
45,000
Total net income from other investments
$
80,000
$
80,000
$
371,000
$
428,000
The following tables present approximate gross unrealized losses
and fair values for those investments that were in an unrealized loss position as of September 30, 2018 and December 31, 2017,
aggregated by investment category and the length of time that investments have been in a continuous loss position:
As of September 30, 2018
12 Months or Less
Greater than 12 Months
Total
Investment Description
Fair Value
Unrealized
Loss
Fair Value
Unrealized
Loss
Fair Value
Unrealized
Loss
Partnerships owning investments in technology related industries
$
-
$
-
$
121,487
$
(28,402
)
$
121,487
$
(28,402
)
Total
$
-
$
-
$
121,487
$
(28,402
)
$
121,487
$
(28,402
)
As of December 31, 2017
12 Months or Less
Greater than 12 Months
Total
Investment Description
Fair Value
Unrealized
Loss
Fair Value
Unrealized
Loss
Fair Value
Unrealized
Loss
Partnerships owning investments in technology related industries
$
138,000
$
(24,000
)
$
-
$
-
$
138,000
$
(24,000
)
Total
$
138,000
$
(24,000
)
$
-
$
-
$
138,000
$
(24,000
)
When evaluating the investments for other-than-temporary impairment,
the Company reviews factors such as the length of time and extent to which fair value has been below cost basis, the financial
condition of the issuer and any changes thereto, and the Company's intent to sell, or whether it is more likely than not
it will be required to sell, the investment before recovery of the investment's amortized cost basis.
There were no impairment valuation adjustments for the three
and nine months ended September 30, 2018 and 2017.
6. FAIR VALUE OF FINANCIAL INSTRUMENTS
In accordance with ASC Topic 820, the Company measures cash
and cash equivalents and marketable debt and equity securities at fair value on a recurring basis. Other investments are measured
at fair value on a nonrecurring basis.
The following are the major categories of assets and liabilities
measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017, using quoted prices in active markets
for identical assets (Level 1) and significant other observable inputs (Level 2). For the periods presented, there were no major
assets measured at fair value on a recurring basis where significant unobservable inputs were used (Level 3):
6
Assets and liabilities measured at fair value on a recurring
basis are summarized below:
Fair value measurement at reporting date using
Description
Total
September 30,
2018
Quoted Prices in Active
Markets for Identical Assets
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable Inputs
(Level 3)
Assets:
Cash equivalents:
Time deposits
$
50,000
$
-
$
50,000
$
-
Money market mutual funds
1,449,000
1,449,000
-
-
US T-Bills
17,448,000
17,448,000
-
-
Marketable securities:
Corporate debt securities
533,000
-
533,000
-
Marketable equity securities
4,582,000
4,582,000
-
-
Total assets
$
24,062,000
$
23,479,000
$
583,000
$
-
Fair value measurement at reporting date using
Description
Total
December 31,
2017
Quoted Prices in Active
Markets for Identical Assets
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable Inputs
(Level 3)
Assets:
Cash equivalents:
Time deposits
$
352,000
$
-
$
352,000
$
-
Money market mutual funds
1,633,000
1,633,000
-
-
US T-Bills
2,935,000
2,935,000
-
-
Marketable securities:
Corporate debt securities
517,000
-
517,000
-
Marketable equity securities
4,033,000
4,033,000
-
-
Total assets
$
9,470,000
$
8,601,000
$
869,000
$
-
Carrying amount is the estimated fair value for corporate debt
securities and time deposits based on a market-based approach using observable (Level 2) inputs such as prices of similar assets
in active markets.
7.
INCOME TAXES
The Company as a qualifying real estate investment trust ("REIT")
distributes its taxable ordinary income to stockholders in conformity with requirements of the Internal Revenue Code and is not
required to report deferred items due to its ability to distribute all taxable income. In addition, net operating losses can be
carried forward to reduce future taxable income but cannot be carried back.
The Company's 95%-owned taxable REIT subsidiary, CII,
files a separate income tax return and its operations are not included in the REIT's income tax return.
Distributed capital gains on sales of real estate as they relate
to REIT activities are not subject to taxes; however, undistributed capital gains may be subject to corporate tax.
In March 2018, the Company paid a cash dividend of approximately
$2.5 million (or $2.50 per share) to shareholders of record as of March 21, 2018. The dividend was a capital gain distribution
to shareholders. No dividends were declared for the year ended December 31, 2017.
In January 2017, the Company paid a cash dividend of approximately
$501,000 (or $.50 per share) to shareholders of record as of December 29, 2016. The dividend was a return of capital to shareholders.
No dividends were declared for the year ended December 31, 2017.
The deferred income taxes are recognized for the tax consequences
of "temporary differences" by applying enacted statutory tax rates applicable to future years to differences between
the financial statement carrying amounts and the tax basis of existing assets and liabilities. The effect on deferred income taxes
of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred taxes only pertain to
CII. As of September 30, 2018, and December 31, 2017, the Company has recorded a net deferred tax liability of approximately $144,000
and $84,000, respectively, primarily as a result of timing differences associated with the carrying value of the investment in
affiliate (TGIF) and other investments. CII's NOL carryover to 2018 is approximately $1.1 million, the estimated tax benefits
of which have been fully reserved due to CII historically having tax losses.
7
The provision for income taxes in the consolidated statements
of comprehensive income consists approximately of the following:
Nine months ended September 30,
2018
2017
Current:
Federal
$
-
$
-
State
-
-
-
-
Deferred:
Federal
$
43,000
$
34,000
State
10,000
4,000
53,000
38,000
Increased (decreased) valuation allowance
7,000
(38,000
)
Total
$
60,000
$
-
8.
STOCK OPTIONS
In January and March 2018 three directors
and one officer exercised options to purchase a total of 10,900 shares at $9.31 per share (options to purchase 1,600 shares by
one director were exchanged for new options via Stock Option Agreement re-load provision). Stock based compensation expense is
recognized using the fair-value method for all awards. During the nine months ended September 30, 2018 there were no options granted,
expired or forfeited.
The following table summarizes stock option
activity during the nine months ended September 30, 2018:
Weighted
Average
Options
Exercise
Outstanding
Price
Outstanding at January 1, 2018
12,500
$
9.31
Exercised (including 1,600 shares exchanged via re-load option)
12,500
9.31
Forfeited
-
-
Expired unexercised
-
-
Granted (via re-load option)
1,600
15.30
Outstanding at September 30, 2018
1,600
$
15.30
The following table summarizes information
concerning outstanding and exercisable options as of September 30, 2018:
Number of
securities to be
issued upon
exercise of
outstanding options
Weighted-average
exercise price of
outstanding options
Number of securities
remaining available for future
issuance under equity
compensation plans
Equity compensation plan approved by shareholders
1,600
$
15.30
47,608
Equity compensation plan not approved by shareholders
—
—
—
Total
1,600
$
15.30
47,608
As of September 30, 2018, the stock options
outstanding and exercisable had no intrinsic value.
8
9.
SUBSEQUENT
EVENT
In May 2018, the Company received a Determination of Eligibility
under the Brownfields Reuse and Liability Limitation Act (BRELLA) related to environmental remediation of the Company's 6-acre
property located in Montpelier, Vermont ("the remediation plan"). Under BRELLA we will receive a Certificate of Completion
upon performance of all actions required under the approved corrective action plan developed for the property. Statutory liability
protections become effective upon issuance of the Certificate of Completion. Forbearance from state enforcement action is in effect
during the BRELLA provided that all required activities are being implemented in good faith.
On October 17, 2018, the Company received approval from the Vermont Department Environmental Conservation
(VTDEC) of its corrective action plan relating to the remediation plan. The estimated costs to remediate the property is $458,000.
The Company owns approximately 70% of the property and we have recorded as expense our portion, $319,000, of the anticipated remediation
costs as of September 30, 2018. The remediation work is expected to begin in the fourth quarter of 2018 with completion sometime
in 2019.
9
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
RESULTS OF OPERATIONS
The Company reported a net loss of approximately $501,000 ($0.49
per share) for the three months ended September 30, 2018, and net income of approximately $4.61 million ($4.56 per share) for the
nine months ended September 30, 2018. For the three and nine months ended September 30, 2017, we reported net losses of $182,000
($0.18 per share) and $151,000 ($0.15 per share), respectively.
REVENUES AND OTHER INCOME
Rentals and related revenues for the three and nine months ended
September 30, 2018 were approximately $18,000 and $54,000, respectively and primarily consists of rent from the Advisor to CII
for its corporate office. For the three and nine months ended September 30, 2017 rental and related revenues were $16,000 and $52,000,
respectively.
Net realized and unrealized gain from investments in marketable
securities:
Net realized gain from investments in marketable securities
for the three and nine months ended September 30, 2018 was approximately $39,000 and $35,000, respectively. Net realized gain from
investments in marketable securities for the three and nine months ended September 30, 2017 was approximately $115,000 and $26,000,
respectively. Unrealized net (loss) from investments in marketable securities for the three and nine months ended September 30,
2018 was approximately ($37,000) and ($9,000), respectively. Unrealized net (loss) gain from investments in marketable securities
for the three and nine months ended September 30, 2017 was approximately (105,000) and $215,000, respectively. For further details
refer to Note 3 to Condensed Consolidated Financial Statements (unaudited).
Equity loss in residential real estate partnership:
Equity loss from operations in residential real estate partnership
for the nine months ended September 30, 2018 was approximately $144,000. Equity loss from operations in residential real estate
partnership for the nine months ended September 30, 2017 was approximately $14,000 and $167,000, respectively. For further details,
refer to Note 4 to Condensed Consolidated Financial Statements (unaudited).
Net income from other investments:
Net income from other investments for the three and nine months
ended September 30, 2018 was approximately $80,000 and $371,000, respectively. Net income from other investments for the three
and nine months ended September 30, 2017 was approximately $80,000 and $428,000, respectively. For further details refer to Note
5 to Condensed Consolidated Financial Statements (unaudited).
Interest, dividend and other income:
Interest, dividend and other income for the three and nine months
ended September 30, 2018 was approximately $83,000 and $271,000, respectively. Interest, dividend and other income for the three
and nine months ended September 30, 2017 was approximately $109,000 and $373,000, respectively. The decreases in the three and
nine-month comparable periods was primarily due to decreased dividend income, offset partially by increase in interest income from
T-bills.
EXPENSES
Rental and other properties operating expenses
for the three and nine months ended September 30, 2018 as compared with the same periods in 2017 increased by $309,000 (908%) and
$294,000 (333%), respectively. The increases were primarily the result of $319,000 in estimated environmental remediation costs
relating the Company's property located in Montpelier, Vermont. For further details refer to Note 9 to Condensed Consolidated
Financial Statements (unaudited)
General and administrative expenses for
the three and nine months ended September 30, 2018 as compared with the same periods in 2017 decreased by $25,000 (22%) and $23,000
(10%), respectively. The decreases were primarily attributable to decreased travel, dues and subscriptions expenses relating to
Courtland Investments, Inc. of approximately $46,000, partially offset by increased costs relating to a proposed real estate venture
in Orlando which was not pursued and the related deposits were written off.
Interest expense for the nine months ended
September 30, 2018 as compared with the same period in 2017 increased by approximately $18,000 (37%). The increase was primarily
due to increased margin borrowings and increased interest rates.
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EFFECT OF INFLATION:
Inflation affects the costs of holding the Company's investments.
Increased inflation would decrease the purchasing power of our mainly liquid investments.
LIQUIDITY, CAPITAL EXPENDITURE REQUIREMENTS AND CAPITAL
RESOURCES
The Company's material commitments primarily consist of a note
payable to the Company's 49% owned affiliate, T.G.I.F. Texas, Inc. ("TGIF") of approximately $1.34 million due
on demand and contributions committed to other investments of approximately $1.2 million due upon demand. The $9.99 million in
margin is primarily related to the purchase of US T-bills at quarter end. The T-bills were sold in October 2018 and the related
margin was repaid. The purchase of T-bills at quarter end is for the purposes of qualifying for the REIT asset test. The funds
necessary to meet the other obligations are expected from the proceeds from the sales of investments, distributions from investments
and available cash.
MATERIAL COMPONENTS OF CASH FLOWS
For the nine months ended September 30, 2018, net cash used
in operating activities was approximately $1.4 million, primarily consisting of operating expenses and $500,000 partial payment
of the incentive fee due to the Advisor.
For the nine months ended September 30, 2018, net cash provided
by investing activities was approximately $8.43 million. This consisted primarily of distributions from investment in residential
real estate partnership of $7.525 million (mainly from the sales proceeds of the Orlando, Florida property), net proceeds from
redemptions of marketable securities of $1.14 million, distributions from other investments of $1.56 million, proceeds from collection
of mortgage loan receivable of $500,000 and distribution from affiliate of $193,000. These sources of funds were partially offset
by uses of cash consisting primarily of $1.38 million in purchases of marketable securities and $1.08 million of contributions
to other investments.
For the nine months ended September 30, 2018, net cash provided
by financing activities was approximately $7.07 million, consisting of margin borrowings of $9.73 million and $92,000 of proceeds
from stock options exercised. These sources of funds were partially offset by a dividend payment of $2.53 million and repayment
of note payable to affiliate of $210,000.
Item 3. Quantitative and Qualitative Disclosures about Market
Risk
Not applicable
Item 4. Controls and Procedures
(a)
Evaluation of Disclosure Controls and Procedures.
Our Chief Executive Officer and Chief Financial Officer, after
evaluating the effectiveness of our disclosure controls and procedures (as defined in the Securities Exchange Act Rules 13a-15(e)
and 15d-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q have concluded that, based on such evaluation,
our disclosure controls and procedures were effective and designed to ensure that material information relating to us and our consolidated
subsidiaries, which we are required to disclose in the reports we file or submit under the Securities Exchange Act of 1934, was
made known to them by others within those entities and reported within the time periods specified in the SEC's rules and forms.
(b)
Changes in Internal Control Over Financial Reporting.
There were no changes in the Company's
internal controls over financial reporting identified in connection with the evaluation of such internal control over financial
reporting that occurred during our last fiscal quarter which have materially affected, or reasonably likely to materially affect,
our internal control over financial reporting
.
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PART II. OTHER INFORMATION
Item 1.
Legal Proceedings:
None
Item 2.
Unregistered Sales of Equity Securities and Use
of Proceeds:
As previously reported, we have one current program to repurchase
up to $600,000 of outstanding shares of our common stock from time to time in the open market at prevailing market prices or in
privately negotiated transactions. This program was approved by our Board of Directors on June 30, 2016 and expires on June 29,
2021. As of September 30, 2018, the maximum dollar value of shares that may yet be purchased under the program is $259,719. During
the nine months ended September 30, 2018 there were no shares purchased as part of this publicly announced program.
Item 3.
Defaults Upon Senior Securities:
None.
Item 4.
Mine Safety Disclosures:
Not applicable.
Item 5.
Other Information:
None
Item 6.
Exhibits:
(a) Certifications pursuant to 18 USC Section 1350-Sarbanes-Oxley
Act of 2002. Filed herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
HMG/COURTLAND
    PROPERTIES, INC.
/s/
    Maurice Wiener
Dated: November 14, 2018
CEO and President
Dated: November 14, 2018
/s/
    Carlos     Camarotti
CFO and Vice President
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