a. General Partner Obligations

The Company serves as general partner in several real estate development partnerships until 2005 when they reduced their position to one partnership (Canyon Shadows) of which they became a limited partner during the 2005 refinance of the project . The Company may still be held liable for certain liabilities, although because the amounts are minimal and the entities are limited liability companies, management does not feel that the potential liabilities will have a material impact on the Company.

b. Housing Grant

In April 1995, the Company acquired a 120-unit apartment complex using a $975,000 loan that was converted to a grant from the City of Riverside, California. The loan was a non-recourse and was secured by a second trust deed on the property. After the Company met certain requirements pertaining to the complex, which have been stipulated by the city, the loan was forgiven by the City of Riverside on January 31, 2005 before the refinance of the Canyon Shadows project.

a. Stock Escrow and Security Agreement

In 2004 and 2005, the Company entered into a Stock Escrow and Security Agreement with Angus Holdings, LLC ("Angus") and Douglas Morgan whereby the Company borrowed funds under the terms of a convertible promissory note. The Company still has $53,371 outstanding on its books as of December 31, 2010. Although the Company has not had request to convert these loans in many years and feels the statute of limitations has passed, they have kept the liabilities open in the event some settlement is eventually reached. Currently, there is no stock being held in escrow.

d. Litigation

At September 30, 2011, the Company was party to certain legal proceedings, resulting in judgments and settlements since the 2003 audited calendar year. The following is a summary of those payables:

In 2002, a former employee received a legal judgment against the Company totaling $20,110. At December 31, 2003, this liability is recorded at the settled amount plus accrued interest imputed at 8% annually for a total liability of $23,021. This amount was adjusted for another judgment which was then being recorded as accounts payable of December 31, 2004. During 2007, there was a partial payment of the settlement of the combined balance and $14,372 is still recorded as a judgment payable at September 30, 2011.