BOP West 31 st Street LLC Consolidated Financial Statements as of and for the Year Ended December 31, 2016 and as of December 31, 2015 and for the

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1 BOP West 31 st Street LLC Consolidated Financial Statements as of and for the Year Ended December 31, 2016 and as of December 31, 2015 and for the Period from October 28, 2015 (commencement of operations) to December 31, 2015 and Independent Auditors Report

2 BOP WEST 31ST STREET LLC TABLE OF CONTENTS Consolidated Financial Statements as of and for the Year Ended December 31, 2016 and as of December 31, 2015 and for the Period from October 28, 2015 (commencement of operations) to December 31, 2015: PREPARED IN ACCORDANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS Independent Auditors Report 2-3 Consolidated Balance Sheets 4 Consolidated Statements of Income 5 Consolidated Statements of Members Equity 6 Consolidated Statements of Cashflow 7 Notes to the Consolidated Financial Statements 8-12 Page 1

3 Deloitte & Touche LLP 30 Rockefeller Plaza New York, NY USA Tel: Fax: INDEPENDENT AUDITORS REPORT To the Members of BOP West 31 st Street LLC: We have audited the accompanying consolidated financial statements of BOP West 31 st Street LLC (the Company ), which comprise the consolidated balance sheets as of December 31, 2016 and 2015, and the related consolidated statements of income, members equity and cash flows for the year ended December 31, 2016, and for the period from October 28, 2015 (commencement of operations) to December 31, 2015 and the related notes to the consolidated financial statements. Management s Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with the International Financial Reporting Standards as issued by the International Accounting Standards Board; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors judgment, including the assessment of risks of material misstatement of the consolidated financial statements, whether due to error or fraud. In making those risk assessments, the auditor considers internal control relevant to the Company s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

4 Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of BOP West 31 st Street LLC as of December 31, 2016 and 2015, and the results of their operations and their cash flows for the year ended December 31, 2016, and for the period from October 28, 2015 (commencement of operations) to December 31, 2015 in accordance with the International Financial Reporting Standards as issued by the International Accounting Standards Board. March 31, 2017

5 BOP WEST 31ST STREET LLC CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2016 AND DECEMBER 31, 2015 (U.S. dollars in thousands) ASSETS Note(s) December 31, 2016 December 31, 2015 Investment property 4 $ 705,120 $ 426,266 Cash and cash equivalents 5 2,137 3,815 Investment in BOP West 33rd JV Investor LLC 9 25,455 - Due from affiliate 2 9,688 - Accounts receivable Other assets TOTAL ASSETS $ 743,423 $ 431,066 LIABILITIES Investment property debt 7 $ 267,725 $ 80,340 Accounts payable and other liabilities 8 27,994 21,593 Due to affiliate 2 3,473 4,505 Total liabilities 299, ,438 EQUITY Total members' equity 9 444, ,628 TOTAL LIABILITIES AND M EM BERS' EQUITY $ 743,423 $ 431,066 See notes to the consolidated financial statements. 4

6 BOP WEST 31ST STREET LLC CONSOLIDATED STATEMENTS OF INCOME (U.S. dollars in thousands) Note(s) For the year ended December 31, 2016 For the period from October 28, 2015 (commencement of operations) to December 31, 2015 Investment property recovery (expense) $ 91 $ (177) Interest income 480 Fair value gain 4 94,032 - Interest expense - (2) Net income (loss) $ 94,603 $ (179) Net income attributed to preferred shares 9 $ 455 $ - Net income attributable to common shares $ 94,148 $ - See notes to the consolidated financial statements. 5

7 BOP WEST 31ST STREET LLC CONSOLIDATED STATEMENTS OF MEMBERS' EQUITY (U.S. dollars in thousands) Note(s) BOP Manhattan West Holdings LLC QIA MW Member LLC BOP NE Holdings LLC Preferred Total Equity BEGINNING BALANCE $ - $ - $ - $ - Initial contributions 9 255, , ,801 Distribution 9 (73,994) - - (73,994) Net loss (100) (79) - (179) BALANCE - December 31, 2015 $ 181,792 $ 142,836 $ - $ 324,628 Contribution ,000 25,000 Net income 52,723 41, ,603 BALANCE - December 31, 2016 $ 234,515 $ 184,261 $ 25,455 $ 444,231 See notes to the consolidated financial statements. 6

8 BOP WEST 31ST STREET LLC CONSOLIDATED STATEMENTS OF CASHFLOW (U.S. dollars in thousands) For the period from October 28, 2015 (commencement of For the year ended December 31, 2016 operations) to December 31, 2015 Operating activities Net income (loss) $ 94,603 $ (179) Fair value (gains), net (94,032) - Accounts payable and other liabilites Accounts receivable (128) - Prepaid expense and other assets 90 (985) Due to/from affiliates (1,032) 4,505 Net cash used in operating activities (499) 3,671 Financing activities Contribution from Qatar Investment Authority - 142,915 Paydown of note due to affiliate - (65,921) Distribution to Brookfield entities - (73,994) Investment property debt arranged 187,104 51,578 Net cash provided by financing activities 187,104 54,578 Investing activities Interest income (455) - Due from affiliate (9,688) Capital expenditures (178,140) (54,434) Net cash used in investing activities (188,283) (54,434) (Decrease) Increase in cash resources (1,678) 3,815 Cash and cash equivalents, beginning of period 3,815 - Cash and cash equivalents, end of period $ 2,137 $ 3,815 Supplemental cash flow information Cash paid for: Interest $ 2,069 $ 356 See notes to the consolidated financial statements. 7

9 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 1: NATURE AND DESCRIPTION OF THE COMPANY BOP West 31 st Street LLC (the Company ) is a Delaware Limited Liability company formed on October 28, The Company was formed for the purpose of creating a venture that is developing and constructing a residential building as part of the Manhattan West complex in New York, New York. The Company s members include BOP Manhattan West Holdings LLC ( managing member ), a Delaware limited liability company and an affiliate of Brookfield Property Partners L.P., a publicly traded real estate company ( BPY or Brookfield ) and QIA MW Member LLC, a Delaware limited liability company, a subsidiary of Qatar Investment Authority ( QIA ). As of December 31, 2016, the Company is owned 56% by BPY and 44% by QIA. NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (a) Basis of presentation The consolidated financial statements are prepared in accordance with International Financial Reporting Standards ( IFRS ) as issued by the International Accounting Standards Board ( IASB ). The consolidated financial statements have been presented in United States dollars rounded to the nearest thousand unless otherwise indicated. (b) Basis of consolidation The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company and its wholly owned subsidiaries. Control is achieved when the Company has power over the investee; is exposed, or has rights, to variable returns from its investment with the investee, and has the ability to use its power to affect its returns. The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. All intercompany assets, liabilities, equity, income, expenses, and cash flows relating to transactions between members of the Company are eliminated in full on consolidation. (c) Fair value measurement The Company measures its non-financial assets such as investment property, at fair value at each balance sheets dates. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or liability, the Company takes into account the characteristics of the asset or liability and available market evidence at the measurement date. In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at the measurement date; Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and Level 3 inputs are unobservable inputs for the asset or liability. (d) Investment property The fair value of the investment properties is determined by management, using recognized valuation techniques. In 2015 the commercial property was considered to be under active development, as such, the investment property fair value was determined using comparable market values for similar assets plus the costs incurred to develop the property. As the property approached completion toward the end of 2016, the Company used the Income Approach to derive market value by estimating the future cash flows that will be generated by the property and then applying an appropriate capitalization rate or discount rate to those cash flows. This approach can utilize the direct capitalization method and/or the discounted cash flow analysis. (e) Provisions A provision is a liability of uncertain timing or amount. Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated. Provisions are not recognized for future operating losses. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a discount rate that reflects current market assessments of the time value of money and the risks specific to the obligation. Provisions are remeasured at each balance sheet date using the current discount rate. The increase in the provision due to the passage of time is recognized as interest expense. There were no such provisions recognized by the Company as of December 31, (f) Revenue recognition Rental income related to leases is recognized on an accrual basis when due from residents as required by the accounting guidance applicable to leases, which provides guidance on classification and recognition. In accordance with the Company's standard lease terms, rental payments are generally due on a monthly basis. Any cash concessions given at the inception of the lease are amortized over the approximate life of the lease, which is generally one year. 8

10 (g) Financial instruments The following summarizes the Company s classification and measurement of financial instruments: Financial assets and liabilities Classification Measurement Cash and cash equivalents Loans and receivables Amortized cost Investment in BOP West 33 rd JV Investor LLC Equity instrument cost Accounts receivable Loans and receivables Amortized cost Other assets Loans and receivables Amortized cost Due from affiliate Loans and receivables Amortized cost Investment property debt Other liabilities Amortized cost Due to affiliate Other liabilities Amortized cost Accounts payable and other liabilities Other liabilities Amortized cost With the exception of investment property debt, the carrying amounts of these financial assets and liabilities approximate fair value due to their short-term nature. Investment in BOP West 33 rd JV Investor LLC is measured at cost because it cannot be reliably measured at fair value due to its related party nature.the fair value of investment property debt is determined by discounting contractual principal and interest payments at estimated current market interest rates for the instrument. Current market interest rates are determined with reference to current benchmark rates for a similar term and current credit spreads for debt with similar terms and risks. (h) Cash and cash equivalents Cash and cash equivalents may include cash and short-term investments with original maturities of three months or less. (i) Restricted cash Restricted cash consists primarily of deposits for tenant improvements and leasing commissions, real estate taxes and insurance reserves, debt service reserves and other items as required by the Company s loan agreements. The Company had no restricted cash as of December 31, 2016 and (j) Income taxes The Company is a partnership for U.S. tax purposes and therefore is generally not subject to federal and state income taxes, with the exception of its taxable corporate subsidiaries. For the year ended December 31, 2016 and period ended December 31, 2015, no provision has been made in the consolidated financial statements for Federal or state income taxes. The Company s taxable income or loss, which is different than financial statement income or loss, is reportable by the members. The taxable corporate subsidiaries deferred income taxes, where applicable, are accounted for using the asset and liability method. Under this method, deferred income taxes are recognized for temporary differences between the financial reporting basis of assets and liabilities and their respective tax basis and for operating loss and tax credit carryforwards based on enacted tax rates expected to be in effect when such amounts are realized or settled. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on consideration of available evidence, including tax planning strategies and other factors.. The Company wholly owns BOP MW Residential LLC, which is a corporation that has elected to be taxed as a real estate investment trust (REIT) pursuant to sections 856 and 860 of the Internal Revenue Code of 1986, as amended, commencing in In general, a corporation that distributes at least 90% of its REIT taxable income to its shareholders in any taxable year, and complies with certain other requirements (relating primarily to its organization, the nature of its assets, the sources of its revenues and ownership rules) is not subject to United States Federal income taxation to the extent of the income which it distributes. However, the corporation is still subject to state and local income taxes and to Federal income tax on its undistributed income. BOP MW Residential LLC believes that it meets the qualifications for REIT status as of December 31, 2016 and As a result, no provision has been made in the consolidated financial statements. If BOP MW Residential LLC fails to qualify as a REIT in any taxable year, it will be subject to federal income tax (including Alternative Minimum Tax ( AMT ) on its taxable income at regular corporate rates. At December 31, 2016 and December 31, 2015, the Company had net operating loss carryforwards of approximately $0 and $4, respectively. (k) Due to Affiliates Amounts due to affiliates consist of related party payables to affiliates of BPY for advances received primarily for trade purposes. These amounts are due on demand and are non-interest bearing. At December 31, 2016 and December 31, 2015, due to affiliates were $3,473 and $4,505, respectively. (l) Due from Affiliates Amounts due from affiliates consist of related party receivable from a related party of the company for costs incurred for construction on the related parties behalf. These amounts are due on demand and are non-interest bearing. At December 31, 2016 and December 31, 2015, due from affiliates were $9,688 and $0, respectively. 9

11 (m) Critical judgments in applying accounting policies The following are the critical judgments that have been made in applying the Company s accounting policies and that have the most significant effect on the amounts in the consolidated financial statements: (i) Investment property The Company s accounting policies relating to investment property are described in Note 2(d). In applying this policy, judgment is applied in identifying the point at which practical completion of the property occurs and identifying the directly attributable borrowing costs to be included in the carrying value of the development property. Assumptions and estimates used when determining the fair value of investment properties are: the timing of rental income from future leases reflecting current market conditions; assumptions of future cash flows in respect of current and future leases; maintenance and other capital expenditures; discount rates; terminal capitalization rates; and terminal valuation dates. Properties under active development are recorded at fair value using a discounted cash flow model which includes estimates in respect of the timing and cost to complete the development. (ii) Consolidated financial statements The Company s accounting policies relating to consolidation are described in Note 2(b). In applying this policy, judgment is applied in determining whether or not the Company has control over the entity and if facts or circumstances indicate that there are changes to one or more of the elements of control. (n) Critical Accounting Estimates and Assumptions The Company makes estimates and assumptions that affect the carrying amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amount of earnings for the period. Actual results could differ from estimates. The estimates and assumptions that are critical to the determination of the amounts reported in the consolidated financial statements relate to investment property. The critical estimates and assumptions underlying the valuation of the investment property are set out in Note 4. NOTE 3: FUTURE ACCOUNTING POLICY CHANGES The following are accounting policies issued that the partnership expects to adopt in the future: IFRS 16, Leases ( IFRS 16 ) will bring most leases on-balance sheet for lessees under a single model, eliminating the distinction between operating and finance leases. Lessor accounting however remains largely unchanged and the distinction between operating and finance leases is retained. Under IFRS 16 a lessee recognizes a right-of-use asset and a lease liability. The right-of-use asset is treated similarly to other nonfinancial assets and depreciated accordingly and the liability accrues interest. This will typically produce a front-loaded expense profile (whereas operating leases under IAS 17, Leases ( IAS 17 ) would typically have had straight-line expenses) as an assumed linear depreciation of the right-of-use asset and the decreasing interest on the liability will lead to an overall decrease of expense over the reporting period. IFRS 16 supersedes IAS 17 and related interpretations and is effective for periods beginning on or after 1 January 2019, with earlier adoption permitted if IFRS 15, Revenue from Contracts with Customers has also been applied. The partnership has not yet determined the impact of IFRS 16 to its consolidated financial statements. IFRS 9, Financial Instruments ( IFRS 9 ) will replace IAS 39, Financial Instruments: Recognition and Measurement ( IAS 39 ). IFRS 9 introduces a logical approach for the classification of financial assets, which is driven by cash flow characteristics and the business model in which an asset is held. This single, principle-based approach replaces existing rule-based requirements that are generally considered to be overly complex and difficult to apply. The new model results in a single impairment model being applied to all financial instruments, thereby removing a source of complexity associated with previous accounting requirements. It also introduces a new, expected-loss impairment model that will require more timely recognition of expected credit losses. IFRS 9 is effective for annual periods beginning on or after January 1, 2018, with early adoption permitted and will be applied retrospectively. The partnership has not yet determined the impact of IFRS 9 to its consolidated financial statements. IFRS 15, Revenue from Contracts with Customers ( IFRS 15 ) specifies how and when revenue should be recognized as well as requiring more informative and relevant disclosures. This standard supersedes IAS 18, Revenue, IAS 11, Construction Contracts, and a number of revenuerelated interpretations. Application of the standard is mandatory and it applies to nearly all contracts with customers: the main exceptions are leases, financial instruments and insurance contracts. IFRS 15 is effective for annual periods beginning on or after January 1, 2018 with early application permitted, and will be applied retrospectively. The partnership has not yet determined the impact of IFRS 15 to its consolidated financial statements. The amendments to IAS 7, Statement of Cash Flows requires that the following changes in liabilities arising from financing activities are disclosed (to the extent necessary): (i) changes from financing cash flows; (ii) changes arising from obtaining or losing control of subsidiaries or other businesses; (iii) the effect of changes in foreign exchange rates; (iv) changes in fair values; and (v) other changes. The amendment to IAS 7 is effective for annual periods beginning January 1, Since the amendments are being issued less than one year before the effective date, the partnership is not required to provide comparative information when it first applies the amendments. The partnership has not yet determined the impact of IAS 7 to its consolidated financial statements. The amendment to IAS 12, Income Taxes clarifies the following aspects: (i) unrealized losses on debt instruments measured at fair value and measured at cost for tax purposes give rise to a deductible temporary difference regard less of whether the debt instrument's holder expects to recover the carrying amount of the debt instrument by sale or by use; (ii) the carrying amount of an asset does not limit the estimation of probable future taxable profits; (iii) estimates for future taxable profits exclude tax deductions resulting from the reversal of deductible temporary differences; (iv) an entity assesses a deferred tax asset in combination with other deferred tax assets. The amendment to IAS 12 is effective for annual periods beginning January 1, The amendment will not have any impact to the consolidated financial statements of the partnership as the partnership currently calculates the deferred tax assets and liabilities in accordance with the clarified guidance. 10

12 NOTE 4: INVESTMENT PROPERTY December 31, 2016 December 31, 2015 Beginning Balance $ 426,266 $ - Additions Contributed asset - 350,522 Capital expenditures 174,368 75,744 Other working capital 10,454 - Fair value gain 94,032 - Ending Balance $ 705,120 $ 426,266 Capital expenditures include $6,402 and $21,263 of non-cash expenditures at December 31, 2016 and December 31, 2015, respectively. The fair value of the investment property is determined using comparable market values for similar assets plus the costs incurred to develop the property. In accordance with its policy, the Company measures its commercial property using valuations prepared by management. Investment property is valued using significant unobservable inputs and is considered to be level 3 investments December 31, 2016 Discount rate 7.00% Terminal cap rate 4.25% Market Rent Growth 3.50% NOTE 5: CASH AND CASH EQUIVALENTS At December 31, 2016 and December 31, 2015, the Company had $2,137 and $3,815, respectively, of cash placed in deposits. NOTE 6: OTHER ASSETS At December 31, 2016 and December 31, 2015, the Company s balance of other assets is comprised of prepaid expenses and other assets of $895 and $985 respectively. NOTE 7: INVESTMENT PROPERTY DEBT December 31, 2016 December 31, 2015 Interest Rate Debt Balance Interest Rate Debt Balance Investment property debt principal balance floating rate 2.43% $ 276, % $ 89,820 Unamortized deferred financing costs (9,199) (9,480) Total Investment Property Debt $ 267,725 $ 80,340 The Company s secured investment property debt is non-recourse to the Company. However, certain of the investment property debt is guaranteed by an indirect subsidiary of BPY. The debt is floating rate, with a fixed rate of 1.41% and the spread being dictated by the SIFMA- USD Municipal swap index. There are no scheduled amortization payments on the investment property debt and the total principal balance matures in Brookfield s initial contribution into the Company included financing fees of $9,527 which were paid as part of arranging the debt prior to the commencement of operations. This amount is included in investment property debt on the consolidated balance sheets and has been amortized by $560 as of December 31, 2016 and by $47 as of December 31, The fair value of investment property debt is determined by discounting the contractual principal and interest payments at estimated current market interest rates for the instrument. Current market interest rates are determined with reference to current benchmark rates for a similar term and current credit spreads for debt with similar terms and risk. As of December 31, 2016 and December 31, 2015, the fair value of investment property debt payable and other loans exceeds the book value of these obligations by $0 and $4,700, respectively. NOTE 8: ACCOUNTS PAYABLE AND OTHER LIABILITIES At December 31, 2016 and December 31, 2015, the Company s balance of accounts payable and other liabilities is $27,994 and $21,593, respectively. 11

13 NOTE 9: MEMBER S EQUITY The opening equity of the Company consisted of the following: Qatar Investment Authority Cash $ 142,915 Brookfield entities Real estate 350,522 Mortgages (28,715) Accounts payable and other (65,921) Total Brookfield entities contribution 255,886 Total opening contribution to the Company $ 398,801 On October 29, 2015, The Company made a distribution of $73,994 to BOP Manhattan West Holdings LLC. On September 12, 2016, BOP NE Holdings LLC contributed its preferred interest of $25,000 in BOP West 33rd JV Investor LLC ( 33rd JV ), a related party, to the Company. The Preferred interest pays a rate of 6% per annum. In exchange, the Company gave BOP NE Holdings LLC a preferred interest in the Company that mirrors the Preferred interest in 33rd JV. Interest income on the 33 rd JV preferred interests totaled $455 and was outstanding at December 31, On January 30, 2017 the outstanding receivable was paid to the Company. The return on the preferred interest that the Company has to BOP NE Holdings LLC is included as an attribution of earnings in the consolidated statement of equity and was outstanding at December 31, On January 30, 2017 the Company distributed the outstanding balance. NOTE 10: LIQUIDITY The Company is approaching the completion of its development phase and does not expect to generate significant revenue in the near term. As such, in order to fund the Company s capital needs, of debt service and construction costs, capital may be called from the members. NOTE 11: RELATED PARTY TRANSACTIONS (a) Management Agreement The Company has entered into arrangements with Brookfield Properties Developer, LLC, an affiliate of BPY, which is affiliated with the Company through common ownership through BPY, under with the affiliate provides various services as part of the development and construction of the property. The Company was charged $6,194 and $2,927 by Brookfield Properties Developer, LLC for development fees during the periods ended December 31, 2016 and December 31, 2015, respectively. This amount was capitalized and is therefore included in investment properties in the consolidated balance sheets. (b) Insurance Agreements The Company carries a builders risk insurance policy with a completed value limit and a $50 deductible for all-risk perils. Sublimits of $250,000 apply to the perils of earthquake and flood, with a $250 deductible for these perils. The Company also purchases a liability program which covers the General Liability (including $200,000 excess liability) and Workers Compensation exposures during construction; deductibles are $1,500 per occurrence for General Liability and $500 for Workers Compensation. The platform that the Company shares with the entire Manhattan West project is covered under an insurance policy entered into by BPY that provides all risk property and business interruption for BPY s commercial portfolio with a limit of $2,500,000 per occurrence as well as an aggregate limit of $300,000 of earthquake insurance. In addition, the property is covered by a terrorism insurance policy that provides aggregate coverage of $4,000,000 per occurrence for all of BPY s U.S. properties. The property is in compliance with the contractual obligations regarding terrorism insurance contained in such policies. NOTE 12: GUARANTEES, COMMITMENTS AND CONTINGENCIES The Company may be subject to pending legal proceedings and litigation incidental to its business. Management believes the maximum liability that may result from any adverse determination from these legal actions is covered by the amount of insurance available under the Company s policy and therefore, such legal actions will not be material to the Company s financial position or result of operations. NOTE 13: APPROVAL OF FINANCIAL STATEMENTS The financial statements were approved by management and authorized for issue on March 31, ****** 12