The following tables present gross unrealized losses and fair values for those investments that were in an unrealized loss position as of March 31, 20172018 and December 31, 2016,2017, aggregated by investment category and the length of time that investments have been in a continuous loss position:

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.

In accordance with ASC Topic 320-10-65, Recognition and Presentation of Other-Than-Temporary Impairments there were no OTTI impairment valuation adjustments for the three months ended March 31, 20172018 and 2016.2017.

6.FAIR VALUE OF FINANCIAL INSTRUMENTS

In accordance with ASC Topic 820, the Company measures cash and cash equivalents, 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 during the three months endedas of March 31, 20172018 and for the year ended December 31, 2016,2017, 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 which uses significant unobservable inputs (Level 3):

Assets and liabilities measured at fair value on a recurring basis are summarized below:

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.

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 Company accounts for income taxes in accordance with ASC Topic 740, “Accounting for Income Taxes.” ASC Topic 740 requires a Company to use the asset and liability method of accounting for income taxes. Under this method, 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 basesbasis 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 March 31, 2017,2018, and December 31, 2016,2017, the Company has recorded a net deferred tax liability of $76,000$111,000 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 estimated at $1$989,000 million expiring beginning in 2028 and has been fully reserved due to CII historically having tax losses.

The provision for income taxes in the consolidated statements of comprehensive income consists of the following:

The Company follows the provisions of ASC Topic 740-10, “Accounting for Uncertainty in Income Taxes” which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with ASC Topic 740 and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This topic also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

Based on our evaluation, we have concluded that there are no significant uncertain tax positions requiring recognition in our consolidated financial statements. Our evaluation was performed for the tax years ended December 31, 2016.2017. The Company’s federal income tax returns since 20132014 are subject to examination by the Internal Revenue Service, generally for a period of three years after the returns were filed.

We may from time to time be assessed interest or penalties by major tax jurisdictions, although any such assessments historically have been minimal and immaterial to our financial results. In the event we have received an assessment for interest and/or penalties, it has been classified in the consolidated financial statements as selling, general and administrative expense.

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 three months ended March 31, 20172018 there were no options granted, exercised, expired or forfeited.

The following table summarizes stock option activity during the three months ended March 31, 2018:

The following table summarizes information concerning outstanding and exercisable options as of March 31, 2017:2018:

As of March 31, 20172018, the stock options outstanding and exercisable had anno intrinsic value of approximately $17,000.value.

RESULTS OF OPERATIONS

The Company reported net income of approximately $52,000$5.19 million (or $.05$5.15 per share) for the three months ended March 31, 2017.2018. For the three months ended March 31, 20162017 the Company reported a net lossincome of approximately $59,000$52,000 (or $.06$.05 share).

REVENUES

Rentals and related revenues for the three months ended March 31, 20172018 and 20162017 were approximately $17,000$18,000 and $16,000,$17,000, respectively and primarily consists of rent from the Advisor to CII for its corporate office.

Net realized and unrealized gain from investments in marketable securities:

Net realized and unrealized (loss) gain from investments in marketable securities for the three months ended March 31, 20172018 and 20162017 was approximately $127,000($21,000) and $164,000,$127,000, respectively. For further details, refer to Note 3 to Condensed Consolidated Financial Statements (unaudited).

Equity loss from operations in residential real estate partnership:

Equity loss from operations in residential real estate partnership for the three months ended March 31, 2018 and 2017 was approximately $117,000.$144,000 and $117,000, 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 months ended March 31, 20172018 and 20162017 was approximately $279,000$218,000 and $37,000,$279,000, respectively. For further details, refer to Note 5 to Condensed Consolidated Financial Statements (unaudited).

Interest, dividend and other income for the three months ended March 31, 20172018 as compared with the same period in 20162017 decreased by approximately $8,000$50,000 (or 5%36%) primarily due to decreased dividend income.

EXPENSES

Rental and related expenses for the three months ended March 31, 2018 as compared with the same period in 2017 decreased by approximately $12,000 (or 52%) primarily due to decreased repairs and maintenance expenses of corporate offices.

Professional fees and expenses for the three months ended March 31, 20172018 as compared with the same period in 2016 decreased2017 increased by approximately $12,000$22,000 (or 13%28%) primarily due to decreased legalincreased tax consulting fees.

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 $1.6$1.34 million due on demand, contributions committed to other investments of approximately $2$2.1 million due upon demand. The funds necessary to meet these obligations are expected from the proceeds from the sales of investments, distributions from investments and available cash.

MATERIAL COMPONENTS OF CASH FLOWS

For the three months ended March 31, 2017,2018, net cash used in operating activities was approximately $42,000,$286,000, primarily consisting of operating expenses.

For the three months ended March 31, 2017,2018, net cash provided by investing activities was approximately $610,000.$7.34 million. This consisted primarily of distributions from investment in residential real estate partnership of $7.25 million (mainly from the sales proceeds of the Orlando, Florida property), net proceeds from sales and redemptions of marketable securities of $1.9 million,$994,000, distributions from other investments of $568,000, distributions$579,000 and distribution from residential real estate partnershipaffiliate of $130,000 and proceeds from collections of mortgage receivable of $78,000.$193,000. These sources of funds were partially offset by uses of cash consisting primarily of $1.9$1.3 million in purchases of marketable securities and $153,000$345,000 of contributions to other investments.

For the three months ended March 31, 2017,2018, net cash used inprovided by financing activities was approximately $550,000,$7.57 million, consisting of repayments of margin borrowings of $49,000$10.23 million and $92,000 of proceeds from stock options exercised. These sources of funds were partially offset by a dividend payment of $501,000.$2.53 million and repayment of note payable to affiliate of $210,000.

Not applicable

(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.

PART II. OTHER INFORMATION

As previously reported, the Company haswe 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 March 31, 2017,2018, the maximum dollar value of shares that may yet be purchased under the program is $259,719. During the three months ended March 31, 2017,2018 there were no shares purchased as part of this publicly announced program.

(a) Certifications pursuant to 18 USC Section 1350-Sarbanes-Oxley Act of 2002.Filed2002. Filed herewith.

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.