Common use of RISK FACTORS Clause in Contracts

RISK FACTORS. Participation in this offer involves a number of potential risks, including those described below. The risks described below and the risk factors under the heading entitled "Certain Factors That May Affect Future Results" in our Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 2001, filed on March 16, 2001, as amended on March 19, 2001, highlight the material risks of participating in this offer. Eligible participants should carefully consider these risks and are encouraged to speak with an investment and tax advisor as necessary before deciding whether to surrender or not surrender options in this offer. In addition, we strongly urge you to read the rest of these materials for a xxxxxx discussion of the risks which may apply to you before deciding whether to surrender or not surrender your options in this offer. ECONOMIC RISKS OF PARTICIPATING IN THIS OFFER IF OUR STOCK PRICE INCREASES AFTER THE DATE YOU SURRENDER YOUR EXISTING OPTIONS, YOUR SURRENDERED OPTIONS MIGHT HAVE BEEN WORTH MORE THAN THE NEW OPTIONS THAT YOU RECEIVE IN EXCHANGE FOR THEM. From time to time we engage in business acquisitions and other strategic transactions. We may engage in such transactions in the future which could significantly change our structure, ownership, organization or management or the make-up of our board of directors, and which could significantly affect the price of our shares. If we engage in such a transaction or transactions before the date we grant the new options, our shares could increase (or decrease) in value, and the exercise price of the new options could be higher (or lower) than the exercise price of options you elect to have cancelled as part of this offer. As is outlined in Section 8, the exercise price of any new options granted to you in return for your surrendered options will be the fair market value of a share of Class A common stock on the date of grant, as determined by the closing price reported by the Nasdaq National Market on the date of grant. You will be at risk of any such increase in our Class A common stock price before the grant date of the new options for these or any other reasons. PARTICIPATION IN THIS OFFER WILL MAKE YOU INELIGIBLE TO RECEIVE ANY OPTION GRANTS UNTIL FEBRUARY 4, 2002 AT THE EARLIEST. Employees are generally eligible to receive option grants at any time that the board of directors or Compensation Committee chooses to make them. However, if you participate in this offer, you will not be eligible to receive any option grants until February 4, 2002 at the earliest because of potentially adverse accounting consequences to us if options were granted earlier. IF YOUR EMPLOYMENT TERMINATES PRIOR TO THE GRANT OF THE NEW OPTION, YOU WILL RECEIVE NEITHER A NEW OPTION NOR THE RETURN OF YOUR SURRENDERED OPTION. Once your option is surrendered and accepted by us, it is gone for good. Accordingly, if your employment terminates for any reason prior to the grant of the new option, you will have the benefit of neither the surrendered option nor the new option. TAX-RELATED RISKS OF RECEIVING AND PARTICIPATING IN THIS OFFER YOUR NEW OPTION MAY BE A NONQUALIFIED STOCK OPTION, WHEREAS YOUR SURRENDERED OPTION MAY HAVE BEEN AN INCENTIVE STOCK OPTION. If your surrendered option was an incentive stock option, your new option will be an incentive stock option, but only to the extent it qualifies as such under the Internal Revenue Code. For options to qualify as incentive stock options, the value of shares subject to the options and any other incentive stock options issued by us that first become exercisable by the optionholder in any calendar year cannot exceed $100,000, as determined using the value of the shares on the grant date. It is possible that by participating in this exchange, your options will exceed this limit and will be treated as nonqualified stock options to the extent of that excess. In general, nonqualified stock options may be less favorable to you from a tax perspective. EVEN IF YOU ELECT NOT TO PARTICIPATE IN THIS OFFER, YOUR INCENTIVE STOCK OPTIONS MAY BE AFFECTED. We believe that you will not be subject to current U.S. federal income tax if you do not elect to participate in this offer. We also believe that this offer will not change the U.S. federal income tax treatment of subsequent exercises of your incentive stock options (and sales of shares acquired upon exercise of such options) if you do not participate in this offer. However, there is a risk that the IRS may characterize this offer as a "modification" of your eligible incentive stock options, even if you decline to participate. In 1991, the IRS issued a private letter ruling in which another company's option exchange program was characterized as a "modification" of any incentive stock option that could be exchanged (whether or not it was exchanged). This does not necessarily mean that our offer will be viewed the same way, and, in fact, we believe that we have structured this offer so as to mitigate this risk. Private letter rulings issued by the IRS contain the IRS's opinion regarding only the specific facts presented by a specific person or company. We therefore do not know if the IRS will assert the position that our offer constitutes a "modification" of incentive stock options that can be surrendered. A successful assertion by the IRS of this position could extend the options' requisite holding periods to qualify for favorable tax treatment and could also convert some incentive stock options into nonqualified stock options.

RISK FACTORS. Participation in this offer involves Before making a number decision whether or not to accept the Offer, you should consider the following Risk Factors: IN MAKING THE OFFER, THERE HAS BEEN NO THIRD PARTY VALUATION OR APPRAISAL. No independent party has been retained by Lexington Fund or any other person to evaluate or render any opinion to Limited Partners with respect to the fairness of potential risksthe Offer Price, including those described belowand no representation is made as to any fairness or other measures of value that may be relevant to Limited Partners. The risks described below In making the Offer, Lexington Fund has not based its valuation of the properties owned by the Partnership on any third-party appraisal or valuation and it is uncertain whether the risk factors under Offer Price reflects the heading entitled "Certain Factors That May Affect Future Results" in our Quarterly Report on Form 10-Q for value that would be realized upon the fiscal quarter ended January 31, 2001, filed on March 16, 2001, as amended on March 19, 2001, highlight the material risks sale of participating in this offerUnits by a Limited Partner to a third party. Eligible participants should carefully consider these risks and are encouraged We urge Limited Partners to speak with an investment consult their own financial and tax advisor as necessary before deciding whether to surrender advisors in connection with the Offer. THE OFFER PRICE MAY NOT REPRESENT FAIR MARKET VALUE OF UNITS. There is no established or not surrender options in this offer. In additionregular trading market for Units, we strongly urge you to read the rest of these materials nor is there another reliable standard for a xxxxxx discussion of the risks which may apply to you before deciding whether to surrender or not surrender your options in this offer. ECONOMIC RISKS OF PARTICIPATING IN THIS OFFER IF OUR STOCK PRICE INCREASES AFTER THE DATE YOU SURRENDER YOUR EXISTING OPTIONS, YOUR SURRENDERED OPTIONS MIGHT HAVE BEEN WORTH MORE THAN THE NEW OPTIONS THAT YOU RECEIVE IN EXCHANGE FOR THEM. From time to time we engage in business acquisitions and other strategic transactions. We may engage in such transactions in the future which could significantly change our structure, ownership, organization or management or the make-up of our board of directors, and which could significantly affect the price of our shares. If we engage in such a transaction or transactions before the date we grant the new options, our shares could increase (or decrease) in value, and the exercise price of the new options could be higher (or lower) than the exercise price of options you elect to have cancelled as part of this offer. As is outlined in Section 8, the exercise price of any new options granted to you in return for your surrendered options will be determining the fair market value of a share the Units. The Offer Price does not necessarily reflect the price that Limited Partners might receive in an open market sale of Class A common stock on Units. Those prices could be higher than the date of grant, as determined by Offer Price. THE OFFER PRICE DOES NOT TAKE INTO ACCOUNT ANY FUTURE PROSPECTS OF THE PARTNERSHIP. The Offer Price is speculative in nature and does not ascribe any value to potential future improvements in the closing price reported by the Nasdaq National Market on the date of grant. You will be at risk of any such increase in our Class A common stock price before the grant date operating performance of the new options for these or any other reasonsPartnership's properties. PARTICIPATION IN THIS THE OFFER WILL MAKE YOU INELIGIBLE TO PRICE MAY NOT REPRESENT THE VALUE THAT A LIMITED PARTNER MIGHT RECEIVE ANY OPTION GRANTS UNTIL FEBRUARY 4UPON A LIQUIDATION OF THE PARTNERSHIP. Although a liquidation of the Partnership is not anticipated in the near future, 2002 AT THE EARLIEST. Employees are generally eligible to you might receive option grants at any time that the board of directors or Compensation Committee chooses to make them. However, more value if you participate in this offer, you will retain Units until the Partnership is liquidated. The actual proceeds which might be obtained upon liquidation of the Partnership are highly uncertain and could be more than the Offer Price. Limited Partners are not be eligible required to receive any option grants until February 4, 2002 at accept the earliest because of potentially adverse accounting consequences to us if options were granted earlierOffer and tender their Units. IF YOUR EMPLOYMENT TERMINATES PRIOR THERE MAY BE CONFLICTS OF INTEREST WITH RESPECT TO THE GRANT OF THE NEW OPTION, YOU WILL RECEIVE NEITHER A NEW OPTION NOR THE RETURN OF YOUR SURRENDERED OPTIONOFFER. Once your option Lexington Fund is surrendered and accepted by us, it is gone for goodmaking the Offer with a view toward making a profit. Accordingly, if there is a conflict between Lexington Fund's desire to acquire your employment terminates for any reason prior Units at a low price and your desire to sell your Units at a high price. Lexington Fund's intent is to acquire the Units at a discount to the grant of value Lexington Fund might ultimately realize from owning the new option, you will have the benefit of neither the surrendered option nor the new optionUnits. TAX-RELATED RISKS OF RECEIVING AND PARTICIPATING IN THIS OFFER YOUR NEW OPTION MAY BE A NONQUALIFIED STOCK OPTION, WHEREAS YOUR SURRENDERED OPTION MAY HAVE BEEN AN INCENTIVE STOCK OPTION. If your surrendered option was an incentive stock option, your new option will be an incentive stock option, but only to the extent it qualifies as such under the Internal Revenue Code. For options to qualify as incentive stock options, the value of shares subject to the options and any other incentive stock options issued by us that first become exercisable by the optionholder in any calendar year Although Lexington Fund cannot exceed $100,000, as determined using predict the future value of the shares Partnership assets on a per Unit basis, the grant dateOffer Price could differ significantly from the net proceeds that could be realized from a current sale of the properties owned by the Partnership or that may be realized upon future liquidation of the Partnership. WE MAY CONDUCT FUTURE OFFERS AT A HIGHER PRICE. It is possible that by participating we may conduct a future offer at a higher price than the Offer Price. That decision will depend on, among other things, the performance of the Partnership, prevailing economic conditions and our interest in this exchangeacquiring additional Units. IF YOU ACCEPT THE OFFER AND SELL YOUR UNITS, your options will exceed this limit and YOU MAY RECOGNIZE TAXABLE GAIN ON YOUR SALE. A sale of Units in the Offer will be treated as nonqualified stock options to a taxable sale, with the extent of that excess. In general, nonqualified stock options may be less favorable to you from a tax perspective. EVEN IF YOU ELECT NOT TO PARTICIPATE IN THIS OFFER, YOUR INCENTIVE STOCK OPTIONS MAY BE AFFECTED. We believe result that you will not recognize taxable gain or loss measured by the difference between the amount realized on the sale and your adjusted tax basis in the Units you transfer to us. The tax consequences of the Offer to a particular Limited Partner may be subject different from those of other Limited Partners and we urge you to current U.S. federal income consult your own tax if you do not elect advisor in connection with the Offer. Limited Partners who sell their Units will be giving up the opportunity to participate in this offer. We also believe that this offer will not change any future potential benefits associated with ownership of Units, including the U.S. federal income tax treatment of subsequent exercises of your incentive stock options (and sales of shares acquired upon exercise of such options) if you do not right to participate in any future distribution of cash or property. THE OFFER WILL INCREASE OUR STAKE IN THE PARTNERSHIP. Lexington Fund and its affiliates currently own 2,365 units, representing 10.8% of the Partnership's outstanding Units. If Lexington Fund purchases an additional 7,500 Units, Lexington Fund and its affiliates will own 45% of the Partnership's outstanding Units. Although this offerwould not represent a majority interest, this increase in ownership would give Lexington Fund and its affiliates increased control over any vote of the Limited Partners. However, there is a risk that the IRS may characterize this offer as a "modification" of your eligible incentive stock options, even if you decline to participate. In 1991, the IRS issued a private letter ruling in which another company's option exchange program was characterized as a "modification" of any incentive stock option that could be exchanged (whether or not it was exchanged). This does not necessarily mean that our offer will be viewed the same way, and, in fact, we believe that we have structured this offer so as to mitigate this risk. Private letter rulings issued by the IRS contain the IRS's opinion regarding only the specific facts presented by a specific person or company. We therefore do not know if the IRS will assert the position that our offer constitutes a "modification" of incentive stock options that can be surrendered. A successful assertion by the IRS of this position could extend the options' requisite holding periods to qualify for favorable tax treatment and could also convert some incentive stock options into nonqualified stock options.THE OFFER

RISK FACTORS. Participation An investment in this offer our securities involves a number high degree of potential risks, including those risk. Certain risks relating to us and our business are described below. The risks described below and the risk factors under the heading entitled "Certain Factors That May Affect Future Results" headings “Business” and “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Commission on March 26, 2021, and our Quarterly Report on Form 10-Q for the fiscal quarter ended January March 31, 20012021, filed with the Commission on March 16May 17, 20012021, which are incorporated by reference into this prospectus and any accompanying prospectus supplement and which you should carefully review and consider, along with the other information contained in this prospectus and any accompanying prospectus supplement or incorporated by reference herein, as amended on March 19updated by our subsequent filings under the Exchange Act, 2001before making an investment in any of our securities. Additional risks, highlight as well as updates or changes to the material risks described in the documents incorporated by reference herein, may be included in any applicable prospectus supplement. Our business, financial condition or results of participating operations could be materially adversely affected by any of these risks. The market or trading price of our securities could decline due to any of these risks, and you may lose all or part of your investment. Prior to making a decision to invest in our securities you should consider carefully the specific factors discussed under the capitation “Risk Factors” in the applicable prospectus supplement, together with any other information contained in the applicable prospectus supplement or appearing or incorporated by reference in this offer. Eligible participants should carefully consider these risks and are encouraged to speak with an investment and tax advisor as necessary before deciding whether to surrender or not surrender options in this offerprospectus. In addition, we strongly urge you to please read the rest section of these materials for a xxxxxx discussion this prospectus captioned “Special Note Regarding Forward-Looking Statements,” in which we describe additional uncertainties associated with our business and the forward-looking statements included or incorporated by reference in this prospectus. Please note that additional risks not presently known to us or that we currently deem immaterial may also impair our business and operations. Investment in any securities offered pursuant to this prospectus involves risks and uncertainties. If one or more of the risks which may apply to you before deciding whether to surrender or not surrender your options in this offer. ECONOMIC RISKS OF PARTICIPATING IN THIS OFFER IF OUR STOCK PRICE INCREASES AFTER THE DATE YOU SURRENDER YOUR EXISTING OPTIONS, YOUR SURRENDERED OPTIONS MIGHT HAVE BEEN WORTH MORE THAN THE NEW OPTIONS THAT YOU RECEIVE IN EXCHANGE FOR THEM. From time to time we engage in business acquisitions and other strategic transactions. We may engage in such transactions events discussed in the future which could significantly change our structure, ownership, organization or management or the make-up of our board of directors, and which could significantly affect the price of our shares. If we engage in such a transaction or transactions before the date we grant the new optionsrisk factors were to occur, our shares could increase (business, financial condition, results of operations or decrease) in value, and the exercise price of the new options could be higher (or lower) than the exercise price of options you elect to have cancelled as part of this offer. As is outlined in Section 8, the exercise price of any new options granted to you in return for your surrendered options will be the fair market value of a share of Class A common stock on the date of grantliquidity, as determined by the closing price reported by the Nasdaq National Market on the date of grant. You will be at risk of any such increase in our Class A common stock price before the grant date of the new options for these or any other reasons. PARTICIPATION IN THIS OFFER WILL MAKE YOU INELIGIBLE TO RECEIVE ANY OPTION GRANTS UNTIL FEBRUARY 4, 2002 AT THE EARLIEST. Employees are generally eligible to receive option grants at any time that the board of directors or Compensation Committee chooses to make them. However, if you participate in this offer, you will not be eligible to receive any option grants until February 4, 2002 at the earliest because of potentially adverse accounting consequences to us if options were granted earlier. IF YOUR EMPLOYMENT TERMINATES PRIOR TO THE GRANT OF THE NEW OPTION, YOU WILL RECEIVE NEITHER A NEW OPTION NOR THE RETURN OF YOUR SURRENDERED OPTION. Once your option is surrendered and accepted by us, it is gone for good. Accordingly, if your employment terminates for any reason prior to the grant of the new option, you will have the benefit of neither the surrendered option nor the new option. TAX-RELATED RISKS OF RECEIVING AND PARTICIPATING IN THIS OFFER YOUR NEW OPTION MAY BE A NONQUALIFIED STOCK OPTION, WHEREAS YOUR SURRENDERED OPTION MAY HAVE BEEN AN INCENTIVE STOCK OPTION. If your surrendered option was an incentive stock option, your new option will be an incentive stock option, but only to the extent it qualifies well as such under the Internal Revenue Code. For options to qualify as incentive stock options, the value of shares subject to an investment in our securities, could be materially adversely affected. You should carefully consider the options risk factors as well as the other information contained and any other incentive stock options issued incorporated by us that first become exercisable by the optionholder in any calendar year cannot exceed $100,000, as determined using the value of the shares on the grant date. It is possible that by participating reference in this exchange, your options will exceed this limit and will be treated as nonqualified stock options prospectus before deciding to the extent of that excess. In general, nonqualified stock options may be less favorable to you from a tax perspective. EVEN IF YOU ELECT NOT TO PARTICIPATE IN THIS OFFER, YOUR INCENTIVE STOCK OPTIONS MAY BE AFFECTED. We believe that you will not be subject to current U.S. federal income tax if you do not elect to participate in this offer. We also believe that this offer will not change the U.S. federal income tax treatment of subsequent exercises of your incentive stock options (and sales of shares acquired upon exercise of such options) if you do not participate in this offer. However, there is a risk that the IRS may characterize this offer as a "modification" of your eligible incentive stock options, even if you decline to participate. In 1991, the IRS issued a private letter ruling in which another company's option exchange program was characterized as a "modification" of any incentive stock option that could be exchanged (whether or not it was exchanged). This does not necessarily mean that our offer will be viewed the same way, and, in fact, we believe that we have structured this offer so as to mitigate this risk. Private letter rulings issued by the IRS contain the IRS's opinion regarding only the specific facts presented by a specific person or company. We therefore do not know if the IRS will assert the position that our offer constitutes a "modification" of incentive stock options that can be surrendered. A successful assertion by the IRS of this position could extend the options' requisite holding periods to qualify for favorable tax treatment and could also convert some incentive stock options into nonqualified stock optionsinvest.

RISK FACTORS. Participation in this offer involves a number of potential risks, including those described below. The You should carefully consider the risks and uncertainties described below and in our reports filed with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, before exchanging Outstanding Notes for the New Notes. In particular, we refer you to the disclosure regarding certain risk factors under the heading entitled "Certain Factors That May Affect Future Results" applicable to us and our business in our Quarterly Annual Report on Form 10-Q K for the fiscal quarter year ended January December 31, 20012010 and our Quarterly Reports on Form 10-Q filed after that date. We do not intend to list the New Notes on any securities exchange. If the New Notes are traded, filed they may trade at a discount, depending on March 16prevailing interest rates, 2001the market for similar securities, the price of our common stock, the performance of our business and other factors. We do not know whether an active trading market will develop for the New Notes. To the extent that an active trading market does not develop, you may not be able to resell the New Notes or may only be able to sell them at a substantial discount. Consummation of the Exchange will be subject to the satisfaction of certain conditions, including that the Indenture is qualified under the Trust Indenture Act. Even if an exchange agreement is executed, the closing of the Exchange may be delayed for a significant period of time. Accordingly, you may have to wait longer than expected to receive New Notes in the Exchange, during which time you will not be able to effect transfers of your Outstanding Notes subject to the exchange agreement. Our board of directors has made no determination that the consideration to be received in the Exchange represents a fair valuation of either the Outstanding Notes or the New Notes. We have not obtained a fairness opinion from any financial advisor about the fairness to us or to you of the consideration to be received by holders of Outstanding Notes. We have outstanding indebtedness, and may incur additional indebtedness from time to time, that is or may become due prior to the optional redemption date of the New Notes. In particular, the holders of the Outstanding Notes can require us to repurchase their notes on December 15, 2013, and the holders of other series of our convertible senior subordinated notes can require us to repurchase their notes on multiple dates prior to the optional redemption date of the New Notes. Except in limited cases, the New Notes are not convertible prior to June 15, 2016. The Outstanding Notes and other series of our convertible senior subordinated notes will become convertible prior to that date. If certain fundamental changes occur prior to December 15, 2016, we will increase the conversion rate by a number of additional shares of our common stock for notes converted in connection with such fundamental change. The increase in the conversion rate will be determined based on the date on which the fundamental change becomes effective and the price paid per share of our common stock in such transaction. The adjustment to the conversion rate for notes converted in connection with a fundamental change may not adequately compensate you for any lost value of your notes as amended on March 19, 2001, highlight the material risks a result of participating in this offer. Eligible participants should carefully consider these risks and are encouraged to speak with an investment and tax advisor as necessary before deciding whether to surrender or not surrender options in this offersuch transaction. In addition, we strongly urge you to read the rest of these materials for a xxxxxx discussion of the risks which may apply to you before deciding whether to surrender or not surrender your options in this offer. ECONOMIC RISKS OF PARTICIPATING IN THIS OFFER IF OUR STOCK PRICE INCREASES AFTER THE DATE YOU SURRENDER YOUR EXISTING OPTIONS, YOUR SURRENDERED OPTIONS MIGHT HAVE BEEN WORTH MORE THAN THE NEW OPTIONS THAT YOU RECEIVE IN EXCHANGE FOR THEM. From time to time we engage in business acquisitions and other strategic transactions. We may engage in such transactions in the future which could significantly change our structure, ownership, organization or management or the make-up of our board of directors, and which could significantly affect if the price of our sharescommon stock in the transaction is greater than $50.00 per share or less than $7.50 per share (in each case, subject to adjustment), no adjustment will be made to the conversion rate. Moreover, in no event will the total number of shares of common stock issuable upon conversion exceed 133.3333 per $1,000 principal amount of notes, subject to adjustment. The enforceability of our obligation to deliver the additional shares upon a fundamental change could be subject to general principles of reasonableness of economic remedies. We may issue up to $200,000,000 aggregate principal amount of New Notes in exchange for Outstanding Notes (or up to $215,000,000 if our Board approves this amount); however, there is no assurance that we will successfully negotiate or consummate Exchanges with any other holders of Outstanding Notes. If we engage do not issue New Notes in such a transaction or transactions before the date we grant the new optionsExchanges with holders other than you, our shares could increase (or decrease) in value, and the exercise price of the new options could be higher (or lower) than the exercise price of options you elect to have cancelled as part of this offer. As is outlined in Section 8, the exercise price of any new options granted to you in return for your surrendered options will be the fair market value of a share of Class A common stock on the date of grant, as determined by the closing price reported by the Nasdaq National Market on the date of grant. You will be at risk of any such increase in our Class A common stock price before the grant date of the new options for these or any other reasons. PARTICIPATION IN THIS OFFER WILL MAKE YOU INELIGIBLE TO RECEIVE ANY OPTION GRANTS UNTIL FEBRUARY 4, 2002 AT THE EARLIEST. Employees are generally eligible to receive option grants at any time that the board of directors or Compensation Committee chooses to make them. However, if you participate in this offer, you will not be eligible to receive any option grants until February 4, 2002 at the earliest because of potentially adverse accounting consequences to us if options were granted earlier. IF YOUR EMPLOYMENT TERMINATES PRIOR TO THE GRANT OF THE NEW OPTION, YOU WILL RECEIVE NEITHER A NEW OPTION NOR THE RETURN OF YOUR SURRENDERED OPTION. Once your option is surrendered and accepted by us, it is gone for good. Accordingly, if your employment terminates for any reason prior to the grant of the new option, you will have the benefit of neither the surrendered option nor the new option. TAX-RELATED RISKS OF RECEIVING AND PARTICIPATING IN THIS OFFER YOUR NEW OPTION MAY BE A NONQUALIFIED STOCK OPTION, WHEREAS YOUR SURRENDERED OPTION MAY HAVE BEEN AN INCENTIVE STOCK OPTION. If your surrendered option was an incentive stock option, your new option will be an incentive stock option, but only to the extent it qualifies as such under the Internal Revenue Code. For options to qualify as incentive stock options, the value of shares subject to the options and any other incentive stock options issued by us that first become exercisable by the optionholder in any calendar year cannot exceed $100,000, as determined using the value of the shares on the grant date. It is possible that by participating in this exchange, your options will exceed this limit and will be treated as nonqualified stock options to the extent of that excess. In general, nonqualified stock options there may be less favorable to you from a tax perspective. EVEN IF YOU ELECT NOT TO PARTICIPATE IN THIS OFFER, YOUR INCENTIVE STOCK OPTIONS MAY BE AFFECTED. We believe that you will not be subject to current U.S. federal income tax if you do not elect to participate in this offer. We also believe that this offer will not change no trading market for the U.S. federal income tax treatment of subsequent exercises of your incentive stock options (and sales of shares acquired upon exercise of such options) if you do not participate in this offer. However, there is a risk that the IRS may characterize this offer as a "modification" of your eligible incentive stock options, even if you decline to participate. In 1991, the IRS issued a private letter ruling in which another company's option exchange program was characterized as a "modification" of any incentive stock option that could be exchanged (whether or not it was exchanged). This does not necessarily mean that our offer will be viewed the same way, and, in fact, we believe that we have structured this offer so as to mitigate this risk. Private letter rulings issued by the IRS contain the IRS's opinion regarding only the specific facts presented by a specific person or company. We therefore do not know if the IRS will assert the position that our offer constitutes a "modification" of incentive stock options that can be surrendered. A successful assertion by the IRS of this position could extend the options' requisite holding periods to qualify for favorable tax treatment and could also convert some incentive stock options into nonqualified stock optionsNew Notes.

RISK FACTORS. Participation in this offer involves a number of potential risks, including those described below. The risks described below and the risk factors under the heading entitled "Certain Factors That May Affect Future Results" in our Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 2001, filed on March 16, 2001, as amended on March 19, 2001, highlight the material risks of participating in this offer. Eligible participants should carefully consider these risks and are encouraged to speak with an investment and tax advisor as necessary before deciding whether to surrender or not surrender options in this offer. In addition, we strongly urge you to read the rest of these materials for a xxxxxx discussion This section highlights only some of the risks of dealing in the warrants but their inclusion in this document does not mean these are the only significant or relevant risks of dealing in our warrants. Non-collateralised structured products You must rely on our and the guarantor’s creditworthiness; you may lose all or substantially all of your investment if we and/or the guarantor become insolvent There are risks associated with investing in our warrants; our warrants are volatile instruments Warrants are complex and volatile instruments Your ability to realise your investment in our warrants is dependent on the trading market for our warrants Our obligations are not deposit liability or debt obligations You have no rights in the underlying assets and the market price for our warrants may fluctuate differently from that of the underlying assets There could be conflicts of interest arising out of our other activities which may apply to you before deciding whether to surrender or not surrender your options in this offer. ECONOMIC RISKS OF PARTICIPATING IN THIS OFFER IF OUR STOCK PRICE INCREASES AFTER THE DATE YOU SURRENDER YOUR EXISTING OPTIONS, YOUR SURRENDERED OPTIONS MIGHT HAVE BEEN WORTH MORE THAN THE NEW OPTIONS THAT YOU RECEIVE IN EXCHANGE FOR THEM. From time to time we engage in business acquisitions and other strategic transactions. affect our warrants We may engage in such transactions in early terminate our warrants due to illegality or impracticability Liquidation of underlying company Time lag between the future which could significantly change our structure, ownership, organization or management or time of exercise and the make-up time of determination of the settlement amount may affect the settlement amount We may adjust the terms and conditions of our board warrants upon the occurrence of directors, and which could significantly certain corporate events or extraordinary events affecting the underlying assets Our determination of the occurrence of a market or settlement disruption event may affect the value and/or market price of our shares. If we engage warrants The implied volatility of our warrants may not reflect the actual volatility of the underlying asset Investment in such a transaction or transactions before the date we grant the new options, our shares could increase (or decrease) warrants may involve exchange rate risks and interest rate risks Please consult your tax advisers if you are in value, any doubt of your tax position Our warrants are issued in global registered form; you have to rely on your brokers to evidence title to your investment and to receive notices and the exercise price of the new options could be higher (cash settlement amount We and our guarantor do not give you any advice or lower) than the exercise price of options you elect to have cancelled as part of this offer. As is outlined in Section 8, the exercise price of any new options granted to you in return for your surrendered options will be the fair market value of a share of Class A common stock on the date of grant, as determined by the closing price reported by the Nasdaq National Market on the date of grant. You will be at risk of any such increase in our Class A common stock price before the grant date of the new options for these or any other reasons. PARTICIPATION IN THIS OFFER WILL MAKE YOU INELIGIBLE TO RECEIVE ANY OPTION GRANTS UNTIL FEBRUARY 4, 2002 AT THE EARLIEST. Employees are generally eligible to receive option grants at any time that the board of directors or Compensation Committee chooses to make them. However, if you participate in this offer, you will not be eligible to receive any option grants until February 4, 2002 at the earliest because of potentially adverse accounting consequences to us if options were granted earlier. IF YOUR EMPLOYMENT TERMINATES PRIOR TO THE GRANT OF THE NEW OPTION, YOU WILL RECEIVE NEITHER A NEW OPTION NOR THE RETURN OF YOUR SURRENDERED OPTION. Once your option is surrendered and accepted by us, it is gone for good. Accordingly, if your employment terminates for any reason prior credit analysis Risks relating to the grant of guarantor Who will act as liquidity provider for the new option, you warrants? What will have the benefit of neither the surrendered option nor the new option. TAX-RELATED RISKS OF RECEIVING AND PARTICIPATING IN THIS OFFER YOUR NEW OPTION MAY BE A NONQUALIFIED STOCK OPTION, WHEREAS YOUR SURRENDERED OPTION MAY HAVE BEEN AN INCENTIVE STOCK OPTION. If your surrendered option was an incentive stock option, your new option will be an incentive stock option, but only to the extent it qualifies as such under the Internal Revenue Code. For options to qualify as incentive stock options, the value of shares subject to the options and any other incentive stock options issued by us that first become exercisable by the optionholder in any calendar year cannot exceed $100,000, as determined using the value of the shares on the grant date. It is possible that by participating in this exchange, your options will exceed this limit and will be treated as nonqualified stock options to the extent of that excess. In general, nonqualified stock options may be less favorable to you from a tax perspective. EVEN IF YOU ELECT NOT TO PARTICIPATE IN THIS OFFER, YOUR INCENTIVE STOCK OPTIONS MAY BE AFFECTED. We believe that you will not be subject to current U.S. federal income tax if you do not elect to participate in this offer. We also believe that this offer will not change the U.S. federal income tax treatment of subsequent exercises of your incentive stock options (and sales of shares acquired upon exercise of such options) if you do not participate in this offer. However, there is a risk that the IRS may characterize this offer as a "modification" of your eligible incentive stock options, even if you decline to participate. In 1991, the IRS issued a private letter ruling in which another company's option exchange program was characterized as a "modification" of any incentive stock option that could be exchanged (whether or not it was exchanged). This does not necessarily mean that our offer will be viewed the same way, and, in fact, we believe that we have structured this offer so as to mitigate this risk. Private letter rulings issued by the IRS contain the IRS's opinion regarding only the specific facts presented by a specific person or company. We therefore do not know if the IRS will assert the position that our offer constitutes a "modification" of incentive stock options that can be surrendered. A successful assertion by the IRS of this position could extend the options' requisite holding periods to qualify for favorable tax treatment and could also convert some incentive stock options into nonqualified stock options.liquidity provider do?

RISK FACTORS. Participation An investment in this offer involves our common shares is highly speculative and subject to a number of potential known and unknown risks. Before making an investment decision, including those described below. The you should carefully consider the risks described below and in the risk factors under the heading sections entitled "Certain Factors That May Affect Future Results" “Risk Factors” in our Quarterly most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q for as filed with the fiscal quarter ended January 31SEC, 2001, filed on March 16, 2001which are incorporated herein by reference in their entirety, as amended on March 19well any amendment or updates to our risk factors reflected in subsequent filings with the SEC and the risks described below. Our business, 2001financial condition or results of operations could be materially adversely affected by any of these risks. The trading price of our securities could decline due to any of these risks, highlight and you may lose all or part of your investment. This prospectus and the material incorporated documents also contain forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of participating certain factors, including the risks mentioned elsewhere in this offerprospectus. Eligible participants should carefully consider these risks This prospectus supplement relates to $12,073,999 of our common shares that we may issue and are encouraged sell to speak with an investment and tax advisor as necessary before deciding whether Aspire Capital from time to surrender time over the term of the Purchase Agreement, which expires on April 7, 2020. The number of shares ultimately offered for sale to Aspire Capital under this prospectus supplement is dependent upon the number of shares we elect to sell to Aspire Capital under the Purchase Agreement. Depending upon market liquidity at the time, sales of shares of our common shares under the Purchase Agreement may cause the trading price of our common shares to decline. Aspire Capital may ultimately purchase all or not surrender options some of the $12,073,999 of our common shares that is the subject of this prospectus supplement. After Aspire Capital has acquired shares under the Purchase Agreement, it may sell all, some or none of those shares. Sales to Aspire Capital by us pursuant to the Purchase Agreement under this prospectus supplement may result in substantial dilution to the interests of other holders of our common shares. The sale of a substantial number of shares of our common shares to Aspire Capital in this offeroffering, or anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect sales. However, we have the right to control the timing and amount of any sales of our shares to Aspire Capital and the Purchase Agreement may be terminated by us at any time at our discretion without any cost to us. Our management will have broad discretion in the application of the proceeds from sales of our common shares to Aspire Capital offered by this prospectus supplement, and could spend the proceeds in ways that do not improve our results of operations or enhance the value of our common shares. Our failure to apply these funds effectively could have a material adverse effect on our business and cause the price of our common shares to decline. As of May 1, 2019, there were 41,522,031 shares of our common shares outstanding. In addition, as of May 1, 2019, there were outstanding stock options representing the potential issuance of an additional 5,778,488 shares of our common shares. The issuance of these shares in the future would result in significant dilution to our current stockholders and could adversely affect the price of our common shares and the terms on which we could raise additional capital. In addition, the issuance and subsequent trading of shares could cause the supply of our common shares available for purchase in the market to exceed the purchase demand for our common shares. Such supply in excess of demand could cause the market price of our common shares to decline. Sales of a substantial number of our shares of common shares in the public markets, or the perception that such sales could occur, could depress the market price of our shares of common shares and impair our ability to raise capital through the sale of additional equity securities. A substantial number of shares of common shares are being offered by this prospectus supplement, and we cannot predict if and when Aspire Capital may sell such shares in the public markets. In addition, we strongly urge you to read cannot predict the rest number of these materials for a xxxxxx discussion shares that might be sold nor the effect that future sales of our shares of common shares would have on the risks which may apply to you before deciding whether to surrender or not surrender your options in this offer. ECONOMIC RISKS OF PARTICIPATING IN THIS OFFER IF OUR STOCK PRICE INCREASES AFTER THE DATE YOU SURRENDER YOUR EXISTING OPTIONS, YOUR SURRENDERED OPTIONS MIGHT HAVE BEEN WORTH MORE THAN THE NEW OPTIONS THAT YOU RECEIVE IN EXCHANGE FOR THEM. From time to time we engage in business acquisitions and other strategic transactionsmarket price of our shares of common shares. We may engage have never declared or paid any dividends on our common shares. We intend, for the foreseeable future, to retain our future earnings, if any, to finance our commercial activities and further research and the expansion of our business. As a result, the return on an investment in such transactions common shares will likely depend upon any future appreciation in the value, if any, and on a shareholder’s ability to sell common shares. The payment of future which could significantly change our structuredividends, ownershipif any, organization or management or the make-up of will be reviewed periodically by our board of directorsdirectors and will depend upon, among other things, conditions then existing including earnings, financial conditions, cash on hand, financial requirements to fund our commercial activities, development and growth, and which could significantly affect the price of other factors that our shares. If we engage in such a transaction or transactions before the date we grant the new options, our shares could increase (or decrease) in value, and the exercise price of the new options could be higher (or lower) than the exercise price of options you elect to have cancelled as part of this offer. As is outlined in Section 8, the exercise price of any new options granted to you in return for your surrendered options will be the fair market value of a share of Class A common stock on the date of grant, as determined by the closing price reported by the Nasdaq National Market on the date of grant. You will be at risk of any such increase in our Class A common stock price before the grant date of the new options for these or any other reasons. PARTICIPATION IN THIS OFFER WILL MAKE YOU INELIGIBLE TO RECEIVE ANY OPTION GRANTS UNTIL FEBRUARY 4, 2002 AT THE EARLIEST. Employees are generally eligible to receive option grants at any time that the board of directors or Compensation Committee chooses to make them. However, if you participate may consider appropriate in this offer, you will not be eligible to receive any option grants until February 4, 2002 at the earliest because of potentially adverse accounting consequences to us if options were granted earlier. IF YOUR EMPLOYMENT TERMINATES PRIOR TO THE GRANT OF THE NEW OPTION, YOU WILL RECEIVE NEITHER A NEW OPTION NOR THE RETURN OF YOUR SURRENDERED OPTION. Once your option is surrendered and accepted by us, it is gone for good. Accordingly, if your employment terminates for any reason prior to the grant of the new option, you will have the benefit of neither the surrendered option nor the new option. TAX-RELATED RISKS OF RECEIVING AND PARTICIPATING IN THIS OFFER YOUR NEW OPTION MAY BE A NONQUALIFIED STOCK OPTION, WHEREAS YOUR SURRENDERED OPTION MAY HAVE BEEN AN INCENTIVE STOCK OPTION. If your surrendered option was an incentive stock option, your new option will be an incentive stock option, but only to the extent it qualifies as such under the Internal Revenue Code. For options to qualify as incentive stock options, the value of shares subject to the options and any other incentive stock options issued by us that first become exercisable by the optionholder in any calendar year cannot exceed $100,000, as determined using the value of the shares on the grant date. It is possible that by participating in this exchange, your options will exceed this limit and will be treated as nonqualified stock options to the extent of that excess. In general, nonqualified stock options may be less favorable to you from a tax perspective. EVEN IF YOU ELECT NOT TO PARTICIPATE IN THIS OFFER, YOUR INCENTIVE STOCK OPTIONS MAY BE AFFECTED. We believe that you will not be subject to current U.S. federal income tax if you do not elect to participate in this offer. We also believe that this offer will not change the U.S. federal income tax treatment of subsequent exercises of your incentive stock options (and sales of shares acquired upon exercise of such options) if you do not participate in this offer. However, there is a risk that the IRS may characterize this offer as a "modification" of your eligible incentive stock options, even if you decline to participate. In 1991, the IRS issued a private letter ruling in which another company's option exchange program was characterized as a "modification" of any incentive stock option that could be exchanged (whether or not it was exchanged). This does not necessarily mean that our offer will be viewed the same way, and, in fact, we believe that we have structured this offer so as to mitigate this risk. Private letter rulings issued by the IRS contain the IRS's opinion regarding only the specific facts presented by a specific person or company. We therefore do not know if the IRS will assert the position that our offer constitutes a "modification" of incentive stock options that can be surrendered. A successful assertion by the IRS of this position could extend the options' requisite holding periods to qualify for favorable tax treatment and could also convert some incentive stock options into nonqualified stock optionscircumstances.

RISK FACTORS. Participation An investment in this offer our securities involves a number high degree of potential risksrisk. Before making any investment decision, including those described below. The risks described below and you should carefully consider the risk factors set forth below, under the heading entitled "Certain Factors That May Affect Future Results" caption “Risk Factors” in any applicable prospectus supplement and under the caption “Risk Factors” in our Quarterly Report most recent annual report on Form 10-Q for K and our subsequent quarterly reports on Form 10-Q, which are incorporated by reference in this prospectus, as well as in any applicable prospectus supplement, as updated by our subsequent filings under the fiscal quarter ended January 31, 2001, filed on March 16, 2001Securities Exchange Act of 1934, as amended on March 19(the “Exchange Act”). These risks could materially affect our business, 2001, highlight results of operation or financial condition and affect the material risks value of participating in this offerour securities. Eligible participants should carefully consider these Additional risks and uncertainties that are encouraged to speak with an investment not yet identified may also materially harm our business, operating results and tax advisor as necessary before deciding whether to surrender financial condition and could result in a complete loss of your investment. You could lose all or not surrender options in this offerpart of your investment. In additionFor more information, we strongly urge you to read the rest see “Where You Can Find More Information.” Sales of these materials for a xxxxxx discussion our common stock, preferred stock, warrants, units or any combination of the risks which may apply to you before deciding whether to surrender or not surrender your options in this offer. ECONOMIC RISKS OF PARTICIPATING IN THIS OFFER IF OUR STOCK PRICE INCREASES AFTER THE DATE YOU SURRENDER YOUR EXISTING OPTIONS, YOUR SURRENDERED OPTIONS MIGHT HAVE BEEN WORTH MORE THAN THE NEW OPTIONS THAT YOU RECEIVE IN EXCHANGE FOR THEM. From time to time we engage in business acquisitions and other strategic transactions. We may engage in such transactions foregoing in the future which could significantly change our structurepublic market, ownership, organization or management or the make-up of our board of directorsperception that such sales could occur, and which could significantly negatively affect the price of our sharescommon stock. If we engage one or more of our shareholders were to sell large portions of their holdings in such a transaction relatively short time, for liquidity or transactions before other reasons, the date we grant prevailing market price of our common stock could be negatively affected. In addition, the new optionsissuance of additional shares of our common stock, securities convertible into or exercisable for our common stock, other equity-linked securities, including preferred stock or warrants or any combination of the securities pursuant to this prospectus will dilute the ownership interest of our common shareholders and could depress the market price of our common stock and impair our ability to raise capital through the sale of additional equity securities. We may need to seek additional capital. If this additional financing is obtained through the issuance of equity securities or warrants to acquire equity securities, our shares existing shareholders could increase (experience significant dilution upon the issuance, conversion or decrease) in valueexercise of such securities. Our management will have broad discretion to use the net proceeds from any offerings under this prospectus, and you will be relying on the exercise price judgment of our management regarding the application of these proceeds. Except as described in any prospectus supplement or in any related free writing prospectus that we may authorize to be provided to you, the net proceeds received by us from our sale of the new options could be higher (or lower) than the exercise price of options you elect to have cancelled as part of securities described in this offer. As is outlined in Section 8, the exercise price of any new options granted to you in return for your surrendered options prospectus will be the fair market value of a share of Class A common stock on the date of grant, as determined by the closing price reported by the Nasdaq National Market on the date of grant. You added to our general funds and will be at risk used for general corporate purposes. Our management might not apply the net proceeds from offerings of any such our securities in ways that increase in our Class A common stock price before the grant date of the new options for these or any other reasons. PARTICIPATION IN THIS OFFER WILL MAKE YOU INELIGIBLE TO RECEIVE ANY OPTION GRANTS UNTIL FEBRUARY 4, 2002 AT THE EARLIEST. Employees are generally eligible to receive option grants at any time that the board of directors or Compensation Committee chooses to make them. However, if you participate in this offer, you will not be eligible to receive any option grants until February 4, 2002 at the earliest because of potentially adverse accounting consequences to us if options were granted earlier. IF YOUR EMPLOYMENT TERMINATES PRIOR TO THE GRANT OF THE NEW OPTION, YOU WILL RECEIVE NEITHER A NEW OPTION NOR THE RETURN OF YOUR SURRENDERED OPTION. Once your option is surrendered and accepted by us, it is gone for good. Accordingly, if your employment terminates for any reason prior to the grant of the new option, you will have the benefit of neither the surrendered option nor the new option. TAX-RELATED RISKS OF RECEIVING AND PARTICIPATING IN THIS OFFER YOUR NEW OPTION MAY BE A NONQUALIFIED STOCK OPTION, WHEREAS YOUR SURRENDERED OPTION MAY HAVE BEEN AN INCENTIVE STOCK OPTION. If your surrendered option was an incentive stock option, your new option will be an incentive stock option, but only to the extent it qualifies as such under the Internal Revenue Code. For options to qualify as incentive stock options, the value of shares subject to the options your investment and any other incentive stock options issued by us that first become exercisable by the optionholder in any calendar year cannot exceed $100,000, as determined using the value of the shares on the grant date. It is possible that by participating in this exchange, your options will exceed this limit and will be treated as nonqualified stock options to the extent of that excess. In general, nonqualified stock options may be less favorable to you from a tax perspective. EVEN IF YOU ELECT NOT TO PARTICIPATE IN THIS OFFER, YOUR INCENTIVE STOCK OPTIONS MAY BE AFFECTED. We believe that you will might not be subject able to current U.S. federal income tax yield a significant return, if you do not elect to participate in this offer. We also believe that this offer will not change the U.S. federal income tax treatment of subsequent exercises of your incentive stock options (and sales of shares acquired upon exercise any, on any investment of such options) if you do net proceeds. You may not participate in this offer. However, there is a risk that have the IRS may characterize this offer as a "modification" of your eligible incentive stock options, even if you decline opportunity to participate. In 1991, the IRS issued a private letter ruling in which another company's option exchange program was characterized as a "modification" of any incentive stock option that could be exchanged (whether or not it was exchanged). This does not necessarily mean that influence our offer will be viewed the same way, and, in fact, we believe that we have structured this offer so as decisions on how to mitigate this risk. Private letter rulings issued by the IRS contain the IRS's opinion regarding only the specific facts presented by a specific person or company. We therefore do not know if the IRS will assert the position that our offer constitutes a "modification" of incentive stock options that can be surrendered. A successful assertion by the IRS of this position could extend the options' requisite holding periods to qualify for favorable tax treatment and could also convert some incentive stock options into nonqualified stock optionsuse such proceeds.

RISK FACTORS. Participation An investment in this offer our company involves a number of potential risks. Before you make a decision to invest in our common stock, you should consider carefully the risks described below, as well as the risks described in or incorporated by reference in this prospectus supplement and the accompanying prospectus, including those described belowthe risks and uncertainties discussed under the section titled "Risk Factors" in our most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, and all other documents incorporated by reference into this prospectus supplement and accompanying prospectus, as updated by our subsequent filings under the Exchange Act. In addition, our business is subject to significant regulation and is greatly dependent on our ability to protect our proprietary discoveries and technologies. The risks described below and the risk factors under the heading entitled captions "Certain Factors That May Affect Future ResultsRegulatory Risks Relating to Our Business" and "Intellectual Property Risks Related to Our Business" supplement and provide certain updates to certain of the regulatory and intellectual property related risks set forth under the captions "Regulatory Risks Relating to Our Business" and "Intellectual Property Risks Related to Our Business," respectively, in our Quarterly Annual Report on Form 10-Q K for the fiscal quarter year ended January December 31, 2001, filed on March 16, 2001, 2014. The risk factor updates set forth below should be read in conjunction with the risk factors set forth in our most recent Form 10-K under the caption "Item 1A. Risk Factors," as amended on March 19, 2001, highlight the material risks of participating in this offer. Eligible participants should carefully consider these risks and are encouraged to speak with an investment and tax advisor as necessary before deciding whether to surrender or not surrender options in this offer. In addition, we strongly urge you to read the rest of these materials for a xxxxxx discussion of the risks which may apply to you before deciding whether to surrender or not surrender your options in this offer. ECONOMIC RISKS OF PARTICIPATING IN THIS OFFER IF OUR STOCK PRICE INCREASES AFTER THE DATE YOU SURRENDER YOUR EXISTING OPTIONS, YOUR SURRENDERED OPTIONS MIGHT HAVE BEEN WORTH MORE THAN THE NEW OPTIONS THAT YOU RECEIVE IN EXCHANGE FOR THEM. From be updated from time to time we engage in business acquisitions by subsequent filings under the Securities Exchange Act of 1934, as amended. Any of these risks could have a material adverse effect on our business, prospects, financial condition and other strategic transactionsresults of operations. We may engage in In any such transactions in case, the future which could significantly change our structure, ownership, organization or management or the make-up of our board of directors, and which could significantly affect the trading price of our shares. If we engage in such a transaction securities could decline and you could lose all or transactions before the date we grant the new options, our shares could increase (or decrease) in value, and the exercise price of the new options could be higher (or lower) than the exercise price of options you elect to have cancelled as part of this offeryour investment. As is outlined in Section 8, the exercise price of any new options granted to you in return for your surrendered options will be the fair market value of a share of Class A common stock on the date of grant, as determined by the closing price reported by the Nasdaq National Market on the date of grant. You will be at risk of any such increase in our Class A common stock price before the grant date of the new options for these or any other reasons. PARTICIPATION IN THIS OFFER WILL MAKE YOU INELIGIBLE TO RECEIVE ANY OPTION GRANTS UNTIL FEBRUARY 4, 2002 AT THE EARLIEST. Employees are generally eligible to receive option grants at any time that the board of directors or Compensation Committee chooses to make them. However, if you participate in this offer, you will Additional risks not be eligible to receive any option grants until February 4, 2002 at the earliest because of potentially adverse accounting consequences presently known to us if options were granted earlier. IF YOUR EMPLOYMENT TERMINATES PRIOR TO THE GRANT OF THE NEW OPTION, YOU WILL RECEIVE NEITHER A NEW OPTION NOR THE RETURN OF YOUR SURRENDERED OPTION. Once your option is surrendered and accepted by us, it is gone for good. Accordingly, if your employment terminates for any reason prior to the grant of the new option, you will have the benefit of neither the surrendered option nor the new option. TAX-RELATED RISKS OF RECEIVING AND PARTICIPATING IN THIS OFFER YOUR NEW OPTION MAY BE A NONQUALIFIED STOCK OPTION, WHEREAS YOUR SURRENDERED OPTION MAY HAVE BEEN AN INCENTIVE STOCK OPTION. If your surrendered option was an incentive stock option, your new option will be an incentive stock option, but only to the extent it qualifies as such under the Internal Revenue Code. For options to qualify as incentive stock options, the value of shares subject to the options and any other incentive stock options issued by us that first become exercisable by the optionholder in any calendar year cannot exceed $100,000, as determined using the value of the shares on the grant date. It is possible that by participating in this exchange, your options will exceed this limit and will be treated as nonqualified stock options to the extent of that excess. In general, nonqualified stock options may be less favorable to you from a tax perspective. EVEN IF YOU ELECT NOT TO PARTICIPATE IN THIS OFFER, YOUR INCENTIVE STOCK OPTIONS MAY BE AFFECTED. We believe that you will not be subject to current U.S. federal income tax if you do not elect to participate in this offer. We also believe that this offer will not change the U.S. federal income tax treatment of subsequent exercises of your incentive stock options (and sales of shares acquired upon exercise of such options) if you do not participate in this offer. However, there is a risk that the IRS may characterize this offer as a "modification" of your eligible incentive stock options, even if you decline to participate. In 1991, the IRS issued a private letter ruling in which another company's option exchange program was characterized as a "modification" of any incentive stock option that could be exchanged (whether or not it was exchanged). This does not necessarily mean that our offer will be viewed the same way, and, in fact, we believe that we have structured this offer so as to mitigate this riskcurrently deem immaterial may also adversely affect our business operations. Private letter rulings issued by the IRS contain the IRS's opinion regarding only the specific facts presented by a specific person or companyThe risks discussed below also include forward-looking statements and our actual results may differ substantially from those discussed in these forward-looking statements. We therefore do not know if the IRS will assert the position that our offer constitutes a See "modification" of incentive stock options that can be surrendered. A successful assertion by the IRS of this position could extend the options' requisite holding periods to qualify for favorable tax treatment and could also convert some incentive stock options into nonqualified stock optionsSpecial Note Regarding Forward-Looking Statements."

RISK FACTORS. Participation Before deciding whether or not to tender any of your units, you should consider carefully the following risks and disadvantages of the offer: IF YOU TENDER ALL OF YOUR UNITS, YOU MAY NOT BE ABLE TO PARTICIPATE IN ANY FINAL LITIGATION RELIEF OR SETTLEMENT. Certain legal actions have been filed alleging, among other things, breaches of fiduciary duty by your partnership's general partner and certain of its affiliates. Although we cannot predict the precise outcome of these actions or the precise nature of any final relief or settlement with respect to these actions, a limited partner who tenders his units in this the offer involves may not participate in or benefit from such relief or any settlement. There can be no assurance that a number limited partner would not realize greater value for his units by not tendering his units in our offer, and participating in any such relief or settlement WE DID NOT OBTAIN A THIRD-PARTY VALUATION OR APPRAISAL AND DID NOT DETERMINE OUR OFFER PRICE THROUGH ARMS-LENGTH NEGOTIATION. We did not base our valuation of potential risks, including those described belowthe property owned by your partnership on any third-party appraisal or valuation. We established the terms of our offer without any arms-length negotiation. The risks described below and the risk factors under the heading entitled "Certain Factors That May Affect Future Results" in our Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 2001, filed on March 16, 2001, as amended on March 19, 2001, highlight the material risks of participating in this offer. Eligible participants should carefully consider these risks and are encouraged to speak with an investment and tax advisor as necessary before deciding whether to surrender or not surrender options in this offer. In addition, we strongly urge you to read the rest of these materials for a xxxxxx discussion terms of the risks which may apply offer could differ if they were subject to you before deciding independent third-party negotiations. It is uncertain whether our offer price reflects the value that would be realized upon a sale of your units to surrender a third party. OUR OFFER PRICE MAY NOT REPRESENT FAIR MARKET VALUE. There is no established or not surrender your options in this offer. ECONOMIC RISKS OF PARTICIPATING IN THIS OFFER IF OUR STOCK PRICE INCREASES AFTER THE DATE YOU SURRENDER YOUR EXISTING OPTIONS, YOUR SURRENDERED OPTIONS MIGHT HAVE BEEN WORTH MORE THAN THE NEW OPTIONS THAT YOU RECEIVE IN EXCHANGE FOR THEM. From time to time we engage in business acquisitions and other strategic transactions. We may engage in such transactions in the future which could significantly change our structure, ownership, organization or management or the make-up of our board of directors, and which could significantly affect the price of our shares. If we engage in such a transaction or transactions before the date we grant the new options, our shares could increase (or decrease) in value, and the exercise price of the new options could be higher (or lower) than the exercise price of options you elect to have cancelled as part of this offer. As is outlined in Section 8, the exercise price of any new options granted to you in return regular trading market for your surrendered options will be units, nor is there another reliable standard for determining the fair market value of a share the units. Our offer price does not necessarily reflect the price that you would receive in an open market for your units. Such prices could be higher than our offer price. OUR OFFER PRICE DOES NOT REFLECT FUTURE PROSPECTS. Our offer price is based on your partnership's pro forma property income for the quarter ended March 31, 2002. It does not ascribe any value to potential future improvements in the operating performance of Class A common stock on the date of grant, as determined by the closing price reported by the Nasdaq National Market on the date of grantyour partnership's residential property. You will OUR OFFER PRICE MAY NOT REPRESENT LIQUIDATION VALUE. The actual proceeds obtained from liquidation are highly uncertain and could be at risk of any such increase in more than our Class A common stock price before the grant date of the new options for these or any other reasons. PARTICIPATION IN THIS OFFER WILL MAKE YOU INELIGIBLE TO RECEIVE ANY OPTION GRANTS UNTIL FEBRUARY 4, 2002 AT THE EARLIEST. Employees are generally eligible to receive option grants at any time that the board of directors or Compensation Committee chooses to make them. However, if you participate in this offer, you will not be eligible to receive any option grants until February 4, 2002 at the earliest because of potentially adverse accounting consequences to us if options were granted earlier. IF YOUR EMPLOYMENT TERMINATES PRIOR TO THE GRANT OF THE NEW OPTION, YOU WILL RECEIVE NEITHER A NEW OPTION NOR THE RETURN OF YOUR SURRENDERED OPTION. Once your option is surrendered and accepted by us, it is gone for goodestimate. Accordingly, if our offer price could be less than the net proceeds that you would realize upon an actual liquidation of your employment terminates for any reason prior partnership. CONTINUATION OF THE PARTNERSHIP; NO TIME FRAME REGARDING SALE OF PROPERTY. Your general partner, which is our subsidiary, is proposing to continue to operate your partnership and not to attempt to liquidate it at the grant present time. Your partnership's prospectus, dated May 12, 1981, pursuant to which units in your partnership were sold, indicated that your partnership was intended to be self-liquidated and that it was anticipated that the partnership's properties would be sold within five to eight years of their acquisition, provided market conditions permit. The prospectus also indicated that there could be no assurance that the partnership would be able to so liquidate and that, unless sooner terminated as provided in the partnership agreement, the existence of the new optionpartnership would continue until the year 2035. It is not known when the property owned by your partnership may be sold. The market for units in the partnership is illiquid, you will have and it may be difficult to sell your investment in the benefit partnership in the future. The general partner of neither your partnership continually considers whether a property should be sold or otherwise disposed of after consideration of relevant factors, including prevailing economic conditions, availability of favorable financing and tax considerations, with a view to achieving maximum capital appreciation for your partnership. At the surrendered option nor current time, the new optiongeneral partner of your partnership believes that a sale of the property would not be advantageous given market conditions, the condition of the property and tax considerations. TAX-RELATED RISKS OF RECEIVING AND PARTICIPATING IN THIS OFFER YOUR NEW OPTION MAY BE A NONQUALIFIED STOCK OPTIONIn particular, WHEREAS YOUR SURRENDERED OPTION MAY HAVE BEEN AN INCENTIVE STOCK OPTION. If your surrendered option was an incentive stock optionthe general partner considered the changes in the local rental market, your new option will be an incentive stock option, but only to the extent it qualifies as such under the Internal Revenue Code. For options to qualify as incentive stock options, potential for appreciation in the value of shares subject a property and the tax consequences to you on a sale of property. We cannot predict when your partnership's property will be sold or otherwise disposed of. HOLDING YOUR UNITS MAY RESULT IN GREATER FUTURE VALUE. Although a liquidation of your partnership is not currently contemplated in the options near future, you might receive more value if you retain your units until your partnership is liquidated. YOUR GENERAL PARTNER FACES CONFLICTS OF INTEREST WITH RESPECT TO THE OFFER. The general partner of your partnership is our subsidiary, and therefore has substantial conflicts of interest with respect to our offer. We are making this offer with a view to making a profit. There is a conflict between our desire to purchase your units at a low price and your desire to sell your units at a high price. We determined our offer price without negotiation with any other incentive stock options issued by us party, including any general or limited partner. YOUR GENERAL PARTNER IS NOT MAKING A RECOMMENDATION WITH RESPECT TO THIS OFFER. The general partner of your partnership makes no recommendation as to whether or not you should tender or refrain from tendering your units. You must make your own decision whether or not to participate in the offer based upon a number of factors, including several factors that first become exercisable by may be personal to you, such as your financial position, your need or desire for liquidity, your preferences regarding the optionholder in any calendar year cannot exceed $100,000timing of when you might wish to sell your units, as determined using other financial opportunities available to you, and your tax position and the value tax consequences to you of selling your units. YOUR GENERAL PARTNER FACES CONFLICTS OF INTEREST RELATING TO MANAGEMENT FEES. Because we or our subsidiaries receive fees for managing your partnership and its residential property, a conflict of interest exists between continuing the partnership and receiving such fees, and the liquidation of the shares on partnership and the grant datetermination of such fees. Also, a decision of the limited partners of your partnership to remove, for any reason, the general partner of your partnership or the residential property manager of the property owned by your partnership would result in a decrease or elimination of the substantial fees to which they are entitled for services provided to your partnership. WE MAY MAKE A FUTURE OFFER AT A HIGHER PRICE. It is possible that we may conduct a future offer at a higher price. Such a decision will depend on, among other things, the performance of the partnership, prevailing economic conditions, and our interest in acquiring additional units. YOU WILL RECOGNIZE TAXABLE GAIN ON A SALE OF YOUR UNITS. Your sale of units for cash will be a taxable sale, with the result that you will recognize taxable gain or loss measured by participating the difference between the amount realized on the sale and your adjusted tax basis in this exchangethe units of limited partnership interest of your partnership you transfer to us. The "amount realized" with respect to a unit of limited partnership interest you transfer to us will be equal to the sum of the amount of cash received by you for the unit sold pursuant to the offer plus the amount of partnership liabilities allocable to the unit. The particular tax consequences for you of our offer will depend upon a number of factors related to your tax situation, including your tax basis in the units you transfer to us, whether you dispose of all of your units, and whether you have available suspended passive losses, credits or other tax items to offset any gain recognized as a result of your sale of your units. Therefore, depending on your basis in the units and your tax position, your options taxable gain and any tax liability resulting from a sale of units to us pursuant to the offer could exceed our offer price. Because the income tax consequences of tendering units will exceed this limit not be the same for everyone, you should consult your own tax advisor to determine the tax consequences of the offer to you. IF YOU TENDER UNITS TO US IN THIS OFFER, YOU WILL NO LONGER BE ENTITLED TO DISTRIBUTIONS FROM YOUR PARTNERSHIP. If you tender your units in response to our offer, you will transfer to us all right, title and interest in and to all of the units we accept, and the right to receive all distributions in respect of such units on and after the date on which we accept such units for purchase. Accordingly, for any units that we acquire from you, you will not receive any future distributions from operating cash flow of your partnership or upon a sale or refinancing of the property owned by your partnership. WE CONTROL YOUR PARTNERSHIP. Decisions with respect to the day-to-day management of your partnership are the responsibility of the general partner. Because the general partner of your partnership is our subsidiary, we control the management of your partnership. Under your partnership's agreement of limited partnership, limited partners holding a majority of the outstanding units must approve certain extraordinary transactions, including the removal of the general partner, most amendments to the partnership agreement and the sale of all or substantially all of your partnership's assets. We and our affiliates own 9,924 units, or 52.75%, of the outstanding units of your partnership. Because we and our affiliates own a majority of the outstanding units, we have the ability to control most votes of the limited partners. YOU COULD RECOGNIZE GAIN IN THE EVENT OF A REDUCTION IN YOUR PARTNERSHIP'S LIABILITIES. Generally, a decrease in your share of partnership liabilities is treated, for federal income tax purposes, as a deemed cash distribution. Although the general partner of your partnership does not have any current plan or intention to reduce the liabilities of your partnership, it is possible that future economic, market, legal, tax or other considerations may cause the general partner to reduce the liabilities of your partnership. If you retain all or a portion of your units and the liabilities of your partnership were to be reduced, you would be treated as nonqualified stock options receiving a hypothetical distribution of cash resulting from a decrease in your share of the liabilities of the partnership. Any such hypothetical distribution of cash would be treated as a nontaxable return of capital to the extent of that excessyour adjusted tax basis in your units and thereafter as gain. In general, nonqualified stock options Gain recognized by you on the disposition of retained units with a holding period of 12 months or less may be less favorable classified as short-term capital gain and subject to taxation at ordinary income tax rates. YOU MAY BE UNABLE TO TRANSFER YOUR UNITS FOR A 12-MONTH PERIOD. Your partnership's agreement of limited partnership prohibits any transfer of an interest if such transfer, together with all other transfers during the preceding 12 months, would cause 50% or more of the total interest in capital and profits of your partnership to be transferred within such 12-month period. If we acquire a significant percentage of the interest in your partnership, you from may not be able to transfer your units for a tax perspective12-month period following our offer. EVEN IF YOU ELECT NOT TO PARTICIPATE IN THIS OFFERWE MAY DELAY OUR ACCEPTANCE OF, AND PAYMENT FOR, YOUR INCENTIVE STOCK OPTIONS MAY BE AFFECTEDUNITS. We believe that you will not be subject reserve the right to current U.S. federal income tax if you do not elect to participate in this offer. We also believe that this extend the period of time during which our offer will not change the U.S. federal income tax treatment of subsequent exercises of your incentive stock options (is open and sales of shares acquired upon exercise of such options) if you do not participate in this offer. However, there is a risk that the IRS may characterize this offer as a "modification" of your eligible incentive stock options, even if you decline to participate. In 1991, the IRS issued a private letter ruling in which another company's option exchange program was characterized as a "modification" thereby delay acceptance for payment of any incentive stock option that could tendered units. The offer may be exchanged (whether or not it was exchanged). This does not necessarily mean that our offer extended indefinitely, and no payment will be viewed made in respect of tendered units until the same wayexpiration of the offer and acceptance of units for payment. YOUR PARTNERSHIP HAS SIGNIFICANT BALLOON PAYMENTS ON ITS MORTGAGE DEBT. Your partnership has balloon payments of $3,248,000.00 and $4,958,000.00 due on its mortgage debt in October 2003 and December 2004, andrespectively. Your partnership will have to refinance such debt, sell assets or otherwise obtain additional funds prior to the balloon payment due date, or it will be in fact, we believe that we have structured this offer so as to mitigate this risk. Private letter rulings issued by the IRS contain the IRS's opinion regarding only the specific facts presented by a specific person or company. We therefore do not know if the IRS will assert the position that our offer constitutes a "modification" of incentive stock options that can be surrendered. A successful assertion by the IRS of this position could extend the options' requisite holding periods to qualify for favorable tax treatment default and could also convert some incentive stock options into nonqualified stock options.lose the property to foreclosure. THE OFFER

RISK FACTORS. Participation AN INVESTMENT IN THE SECURITIES OFFERED HEREBY IS SPECULATIVE IN NATURE, INVOLVES A HIGH DEGREE OF RISK AND SHOULD NOT BE MADE BY ANY INVESTOR WHO CANNOT AFFORD THE LOSS OF HIS ENTIRE INVESTMENT. EACH PROSPECTIVE PURCHASER SHOULD CAREFULLY CONSIDER THE FOLLOWING RISKS AND SPECULATIVE FACTORS ASSOCIATED WITH THIS OFFERING, AS WELL AS OTHERS DESCRIBED ELSEWHERE IN THE MEMORANDUM, BEFORE MAKING ANY INVESTMENTS. THIS MEMORANDUM CONTAINS CERTAIN STATEMENTS RELATING TO FUTURE EVENTS OR THE FUTURE FINANCIAL PERFORMANCE OF OUR COMPANY. PROSPECTIVE INVESTORS ARE CAUTIONED THAT SUCH STATEMENTS ARE ONLY PREDICTIONS, INOLVE RISKS AND UNCERTAINTIES, AND THAT ACTUAL EVENTS OR RESULTS MAY DIFFER MATERIALLY. IN EVALUATING SUCH STATEMENTS, PROSPECTIVE INVESTORS SHOULD SPECIFICALLY CONSIDER THE VARIOUS FACTORS IDENTIFIED IN THIS MEMORANDUM, INCLUDING THE MATTERS SET FORTH BELOW, WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED BY SUCH FORWARD-LOOKING STATEMENTS. The Company is not in this offer involves a compliance with its reporting requirements under Section 13(a) of the Securities Exchange Act of 1934. The Company has failed to hold an Annual Meeting of Shareholders since 2007. Our officers and directors have limited liability and we are required in certain instances to indemnify them for breaches of their fiduciary duties. A small number of potential risksexisting shareholders own a significant amount of our Common Stock, including those described belowwhich could limit your ability to influence the outcome of any shareholder vote. The risks described below and the risk factors under the heading entitled "Certain Factors That May Affect Future Results" in our Quarterly Report Company is currently critically dependent on Form 10-Q for the fiscal quarter ended January 31, 2001, filed on March 16, 2001, as amended on March 19, 2001, highlight the material risks of participating in this offer. Eligible participants should carefully consider these risks and are encouraged a single employee to speak with an investment and tax advisor as necessary before deciding whether to surrender or not surrender options in this offer. In addition, we strongly urge you to read the rest of these materials for a xxxxxx discussion of the risks which may apply to you before deciding whether to surrender or not surrender your options in this offer. ECONOMIC RISKS OF PARTICIPATING IN THIS OFFER IF OUR STOCK PRICE INCREASES AFTER THE DATE YOU SURRENDER YOUR EXISTING OPTIONS, YOUR SURRENDERED OPTIONS MIGHT HAVE BEEN WORTH MORE THAN THE NEW OPTIONS THAT YOU RECEIVE IN EXCHANGE FOR THEM. From time to time we engage in business acquisitions and other strategic transactions. We may engage in such transactions in the future which could significantly change our structure, ownership, organization or management or the make-up of our board of directors, and which could significantly affect the price of our shares. If we engage in such a transaction or transactions before the date we grant the new options, our shares could increase (or decrease) in value, and the exercise price of the new options could be higher (or lower) than the exercise price of options you elect to have cancelled as part of this offer. As is outlined in Section 8, the exercise price of any new options granted to you in return for your surrendered options will be the fair market value of a share of Class A common stock on the date of grant, as determined by the closing price reported by the Nasdaq National Market on the date of grant. You will be at risk of any such increase in our Class A common stock price before the grant date of the new options for these or any other reasons. PARTICIPATION IN THIS OFFER WILL MAKE YOU INELIGIBLE TO RECEIVE ANY OPTION GRANTS UNTIL FEBRUARY 4, 2002 AT THE EARLIEST. Employees are generally eligible to receive option grants at any time that the board of directors or Compensation Committee chooses to make them. However, if you participate in this offer, you will not be eligible to receive any option grants until February 4, 2002 at the earliest because of potentially adverse accounting consequences to us if options were granted earlier. IF YOUR EMPLOYMENT TERMINATES PRIOR TO THE GRANT OF THE NEW OPTION, YOU WILL RECEIVE NEITHER A NEW OPTION NOR THE RETURN OF YOUR SURRENDERED OPTION. Once your option is surrendered and accepted by us, whom it is gone for good. Accordingly, if your employment terminates for any reason prior to the grant of the new option, you will have the benefit of neither the surrendered option nor the new option. TAX-RELATED RISKS OF RECEIVING AND PARTICIPATING IN THIS OFFER YOUR NEW OPTION MAY BE A NONQUALIFIED STOCK OPTION, WHEREAS YOUR SURRENDERED OPTION MAY HAVE BEEN AN INCENTIVE STOCK OPTION. If your surrendered option was an incentive stock option, your new option will be an incentive stock option, but only to the extent it qualifies as such under the Internal Revenue Code. For options to qualify as incentive stock options, the value of shares subject to the options and any other incentive stock options issued by us that first become exercisable by the optionholder in any calendar year cannot exceed $100,000, as determined using the value of the shares on the grant date. It is possible that by participating in this exchange, your options will exceed this limit and will be treated as nonqualified stock options to the extent of that excess. In general, nonqualified stock options may be less favorable to you from a tax perspective. EVEN IF YOU ELECT NOT TO PARTICIPATE IN THIS OFFER, YOUR INCENTIVE STOCK OPTIONS MAY BE AFFECTED. We believe that you will not be subject to current U.S. federal income tax if you do not elect to participate in this offer. We also believe that this offer will not change the U.S. federal income tax treatment of subsequent exercises of your incentive stock options (and sales of shares acquired upon exercise of such options) if you do not participate in this offer. However, there is a risk that the IRS may characterize this offer as a "modification" of your eligible incentive stock options, even if you decline to participate. In 1991, the IRS issued a private letter ruling in which another company's option exchange program was characterized as a "modification" of any incentive stock option that could be exchanged (whether or not it was exchanged). This does not necessarily mean that our offer will be viewed the same way, and, in fact, we believe that we have structured this offer so as to mitigate this risk. Private letter rulings issued by the IRS contain the IRS's opinion regarding only the specific facts presented by a specific person or company. We therefore do not know if the IRS will assert the position that our offer constitutes a "modification" of incentive stock options that can be surrendered. A successful assertion by the IRS of this position could extend the options' requisite holding periods to qualify for favorable tax treatment and could also convert some incentive stock options into nonqualified stock optionsowes significant sums.

RISK FACTORS. Participation An investment in our securities involves a high degree of risk. Before deciding whether to invest in our securities, you should consider carefully the risks described below, together with other information in this offer involves prospectus supplement, the accompanying prospectus, the information and documents incorporated by reference. You should also consider the risks, uncertainties and assumptions discussed under the heading “Risk Factors” included in our most recent annual report on Form 10-K and the subsequent quarterly reports on Form 10-Q and other reports that we file with the Securities and Exchange Commission which are on file with the Securities and Exchange Commission and are incorporated herein by reference, and which may be amended, supplemented or superseded from time to time by other reports we file with the Securities and Exchange Commission in the future. If any of these risks actually occurs, our business, financial condition, results of operations or cash flow could be seriously harmed. This could cause the trading price of our common stock to decline, resulting in a loss of all or part of your investment. The risks and uncertainties described below are not the only ones facing us. Additional risks and uncertainties not presently known to us, or that we currently see as immaterial, may also harm our business. Please also read carefully the section below entitled “Special Note Regarding Forward-Looking Statements.” The market price for our common stock is volatile and may fluctuate significantly in response to a number of factors, many of which we cannot control, such as quarterly fluctuations in financial results, the timing and our ability to advance the development of our product candidates or changes in securities analysts’ recommendations could cause the price of our stock to fluctuate substantially. Each of these factors, among others, could harm your investment in our common stock and could result in your being unable to resell the shares of our common stock that you purchase at a price equal to or above the price you paid. In addition, the stock markets in general, and the markets for biotechnology stocks in particular, have experienced extreme volatility that has at times been unrelated to the operating performance of the issuer. Between May 13, 2021 and May 13, 2022, the closing sales price of our common stock reported on the Nasdaq Capital Market has ranged between $4.35 and $0.77 per share. These broad market fluctuations may adversely affect the trading price or liquidity of our common stock. In the past, when the market price of a stock has been volatile, holders of that stock have sometimes instituted securities class action litigation against the issuer. If any of our stockholders were to bring such a lawsuit against us, we could incur substantial costs defending the lawsuit and the attention of our management would be diverted from the operation of our business. We may issue shares of our common stock from time to time in connection with this offering. The issuance from time to time of these new shares of common stock, or our ability to issue new shares of common stock in this offering, could result in resales of our common stock by our current stockholders concerned about the potential risksdilution of their holdings. In turn, these resales could have the effect of depressing the market price for our common stock. The common stock offered under this prospectus supplement and the accompanying prospectus may be sold in“at-the-market” offerings, and investors who buy shares at different times will likely pay different prices. Investors who purchase shares under this prospectus supplement and the accompanying prospectus at different times will likely pay different prices, and so may experience different outcomes in their investment results. We will have discretion, subject to market demand, to vary the timing, prices, and numbers of shares sold, and there is no minimum or maximum sales price. Investors may experience declines in the value of their shares as a result of share sales made at prices lower than the prices they paid. Subject to certain limitations in the sales agreement and compliance with applicable law, we have the discretion to deliver a sales notice to Virtu at any time throughout the term of the sales agreement. The number of shares that are sold by Virtu after delivering a sales notice will fluctuate based on the market price of shares of our common stock during the sales period and limits we set with Virtu. Because the price per share of each share sold will fluctuate based on the market price of our common stock during the sales period, it is not possible at this stage to predict the number of shares that will ultimately be issued. The price per share of our common stock being offered may be higher than the current book value per share of our common stock. Therefore, if you purchase shares of our common stock in this offering, your interest will be diluted to the extent of the difference between the price per share you pay and the net tangible book value per common share. Assuming that the sale of an aggregate amount of $10,000,000 of our common stock in this offering at an assumed offering price of $1.22 per share, which was the last reported sale price of our common stock on The Nasdaq Capital Market on May 13, 2022, and based on our net tangible book value as of March 31, 2022, if you purchase common stock in this offering you will suffer substantial and immediate dilution of $0.84 per share in the net tangible book value of the common stock. The future exercise of outstanding options and warrants will result in further dilution of your investment. See the section entitled “Dilution” below for a more detailed discussion of the dilution you will incur if you purchase shares of our common stock in this offering. In order to raise additional capital, we may in the future offer additional shares of our common stock or other securities convertible into or exchangeable for our common stock, including those described belowofferings pursuant to the accompanying prospectus. We cannot assure you that we will be able to sell shares or other securities in any other offering at a price per share that is equal to or greater than the price per share paid by investors in this offering, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders. The risks price per share at which we sell additional shares of our common stock or other securities convertible into or exchangeable for our common stock in future transactions may be higher or lower than the price per share in this offering. Our management will have broad discretion in the use of the net proceeds, including for any of the purposes described below in the section entitled “Use of Proceeds,” and you will not have the risk opportunity as part of your investment decision to assess whether the net proceeds are being used appropriately. Because of the number and variability of factors under that will determine our use of the heading entitled "Certain Factors That May Affect Future Results" net proceeds from this offering, their ultimate use may vary substantially from their currently intended use. The failure of our management to use these funds effectively could have a material adverse effect on our business and cause the market price of our common stock to decline. Pending their ultimate use, we intend to invest the net proceeds in short-term, investment-grade, interest-bearing instruments. These investments may not yield a favorable return to our stockholders. In order to raise additional funds to support our operations, we may sell additional equity or debt securities, which may impose restrictive covenants that adversely impact our business. The incurrence of indebtedness would result in increased fixed payment obligations and could also result in restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. If we are unable to expand our operations or otherwise capitalize on our business opportunities due to such restrictions, our business, financial condition and results of operations could be materially adversely affected. In its report dated March 31, 2022, Xxxxxxxx LLP, our independent registered public accounting firm, expressed substantial doubt about our ability to continue as a going concern as we have suffered recurring losses from operations and have insufficient liquidity to fund our future operations. If we are unable to improve our liquidity position, we may not be able to continue as a going concern. The consolidated financial statements included in our Quarterly Annual Report on Form 10-Q for K did not include any adjustments that might result if we are unable to continue as a going concern and, therefore, be required to realize our assets and discharge our liabilities other than in the fiscal quarter ended January normal course of business which could cause investors to suffer the loss of all or a substantial portion of their investment. As of December 31, 20012021, filed on March 16, 2001, as amended on March 19, 2001, highlight the material risks we had $11.7 million of participating in this offer. Eligible participants should carefully consider these risks cash and are encouraged to speak with an investment and tax advisor as necessary before deciding whether to surrender or not surrender options in this offercash equivalents. In additionorder to have sufficient cash and cash equivalents to fund our operations in the future, we strongly urge you will need to read the rest of these materials for a xxxxxx discussion of the risks which may apply to you before deciding whether to surrender raise additional equity or debt capital and cannot surrender your options in this offer. ECONOMIC RISKS OF PARTICIPATING IN THIS OFFER IF OUR STOCK PRICE INCREASES AFTER THE DATE YOU SURRENDER YOUR EXISTING OPTIONS, YOUR SURRENDERED OPTIONS MIGHT HAVE BEEN WORTH MORE THAN THE NEW OPTIONS THAT YOU RECEIVE IN EXCHANGE FOR THEM. From time to time provide any assurance that we engage in business acquisitions and other strategic transactions. We may engage in such transactions in the future which could significantly change our structure, ownership, organization or management or the make-up of our board of directors, and which could significantly affect the price of our shares. If we engage in such a transaction or transactions before the date we grant the new options, our shares could increase (or decrease) in value, and the exercise price of the new options could be higher (or lower) than the exercise price of options you elect to have cancelled as part of this offer. As is outlined in Section 8, the exercise price of any new options granted to you in return for your surrendered options will be the fair market value of a share of Class A common stock on the date of grant, as determined by the closing price reported by the Nasdaq National Market on the date of grant. You will be at risk of any such increase successful in our Class A common stock price before the grant date of the new options for these or any other reasons. PARTICIPATION IN THIS OFFER WILL MAKE YOU INELIGIBLE TO RECEIVE ANY OPTION GRANTS UNTIL FEBRUARY 4, 2002 AT THE EARLIEST. Employees are generally eligible to receive option grants at any time that the board of directors or Compensation Committee chooses to make them. However, if you participate in this offer, you will not be eligible to receive any option grants until February 4, 2002 at the earliest because of potentially adverse accounting consequences to us if options were granted earlier. IF YOUR EMPLOYMENT TERMINATES PRIOR TO THE GRANT OF THE NEW OPTION, YOU WILL RECEIVE NEITHER A NEW OPTION NOR THE RETURN OF YOUR SURRENDERED OPTION. Once your option is surrendered and accepted by us, it is gone for good. Accordingly, if your employment terminates for any reason prior to the grant of the new option, you will have the benefit of neither the surrendered option nor the new option. TAX-RELATED RISKS OF RECEIVING AND PARTICIPATING IN THIS OFFER YOUR NEW OPTION MAY BE A NONQUALIFIED STOCK OPTION, WHEREAS YOUR SURRENDERED OPTION MAY HAVE BEEN AN INCENTIVE STOCK OPTION. If your surrendered option was an incentive stock option, your new option will be an incentive stock option, but only to the extent it qualifies as such under the Internal Revenue Code. For options to qualify as incentive stock options, the value of shares subject to the options and any other incentive stock options issued by us that first become exercisable by the optionholder in any calendar year cannot exceed $100,000, as determined using the value of the shares on the grant date. It is possible that by participating in this exchange, your options will exceed this limit and will be treated as nonqualified stock options to the extent of that excess. In general, nonqualified stock options may be less favorable to you from a tax perspective. EVEN IF YOU ELECT NOT TO PARTICIPATE IN THIS OFFER, YOUR INCENTIVE STOCK OPTIONS MAY BE AFFECTED. We believe that you will not be subject to current U.S. federal income tax if you do not elect to participate in this offer. We also believe that this offer will not change the U.S. federal income tax treatment of subsequent exercises of your incentive stock options (and sales of shares acquired upon exercise of such options) if you do not participate in this offer. However, there is a risk that the IRS may characterize this offer as a "modification" of your eligible incentive stock options, even if you decline to participate. In 1991, the IRS issued a private letter ruling in which another company's option exchange program was characterized as a "modification" of any incentive stock option that could be exchanged (whether or not it was exchanged). This does not necessarily mean that our offer will be viewed the same way, and, in fact, we believe that we have structured this offer so as to mitigate this risk. Private letter rulings issued by the IRS contain the IRS's opinion regarding only the specific facts presented by a specific person or company. We therefore do not know if the IRS will assert the position that our offer constitutes a "modification" of incentive stock options that can be surrendered. A successful assertion by the IRS of this position could extend the options' requisite holding periods to qualify for favorable tax treatment and could also convert some incentive stock options into nonqualified stock optionsdoing so.

RISK FACTORS. Participation Investing in our securities involves a high degree of risk. Before making a decision to invest in our securities, in addition to carefully considering the other information contained in this offer involves a number of potential risksprospectus supplement, including those described below. The the accompanying base prospectus and the documents incorporated by reference herein and therein, you should carefully consider the risks described below under the caption “Risk Factors” contained in the accompanying base prospectus, and the risk factors risks discussed under the heading entitled "Certain Factors That May Affect Future Results" caption “Risk Factors” contained in our Quarterly Report most recent annual report on Form10-K, as amended, and in our subsequently filed quarterly reports on Form 10-Q for the fiscal quarter ended January 31, 2001, filed on March 16, 2001Q, as amended on March 19well as any amendments thereto, 2001which are incorporated by reference into this prospectus supplement and the accompanying base prospectus in their entirety, highlight the material risks of participating together with other information in this offerprospectus supplement, the accompanying base prospectus and the documents incorporated by reference herein and therein. Eligible participants should carefully consider these risks See “Where You Can Find More Information” and are encouraged to speak with an investment “Incorporation of Certain Information by Reference.” The common stock offered hereby will be sold in“at the market” offerings, and tax advisor as necessary before deciding whether to surrender or not surrender options investors who buy shares at different times will likely pay different prices. Investors who purchase shares in this offeroffering at different times will likely pay different prices. As a result, investors may experience different outcomes in their investment results. We will have discretion, subject to market demand, to vary the timing, prices and numbers of shares sold, and there is no minimum or maximum sales price. Investors may experience a decline in the value of their shares as a result of share sales made at prices lower than the prices they paid. Subject to certain limitations in the sales agreement and compliance with applicable law, we have the discretion to deliver a sales notice to Xxxxxxxxxx as our sales agent at any time throughout the term of the sales agreement. The number of shares that are sold by Xxxxxxxxxx after delivering a sales notice will fluctuate based on the market price of our common stock during the sales period and limits we set with Xxxxxxxxxx. Because the price per share of each share sold will fluctuate based on the market price of our common stock during the sales period, it is not possible at this stage to predict the number of shares that will be ultimately issued. Our management will have broad discretion over the use of proceeds from the sale of shares of our common stock in this offering, including for any of the purposes described in the section of this prospectus supplement entitled “Use of Proceeds,” and could spend the proceeds in ways that do not improve our results of operations or enhance the value of our common stock. You may not agree with our decisions, and our use of the proceeds may not yield any return on your investment. Our failure to apply the net proceeds from the sale of our shares in this offering could effectively have a material adverse effect on our business, delay the development of our products, compromise our ability to pursue our business strategy, and cause the price of our common stock to decline, and we might not be able to yield a significant return, if any, on our investment of these net proceeds. In addition, the net proceeds from the sale of our shares in this offering may not be sufficient for our anticipated uses, and we may need additional resources to progress our product candidates to the stage we expect. Because the public offering price per share sold under this prospectus supplement will likely be substantially higher than the net tangible book value per share of our common stock, you will suffer substantial dilution in the net tangible book value of the common stock you purchase in this offering. Assuming that an aggregate of 3,937,007 shares of our common stock are sold at an assumed public offering price of $1.27 per share, for aggregate gross proceeds of $5.0 million, after deducting commissions and estimated aggregate offering expenses payable by us, you will experience immediate dilution of $0.10 per share as of June 30, 2023, after giving effect to this offering and the assumed offering price. See “Dilution” on page S-7 of this prospectus supplement for a more detailed discussion of the dilution you will incur if you purchase shares of our common stock in this offering. In order to raise additional capital, we may in the future offer additional shares of our common stock or other securities convertible into or exchangeable for our common stock. We cannot assure you that we will be able to sell shares or other securities in any other offering at a price per share that is equal to or greater than the price per share paid by you in this offering, and investors purchasing shares or other securities in future offerings could have rights superior to existing stockholders and warrant holders. A significant portion of our total outstanding shares are eligible to be sold into the market, which could cause the market price of our common stock to drop significantly, even if our business is doing well. Sales of a substantial number of shares of our common stock, or other equity-related securities in the public markets, or the perception that such sales could occur, could depress the market price of our common stock and impair our ability to raise capital through the sale of additional equity securities. Assuming that all shares of our common stock offered by this prospectus supplement are sold at an assumed offering price of $1.27 per share, based upon the shares outstanding as of July 25, 2023, we will have outstanding an aggregate of 17,743,957 shares of common stock after giving effect to this offering. A substantial majority of the outstanding shares of our common stock are, and all of the shares sold in this offering will be, freely tradable without restriction or further registration under the Securities Act, unless these shares are owned or purchased by “affiliates” as that term is defined in Rule 144 under the Securities Act. In addition, we strongly urge you have registered under the Securities Act the offer and sale of 880,661 shares of common stock that we may issue pursuant to read the rest exercise of certain outstanding warrants to purchase our common stock. The shares, when and if issued pursuant to the exercise of such warrants, will be freely tradable without restriction or further registration under the Securities Act, unless these materials for a xxxxxx discussion shares are owned or purchased by “affiliates” as that term is defined in Rule 144 under the Securities Act. We have certain other warrants to purchase 439,816 shares of our common stock, the offering of the risks shares underlying which has not been registered under the Securities Act. Further, we have registered under the Securities Act the offer and sale of all of the shares of our common stock that we may apply issue pursuant to you before deciding whether to surrender or not surrender your the exercise of outstanding stock options and settlement of outstanding restricted stock units granted under our 2014 Incentive Plan, and all of the shares of common stock that we may issue under our ESPP. As of July 25, 2023, 410,364 shares of our common stock were reserved for issuance of future awards under our 2014 Incentive Plan and 33,334 shares of common stock were reserved for issuance under our ESPP. Also, as of July 25, 2023, we had 261,106 shares of common stock issuable upon the exercise of stock options outstanding and 1,555,300 restricted stock units that will, after vesting, be settled in this offer. ECONOMIC RISKS OF PARTICIPATING IN THIS OFFER IF OUR STOCK PRICE INCREASES AFTER THE DATE YOU SURRENDER YOUR EXISTING OPTIONSshares of our common stock As a result, YOUR SURRENDERED OPTIONS MIGHT HAVE BEEN WORTH MORE THAN THE NEW OPTIONS THAT YOU RECEIVE IN EXCHANGE FOR THEM. From time to time we engage in business acquisitions and other strategic transactions. We may engage in such transactions these shares can be freely sold in the future public market upon issuance, subject to restrictions related to affiliate sales under the securities laws. Further, as of July 25, 2023, warrants to purchase 193,060 shares of our common stock, which were issued in May 2019, or May 2019 Warrants, remained outstanding. The May 2019 Warrants contain price-based anti-dilution adjustment provisions. Future anti-dilution adjustments to such warrants may result in substantial additional dilution to existing stockholders and may depress the market price of our common stock. The issuance of the shares of common stock underlying these warrants, or perception that issuance may occur, will have a dilutive impact on other stockholders and could significantly change have a material negative effect on the market price of our structurecommon stock. At the present time, ownershipwe intend to use available funds to finance our operations. Accordingly, organization or management or while payment of dividends rests within the make-up discretion of our board of directors, and which could significantly affect subject to any contractual restrictive covenants, we have no current intention of paying any such dividends in the foreseeable future. Any return to investors is expected to come, if at all, only from potential increases in the price of our sharescommon stock. If we engage in such a transaction or transactions before During the date we grant the new optionsperiod from our initial listing on Nasdaq on August 9, our shares could increase (or decrease) in value2016 through July 25, and the exercise price of the new options could be higher (or lower) than the exercise price of options you elect to have cancelled as part of this offer. As is outlined in Section 82023, the exercise price of any new options granted to you in return for your surrendered options will be the fair market value of a share of Class A common stock on the date of grant, as determined by the closing price reported of our common stock fluctuated from a high of $95.70 per share to a low of $1.03 per share, and our stock price continues to fluctuate. The market price of our common stock may continue to fluctuate significantly in response to numerous factors, some of which are beyond our control, such as: ● our ability to grow our revenue and customer base; ● the announcement of new products or product enhancements by the Nasdaq National Market on the date of grant. You will be at risk of any such increase us or our competitors; ● developments concerning regulatory oversight and approvals; ● variations in our Class A and our competitors’ results of operations; ● changes in earnings estimates or recommendations by securities analysts, if our common stock price before is covered by analysts; ● successes or challenges in our collaborative arrangements or alternative funding sources; ● developments in the grant date rehabilitation and industrial robotics markets; ● the results of product liability or intellectual property lawsuits; ● future issuances of common stock or other securities; ● the new options for these addition or any other reasons. PARTICIPATION IN THIS OFFER WILL MAKE YOU INELIGIBLE TO RECEIVE ANY OPTION GRANTS UNTIL FEBRUARY 4, 2002 AT THE EARLIEST. Employees are generally eligible to receive option grants at any time that the board departure of directors or Compensation Committee chooses to make them. However, if you participate in this offer, you will not be eligible to receive any option grants until February 4, 2002 at the earliest because of potentially adverse accounting consequences to us if options were granted earlier. IF YOUR EMPLOYMENT TERMINATES PRIOR TO THE GRANT OF THE NEW OPTION, YOU WILL RECEIVE NEITHER A NEW OPTION NOR THE RETURN OF YOUR SURRENDERED OPTION. Once your option is surrendered and accepted by us, it is gone for good. Accordingly, if your employment terminates for any reason prior to the grant of the new option, you will have the benefit of neither the surrendered option nor the new option. TAX-RELATED RISKS OF RECEIVING AND PARTICIPATING IN THIS OFFER YOUR NEW OPTION MAY BE A NONQUALIFIED STOCK OPTION, WHEREAS YOUR SURRENDERED OPTION MAY HAVE BEEN AN INCENTIVE STOCK OPTION. If your surrendered option was an incentive stock option, your new option will be an incentive stock option, but only to the extent it qualifies as such under the Internal Revenue Code. For options to qualify as incentive stock options, the value of shares subject to the options and any other incentive stock options issued key personnel; ● announcements by us that first become exercisable by the optionholder in any calendar year cannot exceed $100,000or our competitors of acquisitions, as determined using the value of the shares on the grant date. It is possible that by participating in this exchangeinvestments or strategic alliances; and ● general market conditions and other factors, your options will exceed this limit and will be treated as nonqualified stock options including factors unrelated to the extent of that excess. In general, nonqualified stock options may be less favorable to you from a tax perspective. EVEN IF YOU ELECT NOT TO PARTICIPATE IN THIS OFFER, YOUR INCENTIVE STOCK OPTIONS MAY BE AFFECTED. We believe that you will not be subject to current U.S. federal income tax if you do not elect to participate in this offer. We also believe that this offer will not change the U.S. federal income tax treatment of subsequent exercises of your incentive stock options (and sales of shares acquired upon exercise of such options) if you do not participate in this offer. However, there is a risk that the IRS may characterize this offer as a "modification" of your eligible incentive stock options, even if you decline to participate. In 1991, the IRS issued a private letter ruling in which another company's option exchange program was characterized as a "modification" of any incentive stock option that could be exchanged (whether or not it was exchanged). This does not necessarily mean that our offer will be viewed the same way, and, in fact, we believe that we have structured this offer so as to mitigate this risk. Private letter rulings issued by the IRS contain the IRS's opinion regarding only the specific facts presented by a specific person or company. We therefore do not know if the IRS will assert the position that our offer constitutes a "modification" of incentive stock options that can be surrendered. A successful assertion by the IRS of this position could extend the options' requisite holding periods to qualify for favorable tax treatment and could also convert some incentive stock options into nonqualified stock optionsoperating performance.

RISK FACTORS. Participation Investing in this offer our Class A common stock involves a number high degree of potential risksrisk. Before deciding whether to invest in our Class A common stock, including those described below. The you should consider carefully the risks and uncertainties described below and the risk factors under the heading entitled "Certain Factors That May Affect Future ResultsRisk Factors" contained in any related free writing prospectus, and discussed under the section titled "Risk Factors" contained in our most recent Annual Report on Form 10-K and in our most recent Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 2001, filed on March 16, 2001Q, as amended on March 19well as any amendments thereto reflected in subsequent filings with the SEC, 2001which are incorporated by reference into this prospectus supplement in their entirety, highlight the material risks of participating together with other information in this offerprospectus supplement, the documents incorporated by reference and any free writing prospectus that we may authorize for use in connection with this offering. Eligible participants The risks described in these documents are not the only ones we face, but those that we consider to be material. There may be other unknown or unpredictable economic, business, competitive, regulatory or other factors that could have material adverse effects on our future results. Past financial performance may not be a reliable indicator of future performance, and historical trends should carefully consider not be used to anticipate results or trends in future periods. If any of these risks and are encouraged to speak with an investment and tax advisor as necessary before deciding whether to surrender actually occurs, our business, financial condition, results of operations or not surrender options in this offercash flow could be seriously harmed. In addition, we strongly urge you to read This could cause the rest of these materials for a xxxxxx discussion of the risks which may apply to you before deciding whether to surrender or not surrender your options in this offer. ECONOMIC RISKS OF PARTICIPATING IN THIS OFFER IF OUR STOCK PRICE INCREASES AFTER THE DATE YOU SURRENDER YOUR EXISTING OPTIONS, YOUR SURRENDERED OPTIONS MIGHT HAVE BEEN WORTH MORE THAN THE NEW OPTIONS THAT YOU RECEIVE IN EXCHANGE FOR THEM. From time to time we engage in business acquisitions and other strategic transactions. We may engage in such transactions in the future which could significantly change our structure, ownership, organization or management or the make-up of our board of directors, and which could significantly affect the trading price of our sharesClass A common stock to decline, resulting in a loss of all or part of your investment. If we engage Please also read carefully the section below titled "Special Note Regarding Forward-Looking Statements." The offering price per share of our Class A common stock in such this offering may exceed the net tangible book value per share of our Class A common stock outstanding prior to this offering. Assuming that an aggregate of 7,251,631 shares of our Class A common stock are sold at a transaction or transactions before the date we grant the new options, our shares could increase (or decrease) in value, and the exercise price of $13.79 per share, the new options could be higher (or lower) than the exercise last reported sale price of options you elect to have cancelled as part of this offer. As is outlined in Section 8, the exercise price of any new options granted to you in return for your surrendered options will be the fair market value of a share of our Class A common stock on the date of grant, as determined by the closing price reported by the The Nasdaq National Global Select Market on August 11, 2020, for aggregate gross proceeds of $100.0 million, and after deducting commissions and estimated offering expenses payable by us, you would experience immediate dilution of $6.71 per share, representing the date difference between our adjusted net tangible book value per share as of grantJune 30, 2020, after giving effect to this offering, and the assumed public offering price. The exercise of outstanding stock options and vesting of restricted stock units could result in further dilution of your investment. See "Dilution" beginning on page S-14 of this prospectus supplement for a more detailed description of the dilution to new investors in this offering. We will have broad discretion over the use of proceeds from this offering. You will be at risk may not agree with our decisions, and our use of the proceeds may not yield any such increase return on your investment in us. Our failure to apply the net proceeds of this offering effectively could result in financial losses that could materially impair our ability to pursue our growth strategy, cause the price of our Class A common stock price before to decline, delay development of our products or require us to raise additional capital. In order to raise additional capital, we may offer additional shares of our Class A common stock or other securities convertible into or exchangeable for our Class A common stock in the grant date of the new options for these future. We cannot assure you that we will be able to sell shares or other securities in any other reasonsoffering at a price per share that is equal to or greater than the price per share paid by investors in this offering, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders. PARTICIPATION IN THIS OFFER WILL MAKE YOU INELIGIBLE TO RECEIVE ANY OPTION GRANTS UNTIL FEBRUARY The price per share at which we sell additional shares of our Class A common stock or other securities convertible into or exchangeable for our Class A common stock in future transactions may be higher or lower than the price per share in this offering. The market price for our Class A common stock has fluctuated significantly from time to time, for example, varying between a high of $29.35 on March 4, 2002 AT THE EARLIEST2020 and a low of $9.51 on November 27, 2019. Employees are generally eligible The trading price of our Class A common stock has been and may continue to receive option grants at any time that be highly volatile and subject to wide fluctuations in response to various factors, some of which we cannot control. In addition to the board of directors or Compensation Committee chooses to make them. However, if you participate factors discussed in this offer"Risk Factors" section, you will not be eligible these factors include: § our ability to receive any option grants until February 4advance ATRC-101 or potential future product candidates into the clinic; § results of preclinical studies and clinical trials of ATRC-101 or potential future product candidates, 2002 at or those of our competitors or potential future partners; § regulatory or legal developments in the earliest because United States and other countries, especially changes in laws or regulations applicable to our products; § the success of potentially adverse accounting consequences to us if options were granted earlier. IF YOUR EMPLOYMENT TERMINATES PRIOR TO THE GRANT OF THE NEW OPTION, YOU WILL RECEIVE NEITHER A NEW OPTION NOR THE RETURN OF YOUR SURRENDERED OPTION. Once your option is surrendered competitive products or technologies; § introductions and accepted announcements of new products by us, it is gone our future commercialization partners, or our competitors, and the timing of these introductions or announcements; § actions taken by regulatory agencies with respect to our products, clinical trials, manufacturing process or sales and marketing terms, collaborations or capital commitments; § actual or anticipated variations in our financial results or those of companies that are perceived to be similar to us; § the success of our efforts to acquire or in-license additional technologies, products or product candidates; § developments concerning any future collaborations, including, but not limited to, those with our sources of manufacturing supply and our commercialization partners; § market conditions in the pharmaceutical and biotechnology sectors; § announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments; § developments or disputes concerning patents or other proprietary rights, including patents, litigation matters and our ability to obtain patent protection for good. Accordinglyour products; § our ability or inability to raise additional capital and the terms on which we raise it; § the recruitment or departure of key personnel; § changes in the structure of healthcare payment systems; § actual or anticipated changes in earnings estimates or changes in stock market analyst recommendations regarding our Class A common stock, if your employment terminates for any reason prior other comparable companies or our industry generally; § our failure or the failure of our competitors to meet analysts' projections or guidance that we or our competitors may give to the grant market; § fluctuations in the valuation of companies perceived by investors to be comparable to us; § announcement and expectation of additional financing efforts; § speculation in the press or investment community; § trading volume of our Class A common stock; § sales of our Class A common stock by us or our stockholders; § the concentrated ownership of our Class A common stock; § changes in accounting principles; § terrorist acts, acts of war or periods of widespread civil unrest; § natural disasters and other calamities; and § general economic, industry and market conditions. In addition, the stock market in general, and The Nasdaq Global Select Market and biotechnology companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies, including very recently in connection with the ongoing COVID-19 pandemic, which has resulted in decreased stock prices for many companies notwithstanding the lack of a fundamental change in their underlying business models or prospects. Broad market and industry factors, including potentially worsening economic conditions and other adverse effects or developments relating to the ongoing COVID-19 pandemic, may negatively affect the market price of our Class A common stock, regardless of our actual operating performance. The realization of any of the new optionabove risks or any of a broad range of other risks, you including those described in this "Risk Factors" section, could have a dramatic and material adverse impact on the market price of our Class A common stock. Sales of a substantial number of shares of our Class A common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our Class A common stock. Moreover, certain holders of our Class A common stock have rights, subject to certain conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders. We currently anticipate that we will have retain future earnings for the benefit development, operation and expansion of neither our business and do not anticipate declaring or paying any cash dividends for the surrendered option nor the new optionforeseeable future. TAX-RELATED RISKS OF RECEIVING AND PARTICIPATING IN THIS OFFER YOUR NEW OPTION MAY BE A NONQUALIFIED STOCK OPTION, WHEREAS YOUR SURRENDERED OPTION MAY HAVE BEEN AN INCENTIVE STOCK OPTION. If your surrendered option was an incentive stock option, your new option Any return to stockholders will therefore be an incentive stock option, but only limited to the extent it qualifies as such under the Internal Revenue Code. For options to qualify as incentive stock options, the value appreciation of shares subject to the options and any other incentive stock options issued by us that first become exercisable by the optionholder in any calendar year cannot exceed $100,000, as determined using the value of the shares on the grant date. It is possible that by participating in this exchange, your options will exceed this limit and will be treated as nonqualified stock options to the extent of that excess. In general, nonqualified stock options may be less favorable to you from a tax perspective. EVEN IF YOU ELECT NOT TO PARTICIPATE IN THIS OFFER, YOUR INCENTIVE STOCK OPTIONS MAY BE AFFECTED. We believe that you will not be subject to current U.S. federal income tax if you do not elect to participate in this offer. We also believe that this offer will not change the U.S. federal income tax treatment of subsequent exercises of your incentive stock options (and sales of shares acquired upon exercise of such options) if you do not participate in this offer. However, there is a risk that the IRS may characterize this offer as a "modification" of your eligible incentive stock options, even if you decline to participate. In 1991, the IRS issued a private letter ruling in which another company's option exchange program was characterized as a "modification" of any incentive stock option that could be exchanged (whether or not it was exchanged). This does not necessarily mean that our offer will be viewed the same way, and, in fact, we believe that we have structured this offer so as to mitigate this risk. Private letter rulings issued by the IRS contain the IRS's opinion regarding only the specific facts presented by a specific person or company. We therefore do not know if the IRS will assert the position that our offer constitutes a "modification" of incentive stock options that can be surrendered. A successful assertion by the IRS of this position could extend the options' requisite holding periods to qualify for favorable tax treatment and could also convert some incentive stock options into nonqualified stock optionstheir stock.

RISK FACTORS. Participation Before deciding whether or not to tender any of your units, you should consider carefully the following risks and disadvantages of the offer: IF YOU TENDER ALL OF YOUR UNITS, YOU MAY NOT BE ABLE TO PARTICIPATE IN ANY FINAL LITIGATION RELIEF OR SETTLEMENT. Certain legal actions have been filed alleging, among other things, breaches of fiduciary duty by your partnership's general partner and certain of its affiliates. Although we cannot predict the precise outcome of these actions or the precise nature of any final relief or settlement with respect to these actions, a limited partner who tenders his units in this the offer involves may not participate in or benefit from such relief or any settlement. There can be no assurance that a number limited partner would not realize greater value for his units by not tendering his units in our offer, and participating in any such relief or settlement WE DID NOT OBTAIN A THIRD-PARTY VALUATION OR APPRAISAL AND DID NOT DETERMINE OUR OFFER PRICE THROUGH ARMS-LENGTH NEGOTIATION. We did not base our valuation of potential risks, including those described belowthe property owned by your partnership on any third-party appraisal or valuation. We established the terms of our offer without any arms-length negotiation. The risks described below and the risk factors under the heading entitled "Certain Factors That May Affect Future Results" in our Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 2001, filed on March 16, 2001, as amended on March 19, 2001, highlight the material risks of participating in this offer. Eligible participants should carefully consider these risks and are encouraged to speak with an investment and tax advisor as necessary before deciding whether to surrender or not surrender options in this offer. In addition, we strongly urge you to read the rest of these materials for a xxxxxx discussion terms of the risks which may apply offer could differ if they were subject to you before deciding independent third-party negotiations. It is uncertain whether our offer price reflects the value that would be realized upon a sale of your units to surrender a third party. OUR OFFER PRICE MAY NOT REPRESENT FAIR MARKET VALUE. There is no established or not surrender your options in this offer. ECONOMIC RISKS OF PARTICIPATING IN THIS OFFER IF OUR STOCK PRICE INCREASES AFTER THE DATE YOU SURRENDER YOUR EXISTING OPTIONS, YOUR SURRENDERED OPTIONS MIGHT HAVE BEEN WORTH MORE THAN THE NEW OPTIONS THAT YOU RECEIVE IN EXCHANGE FOR THEM. From time to time we engage in business acquisitions and other strategic transactions. We may engage in such transactions in the future which could significantly change our structure, ownership, organization or management or the make-up of our board of directors, and which could significantly affect the price of our shares. If we engage in such a transaction or transactions before the date we grant the new options, our shares could increase (or decrease) in value, and the exercise price of the new options could be higher (or lower) than the exercise price of options you elect to have cancelled as part of this offer. As is outlined in Section 8, the exercise price of any new options granted to you in return regular trading market for your surrendered options will be units, nor is there another reliable standard for determining the fair market value of a share the units. Our offer price does not necessarily reflect the price that you would receive in an open market for your units. Such prices could be higher than our offer price. OUR OFFER PRICE DOES NOT REFLECT FUTURE PROSPECTS. Our offer price is based on your partnership's pro forma property income for the quarter ended March 31, 2002. It does not ascribe any value to potential future improvements in the operating performance of Class A common stock on the date of grant, as determined by the closing price reported by the Nasdaq National Market on the date of grantyour partnership's residential property. You will OUR OFFER PRICE MAY NOT REPRESENT LIQUIDATION VALUE. The actual proceeds obtained from liquidation are highly uncertain and could be at risk of any such increase in more than our Class A common stock price before the grant date of the new options for these or any other reasons. PARTICIPATION IN THIS OFFER WILL MAKE YOU INELIGIBLE TO RECEIVE ANY OPTION GRANTS UNTIL FEBRUARY 4, 2002 AT THE EARLIEST. Employees are generally eligible to receive option grants at any time that the board of directors or Compensation Committee chooses to make them. However, if you participate in this offer, you will not be eligible to receive any option grants until February 4, 2002 at the earliest because of potentially adverse accounting consequences to us if options were granted earlier. IF YOUR EMPLOYMENT TERMINATES PRIOR TO THE GRANT OF THE NEW OPTION, YOU WILL RECEIVE NEITHER A NEW OPTION NOR THE RETURN OF YOUR SURRENDERED OPTION. Once your option is surrendered and accepted by us, it is gone for goodestimate. Accordingly, if our offer price could be less than the net proceeds that you would realize upon an actual liquidation of your employment terminates partnership. CONTINUATION OF THE PARTNERSHIP; NO TIME FRAME REGARDING SALE OF PROPERTY. Your general partner, which is our subsidiary, is proposing to continue to operate your partnership and not to attempt to liquidate it at the present time. It is not known when the property owned by your partnership may be sold. The market for any reason prior units in the partnership is illiquid, and it may be difficult to sell your investment in the grant partnership in the future. The general partner of your partnership continually considers whether a property should be sold or otherwise disposed of after consideration of relevant factors, including prevailing economic conditions, availability of favorable financing and tax considerations, with a view to achieving maximum capital appreciation for your partnership. At the current time, the general partner of your partnership is of the new optionopinion that a sale of the property would not be advantageous given market conditions, you will have the benefit condition of neither the surrendered option nor property and tax considerations. In particular, the new option. TAX-RELATED RISKS OF RECEIVING AND PARTICIPATING IN THIS OFFER YOUR NEW OPTION MAY BE A NONQUALIFIED STOCK OPTIONgeneral partner considered the changes in the local rental market, WHEREAS YOUR SURRENDERED OPTION MAY HAVE BEEN AN INCENTIVE STOCK OPTION. If your surrendered option was an incentive stock option, your new option will be an incentive stock option, but only to the extent it qualifies as such under the Internal Revenue Code. For options to qualify as incentive stock options, potential for appreciation in the value of shares subject a property and the tax consequences to you on a sale of property. We cannot predict when your partnership's property will be sold or otherwise disposed of. HOLDING YOUR UNITS MAY RESULT IN GREATER FUTURE VALUE. Although a liquidation of your partnership is not currently contemplated in the options near future, you might receive more value if you retain your units until your partnership is liquidated. YOUR GENERAL PARTNER FACES CONFLICTS OF INTEREST WITH RESPECT TO THE OFFER. The general partner of your partnership is our subsidiary, and therefore has substantial conflicts of interest with respect to our offer. We are making this offer with a view to making a profit. There is a conflict between our desire to purchase your units at a low price and your desire to sell your units at a high price. We determined our offer price without negotiation with any other incentive stock options issued by us party, including any general or limited partner. YOUR GENERAL PARTNER IS NOT MAKING A RECOMMENDATION WITH RESPECT TO THIS OFFER. The general partner of your partnership makes no recommendation as to whether or not you should tender or refrain from tendering your units. You must make your own decision whether or not to participate in the offer based upon a number of factors, including several factors that first become exercisable by may be personal to you, such as your financial position, your need or desire for liquidity, your preferences regarding the optionholder in any calendar year cannot exceed $100,000timing of when you might wish to sell your units, as determined using other financial opportunities available to you, and your tax position and the value tax consequences to you of selling your units. YOUR GENERAL PARTNER FACES CONFLICTS OF INTEREST RELATING TO MANAGEMENT FEES. Because we or our subsidiaries receive fees for managing your partnership and its residential property, a conflict of interest exists between continuing the partnership and receiving such fees, and the liquidation of the shares on partnership and the grant datetermination of such fees. Also, a decision of the limited partners of your partnership to remove, for any reason, the general partner of your partnership or the residential property manager of the property owned by your partnership would result in a decrease or elimination of the substantial fees to which they are entitled for services provided to your partnership. WE MAY MAKE A FUTURE OFFER AT A HIGHER PRICE. It is possible that we may conduct a future offer at a higher price. Such a decision will depend on, among other things, the performance of the partnership, prevailing economic conditions, and our interest in acquiring additional units. YOU WILL RECOGNIZE TAXABLE GAIN ON A SALE OF YOUR UNITS. Your sale of units for cash will be a taxable sale, with the result that you will recognize taxable gain or loss measured by participating the difference between the amount realized on the sale and your adjusted tax basis in this exchangethe units of limited partnership interest of your partnership you transfer to us. The "amount realized" with respect to a unit of limited partnership interest you transfer to us will be equal to the sum of the amount of cash received by you for the unit sold pursuant to the offer plus the amount of partnership liabilities allocable to the unit. The particular tax consequences for you of our offer will depend upon a number of factors related to your tax situation, including your tax basis in the units you transfer to us, whether you dispose of all of your units, and whether you have available suspended passive losses, credits or other tax items to offset any gain recognized as a result of your sale of your units. Therefore, depending on your basis in the units and your tax position, your options taxable gain and any tax liability resulting from a sale of units to us pursuant to the offer could exceed our offer price. Because the income tax consequences of tendering units will exceed this limit not be the same for everyone, you should consult your own tax advisor to determine the tax consequences of the offer to you. IF YOU TENDER UNITS TO US IN THIS OFFER, YOU WILL NO LONGER BE ENTITLED TO DISTRIBUTIONS FROM YOUR PARTNERSHIP. If you tender your units in response to our offer, you will transfer to us all right, title and interest in and to all of the units we accept, and the right to receive all distributions in respect of such units on and after the date on which we accept such units for purchase. Accordingly, for any units that we acquire from you, you will not receive any future distributions from operating cash flow of your partnership or upon a sale or refinancing of the property owned by your partnership. WE CONTROL YOUR PARTNERSHIP. Decisions with respect to the day-to-day management of your partnership are the responsibility of the general partner. Because the general partner of your partnership is our subsidiary, we control the management of your partnership. Under your partnership's agreement of limited partnership, limited partners holding a majority of the outstanding units must approve certain extraordinary transactions, including the removal of the general partner, most amendments to the partnership agreement and the sale of all or substantially all of your partnership's assets. We and our affiliates own 19,293.83 units, or 69.46%, of the outstanding units of your partnership. Because we and our affiliates own a majority of the outstanding units, we have the ability to control most votes of the limited partners. YOU COULD RECOGNIZE GAIN IN THE EVENT OF A REDUCTION IN YOUR PARTNERSHIP'S LIABILITIES. Generally, a decrease in your share of partnership liabilities is treated, for federal income tax purposes, as a deemed cash distribution. Although the general partner of your partnership does not have any current plan or intention to reduce the liabilities of your partnership, it is possible that future economic, market, legal, tax or other considerations may cause the general partner to reduce the liabilities of your partnership. If you retain all or a portion of your units and the liabilities of your partnership were to be reduced, you would be treated as nonqualified stock options receiving a hypothetical distribution of cash resulting from a decrease in your share of the liabilities of the partnership. Any such hypothetical distribution of cash would be treated as a nontaxable return of capital to the extent of that excessyour adjusted tax basis in your units and thereafter as gain. In general, nonqualified stock options Gain recognized by you on the disposition of retained units with a holding period of 12 months or less may be less favorable classified as short-term capital gain and subject to taxation at ordinary income tax rates. YOU MAY BE UNABLE TO TRANSFER YOUR UNITS FOR A 12-MONTH PERIOD. Your partnership's agreement of limited partnership prohibits any transfer of an interest if such transfer, together with all other transfers during the preceding 12 months, would cause 50% or more of the total interest in capital and profits of your partnership to be transferred within such 12-month period. If we acquire a significant percentage of the interest in your partnership, you from may not be able to transfer your units for a tax perspective12-month period following our offer. EVEN IF YOU ELECT NOT TO PARTICIPATE IN THIS OFFERWE MAY DELAY OUR ACCEPTANCE OF, AND PAYMENT FOR, YOUR INCENTIVE STOCK OPTIONS MAY BE AFFECTEDUNITS. We believe that you will not be subject reserve the right to current U.S. federal income tax if you do not elect to participate in this offer. We also believe that this extend the period of time during which our offer will not change the U.S. federal income tax treatment of subsequent exercises of your incentive stock options (is open and sales of shares acquired upon exercise of such options) if you do not participate in this offer. However, there is a risk that the IRS may characterize this offer as a "modification" of your eligible incentive stock options, even if you decline to participate. In 1991, the IRS issued a private letter ruling in which another company's option exchange program was characterized as a "modification" thereby delay acceptance for payment of any incentive stock option that could tendered units. The offer may be exchanged (whether or not it was exchanged). This does not necessarily mean that our offer extended indefinitely, and no payment will be viewed made in respect of tendered units until the same way, and, in fact, we believe that we have structured this expiration of the offer so as to mitigate this riskand acceptance of units for payment. Private letter rulings issued by the IRS contain the IRS's opinion regarding only the specific facts presented by a specific person or company. We therefore do not know if the IRS will assert the position that our offer constitutes a "modification" of incentive stock options that can be surrendered. A successful assertion by the IRS of this position could extend the options' requisite holding periods to qualify for favorable tax treatment and could also convert some incentive stock options into nonqualified stock options.THE OFFER

RISK FACTORS. Participation AN INVESTMENT IN BIOSANTE'S UNITS INVOLVES A HIGH DEGREE OF RISK. PLEASE SEE THE RISK FACTORS IN BIOSANTE'S ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED DECEMBER 31, 1999 AND QUARTERLY REPORTS ON FORM 10-QSB FOR THE QUARTERS ENDED MARCH 31, JUNE 30 AND SEPTEMBER 30, 2000. YOU SHOULD ALSO CAREFULLY CONSIDER THE FOLLOWING RISKS BEFORE INVESTING IN THE UNITS. RISKS RELATING TO OUR COMMON STOCK BECAUSE OUR COMMON STOCK IS TRADED ON THE OVER-THE-COUNTER BULLETIN BOARD AND THE CANADIAN VENTURE EXCHANGE, YOUR ABILITY TO SELL YOUR SHARES IN THE SECONDARY TRADING MARKET MAY BE LIMITED. Our common stock is currently traded on the Over-the-Counter Bulletin Board and the Canadian Venture Exchange. Consequently, the liquidity of our common stock is impaired, not only in this offer involves a the number of potential risksshares that are bought and sold, including those described below. The risks described below but also through delays in the timing of transactions, and coverage by security analysts and the risk factors news media, if any, of our company. As a result, prices for shares of our common stock may be lower than might otherwise prevail if our common stock was traded on Nasdaq or a national securities exchange (i.e., the American Stock Exchange) BECAUSE OUR SHARES ARE "XXXXX STOCKS," YOU MAY HAVE DIFFICULTY SELLING THEM IN THE SECONDARY TRADING MARKET. Federal regulations under the heading entitled Securities Exchange Act of 1934 regulate the trading of so-called "Certain Factors That May Affect Future Resultsxxxxx stocks," in which are generally defined as any security not listed on a national securities exchange or Nasdaq, priced at less than $5.00 per share and offered by an issuer with limited net tangible assets and revenues. Since our Quarterly Report common stock currently trades on Form 10-Q for the fiscal quarter ended January 31OTC Bulletin Board at less than $5.00 per share, 2001, filed on March 16, 2001, as amended on March 19, 2001, highlight our shares are "xxxxx stocks" and may not be traded unless a disclosure schedule explaining the material xxxxx stock market and the risks of participating in this offer. Eligible participants should carefully consider these risks and are encouraged associated therewith is delivered to speak with an investment and tax advisor as necessary before deciding whether a potential purchaser prior to surrender or not surrender options in this offerany trade. In addition, we strongly urge you because our common stock is not listed on Nasdaq or any national securities exchange and currently trades at less than $5.00 per share, trading in our common stock is subject to read Rule 15g-9 under the rest Exchange Act. Under this rule, broker-dealers must take certain steps prior to selling a "xxxxx stock," which steps include: o obtaining financial and investment information from the investor; o obtaining a written suitability questionnaire and purchase agreement signed by the investor; and o providing the investor a written identification of the shares being offered and the quantity of the shares. If these xxxxx stock rules are not followed by the broker-dealer, the investor has no obligation to purchase the shares. The application of these materials comprehensive rules will make it more difficult for a xxxxxx discussion of broker-dealers to sell our common stock and our shareholders, therefore, may have difficulty in selling their shares in the risks which may apply to you before deciding whether to surrender or not surrender your options in this offersecondary trading market. ECONOMIC RISKS OF PARTICIPATING IN THIS OFFER IF OUR STOCK PRICE INCREASES AFTER THE DATE YOU SURRENDER MAY BE VOLATILE AND YOUR EXISTING OPTIONS, YOUR SURRENDERED OPTIONS MIGHT HAVE BEEN WORTH MORE THAN THE NEW OPTIONS THAT YOU RECEIVE INVESTMENT IN EXCHANGE FOR THEMOUR COMMON STOCK COULD SUFFER A DECLINE IN VALUE. From time to time we engage in business acquisitions and other strategic transactions. We may engage in such transactions Our common stock is listed on the Over-the-Counter Bulletin Board in the future which could significantly change our structure, ownership, organization or management or United States and on the make-up of our board of directors, and which could significantly affect the Canadian Venture Exchange in Canada. The market price of our shares. If we engage in such a transaction or transactions before the date we grant the new options, our shares could increase (or decrease) in value, and the exercise price of the new options could be higher (or lower) than the exercise price of options you elect to have cancelled as part of this offer. As is outlined in Section 8, the exercise price of any new options granted to you in return for your surrendered options will be the fair market value of a share of Class A common stock on may fluctuate significantly in response to a number of factors, some of which are beyond our control. These factors include: o progress of our products through the date regulatory process; o results of grant, as determined by the closing price reported by the Nasdaq National Market on the date preclinical studies and clinical trials; o announcements of grant. You will be at risk of any such increase in our Class A common stock price before the grant date of the technological innovations or new options for these or any other reasons. PARTICIPATION IN THIS OFFER WILL MAKE YOU INELIGIBLE TO RECEIVE ANY OPTION GRANTS UNTIL FEBRUARY 4, 2002 AT THE EARLIEST. Employees are generally eligible to receive option grants at any time that the board of directors or Compensation Committee chooses to make them. However, if you participate in this offer, you will not be eligible to receive any option grants until February 4, 2002 at the earliest because of potentially adverse accounting consequences to us if options were granted earlier. IF YOUR EMPLOYMENT TERMINATES PRIOR TO THE GRANT OF THE NEW OPTION, YOU WILL RECEIVE NEITHER A NEW OPTION NOR THE RETURN OF YOUR SURRENDERED OPTION. Once your option is surrendered and accepted by us, it is gone for good. Accordingly, if your employment terminates for any reason prior to the grant of the new option, you will have the benefit of neither the surrendered option nor the new option. TAX-RELATED RISKS OF RECEIVING AND PARTICIPATING IN THIS OFFER YOUR NEW OPTION MAY BE A NONQUALIFIED STOCK OPTION, WHEREAS YOUR SURRENDERED OPTION MAY HAVE BEEN AN INCENTIVE STOCK OPTION. If your surrendered option was an incentive stock option, your new option will be an incentive stock option, but only to the extent it qualifies as such under the Internal Revenue Code. For options to qualify as incentive stock options, the value of shares subject to the options and any other incentive stock options issued products by us that first become exercisable by or our competitors; o government regulatory action affecting our products or our competitors' products in both the optionholder United States and foreign countries; o developments or disputes concerning patent or proprietary rights; o general market conditions for emerging growth and pharmaceutical companies; o economic conditions in any calendar year cannot exceed $100,000, as determined using the value of the shares on the grant date. It is possible that by participating in this exchange, your options will exceed this limit and will be treated as nonqualified stock options to the extent of that excess. In general, nonqualified stock options may be less favorable to you from a tax perspective. EVEN IF YOU ELECT NOT TO PARTICIPATE IN THIS OFFER, YOUR INCENTIVE STOCK OPTIONS MAY BE AFFECTED. We believe that you will not be subject to current U.S. federal income tax if you do not elect to participate in this offer. We also believe that this offer will not change the U.S. federal income tax treatment of subsequent exercises of your incentive stock options (and sales of shares acquired upon exercise of such options) if you do not participate in this offer. However, there is a risk that the IRS may characterize this offer as a "modification" of your eligible incentive stock options, even if you decline to participate. In 1991, the IRS issued a private letter ruling in which another company's option exchange program was characterized as a "modification" of any incentive stock option that could be exchanged (whether United States or not it was exchanged). This does not necessarily mean that our offer will be viewed the same way, and, in fact, we believe that we have structured this offer so as to mitigate this risk. Private letter rulings issued by the IRS contain the IRS's opinion regarding only the specific facts presented by a specific person or company. We therefore do not know if the IRS will assert the position that our offer constitutes a "modification" of incentive stock options that can be surrendered. A successful assertion by the IRS of this position could extend the options' requisite holding periods to qualify for favorable tax treatment and could also convert some incentive stock options into nonqualified stock options.abroad;

RISK FACTORS. Participation Before deciding whether or not to tender any of your units, you should consider carefully the following risks and disadvantages of the offer: IF YOU TENDER ALL OF YOUR UNITS, YOU MAY NOT BE ABLE TO PARTICIPATE IN ANY FINAL LITIGATION RELIEF OR SETTLEMENT. Certain legal actions have been filed alleging, among other things, breaches of fiduciary duty by your partnership's general partner and certain of its affiliates. Although we cannot predict the precise outcome of these actions or the precise nature of any final relief or settlement with respect to these actions, a limited partner who tenders his units in this the offer involves may not participate in or benefit from such relief or any settlement. There can be no assurance that a number limited partner would not realize greater value for his units by not tendering his units in our offer, and participating in any such relief or settlement WE DID NOT OBTAIN A THIRD-PARTY VALUATION OR APPRAISAL AND DID NOT DETERMINE OUR OFFER PRICE THROUGH ARMS-LENGTH NEGOTIATION. We did not base our valuation of potential risks, including those described belowthe property owned by your partnership on any third-party appraisal or valuation. We established the terms of our offer without any arms-length negotiation. The risks described below and the risk factors under the heading entitled "Certain Factors That May Affect Future Results" in our Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 2001, filed on March 16, 2001, as amended on March 19, 2001, highlight the material risks of participating in this offer. Eligible participants should carefully consider these risks and are encouraged to speak with an investment and tax advisor as necessary before deciding whether to surrender or not surrender options in this offer. In addition, we strongly urge you to read the rest of these materials for a xxxxxx discussion terms of the risks which may apply offer could differ if they were subject to you before deciding independent third-party negotiations. It is uncertain whether our offer price reflects the value that would be realized upon a sale of your units to surrender a third party. OUR OFFER PRICE MAY NOT REPRESENT FAIR MARKET VALUE. There is no established or not surrender your options in this offer. ECONOMIC RISKS OF PARTICIPATING IN THIS OFFER IF OUR STOCK PRICE INCREASES AFTER THE DATE YOU SURRENDER YOUR EXISTING OPTIONS, YOUR SURRENDERED OPTIONS MIGHT HAVE BEEN WORTH MORE THAN THE NEW OPTIONS THAT YOU RECEIVE IN EXCHANGE FOR THEM. From time to time we engage in business acquisitions and other strategic transactions. We may engage in such transactions in the future which could significantly change our structure, ownership, organization or management or the make-up of our board of directors, and which could significantly affect the price of our shares. If we engage in such a transaction or transactions before the date we grant the new options, our shares could increase (or decrease) in value, and the exercise price of the new options could be higher (or lower) than the exercise price of options you elect to have cancelled as part of this offer. As is outlined in Section 8, the exercise price of any new options granted to you in return regular trading market for your surrendered options will be units, nor is there another reliable standard for determining the fair market value of a share the units. Our offer price does not necessarily reflect the price that you would receive in an open market for your units. Such prices could be higher than our offer price. OUR OFFER PRICE DOES NOT REFLECT FUTURE PROSPECTS. Our offer price is based on your partnership's pro forma property income for the quarter ended March 31, 2002. It does not ascribe any value to potential future improvements in the operating performance of Class A common stock on the date of grant, as determined by the closing price reported by the Nasdaq National Market on the date of grantyour partnership's residential property. You will OUR OFFER PRICE MAY NOT REPRESENT LIQUIDATION VALUE. The actual proceeds obtained from liquidation are highly uncertain and could be at risk of any such increase in more than our Class A common stock price before the grant date of the new options for these or any other reasons. PARTICIPATION IN THIS OFFER WILL MAKE YOU INELIGIBLE TO RECEIVE ANY OPTION GRANTS UNTIL FEBRUARY 4, 2002 AT THE EARLIEST. Employees are generally eligible to receive option grants at any time that the board of directors or Compensation Committee chooses to make them. However, if you participate in this offer, you will not be eligible to receive any option grants until February 4, 2002 at the earliest because of potentially adverse accounting consequences to us if options were granted earlier. IF YOUR EMPLOYMENT TERMINATES PRIOR TO THE GRANT OF THE NEW OPTION, YOU WILL RECEIVE NEITHER A NEW OPTION NOR THE RETURN OF YOUR SURRENDERED OPTION. Once your option is surrendered and accepted by us, it is gone for goodestimate. Accordingly, if our offer price could be less than the net proceeds that you would realize upon an actual liquidation of your employment terminates for any reason prior partnership. CONTINUATION OF THE PARTNERSHIP; NO TIME FRAME REGARDING SALE OF PROPERTY. Your general partner, which is our subsidiary, is proposing to continue to operate your partnership and not to attempt to liquidate it at the grant present time. Your partnership's prospectus, dated December 21, 1979, pursuant to which units in your partnership were sold, indicated that your partnership was intended to be self-liquidating and that it was anticipated that the partnership's properties would be sold within five to eight years of their acquisition, provided market conditions permit. The prospectus also indicated that there could be no assurance that the partnership would be able to so liquidate and that, unless sooner terminated as provided in the partnership agreement, the existence of the new optionpartnership would continue until the year 2035. It is not known when the property owned by your partnership may be sold. The market for units in the partnership is illiquid, you will have and it may be difficult to sell your investment in the benefit partnership in the future. The general partner of neither your partnership continually considers whether a property should be sold or otherwise disposed of after consideration of relevant factors, including prevailing economic conditions, availability of favorable financing and tax considerations, with a view to achieving maximum capital appreciation for your partnership. At the surrendered option nor current time, the new optiongeneral partner of your partnership believes that a sale of the property would not be advantageous given market conditions, the condition of the property and tax considerations. TAX-RELATED RISKS OF RECEIVING AND PARTICIPATING IN THIS OFFER YOUR NEW OPTION MAY BE A NONQUALIFIED STOCK OPTIONIn particular, WHEREAS YOUR SURRENDERED OPTION MAY HAVE BEEN AN INCENTIVE STOCK OPTION. If your surrendered option was an incentive stock optionthe general partner considered the changes in the local rental market, your new option will be an incentive stock option, but only to the extent it qualifies as such under the Internal Revenue Code. For options to qualify as incentive stock options, potential for appreciation in the value of shares subject a property and the tax consequences to you on a sale of property. We cannot predict when your partnership's property will be sold or otherwise disposed of. HOLDING YOUR UNITS MAY RESULT IN GREATER FUTURE VALUE. Although a liquidation of your partnership is not currently contemplated in the options near future, you might receive more value if you retain your units until your partnership is liquidated. YOUR GENERAL PARTNER FACES CONFLICTS OF INTEREST WITH RESPECT TO THE OFFER. The general partner of your partnership is our subsidiary, and therefore has substantial conflicts of interest with respect to our offer. We are making this offer with a view to making a profit. There is a conflict between our desire to purchase your units at a low price and your desire to sell your units at a high price. We determined our offer price without negotiation with any other incentive stock options issued by us party, including any general or limited partner. YOUR GENERAL PARTNER IS NOT MAKING A RECOMMENDATION WITH RESPECT TO THIS OFFER. The general partner of your partnership makes no recommendation as to whether or not you should tender or refrain from tendering your units. You must make your own decision whether or not to participate in the offer based upon a number of factors, including several factors that first become exercisable by may be personal to you, such as your financial position, your need or desire for liquidity, your preferences regarding the optionholder in any calendar year cannot exceed $100,000timing of when you might wish to sell your units, as determined using other financial opportunities available to you, and your tax position and the value tax consequences to you of selling your units. YOUR GENERAL PARTNER FACES CONFLICTS OF INTEREST RELATING TO MANAGEMENT FEES. Because we or our subsidiaries receive fees for managing your partnership and its residential property, a conflict of interest exists between continuing the partnership and receiving such fees, and the liquidation of the shares on partnership and the grant datetermination of such fees. Also, a decision of the limited partners of your partnership to remove, for any reason, the general partner of your partnership or the residential property manager of the property owned by your partnership would result in a decrease or elimination of the substantial fees to which they are entitled for services provided to your partnership. WE MAY MAKE A FUTURE OFFER AT A HIGHER PRICE. It is possible that we may conduct a future offer at a higher price. Such a decision will depend on, among other things, the performance of the partnership, prevailing economic conditions, and our interest in acquiring additional units. YOU WILL RECOGNIZE TAXABLE GAIN ON A SALE OF YOUR UNITS. Your sale of units for cash will be a taxable sale, with the result that you will recognize taxable gain or loss measured by participating the difference between the amount realized on the sale and your adjusted tax basis in this exchangethe units of limited partnership interest of your partnership you transfer to us. The "amount realized" with respect to a unit of limited partnership interest you transfer to us will be equal to the sum of the amount of cash received by you for the unit sold pursuant to the offer plus the amount of partnership liabilities allocable to the unit. The particular tax consequences for you of our offer will depend upon a number of factors related to your tax situation, including your tax basis in the units you transfer to us, whether you dispose of all of your units, and whether you have available suspended passive losses, credits or other tax items to offset any gain recognized as a result of your sale of your units. Therefore, depending on your basis in the units and your tax position, your options taxable gain and any tax liability resulting from a sale of units to us pursuant to the offer could exceed our offer price. Because the income tax consequences of tendering units will exceed this limit not be the same for everyone, you should consult your own tax advisor to determine the tax consequences of the offer to you. IF YOU TENDER UNITS TO US IN THIS OFFER, YOU WILL NO LONGER BE ENTITLED TO DISTRIBUTIONS FROM YOUR PARTNERSHIP. If you tender your units in response to our offer, you will transfer to us all right, title and interest in and to all of the units we accept, and the right to receive all distributions in respect of such units on and after the date on which we accept such units for purchase. Accordingly, for any units that we acquire from you, you will not receive any future distributions from operating cash flow of your partnership or upon a sale or refinancing of the property owned by your partnership. WE CONTROL YOUR PARTNERSHIP. Decisions with respect to the day-to-day management of your partnership are the responsibility of the general partner. Because the general partner of your partnership is our subsidiary, we control the management of your partnership. Under your partnership's agreement of limited partnership, limited partners holding a majority of the outstanding units must approve certain extraordinary transactions, including the removal of the general partner, most amendments to the partnership agreement and the sale of all or substantially all of your partnership's assets. We and our affiliates own 13,008 units, or 64.47%, of the outstanding units of your partnership. Because we and our affiliates own a majority of the outstanding units, we have the ability to control most votes of the limited partners. YOU COULD RECOGNIZE GAIN IN THE EVENT OF A REDUCTION IN YOUR PARTNERSHIP'S LIABILITIES. Generally, a decrease in your share of partnership liabilities is treated, for federal income tax purposes, as a deemed cash distribution. Although the general partner of your partnership does not have any current plan or intention to reduce the liabilities of your partnership, it is possible that future economic, market, legal, tax or other considerations may cause the general partner to reduce the liabilities of your partnership. If you retain all or a portion of your units and the liabilities of your partnership were to be reduced, you would be treated as nonqualified stock options receiving a hypothetical distribution of cash resulting from a decrease in your share of the liabilities of the partnership. Any such hypothetical distribution of cash would be treated as a nontaxable return of capital to the extent of that excessyour adjusted tax basis in your units and thereafter as gain. In general, nonqualified stock options Gain recognized by you on the disposition of retained units with a holding period of 12 months or less may be less favorable classified as short-term capital gain and subject to taxation at ordinary income tax rates. YOU MAY BE UNABLE TO TRANSFER YOUR UNITS FOR A 12-MONTH PERIOD. Your partnership's agreement of limited partnership prohibits any transfer of an interest if such transfer, together with all other transfers during the preceding 12 months, would cause 50% or more of the total interest in capital and profits of your partnership to be transferred within such 12-month period. If we acquire a significant percentage of the interest in your partnership, you from may not be able to transfer your units for a tax perspective12-month period following our offer. EVEN IF YOU ELECT NOT TO PARTICIPATE IN THIS OFFERWE MAY DELAY OUR ACCEPTANCE OF, AND PAYMENT FOR, YOUR INCENTIVE STOCK OPTIONS MAY BE AFFECTEDUNITS. We believe that you will not be subject reserve the right to current U.S. federal income tax if you do not elect to participate in this offer. We also believe that this extend the period of time during which our offer will not change the U.S. federal income tax treatment of subsequent exercises of your incentive stock options (is open and sales of shares acquired upon exercise of such options) if you do not participate in this offer. However, there is a risk that the IRS may characterize this offer as a "modification" of your eligible incentive stock options, even if you decline to participate. In 1991, the IRS issued a private letter ruling in which another company's option exchange program was characterized as a "modification" thereby delay acceptance for payment of any incentive stock option that could tendered units. The offer may be exchanged (whether or not it was exchanged). This does not necessarily mean that our offer extended indefinitely, and no payment will be viewed made in respect of tendered units until the same wayexpiration of the offer and acceptance of units for payment. YOUR PARTNERSHIP HAS SIGNIFICANT BALLOON PAYMENTS ON ITS MORTGAGE DEBT. Your partnership has balloon payments of $3,041,000 due on its mortgage debt in October 2003. Your partnership will have to refinance such debt, andsell assets or otherwise obtain additional funds prior to the balloon payment due date, or it will be in fact, we believe that we have structured this offer so as to mitigate this risk. Private letter rulings issued by the IRS contain the IRS's opinion regarding only the specific facts presented by a specific person or company. We therefore do not know if the IRS will assert the position that our offer constitutes a "modification" of incentive stock options that can be surrendered. A successful assertion by the IRS of this position could extend the options' requisite holding periods to qualify for favorable tax treatment default and could also convert some incentive stock options into nonqualified stock options.lose the property to foreclosure. THE OFFER

RISK FACTORS. Participation Your investment in this offer involves a number of potential the notes will involve risks, including those described below. The risks described below This pricing supplement and the risk factors under accompanying prospectus do not describe all of those risks. Neither we nor the heading entitled "Certain Factors That May Affect Future Results" in our Quarterly Report on Form 10-Q agents are responsible for the fiscal quarter ended January 31, 2001, filed on March 16, 2001, as amended on March 19, 2001, highlight the material risks advising you of participating in this offer. Eligible participants should carefully consider these risks now or as they may change in the future. In consultation with your own financial and are encouraged to speak with an investment legal advisors, you should consider carefully, among other matters, the following discussion of risks and tax advisor as necessary the discussion of risks in the accompanying prospectus before deciding whether to surrender or an investment in the notes is suitable for you. The notes are not surrender options in this offer. In addition, we strongly urge an appropriate investment for you to read the rest of these materials for a xxxxxx discussion if you are not knowledgeable about significant features of the risks which notes or financial matters in general. You should not purchase the notes unless you understand and know you can bear these investment risks. YOU MAY RECEIVE A LOWER EFFECTIVE RATE OF INTEREST ON THE NOTES THAN YOU WOULD ON A CONVENTIONAL FIXED-RATE OR FLOATING-RATE DEBT SECURITY OF COMPARABLE MATURITY. The yield on your investment may apply to be less than the overall return you before deciding whether to surrender would earn if you purchased a conventional fixed-rate or floating-rate debt security with the same maturity. The notes differ from ordinary debt securities in that, except for the first interest period, the rate of return is not surrender your options set in this offerthe same manner as notes that bear a fixed rate of interest or notes that bear interest at the prime rate multiplied by the principal amount. ECONOMIC RISKS OF PARTICIPATING IN THIS OFFER IF OUR STOCK PRICE INCREASES AFTER THE DATE YOU SURRENDER YOUR EXISTING OPTIONSInstead, YOUR SURRENDERED OPTIONS MIGHT HAVE BEEN WORTH MORE THAN THE NEW OPTIONS THAT YOU RECEIVE IN EXCHANGE FOR THEMexcept for the first interest period, the rate of interest payable on the notes each month will vary depending upon the Percentage Change in the CPI over a one-year period. From time to time we engage The interest rate that you may receive will increase as the change in business acquisitions the Consumer Price Index increases, and other strategic transactionswill decrease as the change in the Consumer Price Index decreases. We may engage in such transactions cannot assure you that the change in the future Consumer Price Index will be positive. If there is no change in the Consumer Price Index for the same month in successive years, which could significantly change our structurelikely is to occur when there is little or no inflation, ownership, organization or management or the make-up of our board of directorsPercentage Change in the CPI will be zero, and which could significantly affect you will receive an interest payment equal to the price of our sharesspread, or [____%] per annum. If we engage the Consumer Price Index for the same month in such a transaction or transactions before the date we grant the new optionssuccessive years decreases, our shares could increase (or decrease) in value, and the exercise price of the new options could be higher (or lower) than the exercise price of options you elect which likely is to have cancelled as part of this offer. As occur when there is outlined in Section 8, the exercise price of any new options granted to you in return for your surrendered options will be the fair market value of a share of Class A common stock on the date of grant, as determined by the closing price reported by the Nasdaq National Market on the date of grant. You will be at risk of any such increase in our Class A common stock price before the grant date of the new options for these or any other reasons. PARTICIPATION IN THIS OFFER WILL MAKE YOU INELIGIBLE TO RECEIVE ANY OPTION GRANTS UNTIL FEBRUARY 4, 2002 AT THE EARLIEST. Employees are generally eligible to receive option grants at any time that the board of directors or Compensation Committee chooses to make them. However, if you participate in this offerdeflation, you will receive an interest payment for the applicable interest period that is less than [____%] per annum. If the Consumer Price Index for the same month in successive years declines by [____%] or more, the Percentage Change in the CPI will be a negative number, and you will not be eligible to receive any option grants until February 4, 2002 at the earliest because of potentially adverse accounting consequences to us if options were granted earlier. IF YOUR EMPLOYMENT TERMINATES PRIOR TO THE GRANT OF THE NEW OPTION, YOU WILL RECEIVE NEITHER A NEW OPTION NOR THE RETURN OF YOUR SURRENDERED OPTION. Once your option is surrendered and accepted by us, it is gone for good. Accordingly, if your employment terminates for any reason prior to the grant of the new option, you will have the benefit of neither the surrendered option nor the new option. TAX-RELATED RISKS OF RECEIVING AND PARTICIPATING IN THIS OFFER YOUR NEW OPTION MAY BE A NONQUALIFIED STOCK OPTION, WHEREAS YOUR SURRENDERED OPTION MAY HAVE BEEN AN INCENTIVE STOCK OPTION. If your surrendered option was an incentive stock option, your new option will be an incentive stock option, but only to the extent it qualifies as such under the Internal Revenue Code. For options to qualify as incentive stock options, the value of shares subject to the options and any other incentive stock options issued by us that first become exercisable by the optionholder in any calendar year cannot exceed $100,000, as determined using the value of the shares on the grant dateinterest. It is possible that by participating in this exchange, your options will exceed this limit and will be treated as nonqualified stock options to investment may not reflect the extent of that excess. In general, nonqualified stock options may be less favorable full opportunity cost to you when you consider factors that affect the time value of money. The Consumer Price Index is a function of the changes in specified consumer prices over time, which result from a tax perspectivethe interaction of many factors over which we have no control. EVEN IF YOU ELECT NOT TO PARTICIPATE See the section entitled "The Consumer Price Index." It is impossible to predict whether the level of the Consumer Price Index will rise or fall. THE CONSUMER PRICE INDEX AND THE MANNER IN THIS OFFER, YOUR INCENTIVE STOCK OPTIONS WHICH THE BUREAU OF LABOR STATISTICS CALCULATES THE CONSUMER PRICE INDEX MAY BE AFFECTEDCHANGE IN THE FUTURE. We believe cannot assure you that you will not be subject to current U.S. federal income tax if you do not elect to participate in this offer. We also believe that this offer the Bureau of Labor Statistics will not change the U.S. federal income tax treatment methodology by which it calculates the Consumer Price Index. For example, the market basket of subsequent exercises goods and services used to calculate the Consumer Price Index, and the weights assigned to these various items, are updated PS-5 periodically to account for changes in consumer spending patterns. Changes in the way the Consumer Price Index is calculated could reduce the level of your incentive stock options (the Consumer Price Index and sales lower the interest payments with respect to the notes. Accordingly, the amount of shares acquired upon exercise interest, if any, payable on the notes, and therefore the value of such options) if you the notes, may be significantly reduced. If the Consumer Price Index is substantially altered, a substitute index may be employed to calculate the interest payable on the notes and that substitution may affect adversely the value of the notes. See "Description of the Notes--Interest." THE HISTORICAL PERFORMANCE OF THE CONSUMER PRICE INDEX IS NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE. The historical performance of the Consumer Price Index is not an indication that the level of the Consumer Price Index is more or less likely to increase or decrease at any time during the term of the notes. The historical Consumer Price Index levels do not participate in this offergive an indication of future levels of the Consumer Price Index or a guarantee of the amount of interest you will earn. However, there is a risk that the IRS may characterize this offer as a "modification" of your eligible incentive stock options, even if you decline to participate. In 1991, the IRS issued a private letter ruling in which another company's option exchange program was characterized as a "modification" of any incentive stock option that could be exchanged (whether or not it was exchanged). This does not necessarily mean that our offer will be viewed the same way, and, in fact, we believe that we have structured this offer so as to mitigate this risk. Private letter rulings issued by the IRS contain the IRS's opinion regarding only the specific facts presented by a specific person or company. We therefore do not know if the IRS will assert the position that our offer constitutes a "modification" of incentive stock options that can be surrendered. A successful assertion by the IRS of this position could extend the options' requisite holding periods to qualify for favorable tax treatment and could also convert some incentive stock options into nonqualified stock options.DESCRIPTION OF THE NOTES

RISK FACTORS. Participation Your investment in this offer shares of our common stock involves a number of potential substantial risks. In consultation with your own financial and legal advisers, including those described you should carefully consider, among other matters, the factors set forth below. The risks described below and , in the risk factors under the heading entitled "Certain Factors That May Affect Future Results" accompanying prospectus, in our Quarterly Annual Report on Form 10-Q K for the fiscal quarter year ended January December 31, 20012021, filed and other information that we file from time to time with the SEC, which are incorporated by reference into this prospectus supplement and the accompanying prospectus, before deciding whether an investment in shares of our common stock is suitable for you. If any of the risks contained in or incorporated by reference into this prospectus supplement or the accompanying prospectus develop into actual events, our business, financial condition, liquidity, results of operations, FFO, our ability to make cash distributions to holders of our common stock and prospects could be materially and adversely affected, the market price of our common stock could decline and you may lose all or part of your investment. In addition, new risks may emerge at any time and we cannot predict such risks or estimate the extent to which they may affect our financial performance. Some statements in this prospectus supplement, including statements in the following risk factors, constitute forward-looking statements. See the “Forward-Looking Statements” sections in this prospectus supplement and in the accompanying prospectus. Our management will have broad discretion in the use of the net proceeds, including but not limited to any of the purposes described in the section entitled “Use of Proceeds,” and you will not have the opportunity as part of your investment decision to assess whether the net proceeds are being used in ways with which you may not agree with or may not otherwise be considered appropriate. Because of the number and variability of factors that will determine our use of the net proceeds from this offering, their ultimate use may vary substantially from their currently intended use. The failure of our management to use these funds effectively could harm our business. Pending their use, we may invest the net proceeds from this offering in short-term, investment-grade, interest-bearing securities. These investments may not yield a favorable return to our stockholders. We cannot predict whether future issuances or sales of our common stock or the availability of shares for resale in the open market will decrease the per share trading price of our common stock. The issuance of substantial numbers of shares of our common stock in the public market or the perception that such issuances might occur, the exchange of OP units, for shares of common stock, the issuance of our common stock or OP units in connection with future property, portfolio or business acquisitions and other issuances of our common stock could have an adverse effect on March 16the per share trading price of our common stock. In addition, 2001future issuances of our common stock may be dilutive to existing stockholders. Delays in investing the net proceeds of this offering may impair our performance. We cannot assure you that we will be able to identify properties that meet our investment objectives or that any investment we make will produce a positive return. We may be unable to invest the net proceeds of this offering on acceptable terms within the time period that we anticipate or at all, which could adversely affect our financial condition and operating results. This offering may have a dilutive effect on our earnings per share and funds from operations per share after giving effect to the issuance of our common stock and the receipt of the expected net proceeds. The actual amount of dilution from this “at the market offering,” or from any future sale of common pursuant to this offering, will be based on numerous factors, particularly the use of proceeds and any return generated thereby, and cannot be determined at this time. The per share trading price of our common stock could decline as a result of sales of a large number of shares of our common stock in the market in connection with this offering, or otherwise, or as a result of the perception or expectation that such sales could occur. Our capital structure includes senior common stock, which is a separate class of our capital stock that has priority over listed common stock with respect to the payment of distributions. However, it is junior to our Series E Preferred Stock, Series F Preferred Stock and Series G Preferred Stock with respect to the payment of distributions. Shares of our senior common stock are not listed or traded on a national securities exchange. Holders of shares of senior common stock have the right, but not the obligation, following the fifth anniversary of the issuance of such shares to exchange any or all of such shares of senior common stock for shares of our listed common stock. Furthermore, in the event of our liquidation, each share of senior common stock will be automatically converted to a number of shares of our listed common stock in accordance with the applicable exchange ratio. Therefore, senior common stock will rank pari passu with our listed common stock upon a liquidation, dissolution or winding up of the Company. We have also entered into an At-the-Market Equity Offering Sales Agreement for the sale of up to $100 million of our Series E Preferred Stock, which is senior to the rights of holders of our common stock. If we were to issue a significant amount of shares of our Series E Preferred Stock under that agreement, it could negatively impact the value of our common stock and further restrict the ability of holders of our common stock to receive dividends and/or liquidation rights. In the future, we may attempt to increase our capital resources by making additional offerings of equity securities or issue debt securities. Upon liquidation, holders of our preferred stock, holders of our debt securities, if any, and lenders with respect to other borrowings, including our line of credit, would receive a distribution of our available assets in full prior to the holders of our common stock. Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Thus, our common stockholders bear the risk of our future offerings reducing the per share trading price of our common stock and diluting their interest in us. Sales of our common stock, if any, under this prospectus supplement and the accompanying prospectus may be made by transactions that are deemed to be part of an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act, by means of ordinary brokers’ transactions that qualify for delivery of a prospectus to Nasdaq in accordance with Rule 153 under the Securities Act or such other sales as may be agreed by us and the Sales Agents, at market prices prevailing at the time of sale, at prices related to prevailing market prices or at other negotiated prices. There is no guarantee that there will be any sales of our common stock pursuant to this prospectus supplement and the accompanying prospectus. Actual sales, if any, of our common stock under this prospectus supplement and the accompanying prospectus may be less than as set forth in this paragraph depending on, among other things, the market price of our common stock at the time of any such sale. As a result, the actual net proceeds we receive may be more or less than the amount of net proceeds estimated in this prospectus supplement. However, assuming we sell all of the shares of common stock covered by the Sales Agreement, we estimate that the total expenses of the offering payable by us, excluding discounts, commissions and reimbursements to the Sales Agents under the Sales Agreement, will be approximately $125,000 which includes our legal, accounting and printing costs and various other fees associated with the offering. We currently intend to use the net proceeds of the offering to fund pending and future acquisitions, through the Operating Partnership, of real property or capital expenditures and/or improvements to properties in our portfolio, in the ordinary course of our business and in accordance with our investment objectives. We may also use a portion of the proceeds from this offering to pay down our Credit Facility and for other general corporate purposes. As of December 31, 2021 there was $258.6 million outstanding under our Credit Facility, at a weighted average interest rate of approximately 2.00%, and $19.5 million outstanding under letters of credit, at a weighted average interest rate of 1.90%. As of February 15, 2022, the maximum additional amount we could draw under the Credit Facility was $24.8 million. We were in compliance with all covenants under the Credit Facility as of December 31, 2021. We have previously entered into the Sales Agreement on December 3, 2019, as amended on March 19February 22, 20012022, highlight the material risks under which we may issue and sell our shares of participating in this offer. Eligible participants should carefully consider these risks and are encouraged to speak with an investment and tax advisor as necessary before deciding whether to surrender or not surrender options in this offer. In addition, we strongly urge you to read the rest of these materials for a xxxxxx discussion of the risks which may apply to you before deciding whether to surrender or not surrender your options in this offer. ECONOMIC RISKS OF PARTICIPATING IN THIS OFFER IF OUR STOCK PRICE INCREASES AFTER THE DATE YOU SURRENDER YOUR EXISTING OPTIONS, YOUR SURRENDERED OPTIONS MIGHT HAVE BEEN WORTH MORE THAN THE NEW OPTIONS THAT YOU RECEIVE IN EXCHANGE FOR THEM. From common stock from time to time through the Sales Agents. Pursuant to this prospectus supplement and the accompanying prospectus, we engage may offer and sell up to $63.0 million of our common stock through the Sales Agents. Sales of our shares, if any, under this prospectus supplement and the accompanying prospectus will be made by any method that is deemed to be an “at the market offering” as defined in business acquisitions Rule 415(a)(4) under the Securities Act, including sales made directly on or through Nasdaq or any other existing trading market for our common stock. This summary of the material provisions of the Sales Agreement does not purport to be a complete statement of its terms and other strategic transactionsconditions. A copy of the Sales Agreement has been filed as an exhibit to a Current Report on Form 8-K and incorporated by reference into this prospectus supplement. The Sales Agents will offer shares of common stock subject to the terms and conditions of the Sales Agreement on any trading day or as otherwise agreed upon by us and the Sales Agents. We will designate the maximum amount and minimum price of shares of common stock to be sold through the Sales Agents on a daily basis or otherwise determine such amounts together with the Sales Agents. Subject to the terms and conditions of the Sales Agreement, the Sales Agents will use their commercially reasonable efforts to sell on our behalf the shares of common stock. We may engage instruct the Sales Agents not to sell shares of common stock if the sales cannot be effected at or above the price designated by us in any such transactions instruction. We may only instruct one Sales Agent to sell shares of common stock on any single given day. We or the Sales Agents may suspend the offering of shares of common stock being made through the Sales Agents under the Sales Agreement upon proper notice to the other party. The Sales Agents will receive from us a commission of up to 2.0% of the gross sales price per common share for any shares of common stock sold under the Sales Agreement. The remaining sales proceeds, after deducting any expenses payable by us and any transaction fees imposed by any governmental, regulatory, or self-regulatory organization in connection with the sales, will equal our net proceeds for the sale of such shares of common stock. The Sales Agents will provide written confirmation to us following the close of trading on Nasdaq each day in which shares of common stock are sold by any Sales Agent for us under the Sales Agreement. Each confirmation will include the number of shares of common stock sold on that day, the gross sales price per share, the net proceeds to us, and the compensation payable by us to the Sales Agents. Settlement for sales of shares of common stock will occur, unless the parties agree otherwise, on the second business day that is also a trading day following the date on which any sales were made in return for payment of the net proceeds to us. There is no arrangement for funds to be received in any escrow, trust or similar arrangement. In connection with the sale of the shares of common stock on our behalf, each Sales Agent will be deemed to be an “underwriter” within the meaning of the Securities Act and the compensation paid to each of the Sales Agents will be deemed to be underwriting commissions or discounts. We have agreed in the Sales Agreement to provide indemnification and contribution to the Sales Agents against certain civil liabilities, including liabilities under the Securities Act. We estimate that the total expenses of the offering payable by us, excluding discounts and commissions payable to the Sales Agents under the Sales Agreement, will be approximately $125,000. The offering of shares of common stock pursuant to the Sales Agreement will terminate upon the earlier of (1) the sale of all of the shares of common stock subject to the Sales Agreement and (2) the termination of the Sales Agreement by the Sales Agents or us. The Sales Agents have from time to time provided, and in the future may provide, certain commercial banking, investment banking and financial advisory services to us and our affiliates, for which could significantly change our structure, ownership, organization or management or the make-up of our board of directorsthey have received, and which could significantly affect in the price future will receive, customary fees. In particular, an affiliate of Fifth Third Securities, Inc. is currently a lender under our sharesCredit Facility, and Xxxxxx X. Xxxxx & Co. Incorporated will pay a referral fee to an affiliate of The Huntington National Bank, one of the lenders under the Credit Facility, in connection with this offering. If we We may use a portion of the proceeds from this offering to pay down the Credit Facility as further described in “Use of Proceeds.” Accordingly, this offering will be conducted in accordance with FINRA Rule 5121(a)(1)(B), since our common shares have a bona fide public market, as defined by FINRA Rule 5121(f)(3). To the extent required by Regulation M, the Sales Agents will not engage in such a transaction or transactions before any market making activities involving our common shares while the date we grant the new options, our shares could increase (or decrease) in value, offering is ongoing under this prospectus supplement. Certain legal matters and the exercise price of the new options could be higher (or lower) than the exercise price of options you elect to have cancelled as part of this offer. As is outlined in Section 8, the exercise price of any new options granted to you in return for your surrendered options will be the fair market value of a share of Class A common stock on the date of grant, as determined by the closing price reported by the Nasdaq National Market on the date of grant. You will be at risk of any such increase in our Class A common stock price before the grant date of the new options for these or any other reasons. PARTICIPATION IN THIS OFFER WILL MAKE YOU INELIGIBLE TO RECEIVE ANY OPTION GRANTS UNTIL FEBRUARY 4, 2002 AT THE EARLIEST. Employees are generally eligible to receive option grants at any time that the board of directors or Compensation Committee chooses to make them. However, if you participate in this offer, you will not be eligible to receive any option grants until February 4, 2002 at the earliest because of potentially adverse accounting consequences to us if options were granted earlier. IF YOUR EMPLOYMENT TERMINATES PRIOR TO THE GRANT OF THE NEW OPTION, YOU WILL RECEIVE NEITHER A NEW OPTION NOR THE RETURN OF YOUR SURRENDERED OPTION. Once your option is surrendered and accepted by us, it is gone for good. Accordingly, if your employment terminates for any reason prior to the grant of the new option, you will have the benefit of neither the surrendered option nor the new option. TAX-RELATED RISKS OF RECEIVING AND PARTICIPATING IN THIS OFFER YOUR NEW OPTION MAY BE A NONQUALIFIED STOCK OPTION, WHEREAS YOUR SURRENDERED OPTION MAY HAVE BEEN AN INCENTIVE STOCK OPTION. If your surrendered option was an incentive stock option, your new option will be an incentive stock option, but only to the extent it qualifies as such under the Internal Revenue Code. For options to qualify as incentive stock options, the value of shares subject to the options and any other incentive stock options issued by us that first become exercisable by the optionholder in any calendar year cannot exceed $100,000, as determined using the value of the shares on the grant date. It is possible that by participating in this exchange, your options will exceed this limit and will be treated as nonqualified stock options to the extent of that excess. In general, nonqualified stock options may be less favorable to you from a tax perspective. EVEN IF YOU ELECT NOT TO PARTICIPATE IN THIS OFFER, YOUR INCENTIVE STOCK OPTIONS MAY BE AFFECTED. We believe that you will not be subject to current U.S. certain federal income tax if you do not elect to participate in this offer. We also believe that this offer will not change the U.S. federal income tax treatment of subsequent exercises of your incentive stock options (and sales of shares acquired upon exercise of such options) if you do not participate in this offer. However, there is a risk that the IRS may characterize this offer as a "modification" of your eligible incentive stock options, even if you decline to participate. In 1991, the IRS issued a private letter ruling in which another company's option exchange program was characterized as a "modification" of any incentive stock option that could be exchanged (whether or not it was exchanged). This does not necessarily mean that our offer matters will be viewed passed upon for us by Bass, Xxxxx & Xxxx PLC, Nashville, Tennessee. Certain matters of Maryland law, including the same wayvalidity of the common stock to be issued in connection with this offering, andwill be passed upon for us by Xxxxxxx LLP, Baltimore, Maryland. The Sales Agents are being represented in factconnection with this offering by Xxxxxx LLP, we believe that we have structured this offer so New York, New York. Bass, Xxxxx & Xxxx PLC and Xxxxxx LLP may rely as to mitigate this risk. Private letter rulings issued by certain matters of Maryland law upon the IRS contain the IRS's opinion regarding only the specific facts presented by a specific person or company. We therefore do not know if the IRS will assert the position that our offer constitutes a "modification" of incentive stock options that can be surrendered. A successful assertion by the IRS of this position could extend the options' requisite holding periods to qualify for favorable tax treatment and could also convert some incentive stock options into nonqualified stock optionsXxxxxxx LLP.

RISK FACTORS. Participation An investment in this offer the Notes involves a number of potential significant risks, including those the risks described belowbelow and discussed under the section captioned “Risk Factors” contained in our annual report on Form 10-K for the year ended December 31, 2020 as updated by our subsequent filings under the Exchange Act, which is incorporated by reference in this prospectus supplement and the accompanying prospectus in their entirety. Before purchasing the Notes, you should carefully consider each of the following risk factors as well as the other information contained in this prospectus supplement and the accompanying prospectus and the documents incorporated by reference, including our consolidated financial statements and the related notes. Each of these risk factors, either alone or taken together, could materially and adversely affect our business, operating results and financial condition, as well as adversely affect the value of an investment in the Notes. The risks described below are not the only ones we face. Additional risks of which we are not presently aware or that we currently believe are immaterial which may also impair our business operations and financial position. If any of the events described below were to occur, our financial condition, our results of operations and/or our future growth prospects could be materially and adversely affected. As a result, you could lose some or all of any investment you may have made or may make in our Company. You should read and consider the significant risk factors under specific to our business before making an investment decision. Those risks are described in the heading section entitled "Certain Factors That May Affect Future Results" “Risk Factors—Risks Relating to Our Industry and Our Business” in our Quarterly Annual Report on Form 10-Q K for the fiscal quarter year ended January December 31, 20012020. Please be aware that additional risks and uncertainties not currently known to us or that we currently deem immaterial could also materially and adversely affect our business, filed on March 16results of operations, 2001financial condition, cash flows, prospects or the value of our common stock. We may be able to incur substantial additional indebtedness in the future. The terms of the indenture governing the Notes will not prohibit us from doing so. If we incur any additional indebtedness that ranks equally with the Notes, the holders of that debt will be entitled to share ratably with you in any proceeds distributed in connection with any insolvency, liquidation, reorganization or dissolution. This may have the effect of reducing the amount of proceeds paid to you. Incurrence of additional debt would also further reduce the cash available to invest in operations, as amended a result of increased debt service obligations. If new debt is added to our current debt levels, the related risks that we now face could intensify. Our level of indebtedness could have important consequences to you, because: • it could affect our ability to satisfy our financial obligations, including those relating to the Notes; • a substantial portion of our cash flows from operations would have to be dedicated to interest and principal payments and may not be available for operations, capital expenditures, expansion, acquisitions or general corporate or other purposes; • it may impair our ability to obtain additional debt or equity financing in the future; • it may limit our ability to refinance all or a portion of our indebtedness on March 19or before maturity; • it may limit our flexibility in planning for, 2001or reacting to, highlight changes in our business and industry; and • it may make us more vulnerable to downturns in our business, our industry or the material risks economy in general. Our operations may not generate sufficient cash to enable us to service our debt. If we fail to make a payment on the Notes, we could be in default on the Notes, and this default could cause us to be in default on other indebtedness, to the extent outstanding. Conversely, a default under any other indebtedness, if not waived, could result in acceleration of participating in this offer. Eligible participants should carefully consider these risks the debt outstanding under the related agreement and are encouraged entitle the holders thereof to speak with an investment and tax advisor as necessary before deciding whether to surrender bring suit for the enforcement thereof or not surrender options in this offerexercise other remedies provided thereunder. In addition, we strongly urge you to read the rest such default or acceleration may result in an event of these materials for a xxxxxx discussion default and acceleration of other indebtedness of the risks which Company, entitling the holders thereof to bring suit for the enforcement thereof or exercise other remedies provided thereunder. If a judgment is obtained by any such holders, such holders could seek to collect on such judgment from the assets of the Company. If that should occur, we may apply not be able to you before deciding whether pay all such debt or to surrender borrow sufficient funds to refinance it. Even if new financing were then available, it may not be on terms that are acceptable to us. However, no event of default under the Notes would result from a default or acceleration of, or suit, other exercise of remedies or collection proceeding by holders of, our other outstanding debt, if any. As a result, all or substantially all of our assets may be used to satisfy claims of holders of our other outstanding debt, if any, without the holders of the Notes having any rights to such assets. The indenture governing the Notes will not surrender your options in this offerrestrict our ability to incur additional indebtedness. ECONOMIC RISKS OF PARTICIPATING IN THIS OFFER IF OUR STOCK PRICE INCREASES AFTER THE DATE YOU SURRENDER YOUR EXISTING OPTIONSThe Notes will not be secured by any of our assets or any of the assets of our subsidiaries. As a result, YOUR SURRENDERED OPTIONS MIGHT HAVE BEEN WORTH MORE THAN THE NEW OPTIONS THAT YOU RECEIVE IN EXCHANGE FOR THEM. From time the Notes will be effectively subordinated to time any secured indebtedness that we engage in business acquisitions and other strategic transactions. We or our subsidiaries have currently outstanding or may engage in such transactions incur in the future which could significantly change our structure, ownership, organization or management or the make-up of our board of directors, and which could significantly affect the price of our shares. If we engage in such a transaction or transactions before the date we grant the new options, our shares could increase (or decreaseany indebtedness that is initially unsecured to which we subsequently grant security) in value, and the exercise price of the new options could be higher (or lower) than the exercise price of options you elect to have cancelled as part of this offer. As is outlined in Section 8, the exercise price of any new options granted to you in return for your surrendered options will be the fair market value of a share of Class A common stock on the date of grant, as determined by the closing price reported by the Nasdaq National Market on the date of grant. You will be at risk of any such increase in our Class A common stock price before the grant date of the new options for these or any other reasons. PARTICIPATION IN THIS OFFER WILL MAKE YOU INELIGIBLE TO RECEIVE ANY OPTION GRANTS UNTIL FEBRUARY 4, 2002 AT THE EARLIEST. Employees are generally eligible to receive option grants at any time that the board of directors or Compensation Committee chooses to make them. However, if you participate in this offer, you will not be eligible to receive any option grants until February 4, 2002 at the earliest because of potentially adverse accounting consequences to us if options were granted earlier. IF YOUR EMPLOYMENT TERMINATES PRIOR TO THE GRANT OF THE NEW OPTION, YOU WILL RECEIVE NEITHER A NEW OPTION NOR THE RETURN OF YOUR SURRENDERED OPTION. Once your option is surrendered and accepted by us, it is gone for good. Accordingly, if your employment terminates for any reason prior to the grant of the new option, you will have the benefit of neither the surrendered option nor the new option. TAX-RELATED RISKS OF RECEIVING AND PARTICIPATING IN THIS OFFER YOUR NEW OPTION MAY BE A NONQUALIFIED STOCK OPTION, WHEREAS YOUR SURRENDERED OPTION MAY HAVE BEEN AN INCENTIVE STOCK OPTION. If your surrendered option was an incentive stock option, your new option will be an incentive stock option, but only to the extent it qualifies as such under the Internal Revenue Code. For options to qualify as incentive stock options, the value of shares subject to the options and any other incentive stock options issued by us that first become exercisable by the optionholder in any calendar year cannot exceed $100,000, as determined using the value of the shares on assets securing such indebtedness. The indenture governing the grant dateNotes does not prohibit us or our subsidiaries from incurring additional secured (or unsecured) indebtedness in the future. It In any liquidation, dissolution, bankruptcy or other similar proceeding, the holders of any of our existing or future secured indebtedness and the secured indebtedness of our subsidiaries may assert rights against the assets pledged to secure that indebtedness and may consequently receive payment from these assets before they may be used to pay other creditors, including the holders of the Notes. The Notes are obligations exclusively of Xxxxxxx & Xxxxxx Enterprises, Inc. and not of any of our subsidiaries. None of our subsidiaries is possible that a guarantor of the Notes, and the Notes are not required to be guaranteed by participating any subsidiaries we may acquire or create in this exchangethe future. Therefore, your options in any bankruptcy, liquidation or similar proceeding, all claims of creditors (including trade creditors) of our subsidiaries will exceed this limit have priority over our equity interests in such subsidiaries (and therefore the claims of our creditors, including holders of the Notes) with respect to the assets of such subsidiaries. Even if we are recognized as a creditor of one or more of our subsidiaries, our claims would still be effectively subordinated to any security interests in the assets of any such subsidiary and to any indebtedness or other liabilities of any such subsidiary senior to our claims. Consequently, the Notes will be treated structurally subordinated to all indebtedness and other liabilities (including trade payables) of any of our subsidiaries and any subsidiaries that we may in the future acquire or establish as nonqualified stock options financing vehicles or otherwise. The indenture governing the Notes does not prohibit us or our subsidiaries from incurring additional indebtedness in the future. In addition, future debt and security agreements entered into by our subsidiaries may contain various restrictions, including restrictions on payments by our subsidiaries to us and the transfer by our subsidiaries of assets pledged as collateral. The indenture under which the Notes will be issued offers limited protection to holders of the Notes. The terms of the indenture and the Notes do not restrict our or any of our subsidiaries’ ability to engage in, or otherwise be a party to, a variety of corporate transactions, circumstances or events that could have an adverse impact on your investment in the Notes. In particular, the terms of the indenture and the Notes will not place any restrictions on our or our subsidiaries’ ability to: • issue debt securities or otherwise incur additional indebtedness or other obligations, including (1) any indebtedness or other obligations that would be equal in right of payment to the Notes, (2) any indebtedness or other obligations that would be secured and therefore rank effectively senior in right of payment to the Notes to the extent of the values of the assets securing such debt, (3) indebtedness of ours that excessis guaranteed by one or more of our subsidiaries and which therefore is structurally senior to the Notes and (4) securities, indebtedness or obligations issued or incurred by our subsidiaries that would be senior to our equity interests in our subsidiaries and therefore rank structurally senior to the Notes with respect to the assets of our subsidiaries; • pay dividends on, or purchase or redeem or make any payments in respect of, capital stock or other securities subordinated in right of payment to the Notes; • sell assets (other than certain limited restrictions on our ability to consolidate, merge or sell all or substantially all of our assets); • enter into transactions with affiliates; • create liens (including liens on the shares of our subsidiaries) or enter into sale and leaseback transactions; • make investments; or • create restrictions on the payment of dividends or other amounts to us from our subsidiaries. In addition, the indenture does not include any protection against certain events, such as a change of control, a leveraged recapitalization or “going private” transaction (which may result in a significant increase of our indebtedness levels), restructuring or similar transactions. Furthermore, the terms of the indenture and the Notes do not protect holders of the Notes in the event that we experience changes (including significant adverse changes) in our financial condition, results of operations or credit ratings, as they do not require that we or our subsidiaries adhere to any financial tests or ratios or specified levels of net worth, revenues, income, cash flow, or liquidity. Also, an event of default or acceleration under our other indebtedness would not necessarily result in an Event of Default under the Notes. Our ability to recapitalize, incur additional debt and take a number of other actions that are not limited by the terms of the Notes may have important consequences for you as a holder of the Notes, including making it more difficult for us to satisfy our obligations with respect to the Notes or negatively affecting the trading value of the Notes. Other debt we issue or incur in the future could contain more protections for its holders than the indenture and the Notes, including additional covenants and events of default. The issuance or incurrence of any such debt with incremental protections could affect the market for and trading levels and prices of the Notes. In general, nonqualified stock options as market interest rates rise, notes bearing interest at a fixed rate decline in value. Consequently, if you purchase the Notes, and the market interest rates subsequently increase, the market value of your Notes may be less favorable to you from a tax perspective. EVEN IF YOU ELECT NOT TO PARTICIPATE IN THIS OFFER, YOUR INCENTIVE STOCK OPTIONS MAY BE AFFECTEDdecline. We believe cannot predict the future level of market interest rates. The Notes are listed for trading on NYSE under the symbol “BWSN”. However, we cannot provide any assurances that an active trading market will develop or be maintained for the Notes or that you will be able to sell your Notes. The Notes may trade at a discount from their initial offering price depending on prevailing interest rates, the market for similar securities, our credit ratings, general economic conditions, our financial condition, performance and prospects and other factors. Accordingly, we cannot assure you that a liquid trading market will develop or be subject maintained for the Notes, that you will be able to current U.S. federal income tax if sell your Notes at a particular time or that the price you do receive when you sell will be favorable. To the extent an active trading market does not elect develop, the liquidity and trading price for the Notes may be harmed. Accordingly, you may be required to participate bear the financial risk of an investment in this offerthe Notes for an indefinite period of time. We also believe that this offer will not change the U.S. federal income tax treatment of subsequent exercises of your incentive stock options (and sales of shares acquired upon exercise of such options) if you do not participate in this offer. HoweverIn addition, there is may be a risk that the IRS may characterize this offer as a "modification" limited number of buyers when you decide to sell your eligible incentive stock options, even if you decline to participate. In 1991, the IRS issued a private letter ruling in which another company's option exchange program was characterized as a "modification" of any incentive stock option that could be exchanged (whether or not it was exchanged)Notes. This does not necessarily mean that our offer will be viewed may affect the same wayprice, andif any, in fact, we believe that we have structured this offer so as offered for your Notes or your ability to mitigate this risk. Private letter rulings issued by the IRS contain the IRS's opinion regarding only the specific facts presented by a specific person sell your Notes when desired or company. We therefore do not know if the IRS will assert the position that our offer constitutes a "modification" of incentive stock options that can be surrendered. A successful assertion by the IRS of this position could extend the options' requisite holding periods to qualify for favorable tax treatment and could also convert some incentive stock options into nonqualified stock optionsat all.

RISK FACTORS. Participation An investment in this offer our common stock involves a number of potential very significant risks, including those described below. The risks described below and the risk factors under the heading entitled "Certain Factors That May Affect Future Results" in our Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 2001, filed on March 16, 2001, as amended on March 19, 2001, highlight the material risks of participating in this offer. Eligible participants You should carefully consider the following risks and uncertainties in addition to other information contained in or incorporated by reference in this prospectus supplement, and the accompanying prospectus including information incorporated in any subsequent filings with SEC, in evaluating our company and our business before making an investment decision about our company. Our business, operating results and financial condition could be seriously harmed as a result of the occurrence of any of the following risks. You could lose all or part of your investment due to any of these risks Subject to certain limitations in the Sales Agreement and compliance with applicable law, we have the discretion to deliver a placement notice to the Sales Agent at any time throughout the term of the Sales Agreement. The number of shares that are encouraged sold through the Sales Agent, if any, after delivering a placement notice will fluctuate based on a number of factors, including the market price of our common stock during the sales period, the limits we set with the Sales Agent in any applicable placement notice, and the demand for our common stock during the sales period. Because the price per share of each share sold will fluctuate during the sales period, it is not currently possible to speak predict the aggregate proceeds to be raised in connection with an investment and tax advisor as necessary before deciding whether to surrender or not surrender options those sales. Investors who purchase shares in this offeroffering at different times will likely pay different prices, and so may experience different levels of dilution and different outcomes in their investment results. We will have discretion, subject to market demand, to vary the timing, prices, and number of shares sold in this offering. In addition, we strongly urge you subject to read the rest of these materials for a xxxxxx discussion of the risks which may apply to you before deciding whether to surrender or not surrender your options in this offer. ECONOMIC RISKS OF PARTICIPATING IN THIS OFFER IF OUR STOCK PRICE INCREASES AFTER THE DATE YOU SURRENDER YOUR EXISTING OPTIONS, YOUR SURRENDERED OPTIONS MIGHT HAVE BEEN WORTH MORE THAN THE NEW OPTIONS THAT YOU RECEIVE IN EXCHANGE FOR THEM. From time to time we engage in business acquisitions and other strategic transactions. We may engage in such transactions in the future which could significantly change our structure, ownership, organization or management or the make-up of final determination by our board of directors, there is no minimum or maximum sales price for shares to be sold in this offering. Investors may experience a decline in the value of the shares they purchase in this offering as a result of sales made at prices lower than the prices they paid. Our management will have broad discretion as to the use of the net proceeds from any offering by us and which could significantly affect use them for purposes other than those contemplated at the time of this offering. Accordingly, you will be relying on the judgment of our management with regard to the use of these net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. It is possible that the proceeds will be invested in a way that does not yield a favorable, or any, return for our company. The offering price per share in this offering may exceed the pro forma net tangible book value per share of our common stock outstanding prior to this offering. Assuming that an aggregate of 20,940,215 shares of our common stock are sold during the term of the Sales Agreement at a price of $0.9551 per share, the last reported sale price of our shares. If we engage in such a transaction or transactions before the date we grant the new options, our shares could increase (or decrease) in value, and the exercise price of the new options could be higher (or lower) than the exercise price of options you elect to have cancelled as part of this offer. As is outlined in Section 8, the exercise price of any new options granted to you in return for your surrendered options will be the fair market value of a share of Class A common stock on the date of grant, as determined by the closing price reported by the Nasdaq National Capital Market on March 24, 2022, for aggregate gross proceeds of approximately $20,000,000, after deducting commissions and estimated aggregate offering expenses payable by us, you will experience immediate dilution of approximately $0.74 per share, representing the date difference between our pro forma net tangible book value per share as of grantDecember 31, 2021 after giving effect to this offering and the assumed offering price. You will be at risk The exercise of any such increase outstanding stock options and warrants may result in our Class A common stock price before further dilution of your investment. See the grant date section entitled "Dilution" below for a more detailed illustration of the new options for these or any other reasons. PARTICIPATION IN THIS OFFER WILL MAKE YOU INELIGIBLE TO RECEIVE ANY OPTION GRANTS UNTIL FEBRUARY 4, 2002 AT THE EARLIEST. Employees are generally eligible to receive option grants at any time that the board of directors or Compensation Committee chooses to make them. However, dilution you would incur if you participate in this offeroffering. In order to raise additional capital, you we may in the future offer additional shares of our common stock or other securities convertible into or exchangeable for our common stock at prices that may not be the same as the price per share in this offering. We may sell shares or other securities in any other offering at a price per share that is less than the price per share paid by investors in this offering, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders. The price per share at which we sell additional shares of our common stock, or securities convertible or exchangeable into common stock, in future transactions may be higher or lower than the price per share paid by investors in this offering. We were incorporated on June 6, 2011, and we began producing and distributing alkaline bottled water in 2013. Since we have a limited operating history, our ability to successfully develop our products and to realize consistent and meaningful revenues and to achieve profitability has not been established and cannot be assured. For us to realize consistent, meaningful revenues and to achieve profitability, our products must receive broad market acceptance by consumers. Without this market acceptance, we will not be eligible able to receive any option grants until February 4, 2002 at the earliest because of potentially adverse accounting consequences generate sufficient revenue to us if options were granted earliercontinue our business operation. IF YOUR EMPLOYMENT TERMINATES PRIOR TO THE GRANT OF THE NEW OPTION, YOU WILL RECEIVE NEITHER A NEW OPTION NOR THE RETURN OF YOUR SURRENDERED OPTION. Once your option is surrendered and If our products are not widely accepted by usthe market, it our business may fail. Our ability to achieve and maintain profitability and positive cash flow is gone for gooddependent upon our ability to generate revenues, manage development costs and expenses, and compete successfully with our direct and indirect competitors. AccordinglyWe anticipate operating losses in upcoming future periods. This will occur because there are expenses associated with the development, if your employment terminates for any reason prior production, marketing, and sales of our products. Our financial statements are prepared using generally accepted accounting principles in the United States applicable to a going concern, which contemplates the grant realization of assets and liquidation of liabilities in the normal course of business. We have not yet established an ongoing source of revenues sufficient to cover our operating costs. As of December 31, 2021, we had an accumulated deficit of $98,471,352. Our ability to continue as a going concern is dependent on our company obtaining adequate capital to fund operating losses until we become profitable. If we are unable to obtain adequate capital, we could be forced to significantly curtail or cease operations. Our management evaluated our disclosure controls and procedures as of December 31, 2021 and concluded that as of that date, our disclosure controls and procedures were not effective. In addition, our management evaluated our internal control over financial reporting as of March 31, 2021 and concluded that that there were material weaknesses in our internal control over financial reporting as of that date and that our internal control over financial reporting was not effective as of that date. A material weakness is a control deficiency, or combination of control deficiencies, such that there is a reasonable possibility that a material misstatement of the new option, you will have the benefit of neither the surrendered option nor the new option. TAX-RELATED RISKS OF RECEIVING AND PARTICIPATING IN THIS OFFER YOUR NEW OPTION MAY BE A NONQUALIFIED STOCK OPTION, WHEREAS YOUR SURRENDERED OPTION MAY HAVE BEEN AN INCENTIVE STOCK OPTION. If your surrendered option was an incentive stock option, your new option will be an incentive stock option, but only to the extent it qualifies as such under the Internal Revenue Code. For options to qualify as incentive stock options, the value of shares subject to the options and any other incentive stock options issued by us that first become exercisable by the optionholder in any calendar year cannot exceed $100,000, as determined using the value of the shares on the grant date. It is possible that by participating in this exchange, your options will exceed this limit and will be treated as nonqualified stock options to the extent of that excess. In general, nonqualified stock options may be less favorable to you from a tax perspective. EVEN IF YOU ELECT NOT TO PARTICIPATE IN THIS OFFER, YOUR INCENTIVE STOCK OPTIONS MAY BE AFFECTED. We believe that you financial statements will not be subject to current U.S. federal income tax if you do not elect to participate in this offerprevented or detected on a timely basis. We also have not yet remediated these material weaknesses and we believe that our disclosure controls and procedures and internal control over financial reporting continue to be ineffective. Until these issues are corrected, our ability to report financial results or other information required to be disclosed on a timely and accurate basis may be adversely affected and our financial reporting may continue to be unreliable, which could result in additional misinformation being disseminated to the public. Investors relying upon this offer misinformation may make an uninformed investment decision. We will have to spend additional funds to continue producing, marketing and distributing our products. If we cannot change the U.S. federal income tax treatment of subsequent exercises of your incentive stock options (raise sufficient capital, we may have to cease operations. We will need additional funds to continue to produce our products for distribution to our target market. We will have to continue to spend substantial funds on distribution, marketing and sales efforts before we will know if we have commercially viable and marketable/sellable products. There is no guarantee that the expenditure of shares acquired upon exercise of such options) if you do not participate money on distribution and marketing efforts will translate into sufficient sales to cover our expenses and result in this offerprofits. HoweverConsequently, there is a risk that you may lose all of your investment. Because of our relative size, we must limit our product development, marketing, and sales activities to the IRS amount of capital we raise. As such, we may characterize this offer not be able to complete our production and business development program in a manner that is as thorough as we would like. We may not ever generate sufficient revenues to cover our operating and expansion costs. The non-alcoholic beverage business environment is rapidly evolving as a "modification" of your eligible incentive stock optionsresult of, even if you decline to participateamong other things, changes in consumer preferences, including changes based on health and nutrition considerations and obesity concerns; shifting consumer tastes and needs; changes in consumer lifestyles; and competitive product and pricing pressures. In 1991addition, the IRS issued non-alcoholic beverage retail landscape is very dynamic and constantly evolving, not only in emerging and developing markets, where modern trade is growing at a private letter ruling faster pace than traditional trade outlets, but also in which another company's option exchange program was characterized developed markets, where discounters and value stores, as well as the volume of transactions through e-commerce, are growing at a "modification" rapid pace. If we are unable to successfully adapt to the rapidly changing environment and retail landscape, our share of any incentive stock option that sales, volume growth and overall financial results could be exchanged (whether or not it was exchanged). This does not necessarily mean that our offer will be viewed the same way, and, in fact, we believe that we have structured this offer so as to mitigate this risk. Private letter rulings issued by the IRS contain the IRS's opinion regarding only the specific facts presented by a specific person or company. We therefore do not know if the IRS will assert the position that our offer constitutes a "modification" of incentive stock options that can be surrendered. A successful assertion by the IRS of this position could extend the options' requisite holding periods to qualify for favorable tax treatment and could also convert some incentive stock options into nonqualified stock optionsnegatively affected.

RISK FACTORS. Participation Your investment in this offer shares of our common stock involves a number of potential substantial risks. In consultation with your own financial and legal advisers, including those described you should carefully consider, among other matters, the factors set forth below. The risks described below and , in the risk factors under the heading entitled "Certain Factors That May Affect Future Results" accompanying prospectus, in our Quarterly Annual Report on Form 10-Q K for the fiscal quarter year ended January December 31, 20012022, filed on March 16and other information that we file from time to time with the SEC, 2001which are incorporated by reference into this prospectus supplement and the accompanying prospectus, as amended on March 19, 2001, highlight the material risks of participating in this offer. Eligible participants should carefully consider these risks and are encouraged to speak with an investment and tax advisor as necessary before deciding whether an investment in shares of our common stock is suitable for you. If any of the risks contained in or incorporated by reference into this prospectus supplement or the accompanying prospectus develop into actual events, our business, financial condition, liquidity, results of operations, FFO, our ability to surrender make cash distributions to holders of our common stock and prospects could be materially and adversely affected, the market price of our common stock could decline and you may lose all or not surrender options in this offerpart of your investment. In addition, new risks may emerge at any time and we strongly urge you cannot predict such risks or estimate the extent to read which they may affect our financial performance. Some statements in this prospectus supplement, including statements in the rest of these materials for a xxxxxx discussion following risk factors, constitute forward-looking statements. See the “Forward-Looking Statements” sections in this prospectus supplement and in the accompanying prospectus. Our management will have broad discretion in the use of the risks net proceeds, including but not limited to any of the purposes described in the section entitled “Use of Proceeds,” and you will not have the opportunity as part of your investment decision to assess whether the net proceeds are being used in ways with which you may apply not agree with or may not otherwise be considered appropriate. Because of the number and variability of factors that will determine our use of the net proceeds from this offering, their ultimate use may vary substantially from their currently intended use. The failure of our management to you before deciding use these funds effectively could harm our business. Pending their use, we may invest the net proceeds from this offering in short-term, investment-grade, interest-bearing securities. These investments may not yield a favorable return to our stockholders. We cannot predict whether to surrender future issuances or not surrender your options sales of our common stock or the availability of shares for resale in this offerthe open market will decrease the per share trading price of our common stock. ECONOMIC RISKS OF PARTICIPATING IN THIS OFFER IF OUR STOCK PRICE INCREASES AFTER THE DATE YOU SURRENDER YOUR EXISTING OPTIONSThe issuance of substantial numbers of shares of our common stock in the public market or the perception that such issuances might occur, YOUR SURRENDERED OPTIONS MIGHT HAVE BEEN WORTH MORE THAN THE NEW OPTIONS THAT YOU RECEIVE IN EXCHANGE FOR THEM. From time to time we engage the exchange of OP units for shares of common stock, the issuance of our common stock or OP units in connection with future property, portfolio or business acquisitions and other strategic transactionsissuances of our common stock could have an adverse effect on the per share trading price of our common stock. In addition, future issuances of our common stock may be dilutive to existing stockholders. Delays in investing the net proceeds of this offering may impair our performance. We cannot assure you that we will be able to identify properties that meet our investment objectives or that any investment we make will produce a positive return. We may engage be unable to invest the net proceeds of this offering on acceptable terms within the time period that we anticipate or at all, which could adversely affect our financial condition and operating results. This offering may have a dilutive effect on our earnings per share and funds from operations per share after giving effect to the issuance of our common stock and the receipt of the expected net proceeds. The actual amount of dilution from this “at the market offering,” or from any future sale of common pursuant to this offering, will be based on numerous factors, particularly the use of proceeds and any return generated thereby, and cannot be determined at this time. The per share trading price of our common stock could decline as a result of sales of a large number of shares of our common stock in the market in connection with this offering, or otherwise, or as a result of the perception or expectation that such sales could occur. Our capital structure includes senior common stock, which is a separate class of our capital stock that has priority over listed common stock with respect to the payment of distributions. However, it is junior to our Series E Preferred Stock, Series F Preferred Stock and Series G Preferred Stock with respect to the payment of distributions. Shares of our senior common stock are not listed or traded on a national securities exchange. Holders of shares of senior common stock have the right, but not the obligation, following the fifth anniversary of the issuance of such shares to exchange any or all of such shares of senior common stock for shares of our listed common stock. Furthermore, in the event of our liquidation, each share of senior common stock will be automatically converted to a number of shares of our listed common stock in accordance with the applicable exchange ratio. Therefore, senior common stock will rank pari passu with our listed common stock upon a liquidation, dissolution or winding up of the Company. In the future, we may attempt to increase our capital resources by making additional offerings of equity securities or issue debt securities. Upon liquidation, holders of our preferred stock, holders of our debt securities, if any, and lenders with respect to other borrowings, including our line of credit, would receive a distribution of our available assets in full prior to the holders of our common stock. Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Thus, our common stockholders bear the risk of our future offerings reducing the per share trading price of our common stock and diluting their interest in us. Sales of our common stock, if any, under this prospectus supplement and the accompanying prospectus may be made by transactions that are deemed to be part of an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act, by means of ordinary brokers’ transactions that qualify for delivery of a prospectus to Nasdaq in accordance with Rule 153 under the Securities Act or such other sales as may be agreed by us and the Sales Agents, at market prices prevailing at the time of sale, at prices related to prevailing market prices or at other negotiated prices. There is no guarantee that there will be any sales of our common stock pursuant to this prospectus supplement and the accompanying prospectus. Actual sales, if any, of our common stock under this prospectus supplement and the accompanying prospectus may be less than as set forth in this paragraph depending on, among other things, the market price of our common stock at the time of any such sale. As a result, the actual net proceeds we receive may be more or less than the amount of net proceeds estimated in this prospectus supplement. However, assuming we sell all of the shares of common stock covered by the Sales Agreement, we estimate that the total expenses of the offering payable by us, excluding discounts, commissions and reimbursements to the Sales Agents under the Sales Agreement, will be approximately $125,000 which includes our legal, accounting and printing costs and various other fees associated with the offering. We currently intend to use the net proceeds of the offering to fund pending and future acquisitions, through the Operating Partnership, of real property or capital expenditures and/or improvements to properties in our portfolio, in the ordinary course of our business and in accordance with our investment objectives. We may also use a portion of the proceeds from this offering to pay down our Credit Facility and for other general corporate purposes. As of December 31, 2022, there was $393.3 million outstanding under our Credit Facility, at a weighted average interest rate of approximately 5.75%, and $15.6 million outstanding under letters of credit, at a weighted average interest rate of 1.50%. As of February 22, 2023, the maximum additional amount we could draw under the Credit Facility was $86.4 million. We were in compliance with all covenants under the Credit Facility as of December 31, 2022. We have entered into the Sales Agreement, dated March 3, 2023, under which we may issue and sell our shares of common stock from time to time through the Sales Agents. Pursuant to this prospectus supplement and the accompanying prospectus, we may offer and sell up to $250,000,000 of our common stock, through the Sales Agents. As of the date of this prospectus supplement, we have not sold any shares of our common stock under the Sales Agreement. Pursuant to the Sales Agreement, sales of the shares, if any, under this prospectus supplement and the accompanying prospectus will be made by any method that is deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act, including sales made directly on or through Nasdaq or any other existing trading market for our common stock. Under the terms of the Sales Agreement, we also may sell shares to one or more of the Sales Agents as a principal for its own account at a price agreed upon at the time of sale. This summary of the material provisions of the Sales Agreement does not purport to be a complete statement of its terms. A copy of the Sales Agreement has been filed as an exhibit to a current report on Form 8-K filed under the Exchange Act, which is incorporated by reference in this prospectus supplement. When requested by us, the Sales Agents will offer shares of common stock subject to the terms and conditions of the Sales Agreement on any trading day or as or as otherwise agreed upon by us and the Sales Agents. We will designate the maximum amount and minimum price of shares of common stock to be sold through the Sales Agents on a daily basis or otherwise determine such amounts together with the Sales Agents. Subject to the terms and conditions of the Sales Agreement, the Sales Agents will use their commercially reasonable efforts to place on our behalf all of the designated shares of common stock. We may instruct the Sales Agents not to place shares of common stock if the sales cannot be effected at or above the price designated by us in any such instruction. We may only instruct one Sales Agent to sell shares of common stock on any single given day. We or the Sales Agents may suspend the offering of shares of common stock being made through the Sales Agents under the Sales Agreement upon proper notice to the other party. The Sales Agents will receive from us a commission of up to 2.0% of the gross sales price per common share for any shares of common stock sold under the Sales Agreement. The remaining sales proceeds, after deducting any expenses payable by us and any transaction fees imposed by any governmental, regulatory, or self-regulatory organization in connection with the sales, will equal our net proceeds for the sale of such shares of common stock. The Sales Agents will provide written confirmation to us following the close of trading on Nasdaq each day on which shares of common stock are sold under the Sales Agreement. Each confirmation will include the number of shares of common stock sold on that day, the aggregate gross proceeds of such sales and the commission payable by us to the Sales Agents. Settlement for sales of shares of common stock will occur, unless the parties agree otherwise, on the second business day that is also a trading day following the date on which such sales were made in return for payment of the net proceeds to us. There is no arrangement for funds to be received in any escrow, trust or similar arrangement. In connection with the sale of the shares of our common stock on our behalf, each Sales Agent will be deemed to be an “underwriter” within the meaning of the Securities Act, and the compensation paid to each of the Sales Agents will be deemed to be underwriting commissions or discounts. We have agreed to indemnify each of the Sales Agents against certain civil liabilities, including liabilities under the Securities Act, or to contribute to payments that any Sales Agent may be required to make because of those liabilities. We estimate that the total expenses of the offering payable by us, excluding discounts and commissions payable to the Sales Agents under the Sales Agreement, will be approximately $125,000. The offering of shares of common stock pursuant to the Sales Agreement will terminate upon the earlier of (1) the sale of all of the shares of common stock subject to the Sales Agreement and (2) the termination of the Sales Agreement according to its terms by either the Sales Agents or us. The Sales Agents and their respective affiliates currently, and may in the future, provide various investment banking, commercial banking, financial advisory and other services to us and our affiliates for which services they have received, and may in the future which could significantly change our structurereceive, ownership, organization or management or customary fees. In the make-up course of our board of directors, and which could significantly affect the price of our shares. If we engage in such a transaction or transactions before the date we grant the new options, our shares could increase (or decrease) in value, and the exercise price of the new options could be higher (or lower) than the exercise price of options you elect to have cancelled as part of this offer. As is outlined in Section 8its business, the exercise price Sales Agents may actively trade our securities for their own account or for the accounts of any new options granted to you in return for your surrendered options will be customers, and, accordingly, the fair market value of a share of Class A common stock on the date of grant, as determined by the closing price reported by the Nasdaq National Market on the date of grant. You will be at risk of any such increase in our Class A common stock price before the grant date of the new options for these or any other reasons. PARTICIPATION IN THIS OFFER WILL MAKE YOU INELIGIBLE TO RECEIVE ANY OPTION GRANTS UNTIL FEBRUARY 4, 2002 AT THE EARLIEST. Employees are generally eligible to receive option grants Sales Agents may at any time that hold long or short positions in such securities. To the board of directors or Compensation Committee chooses to make them. Howeverextent required by Regulation M, if you participate in this offer, you the Sales Agents will not be eligible engage in any market making activities involving our common shares while the offering is ongoing under this prospectus supplement. Affiliates of certain of the Sales Agents are lenders under our unsecured revolving and term loan facilities. Our Operating Partnership may use a portion of the net proceeds we contribute to receive any option grants until February 4, 2002 at the earliest because of potentially adverse accounting consequences it from this offering to us if options were granted earlier. IF YOUR EMPLOYMENT TERMINATES PRIOR TO THE GRANT OF THE NEW OPTION, YOU WILL RECEIVE NEITHER A NEW OPTION NOR THE RETURN OF YOUR SURRENDERED OPTION. Once your option is surrendered repay borrowings outstanding from time to time under our unsecured revolving and accepted by us, it is gone for goodterm loan facilities. Accordingly, if your employment terminates for each such affiliate will receive its proportionate share of any reason prior to amount of our revolving and term loan facilities that is repaid with the grant net proceeds from this offering, and therefore, may receive more than 5% of the new optionnet proceeds from the sale of our common shares, you not including the sales agent commission. Fifth Third Securities, Inc. is currently a lender under our Credit Facility. Xxxxxx X. Xxxxx & Co. Incorporated will have pay a referral fee to an affiliate of The Huntington National Bank, one of the benefit lenders under the Credit Facility, in connection with this offering. KeyBank NA, an affiliate of neither the surrendered option nor the new optionKeyBanc Capital Markets Inc., is currently a lender under our revolving and term loan facilities. TAX-RELATED RISKS OF RECEIVING AND PARTICIPATING IN THIS OFFER YOUR NEW OPTION MAY BE A NONQUALIFIED STOCK OPTIONAccordingly, WHEREAS YOUR SURRENDERED OPTION MAY HAVE BEEN AN INCENTIVE STOCK OPTION. If your surrendered option was an incentive stock option, your new option this offering will be an incentive stock optionconducted in accordance with FINRA Rule 5121(a)(1)(B), but only to the extent it qualifies as such under the Internal Revenue Code. For options to qualify as incentive stock options, the value of since our common shares subject to the options and any other incentive stock options issued by us that first become exercisable by the optionholder in any calendar year cannot exceed $100,000have a bona fide public market, as determined using the value of the shares on the grant datedefined by FINRA Rule 5121(f) (3). It is possible that by participating in this exchange, your options will exceed this limit Certain legal matters and will be treated as nonqualified stock options to the extent of that excess. In general, nonqualified stock options may be less favorable to you from a tax perspective. EVEN IF YOU ELECT NOT TO PARTICIPATE IN THIS OFFER, YOUR INCENTIVE STOCK OPTIONS MAY BE AFFECTED. We believe that you will not be subject to current U.S. certain federal income tax if you do not elect to participate in this offer. We also believe that this offer will not change the U.S. federal income tax treatment of subsequent exercises of your incentive stock options (and sales of shares acquired upon exercise of such options) if you do not participate in this offer. However, there is a risk that the IRS may characterize this offer as a "modification" of your eligible incentive stock options, even if you decline to participate. In 1991, the IRS issued a private letter ruling in which another company's option exchange program was characterized as a "modification" of any incentive stock option that could be exchanged (whether or not it was exchanged). This does not necessarily mean that our offer matters will be viewed passed upon for us by Bass, Xxxxx & Xxxx PLC, Nashville, Tennessee. Certain matters of Maryland law, including the same wayvalidity of the common stock to be issued in connection with this offering, andwill be passed upon for us by Xxxxxxx LLP, Baltimore, Maryland. The Sales Agents are being represented in factconnection with this offering by Xxxxxx LLP, we believe that we have structured this offer so New York, New York. Bass, Xxxxx & Xxxx PLC and Xxxxxx LLP may rely as to mitigate this risk. Private letter rulings issued by certain matters of Maryland law upon the IRS contain the IRS's opinion regarding only the specific facts presented by a specific person or company. We therefore do not know if the IRS will assert the position that our offer constitutes a "modification" of incentive stock options that can be surrendered. A successful assertion by the IRS of this position could extend the options' requisite holding periods to qualify for favorable tax treatment and could also convert some incentive stock options into nonqualified stock optionsXxxxxxx LLP.

RISK FACTORS. Participation Investing in this offer our common stock involves a number high degree of potential risksrisk. Before making an investment decision, including those described below. The risks you should carefully consider the risk factors described below and the risk factors under risks described beginning on page 3 of the heading accompanying prospectus and in the section entitled "Certain Factors That May Affect Future Results" “Risk Factors” contained in our Quarterly Annual Report on Form 10-Q K for the fiscal quarter year ended January December 31, 20012020, filed on March 16which is incorporated herein by reference, 2001, as amended on March 19, 2001, highlight together with all of the material risks of participating other information included or incorporated by reference in this offerprospectus supplement and the accompanying prospectus. Eligible participants should carefully consider Any of these risks described could materially adversely affect our business, financial condition, results of operations, tax status or ability to make distributions to our stockholders. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business operations. If this were to happen, the price of our common stock could decline significantly and you could lose a part or all of your investment. The price at which the shares of our common stock may be sold in the public market after they are encouraged purchased pursuant to speak with an investment this prospectus supplement may be lower than the price at which they are sold through or by a sales agent. The market price of our shares of common stock may be volatile and tax advisor be subject to wide fluctuations. Fluctuations in our stock price may not reflect our historical financial performance and condition and prospects. Our stock price may fluctuate as necessary before deciding whether a result of factors that are beyond our control or unrelated to surrender our historical financial performance, condition and prospects. We cannot assure you that the market price of our shares of common stock will not be volatile or not surrender options fluctuate or decline significantly in this offerthe future. In addition, we strongly urge you the stock market in general can experience considerable price and volume fluctuations that may be unrelated to read the rest of these materials for a xxxxxx discussion of the risks which may apply to you before deciding whether to surrender or not surrender your options in this offer. ECONOMIC RISKS OF PARTICIPATING IN THIS OFFER IF OUR STOCK PRICE INCREASES AFTER THE DATE YOU SURRENDER YOUR EXISTING OPTIONSour historical performance, YOUR SURRENDERED OPTIONS MIGHT HAVE BEEN WORTH MORE THAN THE NEW OPTIONS THAT YOU RECEIVE IN EXCHANGE FOR THEM. From time to time we engage in business acquisitions condition and other strategic transactionsprospects. We may engage in such transactions in cannot predict the effect, if any, that future which could significantly change issuances or sales of our structurecommon stock, ownershippreferred stock, organization warrants or management debt securities convertible into or exercisable or exchangeable for common stock, including sales of our common stock pursuant to the Sales Agreement, or the make-up availability of our board securities for future issuance or sale, will have on the market price of directorsshares of our common stock. Issuances or sales of substantial amounts of our common stock, and which preferred stock, warrants or debt securities convertible into or exercisable or exchangeable for common stock, including sales of our common stock pursuant to the Sales Agreement, or the perception that such issuances or sales might occur, could significantly affect negatively impact the market price of our sharescommon stock and the terms upon which we may obtain additional equity financing in the future. If Preferred stock we engage issue will generally be senior to our common stock with respect to dividends and liquidation rights. The issuance of any additional shares of our common stock or securities convertible into or exchangeable for common stock or that represent the right to receive common stock, or the exercise of such securities, could be substantially dilutive to holders of our common stock, including purchasers of common stock in such a transaction or transactions before this offering. The vesting of any restricted stock granted to directors, executive officers and other employees, and other issuances of our common stock could have an adverse effect on the date we grant the new options, market price of our shares could increase (or decrease) in valuecommon stock, and the exercise price existence of our common stock reserved for issuance under the Ready Capital Corporation 2012 Equity Incentive Plan may adversely affect the terms upon which we may be able to obtain additional capital through the sale of equity securities. We will be required to devote significant management attention and resources to the integration of Xxxxxxx’s business with our business. The potential difficulties we may encounter in the integration process include, but are not limited to, the following: • the inability to successfully combine our and Xxxxxxx’s businesses in a manner that permits us to achieve the cost savings anticipated to result from the acquisition of Anworth, which would result in the anticipated benefits of the new options acquisition of Anworth not being realized in the timeframe currently anticipated or at all; • the complexities of combining two companies with different histories and portfolio assets; • the difficulties or delays in redeploying the capital acquired in connection with the acquisition of Anworth into our target assets; • potential unknown liabilities and unforeseen increased expenses, delays or conditions associated with the acquisition of Anworth; and • performance shortfalls as a result of the diversion of management’s attention caused by integrating the companies’ operations. For all these reasons, it is possible that the integration process could be higher (result in the distraction of our management team, the disruption of our ongoing business or lower) than inconsistencies in our operations, services, standards, controls, policies and procedures, any of which could adversely affect our ability to generate attractive risk-adjusted returns, to maintain relationships with our key stakeholders and employees, to achieve the exercise price anticipated benefits of options you elect the acquisition of Anworth, or could otherwise materially and adversely affect our business and financial results. We have acquired Xxxxxxx’s leveraged portfolio of residential mortgage-backed securities and residential mortgage loans in connection with the acquisition of Anworth and, as a result, our leverage increased relative to prior levels. We have cancelled as substantial indebtedness following completion of the acquisition of Anworth. As part of this offerour business strategy following the completion of the acquisition of Anworth, we currently intend to manage the liquidation and runoff of certain assets within the Anworth portfolio and repay certain indebtedness on the Anworth portfolio, and to redeploy the capital into opportunities in our core SBC strategies and other assets that we expect will generate attractive risk-adjusted returns and long-term earnings accretion. As is outlined Possible market developments, including a sharp rise in Section 8interest rates, a change in prepayment rates, or increasing market concern about the exercise price value or liquidity of any new options granted to you in return for your surrendered options will be the fair portfolio of residential mortgage-backed securities and residential mortgage loans that we acquired upon the completion of the acquisition of Anworth, may reduce the market value of a share of Class A common stock this portfolio. If this were to occur, we may not be able to liquidate the Anworth portfolio on our anticipated timeline, on attractive terms or at all, which may harm our ability to redeploy the capital into opportunities in our core SBC strategies and other assets that we expect will generate attractive risk-adjusted returns and long-term earnings accretion. Further, lenders may require us to pledge additional collateral to secure the borrowings on the date of grantAnworth portfolio, as determined by the closing price reported by the Nasdaq National Market on the date of grant. You will be at risk of any such increase in which could limit our Class A common stock price before the grant date of the new options for these or any other reasons. PARTICIPATION IN THIS OFFER WILL MAKE YOU INELIGIBLE TO RECEIVE ANY OPTION GRANTS UNTIL FEBRUARY 4, 2002 AT THE EARLIEST. Employees are generally eligible ability to receive option grants at any time that the board of directors or Compensation Committee chooses incur additional indebtedness and adversely impact our ability to make them. However, if you participate in this offer, you will not be eligible to receive any option grants until February 4, 2002 at the earliest because of potentially adverse accounting consequences to us if options were granted earlier. IF YOUR EMPLOYMENT TERMINATES PRIOR TO THE GRANT OF THE NEW OPTION, YOU WILL RECEIVE NEITHER A NEW OPTION NOR THE RETURN OF YOUR SURRENDERED OPTION. Once your option is surrendered comply with covenants under our existing and accepted by us, it is gone for good. Accordingly, if your employment terminates for any reason prior to the grant of the new option, you will have the benefit of neither the surrendered option nor the new option. TAX-RELATED RISKS OF RECEIVING AND PARTICIPATING IN THIS OFFER YOUR NEW OPTION MAY BE A NONQUALIFIED STOCK OPTION, WHEREAS YOUR SURRENDERED OPTION MAY HAVE BEEN AN INCENTIVE STOCK OPTION. If your surrendered option was an incentive stock option, your new option will be an incentive stock option, but only to the extent it qualifies as such under the Internal Revenue Code. For options to qualify as incentive stock options, the value of shares subject to the options and any other incentive stock options issued by us that first become exercisable by the optionholder in any calendar year cannot exceed $100,000, as determined using the value of the shares on the grant date. It is possible that by participating in this exchange, your options will exceed this limit and will be treated as nonqualified stock options to the extent of that excess. In general, nonqualified stock options may be less favorable to you from a tax perspective. EVEN IF YOU ELECT NOT TO PARTICIPATE IN THIS OFFER, YOUR INCENTIVE STOCK OPTIONS MAY BE AFFECTED. We believe that you will not be subject to current U.S. federal income tax if you do not elect to participate in this offer. We also believe that this offer will not change the U.S. federal income tax treatment of subsequent exercises of your incentive stock options (and sales of shares acquired upon exercise of such options) if you do not participate in this offer. However, there is a risk that the IRS may characterize this offer as a "modification" of your eligible incentive stock options, even if you decline to participate. In 1991, the IRS issued a private letter ruling in which another company's option exchange program was characterized as a "modification" of any incentive stock option that could be exchanged (whether or not it was exchanged). This does not necessarily mean that our offer will be viewed the same way, and, in fact, we believe that we have structured this offer so as to mitigate this risk. Private letter rulings issued by the IRS contain the IRS's opinion regarding only the specific facts presented by a specific person or company. We therefore do not know if the IRS will assert the position that our offer constitutes a "modification" of incentive stock options that can be surrendered. A successful assertion by the IRS of this position could extend the options' requisite holding periods to qualify for favorable tax treatment and could also convert some incentive stock options into nonqualified stock optionsfuture borrowings.

RISK FACTORS. Participation in this offer involves Before making a number decision whether or not to accept the Offer, you should consider the following Risk Factors: IN MAKING THE OFFER, THERE HAS BEEN NO THIRD PARTY VALUATION OR APPRAISAL. No independent party has been retained by Lexington Fund or any other person to evaluate or render any opinion to Limited Partners with respect to the fairness of potential risksthe Offer Price, including those described belowand no representation is made as to any fairness or other measures of value that may be relevant to Limited Partners. The risks described below In making the Offer, Lexington Fund has not based its valuation of the properties owned by the Partnership on any third-party appraisal or valuation and it is uncertain whether the risk factors under Offer Price reflects the heading entitled "Certain Factors That May Affect Future Results" in our Quarterly Report on Form 10-Q for value that would be realized upon the fiscal quarter ended January 31, 2001, filed on March 16, 2001, as amended on March 19, 2001, highlight the material risks sale of participating in this offerUnits by a Limited Partner to a third party. Eligible participants should carefully consider these risks and are encouraged We urge Limited Partners to speak with an investment consult their own financial and tax advisor as necessary before deciding whether to surrender advisors in connection with the Offer. THE OFFER PRICE MAY NOT REPRESENT FAIR MARKET VALUE OF UNITS. There is no established or not surrender options in this offer. In additionregular trading market for Units, we strongly urge you to read the rest of these materials nor is there another reliable standard for a xxxxxx discussion of the risks which may apply to you before deciding whether to surrender or not surrender your options in this offer. ECONOMIC RISKS OF PARTICIPATING IN THIS OFFER IF OUR STOCK PRICE INCREASES AFTER THE DATE YOU SURRENDER YOUR EXISTING OPTIONS, YOUR SURRENDERED OPTIONS MIGHT HAVE BEEN WORTH MORE THAN THE NEW OPTIONS THAT YOU RECEIVE IN EXCHANGE FOR THEM. From time to time we engage in business acquisitions and other strategic transactions. We may engage in such transactions in the future which could significantly change our structure, ownership, organization or management or the make-up of our board of directors, and which could significantly affect the price of our shares. If we engage in such a transaction or transactions before the date we grant the new options, our shares could increase (or decrease) in value, and the exercise price of the new options could be higher (or lower) than the exercise price of options you elect to have cancelled as part of this offer. As is outlined in Section 8, the exercise price of any new options granted to you in return for your surrendered options will be determining the fair market value of a share the Units. The Offer Price does not necessarily reflect the price that Limited Partners might receive in an open market sale of Class A common stock on Units. Those prices could be higher than the date of grant, as determined by Offer Price. THE OFFER PRICE DOES NOT TAKE INTO ACCOUNT ANY FUTURE PROSPECTS OF THE PARTNERSHIP. The Offer Price is speculative in nature and does not ascribe any value to potential future improvements in the closing price reported by the Nasdaq National Market on the date of grant. You will be at risk of any such increase in our Class A common stock price before the grant date operating performance of the new options for these or any other reasonsPartnership's properties. PARTICIPATION IN THIS THE OFFER WILL MAKE YOU INELIGIBLE TO PRICE MAY NOT REPRESENT THE VALUE THAT A LIMITED PARTNER MIGHT RECEIVE ANY OPTION GRANTS UNTIL FEBRUARY 4UPON A LIQUIDATION OF THE PARTNERSHIP. Although a liquidation of the Partnership is not anticipated in the near future, 2002 AT THE EARLIEST. Employees are generally eligible to you might receive option grants at any time that the board of directors or Compensation Committee chooses to make them. However, more value if you participate in this offer, you will retain Units until the Partnership is liquidated. The actual proceeds which might be obtained upon liquidation of the Partnership are highly uncertain and could be more than the Offer Price. Limited Partners are not be eligible required to receive any option grants until February 4, 2002 at accept the earliest because of potentially adverse accounting consequences to us if options were granted earlierOffer and tender their Units. IF YOUR EMPLOYMENT TERMINATES PRIOR THERE MAY BE CONFLICTS OF INTEREST WITH RESPECT TO THE GRANT OF THE NEW OPTION, YOU WILL RECEIVE NEITHER A NEW OPTION NOR THE RETURN OF YOUR SURRENDERED OPTIONOFFER. Once your option Lexington Fund is surrendered and accepted by us, it is gone for goodmaking the Offer with a view toward making a profit. Accordingly, if your employment terminates for any reason prior to the grant of the new option, you will have the benefit of neither the surrendered option nor the new option. TAX-RELATED RISKS OF RECEIVING AND PARTICIPATING IN THIS OFFER YOUR NEW OPTION MAY BE A NONQUALIFIED STOCK OPTION, WHEREAS YOUR SURRENDERED OPTION MAY HAVE BEEN AN INCENTIVE STOCK OPTION. If your surrendered option was an incentive stock option, your new option will be an incentive stock option, but only to the extent it qualifies as such under the Internal Revenue Code. For options to qualify as incentive stock options, the value of shares subject to the options and any other incentive stock options issued by us that first become exercisable by the optionholder in any calendar year cannot exceed $100,000, as determined using the value of the shares on the grant date. It is possible that by participating in this exchange, your options will exceed this limit and will be treated as nonqualified stock options to the extent of that excess. In general, nonqualified stock options may be less favorable to you from a tax perspective. EVEN IF YOU ELECT NOT TO PARTICIPATE IN THIS OFFER, YOUR INCENTIVE STOCK OPTIONS MAY BE AFFECTED. We believe that you will not be subject to current U.S. federal income tax if you do not elect to participate in this offer. We also believe that this offer will not change the U.S. federal income tax treatment of subsequent exercises of your incentive stock options (and sales of shares acquired upon exercise of such options) if you do not participate in this offer. However, there is a risk that conflict between Lexington Fund's desire to acquire your Units at a low price and your desire to sell your Units at a high price. Lexington Fund's intent is to acquire the IRS may characterize this offer as Units at a "modification" discount to the value Lexington Fund might ultimately realize from owning the Units. Although Lexington Fund cannot predict the future value of your eligible incentive stock options, even if you decline to participate. In 1991the Partnership assets on a per Unit basis, the IRS issued a private letter ruling in which another company's option exchange program was characterized as a "modification" of any incentive stock option Offer Price could differ significantly from the net proceeds that could be exchanged (whether or not it was exchanged). This does not necessarily mean that our offer will be viewed realized from a current sale of the same way, and, in fact, we believe that we have structured this offer so as to mitigate this risk. Private letter rulings issued properties owned by the IRS contain Partnership or that may be realized upon future liquidation of the IRS's opinion regarding only the specific facts presented by a specific person or company. We therefore do not know if the IRS will assert the position that our offer constitutes a "modification" of incentive stock options that can be surrendered. A successful assertion by the IRS of this position could extend the options' requisite holding periods to qualify for favorable tax treatment and could also convert some incentive stock options into nonqualified stock optionsPartnership.