|                                          |
|------------------------------------------|
|                                          |  |
| Delaware                                 | 52-1500621 |
| (State of Incorporation)                 | (I.R.S. Employer Identification No.) |
| 11200 Rockville Pike                     |   |
| Rockville, MD                            | 20852 |
| (Address of Principal Executive Offices) | (ZIP Code) |

----

|          |
|----------|
|          |  |  |
|     |   | Page Number |
|     | PART I |   |
|     |   |   |
| Item 1.  | Business | I-1 |
| Item 1A. | Risk Factors | I-1 |
| Item 1 B | Unresolved Staff Comments | I-3 |
| Item 2.  | Properties | I-3 |
| Item 3.  | Legal Proceedings | I-3 |
| Item 4.  | Mine Safety Disclosures | I-3 |
|     |   |   |
|     | PART II |   |
|     |   |   |
| Item 5.  | Market for the Registrant’s Beneficial Assignee Certificates, |   |
|     | Related Partnership Matters, and Issuer Purchases of Beneficial Assignee Certificates | II-1 |
| Item 6.  | Selected Financial Data | II-1 |
| Item 7.  | Management’s Discussion and Analysis of Financial Condition |   |
|     | and Results of Operations | II-1 |
| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | II-6 |
| Item 8.  | Financial Statements and Supplementary Data | II-6 |
| Item 9.  | Changes In and Disagreements With Accountants |   |
|     | on Accounting and Financial Disclosure | II-6 |
| Item 9A. | Controls and Procedures | II-7 |
| Item 9B. | Other Information | II-8 |
|     |   |   |
|     | PART III |   |
|     |   |   |
| Item 10. | Directors, Executive Officers and Corporate Governance | II-8 |
| Item 11. | Executive Compensation | II-8 |
| Item 12. | Security Ownership of Certain Beneficial Owners and Management | II-8 |
| Item 13. | Certain Relationships and Related Transactions and Director Independence | II-9 |
| Item 14. | Principal Accounting Fees and Services | II-10 |
|     |   |   |
|     | PART IV |   |
|     |   |   |
| Item 15. | Exhibits, Financial Statement Schedules and Related Partnership Matters | IV-1 |
|     |   |   |

----

----

|    |                                                                                 |
|----|---------------------------------------------------------------------------------|
| 1) | the availability of and demand for hotel rooms in the markets where we operate; |

|    |                                                                                                                                             |
|----|---------------------------------------------------------------------------------------------------------------------------------------------|
| 2) | changes in general economic conditions, including the severity and duration of downturns in the United States, Europe and global economies; |

|    |                                                                                                                                                                |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3) | decreases in the demand for transient rooms and related lodging services, including a reduction in business travel as a result of general economic conditions; |

|    |                                                                                                                           |
|----|---------------------------------------------------------------------------------------------------------------------------|
| 4) | increases in energy costs, airline fares and other expenses related to travel, which may negatively affect traveling; and |

|    |                                                                                                                                                                                                 |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 5) | the impact of war and terrorist activity (including threats of terrorist activity) and other matters that influence and/or limit travel, such as travelers’ fears of contagious diseases; |

|    |                                                          |
|----|----------------------------------------------------------|
| 6) | the occurrence of natural disasters, such as hurricanes: |

|    |                                                                                                                                                    |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------|
| 7) | taxes and government regulations that influence or determine wages, and the cost of goods and services the Partnership uses to operate its hotels; |

|    |                                                                                                                |
|----|----------------------------------------------------------------------------------------------------------------|
| 8) | the availability and cost of capital needed by the Partnership to fund capital improvements of the hotels; and |

|    |                                                                                                                                              |
|----|----------------------------------------------------------------------------------------------------------------------------------------------|
| 9) | failure to maintain the integrity of our computerized systems with regards to internal and customer data, including credit card information. |

----

|                                                               |
|---------------------------------------------------------------|
|                                                               |  |  |  |  |  |
| NAME AND LOCATION                                             | NO. OF ROOMS |   | DATE ACQUIRED |   | PURCHASE PRICE |
| Minneapolis Days Inn (University Hotel)Minneapolis, Minnesota | 129 |   | 11/1/1987 |   | $4,800,000 |
| Plymouth Days InnPlymouth, Minnesota                          | 113 |   | 12/30/1987 |   | $4,000,000 |
| Roseville Days InnRoseville, Minnesota                        | 114 |   | 3/1/1988 |   | $4,200,000 |

----

|     |                                                                                                                                                                                                                                         |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (a) | There is no established market for the purchase and sale of BACs, although various informal market services may exist.  Due to the limited markets, investors may be unable to sell or otherwise dispose of their BACs.  |

|     |                                                                                     |
|-----|-------------------------------------------------------------------------------------|
| (b) | As of March 29, 2013, there were 829 registered holders of BACs in the Partnership. |

|     |                                                              |
|-----|--------------------------------------------------------------|
| (c) | The Partnership did not make a distribution in 2012 or 2011. |

----

|                 |
|-----------------|
|                 |  |
| Hotel Location  | Peak Months |
| Clearwater, FL  | January through April |
| Minneapolis, MN | March through November |
| Plymouth, MN    | April through October |
| Roseville, MN   | April through October |
| Scottsdale, AZ  | January through April; and October and November |

----

|                                    |
|------------------------------------|
|                                    |  |  |  |  |  |  |  |
|                               | Gross Operating Income (Loss) |
| Hotel Location                     | 2012 |   | 2011 |
| Minneapolis, MN                    | $ | 2,241,231 |  |   | $ | 2,245,628 |  |
| Plymouth, MN                       | 671,565 |  |   | 558,453 |  |
| Roseville, MN                      | 958,819 |  |   | 935,333 |  |
|                               |   |   |   |
| Total continuing operations        | 3,871,615 |  |   | 3,739,414 |  |
|                               |   |   |   |
| Operations of asset held for sale: |   |  |   |   |  |
| Scottsdale, AZ                     | 1,362,181 |  |   | 1,658,789 |  |
| Clearwater, FL                     | (5,538 | ) |   | 457,103 |  |
|                               |   |   |   |
| Total                              | $ | 5,228,258 |  |   | $ | 5,855,306 |  |

|                                    |
|------------------------------------|
|                                    |  |  |  |  |  |  |  |
|                               | Operating (Loss) Income |
| Hotel Location                     | 2012 |   | 2011 |
| Minneapolis, MN                    | $ | 922,803 |  |   | $ | 934,103 |  |
| Plymouth, MN                       | 61,091 |  |   | 219 |  |
| Roseville, MN                      | 255,858 |  |   | 289,286 |  |
| Depreciation and net Partnership   |   |  |   |   |  |
| Operating expenses                 | (1,002,458 | ) |   | (1,224,312 | ) |
|                               |   |   |   |
| Total continuing operations        | 237,294 |  |   | (704 | ) |
|                               |   |   |   |
| Operations of asset held for sale: |   |  |   |   |  |
| Scottsdale, FL                     | (98,609 | ) |   | 82,516 |  |
| Clearwater, FL                     | (48,889 | ) |   | (159,072 | ) |
|                               |   |   |   |
| Total                              | $ | 89,796 |  |   | $ | (77,260 | ) |

|                 |
|-----------------|
|                 |  |  |  |  |  |
|            | Average Occupancy |
| Hotel Location  | 2012 |   | 2011 |
| Clearwater, FL  | — | % |   | 43 | % |
| Minneapolis, MN | 79 | % |   | 79 | % |
| Plymouth, MN    | 60 | % |   | 54 | % |
| Roseville, MN   | 67 | % |   | 66 | % |
| Scottsdale, AZ  | — | % |   | 58 | % |

----

----

----

----

----

----

|        |
|--------|
|        |  |  |  |
|   | Name and Address | Amount and Nature | % of total BACs |
|   | of Beneficial Owner | of Beneficial Ownership | Issued and outstanding |
|   |   |   |   |
|   | CMG Advisors LLC, et.al. | 108,569 BACs | 12.5% |
|   | 1000 Second Avenue |   |   |
|   | Suite 3950 |   |   |
|   | Seattle, WA 98104 |   |   |
|   |   |   |   |
|   | Equity Resource |   |   |
|   | Investments, LLC | 62,589 BACs | 7.2% |
|   | & Affiliates |   |   |
|   | 1280 Massachusetts Avenue |   |   |
|   | 4th Floor |   |   |
|   | Cambridge, MA 02138 |   |   |
|   |   |   |   |
|   | MacKenzie, Patterson |   |   |
|   | Fuller, LLP & Affiliates | 71,045 BACs | 8.18% |
|   | 1640 School Street |   |   |
|   | Suite 100 |   |   |
|   | Morgan, CA 94556 |   |   |
|   |   |   |   |
|   | Peachtree Partners & Affiliates | 79,534 BACs | 9.15% |
|   | P. O. Box 47638 |   |   |
|   | Phoenix, AZ 85068 |   |   |

|     |                                   |
|-----|-----------------------------------|
| (b) | Security ownership of management. |

|        |
|--------|
|        |  |  |  |
|   |   | Amount and Nature | % of total BACs |
|   | Name of Beneficial Owner | of Beneficial Ownership | Issued and outstanding |
|   |   |   |   |
|   | William B. Dockser | None | —% |
|   | H. William Willoughby | None | —% |
|   | All Directors and Officers |   |   |
|   | As a Group (2 persons) | None | —% |

|     |                     |
|-----|---------------------|
| (c) | Changes in control. |

----

|     |                                 |
|-----|---------------------------------|
| (c) | Certain business relationships. |

|     |                              |
|-----|------------------------------|
| (d) | Transactions with promoters. |

|                |
|----------------|
|                |  |  |  |  |  |  |  |
|           | 2012 |   | 2011 |
| Audit fees (1) | $ | 175,000 |  |   | $ | 160,120 |  |
| Tax fees (2)   | 13,000 |  |   | 14,250 |  |
| All other fees | — |  |   | — |  |
| Total billed   | $ | 188,000 |  |   | $ | 174,370 |  |

|     |                                                                                                                                                                                                                                                                                                        |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1) | Principally fees for the audit of the Partnership’s annual financial statements, the independent registered public accounting firm’s review of the Partnership’s quarterly financial statements and services provided in connection with the Partnership’s regulatory filings. |

|     |                                                                    |
|-----|--------------------------------------------------------------------|
| (2) | Fees for preparation of Partnership federal and state tax returns. |

----

|    |                            |
|----|----------------------------|
| 1. |  Financial Statements |

|    |                                                              |
|----|--------------------------------------------------------------|
| a. | The following documents are included as part of this report: |

|    |                                                                                                                                    |
|----|------------------------------------------------------------------------------------------------------------------------------------|
| a. | Forms of Sales Agency Agreement. (Incorporated by reference to the Registration Statement on Form S-1 filed on December 24, 1986.) |

|    |                                                                                                                                        |
|----|----------------------------------------------------------------------------------------------------------------------------------------|
| b. | Forms of Selected Dealer Agreements. (Incorporated by reference to the Registration Statement on Form S-1 filed on December 24, 1986.) |

|    |                                                                                                                                                                                                                                                                 |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| a. | Certificate of Limited Partnership dated as of September 23, 1986 of CRI Hotel Income Partners, L.P. (formerly named CRI Hotel Income Fund, L.P.).  (Incorporated by reference to the Registration Statement on Form S-1 filed on December 24, 1986.) |

|    |                                                                                                                                                                                                                                                                                                                                           |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| a. | Sale/Purchase Agreement, dated as of October 9, 1986, by and between Days Inns of America, Inc. (DIA), Days Inns Corp. (DID), Days Inns Management Company, Inc. (DIM), and CRI Hotel Income Fund, L.P., and six modifications thereto. (Incorporated by reference to the Registration Statement on Form S-1 filed on December 24, 1986.) |

|    |                                                                                                                                                                                   |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| b. | Form of Management Agreement by and between DIM and CRI Hotel Income Fund, L.P. (Incorporated by reference to the Registration Statement on Form S-1 filed on December 24, 1986.) |

|    |                                                                                                                                            |
|----|--------------------------------------------------------------------------------------------------------------------------------------------|
| c. | Form of Beneficial Assignee Certificate. (Incorporated by reference to the Registration Statement on Form S-1 filed on December 24, 1986.) |

|    |                                                                                                                                                                                                                                         |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| d. | Forms of Amendment to Hotel Management Agreement by and between CRI Hotel Income Partners, L.P. and Buckhead Hotel Management Company, Inc. (Incorporated by reference to the 1994 Annual Report on Form 10-K filed on March 15, 1995.) |

----

|    |                                                                                                                                      |
|----|--------------------------------------------------------------------------------------------------------------------------------------|
| e. | Loan Agreement, dated December 17, 2010, between CRI Hotel Income of Minnesota, LLC, and Franklin National Bank of Minneapolis. |

|    |                                                                                                                                                                                                                         |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| f. | Combination Mortgage, Security Agreement, Assignment of Rents and Fixture Financing Statement dated December, 17, 2010, between CRI Hotel Income of Minnesota, LLC, and Franklin National Bank of Minneapolis |

----

|                |
|----------------|
|                |  |  |  |  |  |  |
|           |   |   | CRI HOTEL INCOME PARTNERS, L.P. |
|           |   |   | (Registrant) |
|           |   |   |   |   |   |   |
|           |   |   | by: | CRICO Hotel Associates I, L.P |
|           |   |   |   |   |   |   |
|           |   |   | by: | C.R.I., Inc. |
|           |   |   |   |   |   |   |
|           |   |   |   |  |   |   |
| March 29, 2013 |   |   | by: |     /s/ William B. Dockser |
| DATE           |   |   | William B. Dockser |
|           |   |   | Director, Chairman of the Board, |
|           |   |   | and Treasurer |
|           |   |   | Principal Executive Officer |
|           |   |   |   |   |   |   |

|                |
|----------------|
|                |  |  |  |  |
| March 29, 2013 |   |  | by: | /s/ H. William Willoughby  |
| DATE           |   |   |   | H. William Willoughby |
|           |   |   |   | Director, President, Secretary, |
|           |   |   |   | Principal Financial Officer and |
|           |   |   |   | Principal Accounting Officer |
|           |   |   |   |   |

----

|                                                                                             |
|---------------------------------------------------------------------------------------------|
|                                                                                             |  |
|                                                                                        | Page |
|                                                                                        |   |
| Consolidated Financial Statements of CRI Hotel Income Partners, L.P.                        |   |
|                                                                                        |   |
| Reports of Independent Registered Public Accounting Firms                                   | IV-5 |
| Consolidated Balance Sheets as of December 31, 2012 and 2011                                | IV-7 |
| Consolidated Statements of Operations for the Years Ended                                   |   |
| December 31, 2012 and 2011                                                                  | IV-8 |
| Consolidated Statements of Changes in Partners’ (Deficit) Capital for the Years Ended |   |
| December 31, 2012 and 2011                                                                  | IV-10 |
| Consolidated Statements of Cash Flows for the Years Ended                                   |   |
| December 31, 2012 and 2011                                                                  | IV-11 |
| Notes to Consolidated Financial Statements                                                  | IV-12 |

----

----

----

|                                                                                                           |
|-----------------------------------------------------------------------------------------------------------|
|                                                                                                           |  |  |  |  |  |  |  |
|                                                                                                      | December 31, |
|                                                                                                      | 2012 |   | 2011 |
|                                                                                                      |   |   | (Note 1) |
| Assets held for sale                                                                                      | $ | 71,273 |  |   | $ | 1,847,101 |  |
| Property and equipment - at cost                                                                          |   |  |   |   |  |
| Land                                                                                                      | 1,191,990 |  |   | 1,191,990 |  |
| Buildings and site improvements                                                                           | 11,051,370 |  |   | 11,051,370 |  |
| Furniture, fixtures and equipment                                                                         | 2,383,286 |  |   | 2,275,854 |  |
| Leasehold improvements                                                                                    | 1,521,020 |  |   | 1,521,020 |  |
|                                                                                                      | 16,147,666 |  |   | 16,040,234 |  |
| Less: accumulated depreciation and amortization                                                           | (12,436,992 | ) |   | (11,882,733 | ) |
|                                                                                                      | 3,710,674 |  |   | 4,157,501 |  |
| Hotel operating cash                                                                                      | 100,370 |  |   | 63,202 |  |
| Working capital reserves                                                                                  | 1,353,505 |  |   | 628,413 |  |
| Restricted cash                                                                                           | 993,220 |  |   | 999,636 |  |
| Receivables and other assets, net of allowance for doubtful accounts of $23,415 and $24,718, respectively | 430,388 |  |   | 317,275 |  |
| Acquisition fees, principally paid to related parties, net of                                             |   |  |   |   |  |
| accumulated amortization of $699,436 and $675,861, respectively                                           | 116,646 |  |   | 140,221 |  |
| Property purchase costs, net of                                                                           |   |  |   |   |  |
| accumulated amortization of $146,403 and $141,779, respectively                                           | 23,212 |  |   | 27,836 |  |
| Loan refinancing costs, net of                                                                            |   |  |   |   |  |
| accumulated amortization of $221,429 and $180,410, respectively                                           | 67,356 |  |   | 108,375 |  |
|                                                                                                      |  |  |   |  |  |
| Total assets                                                                                              | $ | 6,866,644 |  |   | $ | 8,289,560 |  |

|                                                           |
|-----------------------------------------------------------|
|                                                           |  |  |  |  |  |  |  |
| Accounts payable and accrued expenses                     | $ | 404,843 |  |   | $ | 522,187 |  |
| Hotel trade payables                                      | 122,245 |  |   | 58,508 |  |
| Mortgages payable                                         | 6,718,617 |  |   | 6,923,701 |  |
| Liabilities related to assets held for sale               | 140,512 |  |   | 1,335,162 |  |
| Total liabilities                                         | 7,386,217 |  |   | 8,839,558 |  |
|                                                      |   |   |   |
| General Partner                                           | (399,176 | ) |   | (399,785 | ) |
| Beneficial Assignee Certificates (BACs) Series A; 868,662 |   |   |   |
| issued and outstanding                                    | (120,397 | ) |   | (150,213 | ) |
| Total partners' deficit                                   | (519,573 | ) |   | (549,998 | ) |
| Total liabilities and partners' deficit                   | $ | 6,866,644 |  |   | $ | 8,289,560 |  |

----

|                                                                                        |
|----------------------------------------------------------------------------------------|
|                                                                                        |  |  |  |  |  |  |  |
|                                                                                   | For the years ended |
|                                                                                   | December 31, |
|                                                                                   | 2012 |   | 2011 |
|                                                                                   |   |   | (Note 1) |
| Revenue:                                                                               |   |   |   |
| Rooms                                                                                  | $ | 5,358,302 |  |   | $ | 5,433,562 |  |
| Rental and other                                                                       | 331,025 |  |   | 336,207 |  |
| Telephone                                                                              | 2,714 |  |   | 4,912 |  |
| Food and Beverage                                                                      | — |  |   | 7,026 |  |
|                                                                                   | 5,692,041 |  |   | 5,781,707 |  |
| Departmental expenses:                                                                 |   |  |   |   |  |
| Rooms                                                                                  | (1,762,640 | ) |   | (1,658,419 | ) |
| Rental and other                                                                       | (29,753 | ) |   | (29,416 | ) |
| Telephone                                                                              | (28,033 | ) |   | (28,940 | ) |
|                                                                                   | (1,820,426 | ) |   | (1,716,775 | ) |
| Gross operating income                                                                 | 3,871,615 |  |   | 4,064,932 |  |
| Unallocated operating income (expenses):                                               |   |  |   |   |  |
| Interest and other income                                                              | 1,586 |  |   | 5,479 |  |
| General and administrative                                                             | (847,803 | ) |   | (788,380 | ) |
| Building lease expense                                                                 | (23,362 | ) |   | (22,701 | ) |
| Marketing                                                                              | (385,199 | ) |   | (370,651 | ) |
| Depreciation and amortization                                                          | (624,358 | ) |   | (628,531 | ) |
| Energy                                                                                 | (343,258 | ) |   | (352,719 | ) |
| Property taxes                                                                         | (396,568 | ) |   | (377,433 | ) |
| Property operations and maintenance                                                    | (412,232 | ) |   | (394,896 | ) |
| Management fees                                                                        | (199,193 | ) |   | (191,039 | ) |
| Base asset management fee                                                              | (75,000 | ) |   | (93,750 | ) |
| Professional fees                                                                      | (328,934 | ) |   | (525,497 | ) |
| Total operating costs and expenses                                                     | (3,634,321 | ) |   | (3,740,118 | ) |
| Operating income (loss) from continuing operations                                     | 237,294 |  |   | 324,814 |  |
| Interest expense                                                                       | (476,674 | ) |   | (586,880 | ) |
|                                                                                   |   |   |  |  |
| Loss from continuing operations                                                        | (239,380 | ) |   | (262,066 | ) |
| Gain on sale of hotel property                                                         | 417,303 |  |   | — |  |
| Loss from operations of asset held for sale                                            | (147,498 | ) |   | (402,074 | ) |
| Net income (loss) from discontinued operations                                         | 269,805 |  |   | (402,074 | ) |
| Net income (loss)                                                                      | $ | 30,425 |  |   | $ | (664,140 | ) |
| Net income (loss) allocated to GP (2%)                                                 | $ | 609 |  |   | $ | (13,283 | ) |
| Net income (loss) allocated to LPs (98%)                                               | $ | 29,816 |  |   | $ | (650,857 | ) |
| Income (loss) from continuing operations per BAC, based on 868,662 BACs outstanding    | $ | (0.27 | ) |  | $ | (0.30 | ) |
| Income (loss) from discontinued operations per BAC, based on 868,662 BAC's outstanding | $ | 0.30 |  |  | $ | (0.45 | ) |
| Net income (loss) per BAC, based on 868,662 BACs outstanding                           | $ | 0.03 |  |  | $ | (0.75 | ) |

----

----

|                                              |
|----------------------------------------------|
|                                              |  |  |  |  |  |  |  |  |  |  |  |
|                                         | GeneralPartner |   | BeneficialAssigneeCertificateHolders |   | Total |
| Partners' (deficit) capital, January 1, 2011 | $ | (386,502 | ) |  | $ | 500,644 |  |  | $ | 114,142 |  |
|                                         |   |   |   |   |   |
| Net loss 2011                                | (13,283 | ) |  | (650,857 | ) |  | (664,140 | ) |
|                                         |   |   |   |   |   |
| Partners' deficit, December 31, 2011         | (399,785 | ) |  | (150,213 | ) |  | (549,998 | ) |
|                                         |   |   |   |   |   |
| Net income 2012                              | 609 |  |  | 29,816 |  |  | 30,425 |  |
|                                         |   |   |   |   |   |
| Partners' deficit, December 31, 2012         | $ | (399,176 | ) |  | $ | (120,397 | ) |  | $ | (519,573 | ) |

----

|                                                                    |
|--------------------------------------------------------------------|
|                                                                    |  |  |  |  |  |  |  |
|                                                               | For the years endedDecember 31, |
|                                                               | 2012 |   | 2011 |
|                                                               |   |   | (Note 1) |
| Cash flows from operating activities:                              |   |   |   |
| Net income (loss)                                                  | $ | 30,425 |  |   | $ | (664,140 | ) |
| Adjustments to reconcile net income (loss) to net cash provided by |   |  |   |   |  |
| operating activities:                                              |   |  |   |   |  |
| Depreciation and amortization                                      | 624,358 |  |   | 628,531 |  |
| Bad debt                                                           | 5,100 |  |   | — |  |
| Gain on sale of hotel property                                     | (417,303 | ) |  | — |  |
| Changes in assets and liabilities:                                 |   |  |   |   |  |
| (Increase) decrease in receivables and other assets, net           | (126,936 | ) |   | 5,985 |  |
| (Decrease) increase in accounts payable and accrued                |   |  |   |   |  |
| expenses                                                           | (117,344 | ) |   | 234,355 |  |
| Increase (decrease) in hotel trade payables                        | 63,737 |  |   | (53,026 | ) |
| (Decrease) increase in liabilities held for sale                   | (150,574 | ) |   | 11,250 |  |
| Decrease (increase) in assets held for sale                        | 302,119 |  |   | (62,360 | ) |
| Net cash provided by operating activities                          | 213,582 |  |   | 100,595 |  |
| Cash flows from investing activities:                              |   |  |   |   |  |
| Proceeds from sale of hotel property                               | 1,927,275 |  |  | — |  |
| Additions to property and equipment                                | (107,432 | ) |   | (105,220 | ) |
| Change in working capital reserve                                  | (725,092 | ) |   | 1,216,454 |  |
| Change in restricted cash                                          | 6,416 |  |  | (999,636 | ) |
| Change in assets held for sale - addition to property              |   |  |   |   |  |
| and equipment                                                      | (28,421 | ) |   | (69,548 | ) |
| Net cash provided by investing activities                          | 1,072,746 |  |   | 42,050 |  |
| Cash flows from financing activities:                              |   |  |   |   |  |
| Repayment of principal on mortgage loan                            | (1,249,160 | ) |   | (164,463 | ) |
| Net cash used in financing activities                              | (1,249,160 | ) |   | (164,463 | ) |
| Net increase (decrease) in hotel operating cash and                |   |  |   |   |  |
| and cash equivalents                                               | 37,168 |  |   | (21,818 | ) |
| Hotel operating cash and cash and cash equivalents,                |   |  |   |   |  |
| beginning of year                                                  | 63,202 |  |   | 85,020 |  |
| Hotel operating cash and cash and cash equivalents,                |   |   |   |  |
| end of year                                                        | $ | 100,370 |  |   | $ | 63,202 |  |
| Supplemental disclosure of cash flow information:                  |   |  |   |   |  |
| Cash paid during the year for interest                             | $ | 476,674 |  |   | $ | 586,880 |  |

----

----

|                                                                                                        |
|--------------------------------------------------------------------------------------------------------|
|                                                                                                        |  |  |
| Type of asset                                                                                          |   | Estimated life |
|                                                                                                   |   |   |
|             Building and site improvements |   | 10-30 years |
| Furniture, fixtures and equipment                                                                      |   | 7 years |
| Leasehold improvements                                                                                 |   | Shorter of estimated life (usually7 years) or remaining lease term |

|                   |
|-------------------|
|                   |  |  |
| December 31, 2013 |   | $67,746 |
| 2014              |   | $42,105 |
| 2015              |   | $42,105 |
| 2016              |   | $28,201 |
| 2017              |   | $27,057 |

----

----

----

|                      |
|----------------------|
|                      |  |  |
| Hotels               | Date of purchase | Amount of purchase |
| Minneapolis Days Inn | 11/1/1987 | $4,800,000 |
| Plymouth Days Inn    | 12/30/1987 | $4,000,000 |
| Roseville Days Inn   | 3/1/1988 | $4,200,000 |

----

|                   |
|-------------------|
|                   |  |  |  |  |
|                   |   |  |
|              |   |   |
| December 31, 2013 |   | $ | 3,456,055 |  |
| 2014              |   | 135,384 |  |
| 2015              |   | 145,004 |  |
| 2016              |   | 2,982,174 |  |
| Total             |   | $ | 6,718,617 |  |

----

----

----

|                                   |
|-----------------------------------|
|                                   |  |  |  |  |  |  |  |
|                              | December 31,2012 |  |   | December 31,2011 |  |
| Land                              | $ | — |  |   | $ | 382,500 |  |
| Building                          | — |  |   | 3,226,426 |  |
| Furniture, fixtures and equipment | — |  |   | 893,844 |  |
|                              | — |  |   | 4,502,770 |  |
| Less: accumulated depreciation    | — |  |   | (3,148,401 | ) |
| Net property and equipment        | — |  |   | 1,354,369 |  |
|                              |   |   |   |
| Deferred costs, net               | — |  |   | 73,104 |  |
| Other assets                      | — |  |   | 80,682 |  |
|                              | $ | — |  |   | $ | 1,508,155 |  |

|                                       |
|---------------------------------------|
|                                       |  |  |  |  |  |  |  |
| Accounts payable and accrued expenses | $ | — |  |   | $ | 34,033 |  |
| Mortgage payable                      | — |  |   | 1,044,076 |  |
| Hotel trade payables                  | — |  |   | 60,547 |  |
|                                  | $ | — |  |   | $ | 1,138,656 |  |

|                                   |
|-----------------------------------|
|                                   |  |  |  |  |  |  |  |
|                              | December 31,2012 |  |   | December 31,2011 |  |
| Land                              | $ | — |  |   | $ | — |  |
| Building                          | — |  |   | 119,801 |  |
| Furniture, fixtures and equipment | — |  |   | 1,628,021 |  |
|                              | — |  |   | 1,747,822 |  |
| Less: accumulated depreciation    | — |  |   | (1,585,084 | ) |
| Net property and equipment        |   |   | 162,738 |  |
|                              |   |   |   |
|                              |   |   |   |
| Other assets                      | 71,273 |  |   | 176,208 |  |
|                              | $ | 71,273 |  |   | $ | 338,946 |  |

----

|                                       |
|---------------------------------------|
|                                       |  |  |  |  |  |  |  |
| Accounts payable and accrued expenses | $ | 38,674 |  |   | $ | 75,136 |  |
| Hotel trade payables                  | 101,838 |  |   | 121,370 |  |
|                                  | $ | 140,512 |  |   | $ | 196,506 |  |

|                                          |
|------------------------------------------|
|                                          |  |  |  |  |  |  |  |
|                                     | For the twelve months endedDecember 31, |
|                                     | 2012 |   | 2011 |
| Revenue:                                 |   |   |   |
| Rooms                                    | $ | 10,040 |  |   | $ | 827,641 |  |
| Rental and other                         | 228 |  |   | 25,403 |  |
| Telephone                                | (187 | ) |   | 1,667 |  |
|                                     | 10,081 |  |   | 854,711 |  |
| Departmental expenses:                   |   |  |   |   |  |
| Rooms                                    | (16,580 | ) |   | (382,383 | ) |
| Rental and other                         | (101 | ) |   | (3,036 | ) |
| Telephone                                | 1,062 |  |   | (12,189 | ) |
|                                     | (15,619 | ) |   | (397,608 | ) |
| Gross operating (loss) income            | (5,538 | ) |   | 457,103 |  |
| Unallocated operating income (expenses): |   |  |   |   |  |
| General and administrative               | (12,547 | ) |   | (158,610 | ) |
| Depreciation and amortization            | — |  |   | (45,212 | ) |
| Marketing                                | (7,526 | ) |   | (85,698 | ) |
| Energy                                   | 2,132 |  |   | (119,470 | ) |
| Building lease                           | (18,453 | ) |   | (2,210 | ) |
| Property operations and maintenance      | (5,943 | ) |   | (108,206 | ) |
| Property taxes                           | (667 | ) |   | (66,888 | ) |
| Management fees                          | (347 | ) |   | (29,881 | ) |
|                                     | (43,351 | ) |   | (616,175 | ) |
| Operating loss from operations of        |   |  |   |   |  |
| asset held for sale                      | $ | (48,889 | ) |   | $ | (159,072 | ) |

----

|                                            |
|--------------------------------------------|
|                                            |  |  |  |  |  |  |  |
|                                       | For the twelve months endedDecember 31, |
|                                       | 2012 |   | 2011 |
| Revenue:                                   |   |   |   |
| Rooms                                      | $ | 1,862,803 |  |   | $ | 2,181,296 |  |
| Rental and other                           | 32,497 |  |   | 35,608 |  |
| Food and beverage                          | 19,889 |  |   | 26,914 |  |
| Telephone                                  | 9,134 |  |   | 13,098 |  |
|                                       | 1,924,323 |  |   | 2,256,916 |  |
| Departmental expenses:                     |   |  |   |   |  |
| Rooms                                      | (533,788 | ) |   | (565,110 | ) |
| Rental and other                           | (333 | ) |   | (349 | ) |
| Food and beverage                          | (12,007 | ) |   | (15,838 | ) |
| Telephone                                  | (16,014 | ) |   | (16,831 | ) |
|                                       | (562,142 | ) |   | (598,128 | ) |
| Gross operating income                     | 1,362,181 |  |   | 1,658,788 |  |
| Unallocated operating income (expenses):   |   |  |   |   |  |
| General and administrative                 | (273,246 | ) |   | (214,832 | ) |
| Depreciation and amortization              | (29,397 | ) |   | (12,852 | ) |
| Marketing                                  | (208,574 | ) |   | (264,092 | ) |
| Energy                                     | (165,380 | ) |   | (194,857 | ) |
| Building lease                             | (357,525 | ) |   | (490,890 | ) |
| Property operations and maintenance        | (180,674 | ) |   | (189,002 | ) |
| Property taxes                             | (68,658 | ) |   | (108,237 | ) |
| Management fees                            | (90,232 | ) |   | (101,510 | ) |
|                                       | (1,373,686 | ) |   | (1,576,272 | ) |
|                                       |   |   |   |
| Impairment loss                            | (87,104 | ) |   | — |  |
| Operating (loss) income from operations of |   |  |   |   |  |
| asset held for sale                        | $ | (98,609 | ) |   | $ | 82,516 |  |

----

|                                                            |
|------------------------------------------------------------|
|                                                            |  |  |  |  |  |  |  |
|                                                       | For the years endedDecember 31, |
|                                                       | 2012 |   | 2011 |
| Financial statement net income (loss)                      | $ | 30,425 |  |   | $ | (664,140 | ) |
| Difference resulting from impairment loss                  | 87,104 |  |   | — |  |
| Difference resulting from loss on sale of hotel properties | (1,550,820 | ) |   | — |  |
| Depreciation of buildings and site improvements            |   |  |   |   |  |
| computed over 40 years for tax purposes, and over          |   |  |   |   |  |
| shorter lives for financial statement purposes and other   |   |  |   |   |  |
| differences between financial statement net income (loss)  |   |  |   |   |  |
| and taxable income (loss)                                  | 23,398 |  |   | 59,389 |  |
| Taxable loss                                               | $ | (1,409,893 | ) |   | $ | (604,751 | ) |

----

|                       |
|-----------------------|
|                       |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                  | Number of |   | Bank Balance |   | Insured |   | Uninsured |
| Bank                  | Accounts |   | 12/31/2012 |   | 12/31/2012 |   | 12/31/2012 |
| Bank of America, N.A. | 5 |   | $ | 70,018 |  |   | $ | 70,018 |  |   | $ | — |  |
| Wells Fargo           | 2 |   | $ | 6,638 |  |   | $ | 6,638 |  |   | $ | — |  |
| Franklin Bank         | 6 |   | $ | 1,025,661 |  |   | $ | 282,436 |  |   | $ | 743,225 |  |
| Eagle Bank            | 3 |   | $ | 1,386,098 |  |   | $ | 1,386,098 |  |   | $ | — |  |