**Exhibit 99.1**

**RISK FACTORSOF GOLF TRUST OF AMERICA, INC.**

**Risks that might Delay orReduce our Liquidating Distributions**

Wehave recorded the value of the Resort and our remaining golf courses andliabilities at our best estimates of fair value as of August 16, 2006; however,we can provide no assurance that these estimates reflect the actual currentmarket value for the applicable courses. As a result of our inability toprovide any assurance regarding the estimates of the fair value of our assets,including the probability of negotiating and closing a sale of the Resort, atthe present time, we do not believe that we are able to reliably project theamount of the total liquidating distributions we will make to the holders ofour common stock over the remainder of the liquidation period and the amountsmay be significantly less than our earlier projections. Further, while wehave provided in this report estimated adjustments to net assets in liquidationbased upon the sale of the Resort and our interest in Parcel F for aggregateconsideration of approximately $36.4 million, there can be no assurances thatwe will be able to close a sale of the Resort for a price that will allow us torealize the estimated proceeds for the Resort, if at all. Further, in the eventthat we are unsuccessful in negotiating the terms of an amendment of anexisting agreement or a new agreement which will allow us to repurchase all ofAEW’s series A preferred stock for a price of $20,000,000 or less, or if wenegotiate such an agreement and are unable to repurchase AEW’s preferred stockfor any reason, the assets available for distribution to the holders of ourcommon stock, and the ultimate liquidating distributions to the holders of ourcommon stock, will be reduced by the amount of any accrued dividends throughthe date that we redeem AEW’s shares. Even if we are able to successfulnegotiate an agreement with AEW which would allow us to repurchase AEW’spreferred stock at a price that excludes dividends on the preferred stock, wemay either be unable to sell the Resort at a time or under conditions which donot permit us to exercise our option.  Asa result of these factors, the estimated adjustments to net assets inliquidation provided in this report may prove incorrect and the amounts,if any, that we ultimately distribute as liquidating distributions may besignificantly less than estimated.

***In the event that our Management Agreement with Westin is terminated,in addition to our obligation to pay termination fees to Westin, we will berequired to find a third party to manage the Resort or manage the Resortourselves.***

Whilewe continue to contest Westin’s allegations that we have defaulted on ourobligations under the Management Agreement, Westin’s delivery to us of WestinNotices increases the likelihood that Westin may terminate the ManagementAgreement in the near term in accordance with its terms.  The ManagementAgreement provides that we shall pay to Westin, subject to the terms of theManagement Agreement termination fee of at least $5,500,000. The ManagementAgreement provides that the maximum termination shall be reduced by $365 perday for each day elapsed from the effective date of the Management Agreementuntil the termination date.  As of August16, 2006, the termination fee would be approximately $5,622,000.  Seedisclosure of this obligation as accrued at June 30, 2006 in note 9 to ourcondensed consolidated financial statements contained in Part 1, Item 1 of thisQuarterly Report.  While we have notreceived a notice of termination of the Management Agreement from Westin andare seeking to negotiate a successful resolution of our respective claims, ourrelationship with Westin may be terminated in the near term.

Inaddition to any termination fees and deferred management fees which we may berequired to pay to Westin pursuant to the Management Agreement, we may beforced to either find a new manager for the Resort or manage the Resortourselves.  Further, it is possible that Westin will terminate theManagement Agreement on five days notice, in which case we will need to makeimmediate provision for the management of the Resort. Whether we managethe Resort or hire a third party to manage it, there is a substantiallikelihood that the new manager will experience a learning curve related tomanaging the daily operations at the Resort.   We cannot guaranteethat a new manager will be as successful in managing the Resort as Westin hasbeen.   In addition, a third party manager may fail perform, ordefault on its obligations to us.  In the event that any new manager ofthe Resort proves less successful than Westin or defaults in its obligations tous, our results of operations and financial condition could be adverselyaffected.

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***If we are not able to sell the Resort and our otherremaining golf property in a timely manner, obtain liquidity with respect tocertain other non-real estate assets such as our note receivable, or obtainsome form of additional financing, we may experience severe liquidityproblems, not be able to meet the demands of our creditors, and ultimatelybecome subject to bankruptcy proceedings.***

In theevent that we are unable to sell the Resort and our other remaining golfproperty as planned, obtain liquidity with respect to certain other non-realestates assets such as our note receivable, or obtain some form ofadditional financing, we may be unable to pay our obligations as theybecome due or upon demand. In addition, our ability to pay our obligationsmay be compromised if our chief executive officer requires payment ofoutstanding performance milestone payments owed by us to him before we are ableto realize net cash proceeds from asset sales sufficient to discharge thoseobligations. As of August 16, 2006, we owed our two most senior executiveofficers a total of approximately $1,794,000 in milestone payments and accruedinterest on such milestone payments. We also owe a substantial sum in legalfees, including fees incurred in connection with the negotiation of agreementsproviding for the sale of the Resort.

Further,given that the Resort’s only source of cash is from any profitable operationsof the Resort, and that the operational cash flow capacity of the Resort willlikely not permit the Resort to maintain positive cash flow through out 2006,we may be required to seek to provide additional capital to the Resort. Wemade intercompany advances to the Resort to support working capital needs inthe amounts of $2,000,000, $400,000 and $650,000 in July 2004,September 2005 and November 2005, respectively. While the financialperformance of the Resort has shown signs of recovery since the Company assumedtitle to the Resort on July 15, 2004, current projections provided by Westinindicate that an operational cash flow shortfall of approximately $750,000 inthe aggregate is likely to occur at some point in the fourth quarter of 2006.   Further, the Resort’s credit capacity islimited. There are no assurances that additional intercompany advances will notbe necessary prior to the consummation of a sale of the Resort. In the eventthat we must advance additional capital to fund operations at the Resort or ourother operations, we may be required to seek financing or raise furthercapital in order to meet our obligations when they come due. Further, we may alsobe required to use proceeds from the sale of our other assets to fund ouroperations and the operations of the Resort. There is no assurance that we willbe able to obtain liquidity with respect to certain other non-real estateassets, obtain additional financing, raise further capital or that we will havesufficient proceeds from assets sales from which to draw, or that any fundingthat we receive will not contain restrictive covenants or other onerous terms.Additionally, we expect that the cash flow that we receive on the interestincome from our note receivable and the net operating income of the Stonehengegolf courses, if any, will not be substantial

While we continue to contest Westin’s allegations thatwe have defaulted in our obligations under the Management Agreement, Westin’sdelivery to us of Westin Notices increases the likelihood that Westin mayterminate the Management Agreement in the near term in accordance with itsterms.  While we have not received a notice of termination of the ManagementAgreement from Westin and are seeking to negotiate a successful resolution ofour respective claims, our relationship with Westin may be terminated in thenear term either as a result action by Westin or us.  In that event, wemay be required to pay to Westin a termination fee of at least $5,500,000 alongwith any deferred management fees. As of August 16, 2006, the termination feethat would be due would be approximately $5,622,000.We do not have sufficientfunding available to make these payments absent a concurrent sale of theResort, so if these payments become due prior to the sale of the Resort, wewould be forced to seek third party funding or to otherwise gain liquidity.

In theevent we are not able to sell our remaining assets within a reasonable periodof time and for reasonable amounts, obtain liquidity with respect to certainother non-real estate assets, or obtain additional financing, or if ourexpenses exceed our estimates, we may experience severe liquidity problemsand not be able to meet our financial obligations of our creditors. If wecannot meet our obligations to our creditors, we could ultimately becomesubject to bankruptcy proceedings.

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***Our estimate of the Resort’s fair value, as recordedon our books for accounting purposes, is based on forward-looking estimateswhich are subject to change. We might sell the Resort for an amount less thanour current estimate of its fair value, which could significantly reduce ourliquidating distributions to holders of our common stock.***

We donot believe we are able at this time to project the amount of the totalliquidating distributions we will make to the holders of our common stock overthe remainder of the liquidating period. The factors giving rise to thisuncertainty include, without limitation, the following:

·       improvement in thefinancial performance of the Resort that we have observed since we took titlein July 2004 may not continue;

·       despite our execution of anew Management Agreement with Westin at the Resort providing for increasedcontrol by us over accounting and marketing and improved provisions governingWestin’s reporting to us, we do not directly manage the Resort;

·       our Settlement Agreementwith our former borrower and related agreements that we entered with Westinmay prove less successful than anticipated, and the performance of theparties to the Settlement Agreement may fall short of our expectations;

·       historical uncertaintysurrounding the future of the Resort and the level of Westin’s involvement uponthe prospective sale of the Resort may create uncertainty for corporatemeeting planners contracting for large corporate groups, and any suchuncertainty may be used as a competitive advantage by our competitors whenmarketing their hotels against the Resort; and

·       uncertainty about ourability to close the transactions contemplated in any asset purchase agreementwe may execute.

As aresult of the foregoing, at the present time we will refrain from either makingany adjustments (positive or negative) to any earlier reported range of distributionsor proposing a new range. We may, however, be able to do so in future periodsin the event that the quality and reliability of all information necessary tomake estimates of cash flow and, correspondingly, value become more reliable.You should not assume that the liquidating distributions have not declined,perhaps in material amounts, from the historical projections we provided inearlier filings. 

Ourefforts to preserve the value of the Resort until we are able to consummate itssale may be unsuccessful, and we might ultimately sell our interest in theResort for significantly less than our last estimate of its fair value.Accordingly, our assessment of the Resort’s fair value may change at somefuture date, perhaps in a material adverse manner, based on facts andcircumstances at that time, and the Resort’s value may again bewritten-down.

***We are currently negotiating with AEW,  the holder of all of our series A preferredstock, the terms of an amendment of an existing agreement or a new agreementwhich will allow us to repurchase all of AEW’s series A preferred stock for aprice of $20,000,000 or less. As a result of our assumption that thesenegotiations will lead to an executed agreement, we have not recorded in ournet assets a liability for the accrual of preferred dividends payable for thequarter beginning July 1, 2001 or for subsequent quarters. We can provide no assurance, however, that a finalagreement will be executed with AEW. Further, even if we successfully execute such an agreement with AEW, wemay be unable to negotiate a financing arrangement through our existing lenderrelationships or otherwise procure sufficient funding to permit us to exercisethat repurchase right and close the repurchase prior to its expiration. In the event that either we are unable to reach an agreement with AEW, or weare unable to exercise any repurchase right and close the repurchase under anyagreement we may reach with AEW, we may be required to pay AEW all or a portionof the preferred dividends for which we have not recorded a liability, reducingour liquidating distributions to holders of our common stock.***

On April 12, 2006, we executed an Option Agreementwith AEW, the holder of all of our series A preferred stock, in which AEWgranted us an option to purchase, on or before June 30, 2006, the 800,000shares of our series A preferred stock held by AEW, including, withoutlimitation, all of AEW’s rights to due and unpaid principal, accrued and unpaiddividends and liquidation preferences. The exercise price of this option wasapproximately $20 million, and excluded dividends that would accrue to theseries A preferred stock pursuant to existing contractual obligations. Aspreviously reported, this option expired by its terms on June 30, 2006.

We are currently negotiating with AEW the terms of anamendment of an existing agreement or a new agreement which will allow us torepurchase all of AEW’s series A preferred stock plus accrued dividends for aprice of $20 million or less.  Weanticipate that the terms of any agreement that we may enter with AEW wouldinclude, among other terms and conditions, a provision that all or a portion ofour obligations to AEW are secured by the Resort, which we believe provides AEWwith more favorable remedies against us than AEW currently possesses.

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As aresult of our assumption that these negotiations will lead to an executedagreement, we have not recorded in our net assets for the quarter ended June30, 2006 either (i) a liability of $11,164,000 for the accrual of quarterlypreferred dividends for the period July 1, 2001 to June 30, 2006 or (ii)additional dividend accruals of $625,000 for each subsequent quarter throughthe date that the exit transaction is ultimately consummated and liquidationpayments are made to AEW.   Absent either an agreement by a thirdparty to assume all or a portion of our accrued preferred dividend obligationor an agreement by AEW to forgive all or a portion of our preferred dividendobligations, (neither of which have occurred), we will be required toaccrue, and ultimately pay in liquidating distributions to AEW, these preferreddividends.  Any preferred dividends whichwe are required to pay to AEW ultimately would reduce the net assets availableto stockholders in liquidation and correspondingly the estimated liquidationdistribution per common share.  As ofJune 30, 2006, if we were required to pay AEW accrued dividends through thatdate, our liquidating distributions would be reduced by $1.52 per common shareor OP unit of the Operating Partnership outstanding on that date.

       Atthe present time, we have not executed a binding agreement with AEW.  There are no assurances that we willsuccessfully execute such an agreement with AEW, or that the terms of anyagreement that we may execute with AEW will not be more onerous to us than wecurrently anticipate.  Further, even if we are able to execute anagreement with AEW which permits us to repurchase the series A preferred stockat $20 million or less, we may be unable to negotiate a financing arrangementthrough our existing lender relationships or otherwise procure sufficientfunding to permit us to exercise that repurchase right and close the repurchaseprior to its expiration.  In the event that we execute an agreement withAEW and we are unable to repurchase AEW’s series A preferred stock inaccordance with the terms of that agreement, in addition to the requirementthat we pay accrued dividends to AEW, we expect that agreement also wouldsubject us to penalties or grant AEW additional rights with respect to us andour remaining assets which will be prejudicial to us and our assets.

***We cannotguarantee that we will be able to enter into a binding agreement for the saleor other disposition of the Resort.***

Inconnection with our efforts to sell the Resort, we intend to negotiate andexecute a binding asset purchase agreement. 

Thereafter, any closing pursuant to an executed assetpurchase agreement will be conditioned upon, among other things, considerationand approval of the transaction by the Special Committee of our Board and thereceipt of a satisfactory fairness opinion. We cannot assure you that we willenter into an asset purchase agreement for the Resort or, if we do so, that allconditions to closing will be satisfied and the Resort will be sold. Further,the price that we receive if we sell the Resort might be less than the thenapplicable carrying value of the Resort on our financial statements.Significant legal and other costs and expenses will be incurred in connectionwith the negotiation of any sale of the Resort, and these costs and expenseswill further reduce the liquidating distributions that we make to the holdersof our common stock.

***We took ownership of the Resort on July 16, 2004pursuant to a global Settlement Agreement providing for the assumption ofcertain existing or modified financial obligations of our former borrower. Weare now responsible for any negative cash flow of the Resort. If the amount ofassumed liabilities and expenditures with respect to the Resort exceed ourexpectations, our liquidating distributions to common stockholders could bereduced.***

OnJuly 15, 2004, we entered a Settlement Agreement relating to ourJune 1997 $79.0 million loan to our former borrower. This loan wassecured by a mortgage on the Resort. As part of the Settlement Agreement,we assumed certain financial obligations of the borrower, such as refurbishmentexpenses paid by the condominium owners, a modified termination rights fee andoutstanding golf facility management fees payable to Troon. As the owner of theResort, we are responsible for any negative cash flow associated with itsownership and operation. As a result of the assumption of these liabilities andour responsibility for any negative cash flow, we face the risk that ourultimate liabilities and expenditures might be greater than expected. In thatcase, our cash available for distribution and the ultimate amount of ourliquidating distributions to the holders of our common stock could be less thanour expectations. In 2005, we funded $1,050,000 to address seasonal cash flowshortfalls. We expect that additional intercompany advances totalingapproximately $750,000 in the aggregate will be necessary at some point in thefourth quarter of 2006 to fund projected operating cash shortfalls.

Althoughthe revenues of the Resort have begun to increase since we took title to it, wecan provide no assurance that the Resort’s future performance will continue toshow improvement. If we do not continue to improve the Resort’s financialperformance, our recovery with respect to this asset might be significantlydelayed. A delay in our recovery of the Resort might reduce the net proceedsthat we ultimately receive upon a sale of the Resort to less than our currentestimate of the Resort’s fair value, and we may be forced to use funds thatotherwise might be distributed to our stockholders, if any, to fund cashshortages of the Resort, causing our liquidating distributions to holders ofour common stock to be reduced. Our estimate of the Resort’s fair value, asrecorded on our books for accounting purposes, is based on forward-lookingestimates which are subject to change. We can provide no assurance of successunder the Settlement Agreement, or the future success of the Resort.

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***Stockholderlitigation related to the plan of liquidation could result in substantial costsand distract our management.***

Extraordinarycorporate actions, such as our plan of liquidation, often lead to securitiesclass action lawsuits and derivative litigation being filed againstcompanies such as ours. We became involved in this type of litigation inconnection with our plan of liquidation (and the transactions associated withit) in a legal action we refer to as the *Crossley*litigation. During the second quarter of 2003, the *Crossley*claim was dismissed with prejudice on our motion for summary judgment.Accordingly, the lawsuit was dismissed and the plaintiff will not be allowed torefile the claim, although the plaintiff could appeal the dismissal. We subsequentlyentered into a non-monetary settlement with the plaintiff whereby the plaintiffagreed not to appeal the dismissal and we agreed not to seek reimbursement ofour legal costs from the plaintiff. Even though the *Crossley*litigation has been dismissed, we face the risk that other claims might bebrought against us. Any such litigation would likely be expensive and, even ifwe ultimately prevail, the process would divert management’s attention fromimplementing the plan of liquidation and otherwise operating our business. Ifwe do not prevail in any such litigation, we might be liable for damages. It isnot possible to predict the amount of such potential damages, if any, but theymight be significant. Any damage liability would reduce our cash available fordistribution and the ultimate amount of our liquidating distributions toholders of our common stock.

***If we are unable to retain at least one of our keyexecutives and sufficient staff members to complete the plan of liquidation ina reasonably expeditious manner, our liquidating distributions might be delayedor reduced.***

Ourability to consummate sales transactions for our other interests in golfcourses depend to a large extent upon the experience and abilities of our twomost senior executives, W. Bradley Blair, II, our chief executive officerand president, and Scott D. Peters, our senior vice president and chieffinancial officer, and their experience and familiarity with our assets, ourcounter-parties and the market for golf course sales. Mr. Blair andMr. Peters are currently serving us on a reduced schedule basis. Webelieve our liquidation has progressed to the point that the resignation ofone, but not both, of our executives would not likely cause significant adverseconsequences. However, a loss of the services of both of these individualscould materially harm our ability to complete the plan of liquidation in areasonably expeditious manner and our prospects of selling our assets at thebest potential prices. 

Thepotential resignation of Mr. Blair poses a relatively greater risk at thistime in light of the fact that the amount of time that Mr. Peters isrequired to commit to us is less than the amount of time that Mr. Blair isrequired to commit to us. If Mr. Blair were to resign, we would likelyseek to hire a replacement for Mr. Blair. The cost that we incur toreplace Mr. Blair would likely depend upon our determination of theexperience and skills that must be possessed by his replacement in light of ourfinancial condition, our assets remaining to be liquidated, and the complexityof any issues bearing on us and the liquidation at that time.

Ourability to complete the plan of liquidation in a timely manner also depends onour ability to retain our key non-executive employees, in particular ourcontroller. Those employees may seek other employment rather thanremaining with us throughout the process of liquidation, even though theygenerally would lose their eligibility for severance payments by resigning. Ifwe are unable to retain enough qualified staff to complete our plan ofliquidation in a reasonably expeditious manner, liquidating distributions mightbe delayed or reduced.

***If we are unable to consummate a sale of the Resort orour other remaining golf courses at our revised estimates of their respectivevalues, our liquidating distributions might be delayed or reduced.***

Inaddition to the four golf courses at the Resort, we have one other property (ortwo eighteen-hole equivalent golf courses). In calculating our projectedliquidating distributions, we assumed that we would be able to find buyers forthe Resort and our other remaining property at purchase prices equal to ourestimates of their respective fair market values. However, our estimates of thesales prices of the Resort and our other remaining property may exceed theprices we eventually receive. At December 31, 2005, we recorded a $2.421million write-down in the value of the Resort based on market indications ofinterest. Should we not be able to find a buyer at our current carryingvalue,  in order to find a buyer in areasonably expeditious manner, we might be required to lower our asking pricefor the Resort and our other remaining property below our estimate of theirfair value. If we are not able to find new buyers for these assets in areasonably expeditious manner, or if we have overestimated the sales prices wewill ultimately receive, our liquidating distributions to the holders of ourcommon stock will be significantly delayed or reduced.

At thepresent time, we do not believe we are able to reliably project the amount ofthe total liquidating distributions we will make to the holders of our commonstock over the remainder of the liquidation period. Accordingly, you should notrely on the valuations or ranges earlier provided as representative of ourcurrent views on the subject.

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***If we are unable to realize the value of a promissorynote taken as part of any purchase price, our liquidating distributionsmight be reduced.***

Insome golf course sales, we may agree to receive promissory notes from thebuyer as a portion of the purchase price. Promissory notes are often illiquid.If we are not able to sell the promissory note without a great discount, or inthe case of a short-term note, if we hold it to maturity and the makerultimately defaults, our liquidating distributions might be reduced.

***Decreases in golf course values caused by economicrecession and/or additional terrorist activity might reduce the amount forwhich we can sell our assets.***

Thevalue of our interests in golf courses might be reduced, and substantially so,by a number of factors that are beyond our control, including the following:

·       adverse changes in theeconomy, prolonged recession and/or additional terrorist activity against theUnited States or our allies, or other war-time activities might increase publicpessimism and decrease travel and leisure spending, thereby reducing golfcourse operators’ revenues (particularly destination-resort golf courserevenues) and diminishing the resale value of the affected golf courses;

·       increased competition,including, without limitation, increasing numbers of golf courses being offeredfor sale in our markets or nationwide;

·       continuing imbalance insupply and demand in the golf course industry; and

·       changes in real estate taxrates and other operating expenses.

Anyreduction in the value of our golf courses would make it more difficult for usto sell our assets for the amounts and within the time-frames that we haveestimated. Reductions in the amounts that we receive when we sell our assetscould decrease or delay our payment of liquidating distributions to ourstockholders, perhaps in substantial ways.

***If our liquidation costs or unpaid liabilities aregreater than we expect, our liquidating distributions might be delayed orreduced, potentially in a substantial manner.***

Beforemaking the final liquidating distribution to the holders of our stock, we willneed to pay all of our transaction costs pertaining to the liquidation and allvalid claims of our creditors, which we expect will be substantial. Our boardmay also decide to acquire one or more additional insurance policiescovering unknown or contingent claims against us, including, withoutlimitation, additional directors’ and officers’ liability insurance, for whichwe would pay an additional premium based upon market prices prevailing at thetime of any such purchase. In addition, if we form a liquidating trust, wemay have additional expenses for items such as insurance for the trustees.We have estimated such transaction costs in calculating the amount of ourprojected liquidating distributions. To the extent that we have underestimatedcosts and expenses in calculating our historical projections, our actualaggregate liquidating distributions will be lower than we have historicallyprojected, and perhaps by substantial amounts.

***The holder of our series A preferred stock mightexercise its right to appoint two directors to our board of directors, whichmight result in decisions that prejudice the economic interests of our commonstockholders in favor of our preferred stockholders.***

Weentered into a voting agreement with the holder of our preferred stock, AEW,pursuant to which the holder agreed to vote in favor of our plan ofliquidation. The voting agreement provided that if we failed to redeem ourseries A preferred stock by May 22, 2003, the holder of the preferredstock would be entitled to require us to redeem the preferred stock. Wereceived such a demand from the holder of our preferred stock on May 23,2003; however, we do not have cash available to redeem the holder of ourpreferred stock. Our default in making a timely redemption payment gives theholder of our preferred stock the right under the voting agreement to appointtwo new directors to our board. Our charter also gives the holder of ourpreferred stock the right to elect two new directors if and when dividends onits series A preferred stock are in arrears for more than six quarters.Currently, dividends on the series A preferred stock are twenty quartersin arrears. These director election rights are not cumulative, which means thatthe holder of our preferred stock may elect two, but not four, newdirectors. The current holder of our preferred stock, AEW, informed uspreviously that it does not currently intend to exercise its director electionrights. However, it might decide to exercise such right at any time in thefuture. The appointment of such directors to our board might reduce theefficiency of our board’s decision-making or result in decisions that prejudicethe economic interests of the holders of our common stock in favor of theholder of our preferred stock.

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***Distributinginterests in a liquidating trust may cause you to recognize gain prior tothe receipt of cash.***

As wecontemplate the sale of our remaining assets and the wind-up of our company, asexpressly contemplated by our plan of liquidation, we may elect tocontribute our remaining assets and liabilities to a liquidating trust. Ourstockholders would receive interests in the liquidating trust, our corporateexistence would terminate and our shares would no longer trade publicly. Theplan of liquidation prohibits us from contributing our assets to a liquidatingtrust unless and until our preferred stock has been redeemed in full or untilsuch time as it consents to such a contribution.

Fortax purposes, the creation of the liquidating trust should be treated as adistribution of our remaining assets to our stockholders, followed by acontribution of the same assets to the liquidating trust by our stockholders.As a result, we will recognize gain or loss inherent in any such assets, withany gains offset by available net operating loss carry-overs (discussed above).In addition, a stockholder would recognize gain to the extent his share of thecash and the fair market value of any assets received by the liquidating trustwas greater than the stockholder’s basis in his stock, notwithstanding that thestockholder would not contemporaneously receive a distribution of cash or any otherassets with which to satisfy the resulting tax liability, and would not be ableto transfer its interests in the liquidating trust.

Inaddition, it is possible that the fair market value of the assets received bythe liquidating trust, as estimated for purposes of determining the extent ofthe stockholder’s gain at the time interests in the liquidating trust aredistributed to the stockholders, will exceed the cash or fair market value ofproperty ultimately received by the liquidating trust upon its sale of theassets, in which case the stockholder may not receive a distribution ofcash or other assets with which to satisfy any tax liability resulting from thecontribution of the assets to the liquidating trust. In this case, thestockholder would recognize a loss in a taxable year subsequent to the taxableyear in which the gain was recognized, which loss might be limited under thetax code.

If wedo not distribute our assets to a liquidating trust and, instead, continue tooperate as a regular corporation until all of our assets are sold, we wouldrecognize gains or losses upon the sale of assets for federal income taxpurposes. Since we are no longer a REIT, we could be subject to income tax onany recognized gains. If we were to recognize taxable gains in a year beforeconsideration of net operating loss carryovers, we could be subject toalternative minimum tax. Generally, for tax years ending afterDecember 31, 2002, the use of net operating loss carryovers to reducealternative minimum taxable income is limited to 90% of alternative minimumtaxable income. Therefore, tax at a rate of 20% could be imposed on ouralternative minimum taxable income that cannot be reduced by net operating losscarryovers. If a liquidating trust is formed, our net operating loss carryoverswill not be available to reduce any gains recognized within the trust. However,the trust will have a tax basis equal to the fair market value of its assets atthe date the liquidating trust is formed. Any gain recognized by the trust wouldthus be the result of either appreciation in the value of the assets during thetime that they are owned by the trust, or an initial underestimation of thefair market value of the assets at the time the trust is formed.

***Our stock may be de-listed from American StockExchange, which would make it more difficult for investors to sell theirshares.***

Currently,our common stock trades on the American Stock Exchange, or Amex. We cannotassure you that we will be able to maintain our listing on Amex or any otherestablished trading market. Among other things, Amex has considerablediscretion with respect to listing standards, which include qualitative andquantitative criteria, some of which are beyond our control. Further, in theevent that we form a liquidating trust, we expect that we would de-listfrom the Amex.

Wecannot assure you that we will be able to maintain our listing on Amex, andinvoluntary delisting would harm our business and the value of your investment.If our common stock were to be de-listed from Amex, either as a result ofvoluntarily action by us or because we no longer meet the Amex listingstandards, it could severely limit the market liquidity of the common stock andyour ability to sell our securities in the secondary market.

***We and our subsidiary, GTA-IB LLC, expect to incursignificant compliance costs relating to the Exchange Act and Sarbanes-OxleyAct.***

We andour subsidiary, GTA-IB, LLC, are required to comply with the reportingrequirements of the Exchange Act as they apply to non-accelerated filers. Assuch, both entities must timely file Quarterly Reports on Form 10-Q,Annual Reports on Form 10-K and Current Reports on Form 8-K, amongother actions. Further, recently enacted and proposed laws, regulations and standardsrelating to corporate governance and disclosure requirements applicable topublic companies, including the Sarbanes-Oxley Act and new SEC regulations haveincreased the costs of corporate governance, reporting and disclosure practiceswhich are now required of us and of GTA-IB. We were formed prior to theenactment of these new corporate governance standards, and as a result, we didnot have all necessary procedures and policies in place at the time of theirenactment. Our efforts to comply with applicable laws and regulations,including requirements of the Exchange Act and the Sarbanes-Oxley Act, areexpected to involve significant, and potentially increasing, costs. Costsincurred in complying with these regulations may reduce the amount of cashavailable for liquidating distributions.

TheSarbanes-Oxley Act and related laws, rules and regulations create legalbases for administrative enforcement, civil and criminal proceedings against usin case of non-compliance, thereby increasing our risk of liability and potentialsanctions. Costs incurred in defending against any such actions or proceedings,and any liability or sanctions incurred in connection with such actions orproceedings, could negatively affect the amount of cash available forliquidating distributions.

 

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