UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549







Form
10-Q





(Mark
One)






x
            QUARTERLY REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF
      THE SECURITIES EXCHANGE ACT OF
1934




For
the quarterly period ended March 31, 2010





OR




o
              TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF
      THE SECURITIES EXCHANGE ACT OF
  1934


Commission
File Number: 001-12941





EASTERN
LIGHT CAPITAL, INCORPORATED


(Exact
Name of Registrant as Specified in Its Charter)








Delaware
            94-3240473(State
      or other jurisdiction
              of
      incorporation or organization)
            (I.R.S.
      Employer
              Identification
      Number)




100 Pine Street, Suite
      560,   San Francisco,
      California
              94111(Address of principal executive
      office)
              (zip
      code)
  (415)
693-9500
 (Registrant’s
Telephone Number, including Area Code)
  
  Securities
registered pursuant to Section 12(b) of the Act:




Title
      of each class
            
            Name
      of each exchange on which registeredCommon
      Stock $0.01 par value
            
            NYSE
      Amex




Securities
registered pursuant to Section 12(g) of the Act:
 None
 (Title of
Class)





Indicate
by check mark whether the registrant (1) filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.   Yes   x    No o




Indicate
by check mark whether the has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T Section 232.405, during the
preceding 12 months (or for such shorter period that the registrant was required
to submit and post such files).   Yes   x    No
o




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
the definitions of “large accelerated filer”, “accelerated filer” and “smaller
reporting company” in Rule 12b02 of the Exchange Act.




Large
      accelerated filer:   o
            Accelerated
      filer:   oNon-accelerated
      filer:   o
            Smaller
      reporting company:   x





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).


Yes  o   No  x .




As of
March 31, 2010, the registrant has approximately 351,482 shares of common stock
outstanding.












TABLE
OF CONTENTS








PART
      I  – FINANCIAL INFORMATION (UNAUDITED)ITEM
      1
            CONDENSED
      CONSOLIDATED FINANCIAL STATEMENTS:Condensed
      Consolidated Balance Sheets
            1Condensed
      Consolidated Statements of Operations
            2Condensed
      Consolidated Statements of Cash Flows
            3Notes
      to Condensed Consolidated Financial Statements
            4-9ITEM
      2
            MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS
            10-13ITEM
      3
            QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
            13ITEM
      4
            CONTROLS
      AND PROCEDURES
            13PART
      II – OTHER INFORMATIONITEM
      1
            LEGAL
      PROCEEDINGS
            13ITEM
      1A
            RISK
      FACTORS
            14ITEM
      1B
            UNRESOLVED
      STAFF COMMENTS
            14ITEM
      2
            CHANGES
      IN SECURITIES
            14ITEM
      3
            DEFAULTS
      UPON SENIOR SECURITIES
            14ITEM
      4
            SUBMISSION
      OF MATTERS TO VOTE OF SECURITY HOLDERS
            14ITEM
      5
            OTHER
      INFORMATION
            14ITEM
      6
            EXHIBITS
      AND REPORTS ON FORM 8-K
            14-15SIGNATURES
            16CERTIFICATIONS








All other
items called for by the instructions to Form 10-Q have been omitted because the
items are not applicable or the relevant information is not
material.













EASTERN LIGHT CAPITAL, INCORPORATED


Condensed Consolidated Balance Sheets


(unaudited)




March 31, 2010
              
              
              December
      31, 2009ASSETSCash
      and cash equivalents
              
              $
              19,936
              
              
              $
              227,944Marketable
      securities
              
              
              167
              
              
              
              147Accounts
      receivable
              
              
              523,081
              
              
              
              524,717Allowance
      for doubtful accounts
              
              
              (453,974
              )
              
              
              (453,974
              )Net
      accounts receivable
              
              
              69,107
              
              
              
              70,743Notes
      receivable:Mortgage
      notes receivable
              
              
              2,680,498
              
              
              
              2,690,737Allowance
      for loan losses
              
              
              (320,000
              )
              
              
              (310,000
              )Net
      notes receivable
              
              
              2,360,498
              
              
              
              2,380,737Real
      estate owned
              
              
              6,668,792
              
              
              
              6,714,174Other
      assets
              
              
              35,017
              
              
              
              37,987Total
      assets
              
              $
              9,153,517
              
              
              $
              9,431,732LIABILITIES
      AND STOCKHOLDERS’ EQUITYLiabilitiesSenior
      debt
              
              
              4,537,940
              
              
              
              4,487,940Other
      liabilities
              
              
              163,648
              
              
              
              232,032Total
      liabilities
              
              
              4,701,588
              
              
              
              4,719,972Stockholders’
      equityPreferred
      stock, $.01 par value;1,600,000 shares authorized;
              
              
              2,138
              
              
              
              2,138213,820
      shares issued and outstanding at March 31, 2010and
      December 31, 2009Additional
      paid in capital - preferred stock
              
              
              5,509,728
              
              
              
              5,509,728Less
      treasury stock: 16,919 preferred shares atMarch
      31, 2010 and December 31, 2009 at cost
              
              
              (229,179
              )
              
              
              (229,179
              )Common
      stock, $.01 par value; 2,000,000 shares authorized;
              
              
              5,005
              
              
              
              5,005500,432
      shares issued and outstanding at March 31, 2010and
      December 31, 2009Additional
      paid in capital - common stock
              
              
              9,415,696
              
              
              
              9,408,747Less
      treasury stock: 148,950 and 148,550 common shares atMarch
      31, 2010 and December 31, 2009 at cost
              
              
              (1,829,141
              )
              
              
              (1,827,698
              )Accumulated
      other comprehensive income
              
              
              (556
              )
              
              
              (576
              )Accumulated
      deficit
              
              
              (8,421,762
              )
              
              
              (8,156,405
              )Total
      stockholders’ equity
              
              
              4,451,929
              
              
              
              4,711,760Total
      liabilities and stockholders’ equity
              
              $
              9,153,517
              
              
              $
              9,431,732












EASTERN LIGHT CAPITAL, INCORPORATED
 Condensed Consolidated Statements of
Operations
 (unaudited)


Three
      Months EndedMarch
      312010
              
              
              2009REVENUESInterest
      income
              
              $
              31,167
              
              
              $
              47,065Rental
      income
              
              
              17,350
              
              
              
              30,781Other
      income
              
              
              255
              
              
              
              927Total
      revenues
              
              
              48,772
              
              
              
              78,773EXPENSESInterest
      expense on loans
              
              
              ---
              
              
              
              12,606Provision
      for loan losses
              
              
              10,000
              
              
              
              4,297Provision
      for (recovery of) doubtful accounts
              
              
              ---
              
              
              
              8,235Expenses
      of real estate owned
              
              
              43,714
              
              
              
              68,444Impairment
      of real estate owned
              
              
              57,645
              
              
              
              ---Wages
      and salaries
              
              
              94,463
              
              
              
              107,466Non-income
      taxes
              
              
              1,750
              
              
              
              12,276General
      and administrative
              
              
              70,426
              
              
              
              116,869Total
      expenses
              
              
              277,998
              
              
              
              330,193LOSS
      FROM OPERATIONS
              
              
              (229,226
              )
              
              
              (251,420
              )Gain
      (loss) on sale of real estate owned
              
              
              ---
              
              
              
              2Gain
      (loss) on securities transactions
              
              
              (36,131
              )
              
              
              246,555Gain
      (loss) on investments
              
              
              ---
              
              
              
              33,371Total
      other income, net
              
              
              (36,131
              )
              
              
              279,928NET
      INCOME (LOSS)
              
              $
              (265,357
              )
              
              $
              28,508PREFERRED
      DIVIDENDS
              
              
              ---
              
              
              
              ---NET
      INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS
              
              $
              (265,357
              )
              
              $
              28,508NET
      INCOME (LOSS) PER COMMON SHARE - BASIC
              
              $
              (0.76
              )
              
              $
              0.08NET
      INCOME (LOSS) PER COMMON SHARE - DILUTED
              
              $
              (0.76
              )
              
              $
              0.08DIVIDENDS
      PAID PER PREFERRED SHARE
              
              $
              ---
              
              
              $
              ---DIVIDENDS
      PAID PER COMMON SHARE
              
              $
              ---
              
              
              $
              ---BASIC
      COMMON SHARES
              
              
              351,315
              
              
              
              366,207DILUTED
      COMMON SHARES
              
              
              351,315
              
              
              
              373,643















EASTERN LIGHT CAPITAL, INCORPORATED
 Condensed Consolidated Statements of Cash
Flows
 (unaudited)


Three
      Months EndedMarch
      312010
              
              
              2009CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      Income (loss)
              
              $
              (265,357
              )
              
              $
              28,508Adjustments
      to reconcile net income to net cash provided by operating
      activities:Depreciation
              
              
              11,895
              
              
              
              11,896Deferred
      carrying costs
              
              
              (12,143
              )
              
              
              ---Stock-based
      compensation expense
              
              
              6,949
              
              
              
              1,449Provision
      for loan losses
              
              
              10,000
              
              
              
              4,297Change
      in allowance for doubtful accounts
              
              
              ---
              
              
              
              (13,217
              )Impairment
      of real estate owned
              
              
              57,645
              
              
              
              ---Realized
      gain on sale of marketable securities
              
              
              ---
              
              
              
              (279,926
              )Change
      in accounts receivable
              
              
              1,636
              
              
              
              (8,717
              )Change
      in other assets
              
              
              2,970
              
              
              
              (13,000
              )Change
      in in other liabilities
              
              
              (68,384
              )
              
              
              771,791Net
      cash provided by (used in) operating activities
              
              
              (254,789
              )
              
              
              503,081CASH
      FLOWS FROM INVESTING ACTIVITIESProceeds
      from (investment in) marketable securities
              
              
              ---
              
              
              
              (2,104,547
              )Proceeds
      from real estate owned
              
              
              ---
              
              
              
              (37,448
              )Capital
      improvements on real estate owned
              
              
              (12,015
              )
              
              
              ---Principal
      collected on mortgage notes receivable
              
              
              10,239
              
              
              
              13,864Net
      cash (used in) investing activities
              
              
              (1,776
              )
              
              
              (2,128,131
              )CASH
      FLOWS FROM FINANCING ACTIVITIESProceeds
      from (payments of) loans payable
              
              
              50,000
              
              
              
              (827
              )Purchase
      of treasury stock
              
              
              (1,443
              )
              
              
              (2,341
              )Preferred
      dividends paid
              
              
              ---
              
              
              
              ---Common
      dividends paid
              
              
              ---
              
              
              
              ---Net
      cash provided by (used in) financing activities
              
              
              48,557
              
              
              
              (3,168
              )NET
      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
              
              
              (208,008
              )
              
              
              (1,628,218
              )CASH
      AND CASH EQUIVALENTS, BEGINNING OF PERIOD
              
              
              227,944
              
              
              
              1,974,687CASH
      AND CASH EQUIVALENTS, END OF PERIOD
              
              $
              19,936
              
              
              $
              346,469SUPPLEMENTAL
      CASH FLOW INFORMATION:Cash
      paid for interest
              
              $
              150
              
              
              $
              13,433Cash
      paid for taxes
              
              $
              555
              
              
              $
              8,676NON-CASH
      INVESTING AND FINANCING ACTIVITIESForeclosures,
      net of reserves
              
              $
              ---
              
              
              $
              400,000










EASTERN
LIGHT CAPITAL, INCORPORATED
 
 Notes
to Condensed Consolidated Financial Statements
 (unaudited)


1.
            Organization





References
to the “Company” refer to Eastern Light Capital, Incorporated (the “Trust”) – a
Real Estate Investment Trust (“REIT”) – and WrenCap Funding Corporation
(“WCFC”), collectively.  The Trust was incorporated in Delaware on
December 12, 1995. On July 2, 2008, the Trust – formerly known as Capital
Alliance Income Trust, Ltd – was renamed Eastern Light Capital,
Incorporated.





On April
15, 1997, the Trust formed a taxable REIT subsidiary, Capital Alliance Funding
Corporation. On April 20, 2007, the subsidiary was renamed to WrenCap Funding
Corporation. Both the Trust and WCFC are incorporated in Delaware. The Trust
owns all of WCFC’s common and preferred shares and the Trust and WCFC are
consolidated in the Company’s financial statements. Prior to December 29, 2006,
the Company was externally advised by Capital Alliance Advisors, Inc. (“Former
Manager”). On December 29, 2006, the Former Manager was terminated and the
Company became self-administered and self-advised.





2.
            Basis of presentation
      and summary of significant accounting
  policies





These
financial statements should be read in conjunction with the audited financial
statements and notes thereto for the year ended December 31, 2009 as reported in
the Company’s Form 10-K filed pursuant to 15d-2 with the Securities and Exchange
Commission.





Principles of
consolidation. The condensed consolidated financial statements include
the accounts of the Trust and its wholly owned subsidiary, WCFC. All significant
intercompany balances and transactions have been eliminated in
consolidation.





Basis
of accounting.The Company
prepares its condensed consolidated financial statements in accordance with
accounting principles generally accepted in the United States of America and
pursuant to the rules and regulations of the Securities and Exchange
Commission.The financial information herein reflects all
adjustments (consisting of normal, recurring adjustments) which are, in the
opinion of management, necessary for a fair statement of results for the interim
period. The results of operations for the three months ended March 31, 2010, are
not necessarily indicative of the results to be expected for the full year.





Use of
estimates.  The preparation of condensed consolidated financial
statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the condensed consolidated
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. The most
significant estimates are the allowance for loan losses and the valuation of
real estate owned.





Cash and cash
equivalents.  Cash and cash equivalents include cash and highly
liquid investments with maturities of three months or less when
purchased.  The Company deposits cash in financial institutions
insured by the Federal Deposit Insurance Corporation.  At times, the
Company’s account balances may exceed the insured limits. The Company has not
experienced losses on these accounts and management believes the Company is not
exposed to significant risks on such accounts.





Marketable
securities. Marketable securities are classified as either trading or
available-for-sale securities.  Trading securities represent
investments in exchange listed securities that are bought and held principally
for the purpose of selling
them in the near term.  Available-for-sale securities represent
investments in exchange listed securities which the Trust
intends to hold for an indefinite period of time.





Revenue
recognition.Interest income is
recorded on the accrual basis of accounting in accordance with the terms of the
loans.  Management reviews the likelihood that a loan will be repaid
when the payment of principal or interest is delinquent over two
payments.  For these delinquent loans, Management may establish a loan
loss reserve to protect against principal losses in the loan portfolio and an
allowance for doubtful accounts to protect against losses from accrued
interest.  If the mortgage’s collateral is considered insufficient to
satisfy the outstanding balance, after estimated foreclosure and selling costs,
additional interest is not accrued.  Loan origination income and
extension fees are deferred and recognized over the remaining life of the loan
as interest income on the interest method. Rental income is recognized as it is
earned.










EASTERN
LIGHT CAPITAL, INCORPORATED
 
 Notes
to Condensed Consolidated Financial Statements
 (unaudited)


2.
            Basis of presentation
      and summary of significant accounting policies
      (continued)





Fair Value
Measurements.  The Company has adopted ASC Topic 820, Fair Value
Measurements.  ASC Topic 820 establishes a framework for measuring
fair value and expands disclosure requirements for fair value
measurements.





The
Company determines the fair values of its assets and liabilities based on the
fair value hierarchy established in ASC Topic 820.  The standard describes
three levels of inputs that may be used to measure fair value (Level 1, Level 2
and Level 3).  Level 1 inputs are quoted prices (unadjusted) in active
markets for identical assets or liabilities that the Company has the ability to
access at the measurement date.  An active market is a market in which
transactions occur with sufficient frequency and volume to provide pricing
information on an ongoing basis.  Level 2 inputs are inputs other than
quoted prices that are observable for the asset or liability, either directly or
indirectly.  Level 3 inputs are unobservable inputs for the asset or
liability.  Unobservable inputs reflect the Company’s own assumptions about
the assumptions market participants would use in pricing the asset or liability
(including assumptions about risk).  Unobservable inputs are developed
based on the best information available in the circumstances and may include the
Company’s own data.





Stock-based
compensation.   During the three months ended March 31,
2010 and 2009, no option awards were issued.





Reclassifications.  Certain
2009 amounts may have been reclassified to conform to the 2010 presentation.
Such reclassifications had no effect on reported net income (loss) or income
(loss) per share.





Taxes.  The
Trust has elected to be taxed as a REIT under the Internal Revenue Code of 1986,
as amended (the "Code"). A REIT is generally not subject to federal income tax
on taxable income which is distributed to its stockholders, provided that at
least 90% of taxable income is distributed and provided that certain other
requirements are met. Certain assets of the Company that produce non-qualifying
income are held in taxable REIT subsidiaries. Unlike other subsidiaries of a
REIT, the income of a taxable REIT subsidiary is subject to federal and state
income taxes. Even as a REIT, the Company may be subject to certain state and
local taxes on its income and property, and to federal income and excise taxes
on its undistributable taxable income.





Earnings per share.
The Company presents both basic and diluted earnings per share. Basic earnings
per share excludes dilution and is computed by dividing net income available to
common stockholders by the weighted average number of shares outstanding for the
period. Diluted earnings per share reflects the potential dilution that could
occur if securities or other contracts to issue common stock were exercised or
converted into common stock, where such exercise or conversion would result in a
lower earnings per share amount.





Concentration of credit
risk.  The Company holds numerous mortgage notes receivable
that are secured by deeds of trust on residential properties. As of March 31,
2010 and December 31, 2009, 89% of the deeds of trust are located in California.
This concentration of credit may pose a risk to the value of the loan portfolio
due to changes in the economy or other conditions of the geographical
area.


3.
              Marketable
      securities


Available-for-sale
securities are reported at fair value with unrealized gains and losses excluded
from earnings and reported in accumulated other comprehensive income (loss). For
the three month period ended March 31, 2010, the
gain in accumulated other comprehensive income was $20. Trading securities are
reported at fair value with unrealized gains and losses reported in the
statements of operations.  Available-for-sale securities consist of
exchange traded REIT securities whereas trading securities consist of exchange
traded non-REIT securities. Both accounts utilize exchange listed derivative
securities to enhance performance and to hedge against risk. The trading account
also shorts exchange listed securities, including derivative
securities.





As of
March 31, 2010 and December 31, 2009, the trading securities account balance was
$0, and the available for sale securities account balance was $167 and $147,
respectively. Realized gains and losses on sales of both trading and
available-for-sale securities are determined on an average cost basis and are
reported in the statements of operations.








EASTERN
LIGHT CAPITAL, INCORPORATED
 
 Notes
to Condensed Consolidated Financial Statements
 (unaudited)


4.
                Marketable securities
      (continued)


The
accounts utilize margin borrowings and are separately maintained. The equity
balance in the account is sufficient to offset the risk from a potential margin
call. As of March 31, 2010 and December 31, 2009, both the trading securities
account and the available-for-sale securities account had no borrowings. The
interest rate in the trading account is the current Federal Funds rate plus
1.50% and is payable monthly. The interest in the available-for-sale margin
account is the current Prime Rate plus 4.00% and is payable
monthly.





4.
            Accounts
      receivable





Accounts
receivable consists of accrued interest on mortgage notes receivable and other
amounts due from borrowers. As of March 31, 2010 and December 31, 2009 the
account receivable balance was $523,081 and $524,717, respectively. As of March
31, 2010 and December 31, 2009, Management believes that an allowance for
doubtful accounts of $453,974 and $453,974, respectively, is adequate protection
against the collectability of the receivable as well as the costs associated
with possible legal action.




5.
              Mortgage notes
      receivable


Reconciliation
of the mortgage notes receivable balances follows:





Three months
              March 31, 2010
            
            
            Twelve months
              Dec 31, 2009Balance,
      beginning of period
            
            $
            2,690,737
            
            
            $
            5,460,948Additions
      during period:Originations
            
            
            ---
            
            
            
            ---Deductions
      during period:Collections
      of principal
            
            
            (10,239
            )
            
            
            (53,252
            )Repayments
            
            
            ---
            
            
            
            (146,860
            )Write-offs
      of uncollectible loans
            
            
            ---
            
            
            
            ---Foreclosures
            
            
            ---
            
            
            
            (2,570,099
            )Balance,
      as reported in Consolidated Balance Sheet
            
            $
            2,680,498
            
            
            $
            2,690,737





Mortgage
notes receivable are stated at their outstanding principal
balance.  Interest on the mortgages is due monthly and principal is
usually due as a balloon payment at loan maturity. As of March 31, 2010, there
were four (4) loans totaling $1,076,028 of principal and $5,016 of interest that
were delinquent over 60 days. As of December 31, 2009, there were three (3)
loans totaling $1,064,984 of principal and $5,016 of interest that were
delinquent over 60 days. These loans do not accrue interest in agreement with
the Company’s policy on revenue recognition.





Mortgage
notes that have been modified from their original terms are evaluated to
determine if the loan meets the definition of troubled debt restructuring. As of
March 31, 2010 and December 31, 2009, there were no loan modifications that
affected the recognition of revenue or required the Company to recognize
impairment of a mortgage note receivable.





As of
March 31, 2010 and December 31, 2009, the Company had one loan with a carrying
value of $302,709 which was considered impaired. Management has reviewed this
loan and has reserved a loan loss allowance sufficient to absorb losses as a
result of foreclosure.





6.
            Allowance for loan
      losses





The
allowance for loan losses is based on the fair value of the related collateral,
since all loans subject to this measurement are collateral
dependent.  Management believes a $320,000 and $310,000 allowance for
loan losses are adequate to protect against potential losses inherent in
mortgage notes receivables as of March 31, 2010 and December 31, 2009,
respectively. Actual losses may differ from the estimate.





EASTERN
LIGHT CAPITAL, INCORPORATED
 
 Notes
to Condensed Consolidated Financial Statements
 (unaudited)








6.
            Allowance for loan
      losses (continued)





A
reconciliation of the allowance for loan losses follows:




Three months
              March 31, 2010
            
            
            Twelve months
              Dec 31, 2009Provision
      for loan losses
            
            $
            10,000
            
            
            $
            164,794Write-offs
      of uncollectible loans (net)
            
            
            ---
            
            
            
            (574,794
            )Total
      adjustments to allowance
            
            
            10,000
            
            
            
            (410,000
            )Balance,
      beginning of period
            
            
            310,000
            
            
            
            720,000Balance,
      as reported in Consolidated Balance Sheet
            
            $
            320,000
            
            
            $
            310,000




7.
            Real estate
      owned





Real
estate owned includes real estate acquired through foreclosure and is stated at
the lower of the recorded investment in the loan or at the property's estimated
fair value, less estimated costs to sell, as applicable.  Costs
relating to the development and improvement of real estate owned are
capitalized, whereas costs relating to holding the property are expensed. Real
estate owned is either held for sale or for investment. As a property's status
changes, reclassifications may occur.





As of
January 1, 2009, the Company owned five properties. During 2009, the Company
foreclosed on four properties. As of December 31, 2009, the Company owned nine
properties with a reported value of $6,714,174 and senior liens of $4,487,940.
Six properties were held for sale with a reported value of $3,861,755 and senior
mortgage liens of $2,489,563. Three properties were held for investment with a
reported value of $2,852,419 and senior mortgage liens of $1,998,377. During the
three months ended March 31, 2010 there were no foreclosures or property sales.
The Company’s nine properties have a reported value of $6,668,792 and senior
liens of $4,487,940. Eight properties are held for sale with a reported value of
$4,267,812 and senior mortgage liens of $2,489,563. One property is held for
investment with a reported value of $2,400,980 and a senior mortgage lien of
$1,998,377.





A
reconciliation of the real estate owned follows:





Three months
              March 31, 2010
            
            
            Twelve months
              Dec 31, 2009Balance,
      beginning of period
            
            $
            6,714,174
            
            
            $
            5,086,781Add:
      Foreclosed mortgage notes, (net of reserve)
            
            
            ---
            
            
            
            4,135,468Add:
      Investments
            
            
            12,015
            
            
            
            71,900Less:
      Write-downs of property (non-cash)
            
            
            (57,645
            )
            
            
            (2,269,128
            )Less:
      Proceeds from sales (net of closing costs)
            
            
            ---
            
            
            
            ---Less:
      Loss from sales
            
            
            ---
            
            
            
            ---Less:
      Depreciation of real estate held for
      investment                        .
            
            
            (11,895
            )
            
            
            (47,581
            )Change in deferred
      carrying
      costs.
            
            
            12,143
            
            
            
            (263,266
            )Balance,
      as reported in Consolidated Balance Sheet
            
            $
            6,668,792
            
            
            $
            6,714,174








8.
            Fair Value
      Measurements





The
following table presents information about the Company’s assets and liabilities
that are measured at fair value on a recurring basis as of March 31,
2010:





Mar 31, 2010
            
            
            Level 1
            
            
            Level 2
            
            
            Level 3Asset:Marketable
      securities – Available for sale
            
            $
            167
            
            
            $
            167
            
            
            
            ---
            
            
            
            ---Mortgage
      notes receivable (non-recurring)
            
            
            1,052,709
            
            
            
            ---
            
            
            
            1,052,709
            
            
            
            ---Real
      estate owned (non-recurring)
            
            
            ---
            
            
            
            ---
            
            
            
            ---
            
            
            
            ---Total
            
            $
            1,052,876
            
            
            $
            167
            
            
            $
            1,052,709
            
            
            $
            ---






EASTERN
LIGHT CAPITAL, INCORPORATED
 
 Notes
to Condensed Consolidated Financial Statements
 (unaudited)


8.
            Fair Value
      Measurements (continued)





The
following methods and assumptions were used to estimate the fair value of assets
and liabilities:





Cash and cash
equivalents.  The carrying amounts reported in the balance
sheets approximate fair value due to the short term nature of these
accounts.





Available-for-sale and trading
securities (included in marketable securities).  These investments
are reported on the balance sheets based on quoted market prices.




Mortgage notes receivable.
The fair value of non-impaired loans is estimated based upon projected cash
flows discounted at the estimated current interest rates at which similar loans
would be made. The applicable amount of the allowance for loan losses along with
accrued interest and advances related thereto should also be considered in
evaluating the fair value versus the carrying value. For loans in which a
specific allowance is established based on the fair value of the collateral, the
Company records the loan as nonrecurring Level 2 if the fair value of the
collateral is based on an observable market price or a current appraised
value.  If an appraised value is not available or the fair value of
the collateral is considered impaired below the appraised value and there is no
observable market price, the Company records the loan as nonrecurring Level
3.





Real estate
owned.   At the time of foreclosure, real estate owned is
recorded at the lower of the recorded investment in the loan, plus any senior
indebtedness, or at the property’s estimated fair value, less estimated costs to
sell, as applicable. The Company periodically compares the carrying value of
real estate to expected undiscounted future cash flows for the purpose of
assessing the recoverability of the recorded amounts.  If the carrying
value exceeds future undiscounted cash flows, the assets are reduced to
estimated fair value.





9.
            Preferred, common and
      treasury stock





The
Preferred Shareholders are entitled to a dividend preference in an amount equal
to an annualized return on the adjusted net capital contribution of Preferred
Shares at each dividend record date during such year (or, if the Directors do
not set a record date, as of the first day of the month). The annualized return
is the lesser of: (a) 10.25%, (b) 1.50% over the Prime Rate (determined on a not
less than quarterly basis) or (c) the rate set by the Board of Directors. The
preferred dividend preference is non-cumulative.





After
declaring dividends for a given year to the Preferred Shareholders in the amount
of the dividend preference, no further dividends may be declared on the
Preferred Shares for the subject year, until the dividends declared on each
Common Share for that year equals the dividend preference for each Preferred
Share for such year.  Any additional dividends generally will be
allocated such that the amounts of dividends per share to the Preferred
Shareholders and Common Shareholders for the subject year are
equal.  The Preferred Shareholder’s additional dividends, if any, are
non-cumulative. Preferred Shareholders are entitled to receive all liquidating
distributions until they have received an amount equal to their aggregate
adjusted net capital contribution.  Thereafter, Common Shareholders
are entitled to all liquidation distributions until the aggregate adjusted net
capital contributions of all Common Shares have been reduced to
zero.  Any subsequent liquidating distributions will be allocated
among Common Shareholders and Preferred Shareholders pro rata.





The
Preferred Shares are redeemable by a shareholder, subject to the consent of the
Board of Directors, annually on June 30 for written redemption requests received
by May 15 of such year.  The Board of Directors may in its sole
discretion deny, delay, postpone or consent to any or all requests for
redemption.  The redemption amount to be paid


for
redemption of such Preferred Shares is the adjusted net capital contribution
plus unpaid accrued dividends, divided by the aggregate net capital
contributions plus accrued but unpaid dividends attributable to all Preferred
Shares outstanding, multiplied by the net asset value of the Trust attributable
to the Preferred Shares which shall be that percentage of the Trust’s net asset
value that the aggregate adjusted net capital contributions of all Preferred
Shares bears to the adjusted net capital contributions of all Shares
outstanding.





The Trust
has the power to redeem or prohibit the transfer of a sufficient number of
Common and/or Preferred Shares or the exercise of warrants and/or options and to
prohibit the transfer of shares to persons that would result in a violation of
the Trust’s shareholding requirements.  The Bylaws provide that only
with the explicit approval of the Trust’s Board of Directors may a shareholder
own more than 9.8% of the total outstanding shares.






EASTERN
LIGHT CAPITAL, INCORPORATED
 
 Notes
to Condensed Consolidated Financial Statements
 (unaudited)


9.
            Preferred, common and
      treasury stock (continued)





As of
January 1, 2010, the Trust’s net Preferred Stock outstanding shares were
196,901. During the first three months of 2010, no Preferred Stock shares were
purchased. As of March31, 2010, the
Trust’s net Preferred Stock outstanding shares were 196,901.





As of
January 1, 2010, the Trust’s net Common Stock outstanding shares were 351,882.
During the first three months of 2010, 400 shares of Common Stock were purchased
and no options were exercised. As of March 31, 2010, the Trust’s net Common
Stock outstanding shares were 351,482.





10.
            Related party
      transactions





On March
8, 2008, Thomas B. Swartz, a non-independent director and officer of the Former
Manager, resigned from the Trust’s Board of Directors. Mr. Swartz received
$21,100 in cash and his stock options were allowed to continue until maturity or
June 3, 2009, whichever came first. All of Mr. Swartz’s options expired
unexercised.





On March
26, 2010, the Company’s Chairman and Chief Executive Officer provided the
Company a $50,000 loan. The loan has a simple interest rate of 9.99% per annum,
is pre-payable at any time, and has a term of 55 days.





11.
            Earnings per
      share





The
following table represents a reconciliation of the numerators and denominators
of the basic and diluted earnings per common share for the three months ended
March 31, 2010 and 2009:





2010
            
            
            2009Numerator:Net
      income (loss)
            
            $
            (265,357
            )
            
            $
            28,508Preferred
      dividends
            
            
            ---
            
            
            
            ---Net
      income (loss) available to common stockholders
            
            $
            (265,357
            )
            
            $
            28,508Denominator:
              Basic
      weighted average shares
            
            
            351,315
            
            
            
            366,207Dilutive
      effect of options
            
            
            ---
            
            
            
            7,436Diluted
      weighted average shares
            
            
            351,315
            
            
            
            373,643Basic
      earnings per common share
            
            $
            (0.76
            )
            
            $
            0.08Diluted
      earnings per common share
            
            $
            (0.76
            )
            
            $
            0.08




12.
              Wages and
      Benefits


Every
      January 1, full time employees with at least 12 months of full time
      employment qualify for a Company sponsored Simple IRA. Employee
      contributions are governed by Internal Revenue Code limitations. The
      Company contributes up to 3.0% of the employee’s annual compensation, but
      not in excess of the lesser of the employee’s contribution or the maximum
      IRS employer’s contribution. Employer contributions vest upon
      funding.


13.
                Subsequent
      Events


Between
      April 1, 2010 and May 21, 2010, three REOs with a book value of $1,486,311
      sold. These sales did not produce a material gain or loss, but provide net
      cash proceeds of $729,747.





On
      May 4, 2010, the Company repaid a $50,000 borrowing provided by the
      Company’s Chairman and Chief Executive Officer. The payment also included
      accrued simple interest at the rate of 9.99% per
  annum.





On
      May 10, 2010 the Company received a Deficiency Letter dated May 7, 2010
      from the NYSE Amex. The letter indicated that the Company was not in
      compliance with the NYSE Amex continued listing standards. In order to
      maintain its listing, the Company must submit a plan of compliance by June
      7, 2010. The Company expects to submit a plan as soon as practical and no
      later than the June 7, 2010 deadline. There can be no assurance that the
      Company’s plan will be accepted by the
Exchange.











9











PART
I – ITEM 2





MANAGEMENT’S
DISCUSSION AND ANALYSIS


OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS





FORWARD
LOOKING STATEMENTS





Certain
statements made in this Report on Form 10-Q are "forward-looking statements"
(within the meaning of the Private Securities Litigation Reform Act of 1995)
regarding the plans and objectives of management for future operations. Such
statements involve known and unknown risks, uncertainties and other factors that
may cause actual results, performance or achievements of Eastern Light Capital,
Incorporated (the "Company") to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. The forward-looking statements included herein are based on current
expectations that involve numerous risks and uncertainties. The Company's plans
and objectives are based, in part, on assumptions relating to the foregoing and
involve judgments with respect to, among other things, future economic,
competitive and market conditions and future business decisions, all of which
are difficult or impossible to predict accurately and many of which are beyond
the control of the Company. Although the Company believes its assumptions
underlying the forward-looking statements are reasonable, any of the assumptions
could prove inaccurate and, therefore, there can be no assurance the
forward-looking statements included in this Quarterly Report will prove to be
accurate. In light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such information
should not be regarded as a representation by the Company or any other person
that the objectives and plans of the Company will be achieved.





Forward-looking
statements may be identified by reference to a future period or periods, or by
the use of forward-looking terms such as “may”, “will”, “expect”, “anticipate”,
or similar terms.  Actual results could materially differ from those
in the forward-looking statements due to a variety of factors.





Preparation
of the Company’s condensed consolidated financial statements is based upon the
operating results of Eastern Light Capital, Incorporated (the “Trust”) and
WrenCap Funding Corporation (“WCFC”). Management’s discussion and analysis of
the results of operations for the three months ended March 31, 2010 and 2009
follows:





OVERVIEW





In May of
1997, the Trust registered its common shares with the Securities and Exchange
Commission under the Securities Act of 1933. On September 30, 1998, the initial
public offering of Common Shares was completed. Since October 1, 1998, the
common shares have been listed on the NYSE Amex (formerly known as the American
Stock Exchange).





During
the fourth quarter of 2006, the Company’s shareholders voted to terminate the
outside manager (“Former Manager”) and initiate internal management. On December
29, 2006, the Former Manager’s management and advisory contracts were terminated
and the Company became self-administered and self-advised.





The
transition agreement with the Former Manager required the Company to remove the
name “Capital Alliance” from the Trust’s name by June 30, 2008 and from the
Trust’s taxable subsidiary’s name by April 30, 2007. On April 20, 2007, the
subsidiary changed its name to WrenCap Funding Corporation. On July 2, 2008, the
Trust changed its name to Eastern Light Capital, Incorporated.





The
current real estate market is characterized by uncertainty in the availability
of credit and the expected trend in residential property
valuations.  Due to these uncertainties the Company has focused on
debt reduction in lieu of new investments in residential
mortgages.  The current conditions are expected to remain in place for
an undetermined period.  On occasion the Company will make investments
in marketable securities. The Company is reviewing its current investment
policies to include other REIT permissible assets.





The
recent financial crisis has affected the Company’s business by diminishing the
credit quality of existing borrowers, lowering residential property values and
increasing borrower delinquencies.  These factors have led to
increased foreclosures and real estate owned (“REO”) balances.












Mortgage
investments are reported as mortgage notes receivable and held until prepayment,
maturity, sale, or foreclosure. As of March 31, 2010 the mortgage portfolio
totaled $2,680,498 consisting of 13 loans of which $1,076,028 or 40% of the
portfolio loan value were delinquent. As of March 31, 2010, the Trust held nine
properties totaling $6,668,792 as REO. Between April 1, 2010 and May 21, 2010
three of these REOs with a book value of $1,486,311 sold. These transactions
will be reported in the second quarter’s operating results. These sales did not
produce a material gain or loss, but provided net cash proceeds of $729,747. The
monetization of REO assets is an important source of Company
liquidity.





As of
December 31, 2009, the mortgage portfolio totaled $2,690,737 consisting of 13
loans, of which 3 loans totaling 1,064,984 or 39% of the portfolio loan value
were delinquent. As of December 31, 2009, the Trust held nine properties
totaling 6,714,174 as REO





The Trust
is a real estate investment trust (“REIT”) and REIT’s are generally required to
distribute at least 90% of their annual taxable income as dividend
payments.  Since 2006, the Trust has incurred taxable
losses.  On account of these losses, dividend payments were curtailed.
These taxable losses, also known as Net Operating Losses (“NOL”), allow the
Trust to retain future taxable income equal to the cumulative amount of its NOL
balance. The Internal Revenue Code waives mandatory dividend payments until
prior years taxable losses are recovered.





When the
Trust produces pre-NOL taxable income, the Trust’s Board of Directors will need
to reconcile the competing opportunities of strengthening the Company’s balance
sheet and the priority of restoring dividend payments. Although the Board of
Directors is inclined to retain future taxable income until the cumulative NOL
is fully utilized, this issue will require additional review and
analysis.





CRITICAL
ACCOUNTING POLICIES





The
accounting and reporting policies of the Company are in accordance with
accounting principles generally accepted in the United States of
America.  The Company’s significant accounting policies are described
in the notes to the consolidated financial statements as contained in the
Company’s 2009 Form 10-K as filed with the SEC on April 14,
2010.  Certain accounting policies require management to make
significant estimates and assumptions, which have a material impact on the
carrying value of certain assets and liabilities, and the Company considers
these to be critical accounting policies.  The estimates and
assumptions used are based on historical experience and other factors, which
management believes to be reasonable under the circumstances.  Actual
results could differ significantly from these estimates and assumptions, which
could have a material impact on the carrying value of assets and liabilities at
the balance sheet dates and results of operations for the reporting periods.
There have been no material changes to the critical accounting policies as
disclosed in 2009 Form 10-K.





Operating
Strategy.





Mortgage
investment loans are reported as mortgage notes receivable and are held until
prepayment, maturity, sale, or foreclosure. The Company owns non-conforming
mortgage loans on one-to-four unit residential properties secured by first and
second deeds of trust.  These loans are primarily secured by
California real estate. The Company seeks to maximize the value of its loan
portfolio through active asset management.





The
Company is reviewing its current investment policies to include other REIT
permissible assets, instead of focusing on residential mortgage loans. The
Company may also consider relinquishing its REIT status to enhance shareholder
value.





Loan
Origination. During 2009 and the three months ended March 31, 2010, the Company
did not make or acquire any new loans. Prospectively, loans may be internally
originated or acquired from unaffiliated third parties.





Asset
Management. Asset management is mortgage loan servicing and REO
dispositions.  Loan servicing consists of collecting payments from
borrowers, making required advances, accounting for principal and interest
payments, holding borrowed proceeds in escrow until fulfillment of mortgage loan
requirements, contacting delinquent borrowers, and in the event of unremedied
defaults performing other administrative duties including supervising
foreclosures.





Only
mortgage loans owned by the Company are serviced. The Company does not acquire
loan servicing rights or maintain a loan’s servicing rights at disposition. REO
dispositions include all of the supervisory and administrative processes of
preparing a foreclosed asset for sale.





11







Loan
Portfolio and Allowance for Loan Losses.As of March 31, 2010,
the Company’s loan portfolio included 13 loans totaling $2,680,498 of which four
loans totaling $1,076,028 representing 40% of the loan portfolio were delinquent
over two payments.  In assessing the collectibility of these
delinquent mortgage loans, management has established a loan loss reserve of
$320,000, if it is necessary to foreclose upon the mortgage loans.





As of
December 31, 2009, the Company’s loan portfolio included 13 loans totaling
$2,690,737 of which 3 loans totaling $1,064,984 representing 39% of the loan
portfolio were delinquent over two payments.  In assessing the
collectibility of these delinquent mortgage loans, management has established a
loan loss reserve of $310,000, if it is necessary to foreclose upon the mortgage
loans.


The
Company may issue loan commitments on a conditional basis and will fund such
loans upon removal of all conditions.  The Trust did not have any
commitments to fund loans as of March 31, 2010 and December 31,
2009.





As of
March 31, 2010, the following table summarizes the Company’s outstanding
repayment obligations:




Maximum
      Other
                Commercial
      Commitments (a)
                As
      of March 31, 2010
              Total
      Amounts
                Committed
              Amount
      of Commitment Expiration Per PeriodLess
      than
                1
      year
              1
      - 3 years
              4
      - 5
                years
              After
      5
                yearsMargin
      Loan
              0
              0
              0
              0
              0Lease
      Commitment
              $153,056
              $116,756
              $36,300
              0
              0Standby
      Repurchase Obligations
              0
              0
              0
              0
              0Total
      Commercial Commitments
              $153,056
              $116,756
              $36,300
              0
              0




(a)
            Commercial
      commitments are funding commitments that could potentially require
      registrant performance in the event of demands by third parties or
      contingent events, such as under lines of credit extended or under
      guarantees of debt.





RESULTS
OF OPERATIONS





The
historical information presented herein is not necessarily indicative of future
operations.





Three months ended March 31, 2010
and 2009.  Revenues for the first quarter decreased to $48,772
as compared to $78,773 for the same period in the prior year. The decrease in
revenue was due to a decrease in interest income of $15,715 and a decrease in
rental income of $13,431. The decrease in interest income was the result of a
smaller loan portfolio. The decrease in rental income was the result of
increased vacancies to facilitate REO sales.





Expenses
for first quarter decreased to $277,998 as compared to $330,193 for the same
period in the prior year. The decrease in expenses resulted from lower wages and
salaries of $13,003 from the elimination of employee bonuses, lower general and
administration expenses of $36,443 from deferred spending and lower REO expense
of $24,730. During the three month period ended March 31, 2010 the Company also
expensed $57,645 in REO impairment costs on two properties. No REO impairment
costs were incurred in the three month period ended March 31, 2009.





LIQUIDITY
AND CAPITAL RESOURCES





Management
believes that the cash flows from operations, mortgage loans that are paid off,
real estate owned that is sold, credit facilities that may be obtained during
2010 and the sale of investment mortgages will be sufficient to meet the
liquidity needs of the Company’s business for the next twelve
months.





Three months ended March 31, 2010
and 2009. As of January 1, 2010 and 2009, the Trust had $227,944 and
$1,974,687 of cash and cash equivalents, respectively. During the three month
period ended March 31, 2010, cash and cash equivalents decreased by
$208,008.  During the three month period ended March 31, 2009, cash
and cash equivalents decreased by $1,628,218. After taking into effect the
various transactions discussed below, cash and cash equivalents at March 31,
2010 and 2009 were $19,936 and $346,469, respectively.





The
following summarizes the changes in net cash provided by (used in) operating
activities, net cash provided by (used in) investing activities, and net cash
provided by (used in) financing activities.





Net cash
provided by (used in) operating activities during the three months ended March
31, 2010 and 2009 was ($254,789) and $503,081, respectively. During the first
three months of 2010, net cash used from operating activities was primarily the
result of the net loss for the quarter. During the first three months of 2009,
the net cash provided by operating activities was primarily the result of the
increase in other liabilities of $771,791.

















Net cash
(used in) investing activities for the three months ended March 31, 2010 and
2009 was ($1,776) and ($2,128,131) respectively. During the first three months
of 2010, improvements to real estate owned used ($12,015), and proceeds from
mortgage notes receivable provided $10,239. During the first three months of
2009, investments in marketable securities used ($2,128,131).





Net cash
provided by (used in) financing activities during the three months ended March
31, 2010 and 2009 was $48,557 and ($3,168), respectively.  During the
first three months of 2010, borrowing provided $50,000. During the first three
months of 2009, purchases of treasury stock used ($2,341).








PART
I – ITEM 3





QUANTITATIVE
AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK





The
Company is not required to provide the information required by this item as it
is a smaller reporting company.





PART
I – ITEM 4





CONTROLS
AND PROCEDURES





(A)Evaluation of Disclosure Controls and
Procedures.  Based on management's evaluation (with the
participation of our CEO and Principal Accounting Officer), as of the end of the
period covered by this report, our CEO and Principal Accounting Officer have
concluded that our disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended
(“Exchange Act”)), are effective to provide reasonable assurance that
information required to be disclosed by us in reports that we file or submit
under the Exchange Act is recorded, processed, summarized, and reported within
the time periods specified in SEC rules and forms, and is accumulated and
communicated to management, including our principal executive officer and
principal financial officer, as appropriate, to allow timely decisions regarding
required disclosure.





(B) Changes in Internal Control over
Financial Reporting.  There have been no changes in the
Company’s internal control over financial reporting (as defined in Rules
13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period
covered by this report that have materially affected, or are reasonably likely
to materially affect, our internal control over financial
reporting.




PART
II





OTHER
INFORMATION





ITEM
1   LEGAL PROCEEDINGS





The
Company is involved in two legal proceeding as of March 31, 2010.





On April
14, 2006, the Trust and WCFC were served a summons alleging that the Company was
involved with misleading a former mortgage holder. Upon the satisfaction of
their mortgage claim from the proceeds of a Company provided mortgage, the
former mortgage holder released their escrow settlement to the new purchaser
without re-recording their subordinate mortgage claim. On July 14, 2006, the
property was sold at a Trustee sale and the Company’s loan was paid in full. The
former mortgage holder’s unrecorded claim was not satisfied at the
aforementioned Trustee sale. The case was resolved in the first quarter of
2010.





On
November 1, 2007, WCFC was served a summons dated September 5, 2007 from a
former borrower alleging that the Company assisted the replacement lender to
unlawfully and illegally foreclose on the former borrower’s property. The
Company believes the former mortgage holder’s action is without merit and is
seeking dismissal. The case was resolved in the first quarter of
2010.












In March
2008, the Trust was named as a defendant in a complaint alleging breach of
contract, fraud and negligence relating to two foreclosed properties. The
Company believes the former mortgage holder’s action is without merit and is
seeking dismissal. The case was dismissed in the second quarter of
2010.





During
January 2010, a former mortgage holder filed an appeal of a previously dismissed
case. The former mortgage holder continues to allege that the Company made a
fraudulent loan to him by cross collateralizing two separate properties. The
cross collateralization was necessary to grant the borrower the desired loan,
since there was insufficient equity in the primary property used as collateral
for the loan. The Company believes the former mortgage holder’s action is
without merit and is seeking a dismissal.





ITEM
1A    RISK FACTORS





The
Company is not required to provide the information required by this item as it
is a smaller reporting company.





ITEM
1B    UNRESOLVED STAFF COMMENTS





None





ITEM
2   CHANGES IN SECURITIES





400
common shares were purchased for treasury stock during the three month period
ended March 31, 2010. No preferred shares were purchased for treasury stock
during the three month period ended March 31, 2010.





ITEM
3   DEFAULTS UPON SENIOR SECURITIES





None





ITEM
4    SUBMISSION OF MATTERS TO VOTE OF SECURITY
HOLDERS





None





ITEM
5    OTHER INFORMATION





None




ITEM
6   EXHIBITS AND REPORTS ON FORM 8-K





(a)           Exhibits





Exhibit No.





3.1
            Certificate
      of Incorporation and Amendment No. 1
(1)


3.2
            Bylaws
      of the Registrant (1)


3.3
            Certificate
      of Amendment of Certificate of Incorporation
(3)


4.1
            Form
      of Stock Certificate of Common Shares of the Registrant
  (2)


10.2
            Form
      of Indemnity Agreement between the Registrant and its Directors and
      Officers (1)


24.7
            Power
      of Attorney of Richard J. Wrensen
(4)


31.1
            Sarbanes
      Certification of Richard J. Wrensen


31.2
            Sarbanes
      Certification of Andrea Barney


32.1
            Sarbanes
      Certification





(1)
            These
      exhibits were previously contained in Registrant’s Registration Statement
      filed on Form S-11 with the Commission on September 9, 1996, and are
      incorporated by reference herein.





(2)
            These
      exhibits were previously contained in Amendment No. 1 to the Registrant’s
      Registration Statement filed on Form S-11 with the Commission on January
      15, 1997, and are incorporated by reference
  herein.





(3)
            These
      exhibits were previously contained in Form 10-Q for the period ending June
      30, 1997 filed with the Commission on August 14, 1997, and are
      incorporated by reference herein.














(4)
            This
      exhibit was previously contained in Form 10-K for the period ending
      December 31, 1998 filed with the Commission on April 10, 1999, and is
      incorporated by reference herein.








(b)
            Reports on Form
      8-K.





Form 8-K
was filed on:




·
            April
      19, 2010 due to the press release of April 15, 2010 announcing financial
      results for the first quarter of
2010.




·
            May
      14, 2010 due to the press release of May 13, 2010 announcing receipt of
      NYSE Amex deficiency letter for continued listing dated May 7,
      2010.




















SIGNATURES








Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.







Dated: 
      May 21, 2010
                By:
                /s/ Richard
      J. WrensenRichard
      J. WrensenPresident,
      Chief Executive Officer and Chief Financial Officer
 By:
                /s/
      Andrea BarneyAndrea
      BarneyPrincipal
      Accounting Officer and Controller