----

----

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

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

| Delaware                                                      | 94-3240473                             |
|---------------------------------------------------------------|----------------------------------------|
| (State or other jurisdictionof incorporation or organization) | (I.R.S. EmployerIdentification Number) |

| 100 Pine Street, Suite 560,   San Francisco, California | 94111      |
|------------------------------------------------------------------------|------------|
| (Address of principal executive office)                                | (zip code) |

----

|   | Title of each class          |   | Name of each exchange on which registered |   |
|--------|------------------------------|--------|-------------------------------------------|--------|
|   | Common Stock $0.01 par value |   | NYSE Amex                                 |   |

|   | Large accelerated filer:   o | Accelerated filer:   o         |
|--------|----------------------------------------|------------------------------------------|
|   | Non-accelerated filer:   o   | Smaller reporting company:   x |

----

|    | PART I  – FINANCIAL INFORMATION (UNAUDITED)                                 |   |
|---------|---------------------------------------------------------------------------------------------|--------|
|    |                                                                                        |   |
| ITEM 1  | CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:                                                |   |
|    |                                                                                        |   |
|    | Condensed Consolidated Balance Sheets                                                       | 1      |
|    |                                                                                        |   |
|    | Condensed Consolidated Statements of Operations                                             | 2      |
|    |                                                                                        |   |
|    | Condensed Consolidated Statements of Cash Flows                                             | 3      |
|    |                                                                                        |   |
|    | Notes to Condensed Consolidated Financial Statements                                        | 4-16   |
|    |                                                                                        |   |
| ITEM 2  | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 17-20  |
|    |                                                                                        |   |
| ITEM 3  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                  | 20     |
|    |                                                                                        |   |
| ITEM 4  | CONTROLS AND PROCEDURES                                                                     | 20     |
|    |                                                                                        |   |
|    | PART II – OTHER INFORMATION                                                           |   |
|    |                                                                                        |   |
| ITEM 1  | LEGAL PROCEEDINGS                                                                           | 20     |
|    |                                                                                        |   |
| ITEM 1A | RISK FACTORS                                                                                | 20     |
|    |                                                                                        |   |
| ITEM 1B | UNRESOLVED STAFF COMMENTS                                                                   | 20     |
|    |                                                                                        |   |
| ITEM 2  | CHANGES IN SECURITIES                                                                       | 20     |
|    |                                                                                        |   |
| ITEM 3  | DEFAULTS UPON SENIOR SECURITIES                                                             | 21     |
|    |                                                                                        |   |
| ITEM 4  | SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS                                           | 21     |
|    |                                                                                        |   |
| ITEM 5  | OTHER INFORMATION                                                                           | 21     |
|    |                                                                                        |   |
| ITEM 6  | EXHIBITS AND REPORTS ON FORM 8-K                                                            | 21     |
|    |                                                                                        |   |
|    | SIGNATURES                                                                                  | 22     |

----

|                                                                                   |   | March 31, 2011 |       | December 31, 2010 |   |
|----------------------------------------------------------------------------------------|--------|--------------------------|------------|-----------------------------|--------|
| ASSETS                                                                                 |   |                     |       |                        |   |   |
| Cash and cash equivalents                                                              |   | $                        | 589,944    |                        |   | $ | 269,911 |   |
| Marketable securities                                                                  |   |                     | 175        |                        |   |   | 191 |   |
| Investments                                                                            |   |                     | 190,000    |                        |   |   | 190,000 |   |
| Prepaid expenses                                                                       |   |                     | 27,500     |                        |   |   | 7,500 |   |
| Accounts receivable                                                                    |   |                     | 76,821     |                        |   |   | 61,686 |   |
| Allowance for doubtful accounts                                                        |   |                     | -          |                        |   |   | - |   |
|     Net accounts receivable                                        |   |                     | 76,821     |                        |   |   | 61,686 |   |
| Notes receivable:                                                                      |   |                     |       |                        |   |   |   |   |
|    Mortgage notes receivable                                            |   |                     | 1,038,234  |                        |   |   | 1,046,284 |   |
|    Allowance for loan losses                                            |   |                     | (20,000    | )                           |   |   | (20,000 | ) |
|       Net notes receivable                               |   |                     | 1,018,234  |                        |   |   | 1,026,284 |   |
| Real estate owned                                                                      |   |                     | 3,448,746  |                        |   |   | 4,048,746 |   |
| Other assets                                                                           |   |                     | 26,272     |                        |   |   | 29,128 |   |
|                                                                                   |   |                     |       |                        |   |   |   |   |
| Total assets                                                                           |   | $                        | 5,377,692  |                        |   | $ | 5,633,446 |   |
|                                                                                   |   |                     |       |                        |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                             |   |                     |       |                        |   |   |   |   |
|                                                                                   |   |                     |       |                        |   |   |   |   |
| Liabilities                                                                            |   |                     |       |                        |   |   |   |   |
|      Senior mortgage debt                                     |   | $                        | 2,112,947  |                        |   | $ | 2,112,947 |   |
|      Other liabilities                                        |   |                     | 114,943    |                        |   |   | 195,286 |   |
| Total liabilities                                                                      |   |                     | 2,227,890  |                        |   |   | 2,308,233 |   |
|                                                                                   |   |                     |       |                        |   |   |   |   |
| Stockholders’ equity                                                             |   |                     |       |                        |   |   |   |   |
| Preferred stock, $.01 par value;1,600,000 shares authorized;                           |   |                     |       |                        |
| 213,820 shares issued and outstanding at December 31, 2010                             |   |                     |       | 2,138                       |   |
|    Additional paid in capital - preferred stock                         |   |                     | -          |                        |   |   | 5,509,728 |   |
|    Less treasury stock: 16,919 preferred shares at                           |   |                     |       |                        |   |   |   |   |
|        December 31, 2010 at cost                    |   |                     | -          |                        |   |   | (229,179 | ) |
|                                                                                   |   |                     |       |                        |   |   |   |   |
| Common stock, $.01 par value; 2,000,000 shares authorized;                             |   |                     |       |                        |
| 746,558 shares issued and outstanding at March 31, 2011 and                            |   |                     |       |                        |
| 500,432 shares issued and outstanding at December 31, 2010                             |   |                     |       | 5,005                       |   |
|    Additional paid in capital - common stock                            |   |                     | 14,695,922 |                        |   |   | 9,415,696 |   |
|    Less treasury stock: 148,950 common shares at                             |   |                     |       |                        |   |   |   |   |
|        March 31, 2011 and December 31, 2010 at cost |   |                     | (1,829,141 | )                           |   |   | (1,829,141 | ) |
|    Accumulated other comprehensive income                               |   |                     | (548       | )                           |   |   | (532 | ) |
|    Accumulated deficit                                                  |   |                     | (9,723,897 | )                           |   |   | (9,548,502 | ) |
|                                                                                   |   |                     |       |                        |   |   |   |   |
| Total stockholders’ equity                                                       |   |                     | 3,149,802  |                        |   |   | 3,325,213 |   |
|                                                                                   |   |                     |       |                        |   |   |   |   |
| Total liabilities and stockholders’ equity                                       |   | $                        | 5,377,692  |                        |   | $ | 5,633,446 |   |

----

|                                               |   | Three Months Eneded |     |
|----------------------------------------------------|--------|---------------------|----------|
|                                               |   | March 31            |     |   |   |   |
|                                               |   | 2011                |     |   | 2010 |   |
| REVENUES                                           |   |                |     |   |   |   |
| Interest income                                    |   | $                   | 18,875   |   |   | $ | 31,167 |   |
| Rental income                                      |   |                | 28,250   |   |   |   | 17,350 |   |
| Other income                                       |   |                | 881      |   |   |   | 255 |   |
| Total revenues                                     |   |                | 48,006   |   |   |   | 48,772 |   |
|                                               |   |                |     |   |   |   |   |   |
| EXPENSES                                           |   |                |     |   |   |   |   |   |
| Provision for loan losses                          |   |                | ---      |   |   |   | 10,000 |   |
| Expenses of real estate owned                      |   |                | 1,645    |   |   |   | 43,714 |   |
| Impairment of real estate owned                    |   |                | ---      |   |   |   | 57,645 |   |
| Wages and salaries                                 |   |                | 78,244   |   |   |   | 94,463 |   |
| Non-income taxes                                   |   |                | 34,223   |   |   |   | 1,750 |   |
| General and administrative                         |   |                | 133,103  |   |   |   | 70,426 |   |
| Total expenses                                     |   |                | 247,215  |   |   |   | 277,998 |   |
|                                               |   |                |     |   |   |   |   |   |
| LOSS FROM OPERATIONS                               |   |                | (199,209 | ) |   |   | (229,226 | ) |
|                                               |   |                |     |   |   |   |   |   |
| Gain (loss) on sale of real estate owned           |   |                | 23,814   |   |   |   | --- |   |
| Gain (loss) on securities transactions             |   |                | ---      |   |   |   | (36,131 | ) |
| Gain (loss) on investments                         |   |                | ---      |   |   |   | --- |   |
| Total other income (loss), net                     |   |                | 23,814   |   |   |   | (36,131 | ) |
|                                               |   |                |     |   |   |   |   |   |
| NET INCOME (LOSS)                                  |   | $                   | (175,395 | ) |   | $ | (265,357 | ) |
|                                               |   |                |     |   |   |   |   |   |
| PREFERRED DIVIDENDS                                |   |                | ---      |   |   |   | --- |   |
|                                               |   |                |     |   |   |   |   |   |
| NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS |   | $                   | (175,395 | ) |   | $ | (265,357 | ) |
|                                               |   |                |     |   |   |   |   |   |
| NET INCOME (LOSS) PER COMMON SHARE - BASIC         |   | $                   | (0.29    | ) |   | $ | (0.76 | ) |
|                                               |   |                |     |   |   |   |   |   |
| NET INCOME (LOSS) PER COMMON SHARE - DILUTED       |   | $                   | (0.29    | ) |   | $ | (0.76 | ) |
|                                               |   |                |     |   |   |   |   |   |
| DIVIDENDS PAID PER PREFERRED SHARE                 |   | $                   | -        |   |   | $ | - |   |
|                                               |   |                |     |   |   |   |   |   |
| DIVIDENDS PAID PER COMMON SHARE                    |   | $                   | -        |   |   | $ | - |   |

----

|                                                                                                |   |  Three Months Ended |      |
|-----------------------------------------------------------------------------------------------------|--------|--------------------------|-----------|
|                                                                                                |   |                     |      |   | March 31 |   |
|                                                                                                |   | 2011                     |      |   | 2010 |   |
| CASH FLOWS FROM OPERATING ACTIVITIES                                                                |   |                     |      |   |   |   |
| Net loss                                                                                            |   | $                        | (175,395  | ) |   | $ | (265,357 | ) |
|      Adjustments to reconcile net loss to net cash used in operating activities |   |                     |      |   |   |
| Depreciation                                                                                        |   |                     | -         |   |   |   | 11,895 |   |
| Deferred carry cost                                                                                 |   |                     | -         |   |   |   | (12,143 | ) |
| Realized loss on sale of REO                                                                        |   |                     | (23,814   | ) |   |   | - |   |
| Stock based compensation expense                                                                    |   |                     | -         |   |   |   | 6,949 |   |
| Provision for loan losses                                                                           |   |                     | -         |   |   |   | 10,000 |   |
| Change in allowance for doubtful accounts                                                           |   |                     | -         |   |   |   | - |   |
| Impairment of real estate owned                                                                     |   |                     | -         |   |   |   | 57,645 |   |
| Realized loss on sale of marketable securities                                                      |   |                     | -         |   |   |   | - |   |
| Change in operating assets and liabilities                                                          |   |                     |      |   |   |   |   |   |
| Change in prepaid expenses                                                                          |   |                     | (20,000   | ) |   |   | - |   |
| Change in accounts receivable                                                                       |   |                     | (15,135   | ) |   |   | 1,636 |   |
| Change in other assets                                                                              |   |                     | 2,856     |   |   |   | 2,970 |   |
| Change in other liabilities                                                                         |   |                     | (19,124   | ) |   |   | (68,384 | ) |
| Net cash used in operating activities                                                               |   |                     | (250,612  | ) |   |   | (254,789 | ) |
|                                                                                                |   |                     |      |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                                                                |   |                     |      |   |   |   |   |   |
| Proceeds from marketable securities                                                                 |   |                     | -         |   |   |   | - |   |
| Proceeds from real estate owned                                                                     |   |                     | 562,595   |   |   |   | - |   |
| Purchase of investments                                                                             |   |                     | -         |   |   |   | - |   |
| Capital improvements on real estate owned                                                           |   |                     | -         |   |   |   | (12,015 | ) |
| Principal collected on mortgage notes receivable                                                    |   |                     | 8,050     |   |   |   | 10,239 |   |
|   Net cash provided by (used in) investing activities                                     |   |                     | 570,645   |   |   |   | (1,776 | ) |
|                                                                                                |   |                     |      |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                                                                |   |                     |      |   |   |   |   |   |
| Payments of senior mortgage loans payable                                                           |   |                     | -         |   |   |   | 50,000 |   |
| Issuance of Common Stock                                                                            |   |                     | -         |   |   |   | - |   |
| Issuance of Common Stock - APIC                                                                     |   |                     | -         |   |   |   | - |   |
| Payments of Company loans payable                                                                   |   |                     | -         |   |   |   | - |   |
| Purchase of treasury stock                                                                          |   |                     | -         |   |   |   | (1,443 | ) |
|   Net cash provided by financing activities                                               |   |                     | -         |   |   |   | 48,557 |   |
|                                                                                                |   |                     |      |   |   |   |   |   |
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                |   |                     | 320,033   |   |   |   | (208,008 | ) |
|                                                                                                |   |                     |      |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                                      |   |                     | 269,911   |   |   |   | 227,944 |   |
|                                                                                                |   |                     |      |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, END OF PERIOD                                                            |   | $                        | 589,944   |   |   | $ | 19,936 |   |
|                                                                                                |   |                     |      |   |   |   |   |   |
| SUPPLEMENTAL CASH FLOW INFORMATION:                                                                 |   |                     |      |   |   |   |   |   |
|   Cash paid for interest and senior mortgage interest expense                                  |   | $                        | -         |   |   | $ | 555 |   |
| Cash paid for taxes                                                                                 |   | $                        | 1,600     |   |   | $ | 150 |   |
|                                                                                                |   |                     |      |   |   |   |   |   |
| NON-CASH INVESTING AND FINANCING ACTIVITIES                                                         |   |                     |      |   |   |
| Foreclosures, net of reserves                                                                       |   | $                        | -         |   |   | $ | - |   |
| Assumption of senior debt upon foreclosure                                                          |   | $                        | -         |   |   | $ | - |   |
| Write-offs of uncollectible loans                                                                   |   | $                        | -         |   |   | $ | - |   |
| Conversion of preferred stock to common stock                                                       |   | $                        | 5,282,687 |   |   | $ | - |   |

----

| 1.  | Organization |
|----------|--------------|

| 2. | Basis of presentation and summary of significant accounting policies |
|----|----------------------------------------------------------------------|

----

----

----

| 3.  | Marketable securities |
|----------|-----------------------|

| 4.  | Accounts receivable |
|----------|---------------------|

----

| 5.  |  Mortgage notes receivable |
|----------|---------------------------------|

|                                                |   | Three monthsMarch 31, 2011 |      |   | Twelve months Dec. 31, 2010 |   |
|-----------------------------------------------------|--------|----------------------------|-----------|--------|-----------------------------|--------|
| Balance, beginning of period                        |   | $                          | 1,046,284 |   |                        | $      | 2,690,737 |   |
| Additions during period:                            |   |                       |      |   |                        |   |   |   |
|    Originations                      |   |                       | ---       |   |                        |   | --- |   |
| Deductions during period:                           |   |                       |      |   |                        |   |   |   |
|    Collections of principal          |   |                       | (8,050    | )      |                        |   | (35,925 | ) |
|    Repayments                        |   |                       | ---       |   |                        |   | (332,084 | ) |
|    Write-offs of uncollectible loans |   |                       | ---       |   |                        |   | --- |   |
|    Foreclosures                      |   |                       | ---       |   |                        |   | (1,276,444 | ) |
| Balance, as reported in Balance Sheet               |   | $                          | 1,038,234 |   |                        | $      | 1,046,284 |   |

|    |   | March 31, 2011       |   |   | Dec. 31, 2010    |   |
|---------|--------|----------------------|--------|--------|------------------|--------|
| State   |   | Number of loans |   |   | $-% of Portfolio |   |   | Number of loans |   |   | $-% of Portfolio |   |
| CA      |   |                 | 7      |   |             |   | 88% |   |   |   | 7 |   |   |   | 88% |   |
| Other   |   |                 | 1      |   |             |   | 12% |   |   |   | 1 |   |   |   | 12% |   |
| Totals: |   |                 | 8      |   |             |   | 100% |   |   |   | 8 |   |   |   | 100% |   |

----

| 5.  | Mortgage notes receivable (continued) |
|----------|---------------------------------------|

|                                                                | March 31, 2011 |                             | Dec. 31, 2010 |
|---------------------------------------------------------------------|----------------|----------------------------------|---------------|
|                                                                | Loans          | Principal                        | Percent       |   | Loans | Principal | Percent |
| First trust deeds                                                   | 5              |  $   840,565 | 81%           |   | 5 |  $   848,513 | 81% |
| Second trust deeds                                                  | 3              | 197,669                          | 19%           |   | 3 | 197,771 | 19% |
| Third trust deeds                                                   | 0              | ---                              | 0%            |   | 0 | --- | 0% |
| Total secured loans                                                 | 8              | 1,038,234                        | 100%          |   | 8 | 1,046,284 | 100% |
| Liens due other lenders at loan closing                             |           | 702,029                          |          |   |   | 702,029 |   |
| Total debt                                                          |           |  $1,740,263                 |          |   |   |  $1,748,313 |   |
| Appraised property value at loan closing                            |           |  $3,456,900                 |          |   |   |  $3,456,900 |   |
| Percent of total debt to appraised values (LTV) at loan closing (1) |           | 50.34%                           |          |   |   | 50.58% |   |

|   (1) | Based on appraised values and liens due other lenders at loan closing.  The loan to value computation does not take into account subsequent increases or decreases in security property values following the loan closing nor does it include decreases or increases of the amount owing on senior liens to other lenders by payments or interest accruals, if any. Property values likely have changed, particularly over the last three years, and the portfolio’s current loan to value ratio likely is higher than this historical ratio. |
|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                |   | March 31, 2011 |   |      | Dec. 31, 2010               |    |
|---------------------|--------|----------------|--------|-----------|-----------------------------|---------|
|                |   | Loans          |   | Principal |                        | Percent |   |   | Loans |   | Principal |   | Percent |   |
| Single family       |   | 8              |   |      | $1,038,234                  |    | 100% |   |   | 8 |   |   | $1,046,284 |   | 100% |   |
| Multi-family        |   | 0              |   |      |     --- |    | 0% |   |   | 0 |   |   |   --- |   | 0% |   |
| Commercial          |   | 0              |   |      |     --- |    | 0% |   |   | 0 |   |   |   --- |   | 0% |   |
| Land                |   | 0              |   |      |     --- |    | 0% |   |   | 0 |   |   |   --- |   | 0% |   |
| Total secured loans |   | 8              |   |      | $1,038,234                  |    | 100% |   |   | 8 |   |   | $1,046,284 |   | 100% |   |

----

| 5.  | Mortgage notes receivable (continued) |
|----------|---------------------------------------|

|                      |   | March 31, 2011 |   |
|---------------------------|--------|----------------|--------|
|                      |   | Loans          |   | Principal |   | Percent |   |
| 2011                      |   | 3              |   |   |   $347,691 |   | 34% |   |
| 2012                      |   | 2              |   |   |     319,844 |   | 31% |   |
| 2013                      |   | 0              |   |   |   --- |   | 0% |   |
| 2014                      |   | 0              |   |   |   --- |   | 0% |   |
| 2015                      |   | 0              |   |   |   --- |   | 0% |   |
| Thereafter                |   | 2              |   |   |    345,199 |   | 33% |   |
| Total future maturities   |   | 7              |   |   |   1,012,734 |   | 98% |   |
| Matured at March 31, 2011 |   | 1              |   |   |     25,500 |   | 2% |   |
| Total secured loans       |   | 8              |   |   |  $1,038,234 |   | 100% |   |

----

| 5.  | Mortgage notes receivable (continued) |
|----------|---------------------------------------|

| Principal outstanding                             | Interest rate    | Finalmaturity date | Monthly  payment | Lien Priority | Face amount of mortgage(s)                        | Carrying amount of mortgage(s)                    | Amount of delinquent principal(Note A)           |
|---------------------------------------------------|------------------|--------------------|----------------------------|---------------|---------------------------------------------------|---------------------------------------------------|--------------------------------------------------|
|                                              |             |               |                       |          |                                              |                                              |                                             |
| Individual loans greater than $499,999:           | ---              | ---                | ---                        | ---           | ---                                               | ---                                               | ---                                              |
| Loans from $400,000-$499,999                      | ---              | ---                | ---                        | ---           | ---                                               | ---                                               | ---                                              |
| Loans from $300,000-$399,999                      | 6.25 %           | 0 months           | $2,000                     | 1st           | 359,000                                           | 324,372                                           | ---                                              |
| Loans from $200,000-$299,999                      | 6.375% to 8%     | 10 to 286 months   | $5,435                     | 1st           | 632,243                                           | 492,875                                           | ---                                              |
| Loans from $100,000- 199,999                      | ---              | ---                | ---                        | ---           | ---                                               | ---                                               | ---                                              |
| Loans up to $99,999                               | 7.00% to 12.125% | 0 to115 months     | $2,713                     | 1st & 2nd |        407,377 |        220,987 |        23,318 |
| Total Mortgage Notes Receivable at March 31, 2011 |             | $ 1,398,620   | $1,038,234                 | $ 23,318 |

----

| 5.  | Mortgage notes receivable (continued) |
|----------|---------------------------------------|

| Principal outstanding                                | Interest rate    | Finalmaturity date | Monthly  payment | Lien Priority | Face amount of mortgage(s)                        | Carrying amount of mortgage(s)                    | Amount of delinquent principal(Note A)           |
|------------------------------------------------------|------------------|--------------------|----------------------------|---------------|---------------------------------------------------|---------------------------------------------------|--------------------------------------------------|
|                                                 |             |               |                       |          |                                              |                                              |                                             |
| Individual loans greater than $499,999:              | ---              | ---                | ---                        | ---           | ---                                               | ---                                               | ---                                              |
| Loans from $400,000-$499,999                         | ---              | ---                | ---                        | ---           | ---                                               | ---                                               | ---                                              |
| Loans from $300,000-$399,999                         | 6.25 %           | 1 month            | $2,000                     | 1st           | 359,000                                           | 325,294                                           | ---                                              |
| Loans from $200,000-$299,999                         | 6.375% to 8%     | 13 to 289 months   | $5,435                     | 1st           | 632,243                                           | 499,901                                           | ---                                              |
| Loans from $100,000- 199,999                         | ---              | ---                | ---                        | ---           | ---                                               | ---                                               | ---                                              |
| Loans up to $99,999                                  | 7.00% to 12.125% | 0 to118 months     | $2,713                     | 1st & 2nd |        407,377 |        221,089 |        23,318 |
| Total Mortgage Notes Receivable at December 31, 2010 |             | $ 1,398,620   | $1,046,284                 | $ 23,318 |

----

| 6. | Allowance for loan losses |
|----|---------------------------|

|                                    |   | Three months March 31, 2011 |   |   | Twelve months Dec. 31, 2010 |   |
|-----------------------------------------|--------|----------------------------------|--------|--------|-----------------------------|--------|
| Provision for loan losses               |   | $                                | ---    |   |                        | $      | 12,709 |   |
| Write-offs of uncollectible loans (net) |   |                             | ---    |   |                        |   | (302,709 | ) |
| Total adjustments to allowance          |   |                             | ---    |   |                        |   | (290,000 | ) |
| Balance, beginning of period            |   |                             | 20,000 |   |                        |   | 310,000 |   |
| Balance, end of period                  |   | $                                | 20,000 |   |                        | $      | 20,000 |   |

| 7.  | Real estate owned |
|----------|-------------------|

|                                                                                                                                                                                                                                                                                                                                                                                   |   | Three monthsMarch 31, 2011 |      |   | Twelve months Dec. 31, 2010 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------|-----------|--------|-----------------------------|--------|
| Balance, beginning of period                                                                                                                                                                                                                                                                                                                                                           |   | $                          | 4,048,746 |   |                        | $      | 6,714,174 |   |
| Additions:                                                                                                                                                                                                                                                                                                                                                                             |   |                       |      |   |                        |   |   |   |
| Foreclosed mortgage notes, net of reserve (non-cash)                                                                                                                                                                                                                                                                                                                                   |   |                       | ---       |   |                        |   | 1,276,444 |   |
| Assumptions of senior debt upon foreclosure, net of repayments                                                                                                                                                                                                                                                                                                                         |   |                       | ---       |   |                        |   | 545,025 |   |
| Capital improvements                                                                                                                                                                                                                                                                                                                                                                   |   |                       | ---       |   |                        |   | 12,015 |   |
| Deductions:                                                                                                                                                                                                                                                                                                                                                                            |   |                       |      |   |                        |   |   |   |
| Repayment of senior debt                                                                                                                                                                                                                                                                                                                                                               |   |                       | ---       |   |                        |   | --- |   |
|     Write-downs of property (non-cash)                                                                                                                                                                                                                                                                                                                             |   |                       | (61,219   | )      |                        |   | (457,645 | ) |
|     Proceeds from sale of real estate owned (net of closing costs)                                                                                                                                                                                                                                                                                                 |   |                       | (562,595  | )      |                        |   | (3,926,520 | ) |
|     Gain (loss) on real estate owned                                                                                                                                                                                                                                                                                                                               |   |                       | 23,814    |   |                        |   | (93,048 | ) |
|     Depreciation                                                         . |   |                       | ---       |   |                        |   | (21,699 | ) |
| Balance, end of period                                                                                                                                                                                                                                                                                                                                                                 |   | $                          | 3,448,746 |   |                        | $      | 4,048,746 |   |

| 8.  | Fair Value Measurements |
|----------|-------------------------|

|                                             |   | March 31, 2011 |   |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |
|--------------------------------------------------|--------|----------------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|
| Asset:                                           |   |           |   |   |    |   |   |    |   |   |    |   |
| Marketable securities – Available for sale |   | $              | 175    |   |    | $      | 175    |    |   |   | ---     |   |   |   | --- |   |
| Mortgage notes receivable (non-recurring)        |   |           | ---    |   |    |   | ---    |    |   |   | ---     |   |   |   | --- |   |
| Real estate owned (non-recurring)                |   |           | ---    |   |    |   | ---    |    |   |   | ---     |   |   |   | --- |   |
| Total                                            |   | $              | 175    |   |    | $      | 175    |    |   | $      | ---     |   |   | $ | --- |   |

----

| 8.  | Fair Value Measurements (continued) |
|----------|-------------------------------------|

|                                             |   | 2010   |      |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |
|--------------------------------------------------|--------|--------|-----------|--------|---------|--------|--------|---------|--------|--------|---------|--------|
| Asset:                                           |   |   |      |   |    |   |   |    |   |   |    |   |
| Marketable securities – Available for sale |   | $      | 191       |   |    | $      | 191    |    |   |   | ---     |   |   |   | --- |   |
| Mortgage notes receivable (non-recurring)        |   |   | ---       |   |    |   | ---    |    |   |   | ---     |   |   |   | --- |   |
| Real estate owned (non-recurring)                |   | $      | 1,903,437 |   |    |   | ---    |    |   |   | ---     |   |   | $ | 1,903,437 |   |
| Total                                            |   | $      | 1,903,628 |   |    | $      | 191    |    |   | $      | ---     |   |   | $ | 1,903,437 |   |

| 9.  | Senior Mortgage Debt |
|----------|----------------------|

----

| 10. | Related party transactions |
|-----|----------------------------|

| 11.  | Common and treasury stock |
|-----------|---------------------------|

| 12. | Earnings per share |
|-----|--------------------|

|                                                    |   | 2011   |     |   | 2010   |   |
|---------------------------------------------------------|--------|--------|----------|--------|--------|--------|
| Numerator:                                              |   |   |     |   |   |   |
|     Net income (loss)               |   | $      | (175,395 | )      |   | $      | (265,357 | ) |
|     Preferred dividends             |   |   | -        |   |   |   | - |   |
| Net income (loss) available to common stockholders      |   | $      | (175,395 | )      |   | $      | (265,357 | ) |
| Denominator:                                            |   |   |     |   |   |   |   |   |
|     Basic weighted average shares   |   |   | 597,608  |   |   |   | 351,315 |   |
|     Dilutive effect of options      |   |   | -        |   |   |   | - |   |
|     Diluted weighted average shares |   |   | 597,608  |   |   |   | 351,315 |   |
| Basic earnings per common share                         |   | $      | (0.29    | )      |   | $      | (0.76 | ) |
| Diluted earnings per common share                       |   | $      | (0.29    | )      |   | $      | (0.76 | ) |

| 13.  | Legal proceedings and contingencies |
|-----------|-------------------------------------|

----

| 13. | Legal proceedings and contingencies (continued) |
|-----|-------------------------------------------------|

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|      |   | For    |    |   | Against |   |   | Abstain |   |
|-----------|--------|--------|---------|--------|---------|--------|--------|---------|--------|
| Common    |   |   | 177,138 |   |    |   | 200    |    |   |   | 792 |   |
| Preferred |   |   | 136,592 |   |    |   | 17,854 |    |   |   | 625 |   |

| 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. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | February 1, 2011 due to the press release announcing that the shareholder voting period was extended. |
|--------------------|-------------------------------------------------------------------------------------------------------|

| ·   | February 14, 2011 due to the press release of February 11, 2011 announcing the shareholders approval of the Preferred Stock conversion. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| ·   | February 17, 2011 announcing that Eastern Light Capital has received an extension to fulfill a NYSE Amex compliance listing requirement. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------|

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|                     |                                                           |   |
|--------------------------|----------------------------------------------------------------|--------|
|                     |                                                           |   |
| Date:  May 23, 2011 | /s/ Richard J. Wrensen                                    |   |
|                     | Richard J. Wrensen                                             |   |
|                     | President, Chief Executive Officer and Chief Financial Officer |   |
|                     |                                                           |   |

|   |                                        |   |
|--------|---------------------------------------------|--------|
|   |                                        |   |
|   | /s/ Andrea Barney                      |   |
|   | Andrea Barney                               |   |
|   | Principal Accounting Officer and Controller |   |
|   |                                        |   |

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