##### Table of Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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Form 10-Q



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(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, 2003



OR



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



For the transition period from
 to



Commission file number 000-24594



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MEREDITH ENTERPRISES, INC.

(formerly West
Coast Realty Investors, Inc.)

(Exact name of registrant as specified in its charter)



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|Delaware                                                          |  | 95-4246740                       
|----------------------------------------------------------------- |  | ---------------------------------
|State or other jurisdiction of incorporation or organization      |  | (IRS Employer Identification No.)
|                                                                 
|3000 SAND HILL ROAD, BUILDING 2, SUITE 120 MENLO PARK, CALIFORNIA |  | 94025                            
|(Address of principal executive offices)                          |  | (Zip Code)                       



(650)
233-7140

(Registrants telephone number, including area code)



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Indicate by check mark whether the registrant (1) has filed all reports 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 ̈



Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).    Yes ̈No  x



APPLICABLE
ONLY TO CORPORATE ISSUERS



As of May 12, 2003, 975,298
shares of the Registrants Common Stock were outstanding.



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##### Table of Contents

MEREDITH ENTERPRISES, INC.



REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2003



TABLE OF CONTENTS



|Part IFinancial Information                                                                           |  |   
|------------------------------------------------------------------------------------------------------ |  | --
|                                                                                                      
|Item 1.
Consolidated Financial Statements                                                              |  |   
|Consolidated Balance SheetsAs of March 31, 2003 (unaudited) and December 31, 2002 (audited)           |  | 3 
|Consolidated Statements of Income (unaudited)Three months ended March 31, 2003 and 2002               |  | 4 
|Consolidated Statements of Cash Flows (unaudited)Three months ended March 31, 2003 and 2002           |  | 5 
|Consolidated Statements of Stockholders Equity (unaudited)Three months ended March 31, 2003 and 2002 |  | 6 
|Summary of accounting policies                                                                         |  | 7 
|Notes to consolidated financial statements                                                             |  | 11
|                                                                                                      
|Item 2.
Managements Discussion and Analysis of Financial Condition and Results of Operations          |  | 21
|                                                                                                      
|Item 3.
Quantitative and Qualitative Disclosures about Market Risk                                     |  | 40
|                                                                                                      
|Item 4.
Controls and Procedures                                                                        |  | 40
|                                                                                                      
|Part IIOther Information                                                                              |  |   
|                                                                                                      
|Item 1.
Legal Proceedings                                                                              |  | 42
|                                                                                                      
|Item 2.
Changes In Securities and Use of Proceeds                                                      |  | 42
|                                                                                                      
|Item 3.
Defaults Upon Senior Securities                                                                |  | 43
|                                                                                                      
|Item 4.
Submission of Matters to a Vote of Security Holders                                            |  | 43
|                                                                                                      
|Item 5.
Other Information                                                                              |  | 43
|                                                                                                      
|Item 6.
Exhibits and Reports on Form 8-K                                                               |  | 43
|                                                                                                      
|Signatures                                                                                             |  | 44
|                                                                                                      
|Certifications                                                                                         |  | 45



As used in this Report
on Form 10-Q, unless the context otherwise requires, the terms we, us, and our refer to Meredith Enterprises, Inc., a Delaware corporation.



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##### Table of Contents



PART IFINANCIAL INFORMATION



ITEM 1FINANCIAL STATEMENTS



MEREDITH ENTERPRISES, INC.



CONSOLIDATED BALANCE SHEETS



|                                                                                                                                            |  | March 31, 2003 |             |   | December 31, 2002 |  
|------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ----------- | - | ----------------- | -
|                                                                                                                                            |  | (Unaudited)    |             |   | (Audited)         |  
|Assets                                                                                                                                      |  |                |             |   |                   |  
|Rental real estate, less accumulated depreciation (Notes 1 and 3)                                                                           |  | $              | 45,260,433  |   |                   | $
|Rental real estate held for sale, net (Note 1)                                                                                              |  |                | 7,444,819   |   |                   |  
|Land held for development (Note 1)                                                                                                          |  |                | 2,238,359   |   |                   |  
|Cash and cash equivalents                                                                                                                   |  |                | 700,326     |   |                   |  
|Deferred rent                                                                                                                               |  |                | 353,743     |   |                   |  
|Accounts receivable                                                                                                                         |  |                | 69,665      |   |                   |  
|Loan origination fees, net of accumulated amortization of $64,084 and $45,929 at March
31, 2003 and December 31, 2002, respectively         |  |                | 684,864     |   |                   |  
|Other assets                                                                                                                                |  |                | 933,773     |   |                   |  
|Other assetsrental real estate held for sale                                                                                               |  |                | 229,530     |   |                   |  
|                                                                                                                                            |  |                |             |   |                   |  
|Total assets                                                                                                                                |  | $              | 57,915,512  |   |                   | $
|                                                                                                                                            |  |                |             |   |                   |  
|Liabilities and Stockholders Equity                                                                                                        |  |                |             |   |                   |  
|Liabilities                                                                                                                                 |  |                |             |   |                   |  
|Accounts payable and accrued liabilities                                                                                                    |  | $              | 740,803     |   |                   | $
|Due to related party (Note 4)                                                                                                               |  |                | 30,077      |   |                   |  
|Security deposits and prepaid rent                                                                                                          |  |                | 211,003     |   |                   |  
|Dividend payable                                                                                                                            |  |                | 292,589     |   |                   |  
|Other liabilitiesrental real estate held for sale                                                                                          |  |                | 52,740      |   |                   |  
|Notes payable secured by rental real estate (Note 5)                                                                                        |  |                | 36,409,953  |   |                   |  
|Notes payable secured by rental real estate held for sale (Note 5)                                                                          |  |                | 4,289,261   |   |                   |  
|                                                                                                                                            |  |                |             |   |                   |  
|Total liabilities                                                                                                                           |  |                | 42,026,426  |   |                   |  
|                                                                                                                                            |  |                |             |   |                   |  
|Commitments and contingencies (Note 9)                                                                                                      |  |                |            |   |                   |  
|Stockholders equity                                                                                                                        |  |                |             |   |                   |  
|Common stock $.01 par value; 15,000,000 shares authorized; 975,298 shares issued and
outstanding as of March 31, 2003 and December 31, 2002 |  |                | 9,753       |   |                   |  
|Additional paid-in capital                                                                                                                  |  |                | 27,157,247  |   |                   |  
|Dividends in excess of retained earnings                                                                                                    |  |                | (11,277,914 | ) |                   |  
|                                                                                                                                            |  |                |             |   |                   |  
|Total stockholders equity                                                                                                                  |  |                | 15,889,086  |   |                   |  
|                                                                                                                                            |  |                |             |   |                   |  
|Total liabilities and stockholders equity                                                                                                  |  | $              | 57,915,512  |   |                   | $
|                                                                                                                                            |  |                |             |   |                   |  



See
accompanying summary of accounting policies and notes to consolidated financial statements.



3



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MEREDITH
ENTERPRISES, INC.



CONSOLIDATED STATEMENTS OF INCOME



|Three months ended                                      |  | March 31, 2003 |           |   | March 31, 2002
|------------------------------------------------------- |  | -------------- | --------- | - | --------------
|                                                        |  | (Unaudited)    |           |   | (Unaudited)   
|Revenues                                                |  |                |           |   |               
|Rental (Notes 1 and 3)                                  |  | $              | 1,866,880 |   |               
|Interest                                                |  |                | 8,114     |   |               
|                                                        |  |                |           |   |               
|                                                        |  |                | 1,874,994 |   |               
|                                                        |  |                |           |   |               
|Cost and expenses                                       |  |                |           |   |               
|Interest                                                |  |                | 687,953   |   |               
|General and administrative                              |  |                | 431,129   |   |               
|Depreciation                                            |  |                | 246,404   |   |               
|Ground rent (Note 9)                                    |  |                | 233,893   |   |               
|Operating                                               |  |                | 244,546   |   |               
|Property tax                                            |  |                | 121,738   |   |               
|                                                        |  |                |           |   |               
|                                                        |  |                | 1,965,663 |   |               
|                                                        |  |                |           |   |               
|Net (loss) income from operations                       |  |                | (90,669   | ) |               
|Discontinued operations (Note 2)                        |  |                | 54,919    |   |               
|                                                        |  |                |           |   |               
|Net (loss) income                                       |  | $              | (35,750   | ) |               
|                                                        |  |                |           |   |               
|Net (loss) income per sharebasic (Note 6):             |  |                |           |   |               
|Net (loss) income from operations                       |  | $              | (0.09     | ) |               
|Discontinued operations                                 |  | $              | 0.05      |   |               
|                                                        |  |                |           |   |               
|Net (loss) income per sharebasic                       |  | $              | (0.04     | ) |               
|                                                        |  |                |           |   |               
|Net (loss) income per shareassuming dilution (Note 6): |  |                |           |   |               
|Net (loss) income from operations                       |  | $              | (0.09     | ) |               
|Discontinued operations                                 |  | $              | 0.05      |   |               
|                                                        |  |                |           |   |               
|Net (loss) income per shareassuming dilution           |  | $              | (0.04     | ) |               
|                                                        |  |                |           |   |               



See
accompanying summary of accounting policies and notes to consolidated financial statements.



4



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MEREDITH
ENTERPRISES, INC.



CONSOLIDATED STATEMENTS OF CASH FLOWS



Increase (Decrease) in Cash and Cash Equivalents



|Three months ended March 31,                                                             |  | 2003 |            |   | 2002 |  
|---------------------------------------------------------------------------------------- |  | ---- | ---------- | - | ---- | -
|Cash flows from operating activities                                                     |  |      |            |   |      |  
|Net (loss) income                                                                        |  | $    | (35,750    | ) |      | $
|Adjustments to reconcile net (loss) income to net cash provided by operating
activities: |  |      |            |   |      |  
|Depreciation expense                                                                     |  |      | 246,404    |   |      |  
|Interest expense due to amortization of loan origination fees                            |  |      | 18,155     |   |      |  
|Increase (decrease) in cash flows from changes in operating assets and
liabilities:      |  |      |            |   |      |  
|Deferred rent                                                                            |  |      | (6,763     | ) |      |  
|Accounts receivable                                                                      |  |      | 132,780    |   |      |  
|Other assets                                                                             |  |      | (288,881   | ) |      |  
|Other assetsrental real estate held for sale                                            |  |      | 360,285    |   |      |  
|Accounts payable and accrued liabilities                                                 |  |      | (170,156   | ) |      |  
|Due to related party                                                                     |  |      |           |   |      |  
|Security deposits and prepaid rent                                                       |  |      | (145,460   | ) |      |  
|Other liabilitiesrental real estate held for sale                                       |  |      | (8,333     | ) |      |  
|                                                                                         |  |      |            |   |      |  
|Net cash provided by operating activities                                                |  |      | 102,281    |   |      |  
|                                                                                         |  |      |            |   |      |  
|Cash flows from investing activities                                                     |  |      |            |   |      |  
|Capital expenditures on rental real estate                                               |  |      | (324,605   | ) |      |  
|Purchase of land held for development                                                    |  |      | (2,238,359 | ) |      |  
|                                                                                         |  |      |            |   |      |  
|Net cash (used in) investing activities                                                  |  |      | (2,562,964 | ) |      |  
|                                                                                         |  |      |            |   |      |  
|Cash flows from financing activities                                                     |  |      |            |   |      |  
|Dividends paid                                                                           |  |      | (292,589   | ) |      |  
|Payments on notes payable secured by rental real estate                                  |  |      | (118,500   | ) |      |  
|Payments on notes payable secured by rental real estate held for sale                    |  |      | (351,825   | ) |      |  
|(Increase) decrease in loan origination fees                                             |  |      |           |   |      |  
|                                                                                         |  |      |            |   |      |  
|Net cash (used in) financing activities                                                  |  |      | (762,914   | ) |      |  
|                                                                                         |  |      |            |   |      |  
|Net (decrease) in cash and cash equivalents                                              |  |      | (3,223,597 | ) |      |  
|Cash and cash equivalents, beginning of year                                             |  |      | 3,923,923  |   |      |  
|                                                                                         |  |      |            |   |      |  
|Cash and cash equivalents, end of period                                                 |  | $    | 700,326    |   |      | $
|                                                                                         |  |      |            |   |      |  



See
accompanying summary of accounting policies and notes to consolidated financial statements.



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MEREDITH
ENTERPRISES, INC.



CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY



|                                             |  | Common Stock |  | Additional Paid-In |       | Dividends in Excess of Retained |   |            |  |  
|-------------------------------------------- |  | ------------ |  | ------------------ | ----- | ------------------------------- | - | ---------- |  | -
|                                             |  | Shares       |  | Amount             |       | Capital                         |   | Earnings   |  |  
|Balance, December 31, 2001                   |  | 975,989      |  | $                  | 9,760 |                                 | $ | 27,167,292 |  | $
|Net income for the period                    |  |              |  |                    |       |                                 |   |            |  |  
|Dividends declared ($.30 per share) (Note 6) |  |              |  |                    |       |                                 |   |            |  |  
|                                             |  |              |  |                    |       |                                 |   |            |  |  
|Balance, March 31, 2002                      |  | 975,989      |  | $                  | 9,760 |                                 | $ | 27,167,292 |  | $
|                                             |  |              |  |                    |       |                                 |   |            |  |  
|Balance, December 31, 2002                   |  | 975,298      |  | $                  | 9,753 |                                 | $ | 27,157,247 |  | $
|Net (loss) for the period                    |  |              |  |                    |       |                                 |   |            |  |  
|Dividends declared ($.60 per share) (Note 6) |  |              |  |                    |       |                                 |   |            |  |  
|                                             |  |              |  |                    |       |                                 |   |            |  |  
|Balance, March 31, 2003                      |  | 975,298      |  | $                  | 9,753 |                                 | $ | 27,157,247 |  | $
|                                             |  |              |  |                    |       |                                 |   |            |  |  



See
accompanying summary of accounting policies and notes to consolidated financial statements.



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MEREDITH
ENTERPRISES, INC.



SUMMARY OF ACCOUNTING POLICIES



Business



Meredith Enterprises, Inc.
(formerly West Coast Realty Investors, Inc.) was originally organized in October 1989 under the laws of the State of Delaware. We have elected tax status as a Real Estate Investment Trust (REIT) for federal and state income tax purposes
since 1991. From inception to March 31, 2002, West Coast Realty Advisors, Inc. (WCRA) advised us and West Coast Realty Management (WCRM) (collectively, the Advisor) managed our properties. Both WCRA and WCRM are
wholly-owned subsidiaries of Associated Financial Group, Inc. The Advisor managed and oversaw our investments, subject to the direction of the board of directors, until the Advisor terminated as advisor effective March 31, 2002. On January 15, 2002,
our stockholders voted to amend our bylaws to allow us to become self-managed upon the Advisors termination. On April 1, 2002, we became self-managed and self-administered upon the Advisors termination.



As of March 31, 2003, all of our properties were located in California and
Georgia, and we did not own any residential properties. Many of our leases are triple-net leases where the tenant is responsible for maintenance, taxes and insurance, either by directly paying such costs or reimbursing us for those costs
through additional rental payments.



Rental Real Estate,
Rental Real Estate Held for Sale and Depreciation



Assets
are stated at lower of cost or net realizable value. Depreciation is computed using the straight-line method over their estimated useful lives of 31.5 to 39 years for financial reporting purposes.



In the event that facts and circumstances indicate that the carrying value of
an asset may be impaired, an evaluation of recoverability would be performed. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset would be compared to the carrying amount to determine if a write-down
to fair value is required.



Real estate classified as held
for sale is stated at the lower of its carrying amount or estimated fair value less disposal costs. Depreciation is not recorded on assets classified as held for sale.



In the normal course of business, we may receive offers for sale of our properties, either solicited or unsolicited. For
those offers that are accepted, the prospective buyer will usually require a due diligence period before consummation of the transaction. It is not unusual for matters to arise that result in the withdrawal or rejection of the offer during this
process. As a result, real estate is not classified as held for sale until it is likely, in the opinion of management, that a property will be disposed of in the near term, even if sales negotiations for such property are currently under
way. Properties classified as held for sale are segregated from rental real estate in our financial statement presentation. As of March 31, 2003, we classified six properties as held for sale, as they were listed for sale with real
estate brokers and we believed there was a high likelihood of sale in the near term. There can be no assurance that the properties held for sale will be sold in the near term, at prices we consider acceptable, or at all.



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MEREDITH ENTERPRISES, INC.



SUMMARY OF ACCOUNTING POLICIES





Rental Income,
Operating Expense and Capitalized Costs



Rental revenue is
recognized on a straight-line basis to the extent that rental revenue is deemed collectible. There were no percentage rents in the three month periods ended March 31, 2003 and 2002. Improvements and betterments that increase the value of the
property or extend its useful life are capitalized.



Acquisition Costs



We expense internal
acquisition costs, including any acquisition costs paid to the Advisor, in accordance with Emerging Issues Task Force 97-11, Accounting for Internal Costs Relating to Real Estate Property Acquisitions. There were no such costs in the
three month periods ended March 31, 2003 and 2002.



Loan
Origination Fees



Loan origination fees are capitalized and
amortized over the life of the loan and are included in interest expense.



Cash and Cash Equivalents



We consider
cash in the bank, liquid money market funds and all highly liquid certificates of deposit, with original maturities of three months of less, to be cash and cash equivalents. We place funds in what we believe are creditworthy, high-quality financial
institutions. Cash and cash equivalent balances are held with various financial institutions and at times exceed the Federal Deposit Insurance Corporation limit of $100,000.



Consolidation



The accompanying consolidated financial statements include the accounts of Meredith Enterprises, Inc. and other subsidiaries that hold title to individual
properties. All significant intercompany balances and transactions have been eliminated in consolidation.



Use of Estimates



The preparation of financial statements in conformity with generally accepted accounting principles 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates.



Comprehensive Income



Statement of Financial Accounting Standards No. 130, Reporting
Comprehensive Income, (SFAS 130) establishes standards for reporting and display of comprehensive income and its components in a full set of general-purpose financial statements. Comprehensive income is comprised of net income and
all changes to stockholders equity except those due to investments by owners and



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MEREDITH ENTERPRISES, INC.



SUMMARY OF ACCOUNTING POLICIES



distributions to owners. We do not have any components of comprehensive income in the three month periods ended March 31, 2003 and 2002,
other than net income.



Reclassifications



Certain reclassifications have been made to the prior years financial
statements to conform to the presentation of the current years financial statements.



Descriptive Information About Reportable Segments



Financial Accounting Standards Board Statement No. 131, Disclosures about Segments of an Enterprise and Related Information (Statement 131) requires certain descriptive
information to be provided about an enterprises reportable segments. We have determined that we have one operating and reportable segment, rental real estate and rental real estate held for sale, which comprised 95% and 89% of our total assets
at March 31, 2003 and December 31, 2002, respectively and over 99% of our total revenues (including discontinued operations) for both of the quarters ended March 31, 2003 and 2002. All the rental real estate we own is located in California and
Georgia. We do not use reporting by geographic region.



Our
business focus is the ownership and operation of suburban office, retail shopping center and light industrial properties. We evaluate performance and allocate resources primarily based on the opportunity for growth of net operating income
(NOI). Like the real estate industry in general, we define NOI as the excess of all revenue generated by the property (primarily rental revenue) less direct operating expenses (primarily, but not limited to, property taxes, insurance,
property management and maintenance expense, to the extent not paid by the tenant). NOI excludes depreciation, capitalized expenditures and interest expense. In addition to NOI growth prospects, we evaluate properties for planned capital
expenditures and various risks such as non-payment of rent by tenant, term of the lease and other factors. All other segment measurements are presently disclosed in the accompanying consolidated balance sheets and Notes to Consolidated Financial
Statements.



All revenues are from external customers, and there
are no revenues from transactions with other segments. See Note 1 for tenants that contributed 10% or more of our total revenues for the three month periods ended March 31, 2003 and 2002. Interest income is not separately reported, as it is
immaterial. Interest expense on debt is not allocated to individual properties, even if such debt is secured. There is no provision for federal or state income taxes as we are organized as a REIT and as such, we owe no tax; see Note 7.



In August 2001, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards No. 144 (SFAS 144) which supersedes SFAS No. 121, Accounting for the impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of and amends APB No. 30,
Reporting the Results of Operations- Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions. Along with establishing a single accounting model, based on
the framework established in SFAS No. 121, for long-lived assets to be disposed of by sale, SFAS 144 retains the basic provisions of APB No. 30 for the presentation of discontinued operations in the income statement but broadens the presentation to
include a component of an entity. SFAS No. 144 requires us to include operating results of properties we



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MEREDITH ENTERPRISES, INC.



SUMMARY OF ACCOUNTING POLICIES



consider held for sale, as well as those sold, in discontinued operations in our consolidated statements of earnings prospectively from the
date of adoption, which was January 1, 2002.



New Accounting
Pronouncements



Stock-based compensation



Financial Accounting Standards No. 148, Accounting
for Stock-Based CompensationTransition and Disclosure (SFAS 148), which amends Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation (SFAS 123) provides
alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS 148 amends the disclosure requirements of SFAS 123 to require more prominent and more
frequent disclosures in financial statements of the effects of stock-based compensation. We have elected not to change to the fair value based method of accounting for stock-based compensation and the adoption of SFAS 148 did not have a material
impact on our consolidated balance sheet or results of operations.



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MEREDITH
ENTERPRISES, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1RENTAL REAL ESTATE



Our major
categories of rental real estate are:



|                              |  | March 31, 2003 |            |   | December 31, 2002 |  
|----------------------------- |  | -------------- | ---------- | - | ----------------- | -
|                              |  | (Unaudited)    |            |   | (Audited)         |  
|Land                          |  | $              | 9,003,326  |   |                   | $
|Buildings and improvements    |  |                | 38,966,909 |   |                   |  
|                              |  |                |            |   |                   |  
|                              |  |                | 47,970,235 |   |                   |  
|Less accumulated depreciation |  |                | (2,709,802 | ) |                   |  
|                              |  |                |            |   |                   |  
|Net rental real estate        |  | $              | 45,260,433 |   |                   | $
|                              |  |                |            |   |                   |  



In addition, we own land
we are holding for future development, valued at its cost at March 31, 2003 of $2,238,359.



Our major categories of rental real estate held for sale are:



|                                     |  | March 31, 2003 |            |   | December 31, 2002 |  
|------------------------------------ |  | -------------- | ---------- | - | ----------------- | -
|                                     |  | (Unaudited)    |            |   | (Audited)         |  
|Land                                 |  | $              | 2,548,473  |   |                   | $
|Buildings and improvements           |  |                | 6,070,089  |   |                   |  
|                                     |  |                |            |   |                   |  
|                                     |  |                | 8,618,562  |   |                   |  
|Less accumulated depreciation        |  |                | (1,173,743 | ) |                   |  
|                                     |  |                |            |   |                   |  
|Net rental real estate held for sale |  | $              | 7,444,819  |   |                   | $
|                                     |  |                |            |   |                   |  



Once we classify a
property as held for sale, we stop charging depreciation expense. Included in the above table are six properties, all in California, as of both March 31, 2003 and December 31, 2002: Fresno, Sacramento- both Java City properties, Roseville, Riverside
and Vacaville.



We earned a portion of our rental revenue from
tenants whose individual rents represented more than 10% of our total rental revenue including discontinued operations. In the three months ended March 31, 2003, one tenant represented 11% of our total rental revenue including discontinued
operations and one other tenant accounted for 8%. The Northlake Festival Shopping Center accounted for approximately 50% of our total rental revenue including discontinued operations. In the three months ended March 31, 2002, three other tenants
accounted for 19%, 14% and 12%, respectively, of our total rental revenue including discontinued operations.



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MEREDITH ENTERPRISES, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS





NOTE
2DISCONTINUED OPERATIONS



As of December 31, 2001, we
had designated four properties as held for sale: Fresno, CA, Huntington Beach, CA, Roseville, CA and Riverside, CA. In accordance with SFAS 144, the results of these properties are not included in the line item discontinued operations until we
adopted SFAS 144 as of January 1, 2002. In 2002, we designated three additional properties as held for sale: Sacramento, CA (717 W. Del Paso Road), Sacramento, CA (721 W. Del Paso Road) and Vacaville, CA and sold another property, Corona, CA. In
accordance with SFAS 144, we have restated the prior results of the properties designated as held for sale and the property we sold as discontinued operations for all periods presented. The results of properties included in discontinued operations
for the three months ended March 31, 2003 and 2002 are as follows:



|Three months ended March 31,            |  | 2003 |         | 2002
|--------------------------------------- |  | ---- | ------- | ----
|Revenues                                |  |      |         |     
|Rental                                  |  | $    | 201,726 |     
|Interest                                |  |      |        |     
|                                        |  |      |         |     
|                                        |  |      | 201,726 |     
|                                        |  |      |         |     
|Cost and expenses                       |  |      |         |     
|Interest                                |  |      | 94,405  |     
|General and administrative              |  |      |        |     
|Depreciation                            |  |      |        |     
|Operating                               |  |      | 41,136  |     
|Property tax                            |  |      | 11,266  |     
|                                        |  |      |         |     
|                                        |  |      | 146,807 |     
|                                        |  |      |         |     
|Net income from discontinued operations |  | $    | 54,919  |     
|                                        |  |      |         |     



In accordance with SFAS
No. 144, net income and gain (loss) on disposition of real estate for properties sold or considered held for sale after December 31, 2001 are reflected in our consolidated statements of income as discontinued operations for all periods
presented. In addition, we have determined to separately reflect the assets and liabilities of properties held for sale or sold in the current period as Rental real estate held for sale, Other assetsrental real estate held
for sale, Notes payable secured by rental real estate held for sale and Other liabilitiesrental real estate held for sale in the balance sheets for all periods presented.



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MEREDITH ENTERPRISES, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS





NOTE 3FUTURE
MINIMUM RENTAL INCOME



As of March 31, 2003, future minimum
rental income under the existing leases for rental real estate and rental real estate held for sale that have remaining noncancelable terms in excess of one year are as follows:



|Years ending March 31, |  | Amount
|---------------------- |  | ------
|2004                   |  | $     
|2005                   |  |       
|2006                   |  |       
|2007                   |  |       
|2008                   |  |       
|Thereafter             |  |       
|                       |  |       
|Total                  |  | $     
|                       |  |       



Future minimum rental
income does not include lease renewals or new leases that may result after a noncancelable-lease expires.



NOTE 4RELATED PARTY TRANSACTIONS



We acquired the Northlake Festival Shopping Center in Atlanta, Georgia in October 2002 and paid a fee of $150,000 to Leeward Investments, LLC, which assisted us in negotiating the transaction. Mr. Eric
P. Von der Porten, a director, is the manager for Leeward Investments, LLC. He was not directly involved in the negotiations.



Also in conjunction with the purchase of the Northlake Festival Shopping Center, we paid a real estate brokerage commission of $100,000 to
Isakson-Barnhart Properties, Inc. and we have retained Isakson-Barnhart Properties, Inc. as the property manager of that shopping center. Isakson-Barnhart Properties, Inc. manages over 1.0 million square feet of retail and office space in Georgia,
North Carolina and Tennessee. Mr. E. Andrew Isakson, one of our directors, is president of Isakson-Barnhart Properties, Inc. Under the property management agreement, Isakson-Barnhart Properties, Inc. manages, maintains and operates the shopping
center for us. In return for its services, we pay a monthly property management fee to Isakson-Barnhart Properties, Inc. equal to the greater of (a) 3% of the gross income of the property actually collected for that month or (b) $2,500. In addition,
we pay Isakson-Barnhart Properties, Inc. a leasing commission, in the range of $2.00 to $4.50 per square foot depending on the size of the space and whether there is a co-broker, on new leases or expansion of current leases. We also pay a
construction maintenance fee of 5% of the total cost of tenant improvements or other construction where Isakson-Barnhart Properties, Inc. supervises the project. Under this agreement, we paid a total of $30,334 to Isakson-Barnhart Properties, Inc.
in the year ended December 31, 2002. The agreement is renewable annually, and either party is allowed to terminate the agreement upon 30 days prior written notice to the other. In addition, Mr. Isakson owns a 50% interest in a retail shopping
center that is located adjacent to the Northlake Festival Shopping Center.



Until March 31, 2002, we had two agreements with the Advisor to provide advice on investments and to administer our day-to-day operations including property managementthe Amended and Restated



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MEREDITH ENTERPRISES, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Advisory Agreement dated July 1, 2001 and the Amended and Restated Property Management Agreement dated July 1, 1998. Both agreements were
terminated effective March 31, 2002, and since April 1, 2002, we have been fully self-administered and self-managed.



At March 31, 2003, the Advisor and its affiliates owned 7,584 of our shares, less than 1% of our outstanding shares. Two of our directors are also
officers or directors of the Advisor or its affiliates. Associated Securities Corporation is an affiliate of the Advisor.



In addition, we had related party accounts payable as follows:



|                                        |  | March 31, 2003 |        | December 31, 2002
|--------------------------------------- |  | -------------- | ------ | -----------------
|                                        |  | (Unaudited)    |        | (Audited)        
|Associated Securities Corporation, Inc. |  | $              | 30,077 |                  
|                                        |  |                |        |                  
|                                        |  | $              | 30,077 |                  
|                                        |  |                |        |                  



NOTE 5NOTES
PAYABLE



Notes payable consist of the following:



|                                                                                                                                                                                                                                                                                                                                                                                                         |  | March 31, 2003 |           | December 31, 2002
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | --------- | -----------------
|Notes payable secured by rental real estate:                                                                                                                                                                                                                                                                                                                                                             |  |                |           |                  
|                                                                                                                                                                                                                                                                                                                                                                                                        
|7.50% promissory note secured by a deed of trust on the Cerritos, CA property, monthly
principal and interest payments are $9,238, due April 1, 2011 (rate is adjustable on the fourth and eighth anniversary years of the loan, to the weekly average of the five year Treasury Note yield for the seventh week prior to the Adjustment Date
plus 275 basis points, but no less than the existing rate) |  | $              | 1,172,401 |                  
|7.50% promissory note secured by a Deed of Trust on the Chino, CA property, monthly
principal and interest payments are $6,836, due October 1, 2010 (rate is adjustable on the fourth and eighth anniversary years of the loan, to the weekly average of the five-year Treasury Note yield for the seventh week prior to the Adjustment Date
plus 200 basis points, but no less than the existing rate)  |  |                | 858,969   |                  
|6.97% promissory note secured by our Folsom, CA property, monthly principal and interest
payments of $32,567 due September 1, 2009 with a balloon payment of $4,479,793                                                                                                                                                                                                                                  |  |                | 4,885,305 |                  



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MEREDITH ENTERPRISES, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS





|Notes payable, continued                                                                                                                                                                                                          |  | March 31, 2003 |  | December 31, 2002
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- |  | -----------------
|6.97% promissory note secured by our Irvine, CA property, monthly principal and interest
payments of $25,105 due September 1, 2009 with a balloon payment of $3,453,364                                                           |  | 3,765,963      |  | 3,775,583        
|7.50% promissory note secured by a deed of trust on the Ontario, CA property, monthly
principal and interest payments are $22,390, due March 1, 2004                                                                              |  | 2,814,693      |  | 2,828,898        
|6.97% promissory note secured by our Sacramento property (Horn Road), monthly principal
and interest payments of $11,276 due September 1, 2009 with a balloon payment of $1,551,049                                               |  | 1,691,450      |  | 1,695,770        
|6.97% promissory note secured by our Tustin, CA property, monthly principal and interest
payments of $30,677 due September 1, 2009 with a balloon payment of $4,219,765                                                           |  | 4,601,738      |  | 4,613,493        
|7.64% promissory note secured by our Atlanta, GA property (Northlake Festival Shopping
Center), monthly principal and interest payments of $124,753 fully amortizing with the final payment due December 1, 2027                  |  | 16,619,434     |  | 16,675,547       
|                                                                                                                                                                                                                                  |  |                |  |                  
|Subtotalnotes payable secured by rental real estate                                                                                                                                                                              |  | 36,409,953     |  | 36,528,453       
|                                                                                                                                                                                                                                  |  |                |  |                  
|Notes payable secured by rental real estate held for sale:                                                                                                                                                                        |  |                |  |                  
|                                                                                                                                                                                                                                 
|8.25% promissory note secured by a Deed of Trust on the Fresno, CA property, monthly
principal and interest payments are $5,244 due August 1, 2003                                                                                |  | 543,316        |  | 548,052          
|8.25% promissory note secured by a Deed of Trust on the Riverside, CA property, monthly
principal and interest payments are $9,116, due November 8, 2004                                                                          |  | 1,092,218      |  | 1,096,970        
|8.33% promissory note secured by a Deed of Trust on the Roseville, CA property, monthly
principal and interest payments are $11,510 due July 1, 2008                                                                              |  | 1,353,643      |  | 1,359,897        
|8.00% promissory note secured by a Deed of Trust on the Sacramento, CA property (Java
City 721 West Del Paso Road), monthly principal and interest payments are $3,126, due June 1, 2018. This loan was paid off in February 2003 |  |               |  | 329,503          



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MEREDITH ENTERPRISES, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS







|Notes payable, continued                                                                                                                                                                                                                                                                                                                                                                                     |  | March 31, 2003 |            | December 31, 2002
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------------- | ---------- | -----------------
|                                                                                                                                                                                                                                                                                                                                                                                                            
|7.50% promissory note secured by a Deed of Trust on the Vacaville, CA property, monthly
principal and interest payments are $10,346, due October 1, 2010 (rate is adjustable on the fourth and eighth anniversary years of the loan, to the weekly average of the five-year Treasury Note yield for the seventh week prior to the Adjustment Date
plus 200 basis points, but no less than the existing rate) |  |                | 1,300,084  |                  
|                                                                                                                                                                                                                                                                                                                                                                                                             |  |                |            |                  
|Subtotalnotes payable secured by rental real estate held for sale                                                                                                                                                                                                                                                                                                                                           |  |                | 4,289,261  |                  
|                                                                                                                                                                                                                                                                                                                                                                                                             |  |                |            |                  
|Total notes payable                                                                                                                                                                                                                                                                                                                                                                                          |  | $              | 40,699,214 |                  
|                                                                                                                                                                                                                                                                                                                                                                                                             |  |                |            |                  



The aggregate fair value
of the notes was approximately $43,005,267 at December 31, 2002, based on current lending rates, which are the approximate industry lending rates on these types of properties and these locations.



The aggregate annual future maturities at March 31, 2003 of notes payable
secured by rental real estate and notes payable secured by rental real estate held for sale are as follows:



|Years ending March 31, |  | Amount
|---------------------- |  | ------
|2004                   |  | $     
|2005                   |  |       
|2006                   |  |       
|2007                   |  |       
|2008                   |  |       
|Thereafter             |  |       
|                       |  |       
|Total                  |  | $     
|                       |  |       



NOTE 6NET
INCOME AND DIVIDENDS PER SHARE



Dividends are declared by
the board of directors and based on a variety of factors, including the previous quarters net (loss) or income from operations before depreciation and amortization, cash requirements to meet REIT distribution tests, other cash requirements and
other factors as the board of directors deems appropriate.



On
November 15, 2002, we filed our restated certificate of incorporation with the Secretary of State of Delaware, which, among other items, provided for a 1:3 reverse stock split. All share and per share amounts have been adjusted to give effect to
this split.



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MEREDITH ENTERPRISES, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS





The 2002 Stock Incentive
Plan provides for the issuance of incentive stock options, non-qualified Stock options, restricted shares and other grants. The maximum number of shares that may be issued under the plan is 150,000. The option price may not be less than the fair
market value of a share on the date that the option is granted and the options generally vest either immediately or over two years. Stockholders adopted the 2002 Stock Incentive Plan in September 2002. Changes in options outstanding during the
period ended March 31, 2003 were as follows:



Period ending March 31, 2003



|                                                          |  | Shares under option |        | Weighted average exercise price
|--------------------------------------------------------- |  | ------------------- | ------ | -------------------------------
|Balance at the beginning of the period                    |  |                     |       |                                
|Granted                                                   |  |                     | 91,669 |                                
|Exercised                                                 |  |                     |       |                                
|Cancelled                                                 |  |                     |       |                                
|                                                          |  |                     |        |                                
|Balance at end of period                                  |  |                     | 91,669 |                                
|                                                          |  |                     |        |                                
|Exercisable                                               |  |                     | 67,085 |                                
|                                                          |  |                     |        |                                
|Shares available for future grants                        |  |                     | 58,331 |                                
|                                                          |  |                     |        |                                
|Estimated fair value of options granted during the period |  | $                   | 29,059 |                                
|                                                          |  |                     |        |                                



At March 31, 2003, the
exercise price of shares under option was $10.25. The exercise price of all options granted in the period ended March 31, 2003 was equal to the market price on the date of grant. The options expire in 2013 and the weighted average remaining
contractual life of these options is 10 years.



Pro forma
information regarding net income and earnings per share required by SFAS 148 was determined as if we had accounted for the employee and non-employee director stock options granted in the period ended March 31, 2003 under the fair value method of
that Statement. The fair value for these options was estimated as of the date of grant using a Black-Scholes option pricing model, with the following weighted average assumptions for the period ended March 31, 2003:



|Risk-free interest rate      |  | 3.90%   
|---------------------------- |  | --------
|Dividend yield               |  | 10.80%  
|Volatility                   |  | 22%     
|Weighted average option life |  | 10 years



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MEREDITH ENTERPRISES, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS





The Black-Scholes
option-pricing model was developed for use in estimating the fair market value of traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions,
including the expected stock price volatility. Because the above stock option plans have characteristics significantly different from those of traded options, and because, in managements opinion, changes in the subjective input assumptions can
materially affect the fair value estimate, the existing models do not necessarily provide a reliable single measure of the fair value of the above stock option plans.



For purposes of pro forma disclosures, the estimated fair value of the options is amortized over the options vesting
periods. Our pro forma information, as if we had adopted SFAS 123 as discussed above, follows:



|                                                                                         |  | Three monthsendedMarch 31, 2003 |        
|---------------------------------------------------------------------------------------- |  | ------------------------------- | -------
|Net (loss), as reported                                                                  |  |                                 | (35,750
|Lesstotal stock-based compensation expense determined under the fair value based
method |  |                                 | (29,059
|                                                                                         |  |                                 |        
|Pro forma net loss                                                                       |  |                                 | (64,809
|                                                                                         |  |                                 |        
|Loss per share:                                                                          |  |                                 |        
|Basicas reported                                                                        |  | $                               | (0.04  
|                                                                                         |  |                                 |        
|Basicproforma                                                                           |  | $                               | (0.07  
|                                                                                         |  |                                 |        
|Dilutedas reported                                                                      |  | $                               | (0.04  
|                                                                                         |  |                                 |        
|Dilutedproforma                                                                         |  | $                               | (0.07  
|                                                                                         |  |                                 |        



The following table sets
forth the computation of basic and diluted earnings per share with respect to net income:



|Three months ended                                                              |  | March 31, 2003 |         |   | March 31, 2002
|------------------------------------------------------------------------------- |  | -------------- | ------- | - | --------------
|Numerator:                                                                      |  |                |         |   |               
|Net (loss) income from operations                                               |  | $              | (90,669 | ) |               
|Net income from discontinued operations                                         |  |                | 54,919  |   |               
|                                                                                |  |                |         |   |               
|Net (loss) income                                                               |  | $              | (35,750 | ) |               
|                                                                                |  |                |         |   |               
|Denominator:                                                                    |  |                |         |   |               
|Denominator for basic earnings per shareweighted average shares                |  |                | 975,298 |   |               
|Effect of dilutive securitiesstock options                                     |  |                | 8,237   |   |               
|                                                                                |  |                |         |   |               
|Denominator for diluted earnings per share adjusted for weighted average
shares |  |                | 983,585 |   |               
|                                                                                |  |                |         |   |               



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MEREDITH ENTERPRISES, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS





NOTE 7TAXES ON
INCOME



We have elected to be taxed as a REIT under Sections
856-860 of the Internal Revenue Code of 1986, as amended (the Code) for federal income tax purposes. This requires, among a number of other organizational and operational requirements, that we distribute at least 90% of our taxable
income (excluding capital gains) to our stockholders. In addition, California and Georgia, the states in which we own and operate real estate properties have provisions equivalent to the federal REIT provisions. Accordingly, no provision has been
made for federal or state income taxes in the accompanying financial statements.



NOTE 8SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION



A supplemental disclosure of cash flow information follows:



|Three months ended March 31,             |  | 2003 |         | 2002
|---------------------------------------- |  | ---- | ------- | ----
|Cash paid during the period for interest |  | $    | 741,275 |     
|                                         |  |      |         |     
|Dividends declared                       |  | $    | 585,178 |     
|                                         |  |      |         |     



NOTE
9COMMITMENTS AND CONTINGENCIES



We purchased the
Northlake Festival Shopping Center in October 2002, and assumed the existing ground lease. The ground lease expires in October 2057 and any improvements on the property revert back to the ground lessor. The ground lease provides for fixed rent and
additional rent calculated on 7% of the gross rents received from tenants. The fixed rent may escalate based on appraisals, with the following limitations:



|January 2003  October 2007  |  | Fixed at $600,000 per year                                                                                                                                     
|---------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
|November 2007  October 2032 |  | Subject to appraisal, but not less than $600,000 per year, nor more than $1,200,000
per year                                                                   
|November 2032  October 2057 |  | Subject to appraisal, but not less than the amount payable in the prior period, nor
more than twice amount payable for the period November 2007 to October 2032



We have entered into
employment agreements with our President and Chief Executive Officer and our Chief Financial Officer under which we would be obligated to make severance payments to them, upon either persons termination or resignation for certain reasons, of
one years salary plus bonus, if any.



We are a defendant in
a lawsuit entitled John Lonberg & Ruthee Goldkorn v. Sanborn Theaters, Inc., a California Corporation Doing Business as Marketplace Cinema and So-Cal Cinema, Inc., a California



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MEREDITH ENTERPRISES, INC.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Corporation; and Salts-Troutman-Kaneshiro, Inc., West Coast Realty Investors, Inc., USDC Central District of California, Eastern Division
Case No. CV-97-6598AHM (JGx). This is an Americans with Disabilities Act claim brought against the Market Place Cinema, our property located in Riverside, CA. We own the theater and have leased it to Sanborn Theaters, Inc., who operates it.
Plaintiffs allege certain features of the theater discriminated against them and violated state and federal disabled access laws. Plaintiffs demand statutory damages, damages for emotional distress, a lodestar multiplier, attorneys
fees and punitive damages. Although Plaintiffs have not quantified their damages, we expect that Plaintiffs claims will exceed $300,000. The United States Department of Justice has intervened in this suit. This case has now been stayed pending
the outcome of a similar case filed against AMC Theaters. We cannot determine the likelihood of an unfavorable outcome or range of potential loss, if any. We believe we have complied with all applicable provisions of law and intend to vigorously
defend the allegations contained in the lawsuit. We believe that the lawsuit will not have a material impact on our continuing operations or overall financial condition.



On July 31, 2002, James E. Prock filed an action against us and our President and Chief Executive Officer, Mr. Allen
Meredith, in Los Angeles County Superior Court. Mr. Prock was an employee of the Advisor and not an employee of West Coast Realty Investors, Inc. He provided services as our Chief Operating Officer from 1992 to August 2001 and as Acting Chief
Operating Officer from August 2001 to March 2002. The lawsuit alleges that during the fall of 2001 and winter of 2002, we purportedly made promises to Mr. Prock that we would hire him as a full time managerial employee after we became a self-managed
REIT. The lawsuit seeks damages for unspecified purported lost compensation and punitive damages, and the discovery process has commenced. We cannot determine the likelihood of an unfavorable outcome or range of potential loss, if any. We believe
the suit is without merit and intend to vigorously defend the allegations contained in the lawsuit. We believe that the lawsuit will not have a material impact on our continuing operations or overall financial condition.



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##### Table of Contents



|ITEM 2. |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- |  | -------------------------------------------------------------------------------------



Special Note Regarding Forward-Looking Statements



This quarterly report contains forward-looking statements
within the meaning of the federal securities laws. Forward-looking statements are identified by words such as believes, expects, may, will, should, seeks,
approximately, intends, plans, pro forma, estimates, or anticipates or in their negative form or other variations, or by discussions of strategy, plans or intentions.
Forward-looking statements are based on assumptions, data or methods that may be incorrect, imprecise or incapable of being realized. These statements include our statements of this nature concerning the following:



| |  |  | the commercial real estate market;
| | - |  | ----------------------------------



| |  |  | our future revenues;
| | - |  | --------------------



| |  |  | our future revenue mix, net operating income and operating results;
| | - |  | -------------------------------------------------------------------



| |  |  | our future cash requirements;
| | - |  | -----------------------------



| |  |  | competition, our competitors and our ability to compete;
| | - |  | --------------------------------------------------------



| |  |  | our financial and managerial controls, reporting systems and procedures, and other systems and processes;
| | - |  | ---------------------------------------------------------------------------------------------------------



| |  |  | property values;
| | - |  | ----------------



| |  |  | any particular tenants intentions or financial condition, such as its plans to renew or terminate a property lease, or the likelihood that it will default upon
a property lease;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | vacancies;
| | - |  | ----------



| |  |  | interest rates;
| | - |  | ---------------



| |  |  | our operating costs;
| | - |  | --------------------



| |  |  | litigation matters and legal proceedings, our defenses to such matters and our contesting of such matters;
| | - |  | ----------------------------------------------------------------------------------------------------------



| |  |  | our ability to meet our debt obligations;
| | - |  | -----------------------------------------



| |  |  | the proposed sales of certain properties;
| | - |  | -----------------------------------------



| |  |  | our ability to obtain outside financing;
| | - |  | ----------------------------------------



| |  |  | identifying, acquiring and successfully integrating new properties, including the shopping center in Atlanta we purchased in October 2002;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the type and locations of real estate investments we may make;
| | - |  | --------------------------------------------------------------



| |  |  | our ability to qualify as a real estate investment trust under the Internal Revenue Code of 1986, as amended;
| | - |  | -------------------------------------------------------------------------------------------------------------



| |  |  | our ability to successfully construct the planned shopping center on 2.5 acres in Garden Grove, California;
| | - |  | -----------------------------------------------------------------------------------------------------------



| |  |  | environmental risks;
| | - |  | --------------------



| |  |  | natural disasters and other threats to our properties; and
| | - |  | ----------------------------------------------------------



| |  |  | the economies of the geographic areas where our properties are located.
| | - |  | -----------------------------------------------------------------------



These statements are subject to risks and uncertainties that could cause actual results and events to differ materially. For
a detailed discussion of these risks and uncertainties, see the portion of this Item 2 entitled Risk Factors. We undertake no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of
this Report on Form 10-Q.



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OVERVIEW



Meredith Enterprises, Inc. (formerly West Coast Realty Investors, Inc.) is a
real estate company engaged in acquiring, owning and managing, suburban office, retail shopping center and light industrial properties. We have elected to be taxed as a real estate investment trust, or REIT, for federal income tax
purposes, which requires, among a number of other organizational and operational requirements, that we distribute at least 90% of our taxable income (excluding capital gains) to our stockholders. From inception to March 31, 2002, West Coast Realty
Advisors, Inc. advised us and West Coast Realty Management, Inc. managed our properties. Each of these companies is a wholly owned subsidiary of Associated Financial Group, Inc., and we sometimes refer to them together as the Advisor.
Since March 31, 2002, we have been self-managed and self-administered.



At March 31, 2003, we had a real estate portfolio of 14 properties, including:



| |  |  | five light industrial properties totaling 238,130 square feet,
| | - |  | --------------------------------------------------------------



| |  |  | one shopping center of 321,621 square feet,
| | - |  | -------------------------------------------



| |  |  | two suburban office properties representing 89,926 square feet and
| | - |  | ------------------------------------------------------------------



| |  |  | six properties held for sale totaling 124,848 square feet.
| | - |  | ----------------------------------------------------------



All of our properties are located in California and Georgia. Until 2002, our business focus was the ownership and operation of suburban office properties
and light industrial buildings. We have broadened our focus to include large shopping centers and properties outside of California. We acquired an Atlanta, Georgia shopping center in October 2002 and may pursue other real estate opportunities in
Georgia and in other states. Most of our leases are triple-net leases where the tenant is responsible for maintenance, taxes and insurance.



SIGNIFICANT RECENT EVENTS



| |  |  | On March 3, 2003, we granted a total of 91,669 options to purchase our common stock to three employees and four directors at $10.25 per share, the fair market value
at the date of grant. At March 31, 2003, 67,085 options were vested. To date, no options have been exercised.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | On March 24, 2003, we changed our name from West Coast Realty Investors, Inc. to Meredith Enterprises, Inc.
| | - |  | -----------------------------------------------------------------------------------------------------------



| |  |  | On March 26, 2003, we acquired a 2.5 acre parcel of undeveloped land in Garden Grove, CA for $2,200,000. We intend to construct a multi-tenant shopping center
comprising approximately 30,000 square feet. We are also under contract to purchase a 4,880 square foot office building on a .5 acre parcel on a corner surrounded by the above property for $1,500,000.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The tenant in our Chino, CA property vacated upon the end of the lease in early April and owes rent for the first quarter of 2003.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------



| |  |  | The tenant in our Ontario property is a subsidiary of Adelphia Communications, which has declared bankruptcy. The rent has been paid through May 31, 2003.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Wherehouse Entertainment, Inc. a tenant in our Fresno property has declared bankruptcy in January 2003. The rent has been paid through May 31, 2003.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------



In the future, we believe our financial results
will also be affected by the following:



| |  |  | Our ability to retain our existing lease arrangements with tenants in bankruptcy.
| | - |  | ---------------------------------------------------------------------------------



| |  |  | Our ability to either sell or re-lease our vacant Vacaville and Chino properties.
| | - |  | ---------------------------------------------------------------------------------



| |  |  | The August 2002 refinancing of four loans.
| | - |  | ------------------------------------------



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| |  |  | The October 15, 2002 acquisition of the Northlake Festival Shopping Center, a 321,000 square foot shopping center.
| | - |  | ------------------------------------------------------------------------------------------------------------------



As a result of the August 2002 refinancing and the purchase of Northlake
Festival, as of March 31, 2003, we had total assets of $57,915,512, total secured indebtedness of $40,699,214, total liabilities of $42,026,426 and a debt-to-total assets ratio of 73%, calculated on the basis of generally accepted accounting
principles. Because this calculation method reflects accumulated depreciation and does not reflect any appreciation of the properties beyond their cost, it may result in assets being valued at less than their fair market values as determined by the
board of directors. Further, this calculation excludes the effects, if any, of the ground lease on the Northlake Festival property. In addition, our aggregate monthly debt service has increased from approximately $150,000 to $300,000 or 100%, from
June 2002 to November 2002, which reflects the August 2002 refinancing, the sale of our Huntington Beach, CA and Corona, CA properties and the assumption of debt with the purchase of the Northlake Festival. We plan to use revenues in excess of
operating costs from the Northlake Festival property to pay the increased debt service.



RESULTS OF OPERATIONS



Quarter ended March 31, 2003 compared to the quarter ended March 31, 2002



As of December 31, 2001, we had designated four properties as held for sale: Fresno, CA, Huntington Beach, CA, Roseville, CA and Riverside, CA. In 2002, we designated three additional properties as
held for sale: Sacramento, CA (717 W. Del Paso Road), Sacramento, CA (721 W. Del Paso Road) and Vacaville, CA and sold another property, Corona, CA. In accordance with SFAS 144, we have restated the prior results of the properties designated as held
for sale in 2002 and the Corona, CA property we sold in 2002 as discontinued operations for all periods presented.



Operations for the three months ended March 31, 2003 and 2002 represented full quarters of rental operations for all of our properties we classify as
continuing operations, except for the Northlake Festival Shopping Center in Atlanta, which we acquired in October 2002. The eight properties designated as held for sale during 2002 are included in the line items under discontinued
operations with revenues netted against expenses.



Rental
revenue increased by $1,071,671 (135%) for the quarter ended March 31, 2003, as compared to the quarter ended March 31, 2002, primarily due to the addition of revenues from of Northlake Festival property and offset in part by the loss of revenues
from the Chino, CA property, where we recorded no revenue in the quarter ended March 31, 2003.



Interest income increased by $3,800 (88%) for the quarter ended March 31, 2003, as compared to the quarter ended March 31, 2002, due to higher average balances maintained in interest earning assets.



Interest expense increased by $472,687 (220%) for the quarter
ended March 31, 2003, as compared to the quarter ended March 31, 2002, due to:



| |  |  | the August 2002 refinancing of four notes payable to balances approximately $6,500,000 higher than in 2002,
| | - |  | -----------------------------------------------------------------------------------------------------------



| |  |  | the addition of the note payable of approximately $16,619,000 secured by Northlake Festival and,
| | - |  | ------------------------------------------------------------------------------------------------



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| |  |  | to a lesser extent, the replacement in the August 2002 refinancing of variable rate debt secured by our Folsom and Irvine properties by fixed rate debt bearing
interest at significantly higher rates.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



General
and administrative costs increased by $225,674 (110%) for the quarter ended March 31, 2003, as compared to the quarter ended March 31, 2002, principally due to higher legal expenses (including amounts related to our defense of the claim by James
Prock), costs related to relocating our corporate headquarters and hiring one employee and engaging a consultant to perform functions previously performed by the Advisor.



Depreciation expense increased by $134,608 (120%) for the quarter ended March 31, 2003, as compared to the quarter ended
March 31, 2002, due to the addition of Northlake Festival property in October 2002.



Ground rent was $ 233,893 in 2003, due to the ground lease for Northlake Festival; there was no ground lease expense in 2002.



Operating expenses increased by $214,340 (710%) for the quarter ended March 31, 2003, as compared to the quarter ended March 31, 2002, due the addition of
Northlake Festival property in October 2002.



Property tax
expense increased by $99,291 (442%) for the quarter ended March 31, 2003, as compared to the quarter ended March 31, 2002, primarily due to the addition of Northlake Festival.



Net income from discontinued operations decreased by $12,299 (18%) for the quarter ended March 31, 2003, as compared to the
quarter ended March 31, 2002, primarily due to full periods of income for the Huntington Beach, CA and Corona, CA properties in 2002 and no income in the quarter ending March 31, 2003 as the properties were sold in 2002.



Net (loss) for the three months ended March 31, 2003 was ($35,750), compared
to net income of $281,571 in the three months ended March 31, 2002. This decrease in net income was primarily due to the higher revenue and expenses in the Northlake Festival property not fully offsetting the higher interest and general and
administrative expenses, and, to a lesser extent, the lack of revenue from the Chino, CA property in 2003.



The weighted average number of shares outstanding (after adjusting for the November 15, 2002 1:3 reverse stock split) was 983,535 and 975,989 for three months ended March 31, 2003 and 2002,
respectively. Net (loss ) per share assuming dilution decreased to ($0.04) in the three months ended March 31, 2003 from net income per share of $0.29 in three months ended March 31, 2002, primarily as a result of the higher revenue and expenses in
the Northlake Festival property not fully offsetting the higher interest and general and administrative expenses, and, to a lesser extent, the lack of revenue from the Chino, CA property in 2003.



INFLATION



Inflation and changing prices have not had a material effect on our operations.



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LIQUIDITY AND CAPITAL
RESOURCES



Our primary source of liquidity to fund
distributions, principal payment on notes payable and minor capital expenditures is our cash flows from operating activities. In order to qualify as a REIT for federal income tax purposes, among other requirements, we must distribute annually at
least 90% of our REIT taxable income (excluding capital gains). Accordingly, we currently intend to continue to make, but have not contractually bound ourselves to make, regular quarterly distributions to holders of our common stock. As a policy, we
keep cash balances on hand for reserves for unexpected cash requirements. Our primary source for liquidity to fund asset acquisitions, major capital expenditures and balloon payments on notes payable is to refinance selected existing notes payable
and the proceeds from asset sales. Further, we may attempt to obtain funding by issuing additional equity either in the form of common stock or through joint ventures.



The following table presents our contractual cash obligations as of March 31, 2003:



|                                                                               |  | Payments Due by Period
|------------------------------------------------------------------------------ |  | ----------------------
|ContractualObligations                                                         |  | Total                 
|Notes payable secured by rental real estate and real estate held for
sale      |  | $                     
|Minimum payments due under the ground lease at the Northlake Festival
property |  | $                     
|                                                                               |  |                       
|Total Contractual Cash Obligations                                             |  | $                     
|                                                                               |  |                       



At March 31, 2003, our
total investments in rental real estate and rental real estate held for sale totaled $54,943,611 for the 14 properties we own. Depending upon the availability and cost of external capital, we anticipate making additional investments in suburban
office, retail shopping center and light industrial properties, although we may make other types of investments. We intend to fund new investments from existing cash balances (subject to maintaining reasonable cash reserves), the proceeds of
refinancing of selected existing mortgage debt to higher balances and the proceeds from asset sales. We may consider other sources of possible funding, including joint ventures or a construction loan to finance the construction of a shopping center
on the 2.5 acres of land we own in Garden Grove, CA. To increase our financial flexibility, we may seek to obtain a revolving line of credit, although there can be no assurance we will be successful.



We believe our liquidity and various sources of capital are sufficient to fund
operations including capital expenditures and leasing commissions, meet debt service and dividend requirements under the Internal Revenue Code for REIT status and finance future investments. We believe our properties are in good condition without
significant deferred maintenance obligations and many are leased under triple-net leases, which reduce our risk pertaining to excessive maintenance and operating costs. However, we anticipate we will continue to require outside sources
of financing to meet our long-term liquidity needs beyond 2003, such as scheduled debt repayments (including balloon payments on our debt), the construction of a shopping center on the 2.5 acres of land we own in Garden Grove, CA and property
acquisitions.



On September 24, 2002, our stockholders voted to
amend and restate our certificate of incorporation and bylaws to, among other items, eliminate the limit on our leverage. Unlike our previous certificate of incorporation and bylaws, these new organizational documents do not



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limit the amount of debt that we may incur. We have adopted a policy that we shall not incur any additional liabilities if, after giving
effect to the additional liabilities, total liabilities would exceed 65% of what the board of directors believes is the fair market value of our portfolio. If we decide to change this policy to increase the percentage of debt we incur above 65% of
our overall portfolio fair market value, we will implement the change only after we seek and obtain the approval of the holders of a majority in voting power of our outstanding shares.



CASH FLOWS IN 2003



Our cash resources decreased $3,223,597 during the three months ended March 31, 2003. During 2003, cash provided by operating activities was $102,281
primarily from net loss adjusted for non-cash items such as depreciation and amortization. Investing activities in 2003 resulted in a $2,562,964 use of cash resources primarily for purchase of the Garden Grove property. Financing activities used
$762,914 for dividends and principal payments on notes payable secured by rental real estate and notes payable secured by rental real estate held for sale, including the pay off of one note secured by the Sacramento, CA (Java City 721 West Del Paso
Road).



CASH FLOWS IN 2002



Our cash resources increased $238,702 during the three months ended March 31,
2002. During 2002, cash provided by operating activities was $392,348 primarily from net income adjusted for non-cash items such as depreciation and amortization. For the three months ended March 31, 2002, financing activities used $153,646 due
largely to principal payments on notes payable.



CRITICAL
ACCOUNTING POLICIES



The preparation of financial statements
in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. We evaluate our estimates and assumptions on an ongoing basis based on a combination of historical information and various other assumptions that we believe are reasonable under the particular circumstances.
Actual results may differ from these estimates based on different assumptions or conditions. We believe the critical accounting policies that most impact our consolidated financial statements are described below.



Revenue RecognitionWe recognize minimum rents on the straight-line
method over the terms of the leases, as required under Statement of Financial Accounting Standard No. 13. Certain of the leases also provide for additional revenue based on contingent percentage income which is recorded on an accrual basis once the
specified target that triggers this type of income is achieved. The leases also typically provide for tenant recoveries of common area maintenance, real estate taxes and other operating expenses. These recoveries are recognized as revenue in the
period the applicable costs are incurred. Rents due, but not yet collected, are recognized to the extent determined by management to be collectible.



Capital ExpendituresWe capitalize those expenditures related to conducting significant rehabilitation of existing assets and extending the useful
life of existing assets. These expenditures are depreciated over estimated useful lives determined by management. We expense certain improvements related to the operation of our properties, as well as those expenditures necessary to maintain a
property in ordinary operating condition. The determination as to



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whether expenditures should be capitalized or expensed, and the period over which depreciation is recognized, requires managements
judgment.



Real EstateWe record real estate assets at the
lower of cost or fair value if impaired. Costs incurred to unaffiliated third parties for the acquisition of properties are capitalized.



We evaluate the recoverability of our investment in real estate quarterly and whenever events or changes in circumstances indicate that the carrying
amount of an asset may be impaired. Our assessment of recoverability of our real estate assets includes, but is not limited to recent operating results, expected cash flows and our plans for future operations.



Properties classified as held for sale are segregated from rental real estate
in our financial statement presentation. We stop recording depreciation on a property once it is classified as held for sale.



On January 1, 2002, we adopted SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets which requires that the assets and
liabilities and the results of operations of any properties which have been sold since the adoption of SFAS No. 144, or otherwise qualify as held for sale as of March 31, 2003, be presented as discontinued operations in our consolidated financial
statements in both current and prior periods presented. The real estate classified as held for sale is stated at the lower of its carrying amount or estimated fair value less disposal costs. Depreciation is not recorded on assets classified as held
for sale.



In accordance with SFAS No. 144, our investments in
real estate are carried at cost and are periodically evaluated for indicators of impairment. The evaluation of impairment and the determination of values are based on several factors, and future events could occur which would cause management to
conclude that indicators of impairment exist and a reduction in carrying value to estimated fair value is warranted.



In the normal course of business, we will receive offers for sale of our properties, either solicited or unsolicited. For those offers that are accepted,
the prospective buyer will usually require a due diligence period before consummation of the transaction. It is not unusual for matters to arise that result in the withdrawal or rejection of the offer during this process. We classify real estate as
held for sale when it is probable, in the opinion of management, that a property will be disposed of within one year.



Use of EstimatesThe preparation of financial statements in conformity with generally accepted accounting principles 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 financial statements and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ materially from those estimates.



NEW ACCOUNTING PRONOUNCEMENTS



Information on new accounting pronouncements is contained in Summary of Accounting Policies under Item 1 in this Report on Form 10-Q.



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RISK FACTORS
THAT MAY AFFECT FUTURE RESULTS





Stockholders should carefully consider the risks described below. These risks are not the only ones we face. Additional risks not presently known to us or that we currently consider immaterial may also
materially impair our business operations and hinder our ability to make expected distributions to our stockholders.



Risks Due to Investment in Real Estate



Decreased yields from an investment in real property may result from factors that may cause a decrease in revenues or values or an increase in
operating expenses.



Real property investments are subject
to varying degrees of risk. The yields available from equity investments in real estate depend upon the amount of revenues generated and expenses incurred. If our properties do not generate revenues sufficient to meet operating expenses, debt
service and capital expenditures, our results of operations and ability to make distributions to stockholders and to pay amounts due on our debt will be adversely affected. The performance of the economy in each of the areas in which the properties
are located can affect occupancy, market rental rates and expenses, which in turn can affect the revenues from the properties and their underlying values. The financial results of major local employers may also affect the revenues and value of some
properties. Other factors include:



| |  |  | the general economic climate;
| | - |  | -----------------------------



| |  |  | local conditions in the areas in which properties are located, such as an oversupply of properties like ours or a reduction in the demand for properties like ours;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the attractiveness of the properties to tenants; and
| | - |  | ----------------------------------------------------



| |  |  | competition from other properties like ours.
| | - |  | --------------------------------------------



Our tenants may go bankrupt.



Our tenants may file for bankruptcy protection or become insolvent in the future. Currently, one of our tenants and the parent company of another tenant
have filed for bankruptcy protection. In addition, another tenant has not paid rent since November 2002. We cannot evict a tenant solely because of its bankruptcy. A court might authorize the tenant to reject and terminate its lease with us. In that
case, our claim against the bankrupt tenant for unpaid, future rent would be subject to a statutory cap that might be substantially less than the remaining rent actually owed under the lease, and, even so, our claim for unpaid rent would likely not
be paid in full.



Our tenants may not renew their leases.



We cannot predict whether current tenants will renew their
leases upon the expiration of their terms or whether current tenants will attempt to terminate their leases before they expire. Because the tenants in our Irvine, CA and Tustin, CA properties are not fully using the properties for their operations,
and they may be less likely to re-lease the properties when the leases expire or may re-lease a smaller space. Further, the leases for our two Sacramento, CA (Java City), properties expire in July of 2003. If we are unable to promptly re-lease or
renew the leases for significant vacant properties, or if the rental rates upon such renewal or re-leasing are significantly lower than expected rates, then our ability to make expected distributions to stockholders and to pay amounts due on our
debt may be adversely affected.



We may be unable to lease
vacant space in our properties.



To lease vacant space, we
may need to pay substantial leasing commissions and renovation costs. We may acquire properties that are not fully leased, and the cash flow from existing operations may be insufficient to pay the operating expenses and debt service associated with
that property



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until the property is fully leased. Operating costs, including real estate taxes, insurance and maintenance costs, and mortgage payments, if
any, do not, in general, decline when circumstances cause a reduction in income from a property from a vacancy or other reason. In addition, because many of our leases are triple-net leases that make the tenant responsible for property
taxes, insurance and maintenance, we, and not the tenant would bear such costs, once the tenant no longer leases the property for any reason. We could sustain a loss as a result of foreclosure on the property if a property is mortgaged to secure
payment of indebtedness and we were unable to meet our mortgage payments. As a result, our ability to make distributions to our stockholders could be adversely affected.



Investments in newly acquired properties may not perform as we expect.



In the normal course of business, we typically evaluate potential
acquisitions, enter into non-binding letters of intent, and may, at any time, enter into contracts to acquire and may acquire additional properties. We can give no assurance, however, that we will have the financial resources to make suitable
acquisitions or that properties that satisfy our investment policies will be available for acquisition. The acquisition of property entails risks that investments will fail to perform in accordance with expectations. Those risks may include
financing not being available on favorable terms or at all. Estimates of the costs of improvements to bring an acquired property up to standards established for the market position intended for that property might prove inaccurate. Although we
evaluate the physical condition of each new property before we acquire it, we may not detect some defects or necessary repairs until after we acquire the property. This could significantly increase our total acquisition cost, which could have a
material adverse effect on us and our ability to make distributions to stockholders and pay amounts due on our debt.



The value of our property interests depends on conditions beyond our control.



General and local economic conditions, neighborhood values, competitive overbuilding, weather, casualty losses and other
factors beyond our control may adversely affect real property income and capital appreciation. For example, the U.S. economy is currently performing poorly, which may negatively impact property values. We are unable to determine the effect, if any,
the performance of the worldwide or U.S. economy will have on us or on the value of our common stock.



The lack of liquidity of real estate may reduce economic returns to investors.



Because real estate investments are relatively illiquid, our ability to adjust our portfolio in response to changes in economic or other conditions is
somewhat limited. Additionally, the Internal Revenue Code places certain limits on the number of properties a REIT may sell without adverse tax consequences. To effect our current operating strategy, we will seek to raise funds, both through outside
financing and through the orderly disposition of assets that no longer meet our investment criteria. Depending upon interest rates, current acquisition opportunities and other factors, generally we will reinvest the proceeds in suburban office,
retail shopping center and light industrial properties, although such funds may be employed in other uses.



The risk that we may be unable to reinvest in attractive properties may affect our returns to stockholders.



In the markets we have targeted for future acquisition of properties, there is considerable buying competition from other
real estate companies, many of whom may have greater resources, experience or expertise than we do. In many cases, this competition for acquisition properties has resulted in an increase in property prices and a corresponding decrease in property
yields.



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We can give no assurances that
we can reinvest the proceeds realized from the disposition of assets into new assets that will produce economic returns comparable to those being realized from the properties disposed of, or that we will be able to acquire properties meeting our
investment criteria. To the extent that we are unable to reinvest those proceeds, or if the properties we acquire with those proceeds produce a lower rate of return than the properties disposed of, those results may have a material adverse effect on
us.



If we are unable to reinvest sales or refinancing
proceeds as quickly as we expect, our returns to stockholders may be adversely affected.



A delay in reinvestment of sales or refinancing proceeds may have a material adverse effect on us. We may seek to structure future dispositions as tax-free exchanges, where appropriate, using the
non-recognition provisions of Section 1031 of the Internal Revenue Code to defer income taxation on the disposition of the exchanged property. For an exchange to qualify for tax-free treatment under Section 1031 of the Internal Revenue Code, we must
meet certain technical requirements. Given the competition for properties meeting our investment criteria, it may be difficult for us to identify suitable properties within the required time frames to meet the requirements of Section 1031.



Substantial competition among properties and real estate
companies may adversely affect our rental revenues and acquisition opportunities.



All of our properties are located in developed areas where we face substantial competition from other properties and from other real estate companies who may develop or renovate competing properties. The number of
competitive properties and real estate companies could have a material adverse effect on our ability to rent our properties, the rents we charge and our acquisition opportunities. The activities of these competitors could cause us to pay a higher
price for a new property than we otherwise would have paid or may prevent us from purchasing a desired property at all, which could have a material adverse effect on us and our ability to make distributions to stockholders and to pay amounts due on
our debt.



Our geographic concentration of properties in
California and Georgia may adversely affect us.



Our
portfolio is located entirely in California and Georgia. Economic conditions in, and other factors relating to, California and Georgia, including supply and demand for properties, zoning and other regulatory conditions and competition from other
properties, could adversely affect our performance. In that regard, these regions have in the past experienced economic recessions and depressed conditions in the local real estate markets. To the extent general economic or social conditions in any
of these areas deteriorate or any of these areas experiences natural disasters, the value of the portfolio, our results of operations and our ability to make distributions to stockholders and to pay amounts due on our debt could be materially
adversely affected.



We depend on single tenants in many of
our properties, and some of them represent a significant percentage of our revenues.



Many of our properties are leased to a single tenant, and some of these single tenant properties are individually significant to our total revenue. In the three months ended March 31, 2003, two tenants accounted for 11% and
8%, respectively, of our total rental revenue, including discontinued operations. The tenant may attempt to terminate the lease before its scheduled term, or we may be unable to renew the lease with the tenant. In that event, we may be unable to
re-lease the space to another anchor tenant of similar or better quality upon expiration of the current lease on similar or better terms, and we could experience material adverse consequences



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such as higher vacancy, re-leasing on less favorable economic terms, reduced net income and reduced funds from operations. Similarly, if one
or more of our single tenants goes bankrupt, we could experience material adverse consequences like those described above. There can be no assurance that our sole tenants will renew their leases when they expire or will be willing to renew on
similar economic terms.



The Northlake Festival Property
represents a significant percentage of our revenues.



The
Northlake Festival Shopping Center property accounted for approximately 50% of our total rental revenue, including discontinued operations. If economic conditions in the area of Northlake Festival become depressed and the performance of that center
is adversely affected, our overall financial condition and results of operations will be adversely affected as well.



Construction and development risks could adversely affect our profitability.



We currently are renovating some of our properties and may in the future renovate or build other properties, including tenant
improvements required under leases. Further, on March 26, 2003, we acquired undeveloped land and intend to build a 30,000 square foot shopping center on the land. We may incur renovation or development costs for a property that exceed our original
estimates due to increased costs for materials or labor or other costs that are unexpected. We also may be unable to complete renovation or development of a property on schedule, which could result in increased debt service expense or construction
costs and loss of rents until the property is ready for occupancy. Additionally, the time required to recoup our renovation and construction costs and to realize a return on such costs can often be lengthy.



We may be unable to implement our growth strategy and may fail to identify,
acquire or integrate new acquisitions.



Our future growth
will be dependent upon a number of factors, including our ability to identify acceptable properties for acquisition, complete acquisitions on favorable terms, successfully integrate acquired properties and obtain financing to support expansion. We
can give no assurances that we will be successful in implementing our growth strategy, that growth will indeed occur at all or that any expansion will improve operating results. The failure to identify, acquire and integrate new properties
effectively could have a material adverse affect on us and our ability to make distributions to stockholders and to pay amounts due on our debt. We intend to acquire properties that meet our investment criteria. Acquisitions of properties entail
risks that investments will fail to perform in accordance with expectations. Estimates of the costs of improvements to bring an acquired property up to standards established for the market position intended for that property may prove inaccurate. `



We may suffer uninsured and underinsured losses, and our
insurance coverage may be limited.



We carry (or require our
tenants to carry) liability, fire, extended coverage and rental loss insurance on our properties. This insurance has policy specifications, limits and deductibles. We do not carry flood and earthquake insurance for our properties. In addition, some
types of extraordinary losses (such as those resulting from civil unrest or acts of war) are not generally insured (or fully insured against) because they are either uninsurable or not economically insurable. In addition, we do not carry insurance
coverage for environmental liabilities. If an uninsured or underinsured loss occurs to a property, we could be required to use our own funds for restoration or lose all or part of our investment in, and anticipated revenues from, the property and
would continue to be obligated on any mortgage indebtedness on the property. Any



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loss of that nature could have a material adverse effect on us and our ability to make distributions to stockholders and pay amounts due on
our debt.



Adverse changes in laws may affect our potential
liability relating to the properties and our operations.



Increases in real estate taxes and income, service and transfer taxes cannot always be passed through to tenants in the form of higher rents (or charges on triple-net leases), and may adversely affect our cash available for
distribution and our ability to make distributions to stockholders and to pay amounts due on our debt. Similarly, changes in laws increasing the potential liability for environmental conditions existing on properties or increasing the restrictions
on discharges or other conditions, as well as changes in laws affecting construction and safety requirements, may result in significant unanticipated expenditures, which could have a material adverse effect on us and our ability to make
distributions to stockholders and pay amounts due on our debt.



Compliance with laws benefiting disabled persons may increase our costs and adversely affect our performance.



A number of federal, state and local laws (including the Americans with Disabilities Act) and regulations may require modifications to existing buildings
or restrict certain renovations by requiring improved access to such buildings by disabled persons and may require other structural features that add to the cost of buildings under construction. Legislation or regulations adopted in the future may
impose further burdens or restrictions on us with respect to improved access by disabled persons. The costs of compliance with these laws and regulations may be substantial, and restrictions on construction or completion of renovations may limit
implementation of our investment strategy in certain instances or reduce overall returns on our investments, which could have a material adverse effect on us and our ability to make distributions to stockholders and to pay amounts due on our debt.



We may have liability under environmental laws.



Under federal, state and local environmental laws,
ordinances and regulations, we may be required to investigate and clean up the effects of releases of hazardous or toxic substances or petroleum products at our properties, regardless of our knowledge or responsibility, simply because of our current
or past ownership or operation of the real estate. Thus, we may have liability with respect to properties we have already sold. If unidentified environmental problems arise, we may have to take extensive measures to remediate the problems, which
could adversely affect our cash flow and our ability to make distributions to our stockholders because:



| |  |  | we may have to pay for property damage and for investigation and clean-up costs incurred in connection with the contamination;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------



| |  |  | the law typically imposes clean-up responsibility and liability regardless of whether the owner or operator knew of or caused the contamination;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | even if more than one person may be responsible for the contamination, each person who shares legal liability under the environmental laws may be held responsible
for all of the clean-up costs; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | governmental entities or other third parties may sue the owner or operator of a contaminated site for damages and costs.
| | - |  | ------------------------------------------------------------------------------------------------------------------------



These costs could be substantial and in extreme cases could exceed the value
of the contaminated property. The presence of hazardous or toxic substances or petroleum products and the failure to properly remediate that contamination may materially and adversely affect our ability to borrow against, sell or rent an affected
property. In addition, applicable environmental laws create liens



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on contaminated sites in favor of the government for damages and costs it incurs in connection with a contamination.



We face particular environmental risks related to asbestos.



Environmental laws also govern the presence, maintenance
and removal of asbestos. Those laws require that owners or operators of buildings containing asbestos:



| |  |  | properly manage and maintain the asbestos;
| | - |  | ------------------------------------------



| |  |  | notify and train those who may come into contact with asbestos; and
| | - |  | -------------------------------------------------------------------



| |  |  | undertake special precautions, including removal or other abatement, if asbestos would be disturbed during renovation or demolition of a building.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------



Those laws may impose fines and penalties on
building owners or operators who fail to comply with these requirements and may allow others to seek recovery from owners or operators for personal injury associated with exposure to asbestos fibers. Some of our properties are located in urban,
industrial and previously developed areas where fill or current or historic industrial uses of the areas have caused site contamination.



Recently, there has been an increasing number of lawsuits against owners and managers of properties alleging personal injury and property damage caused by
the presence of mold in real estate. Some of these lawsuits have resulted in substantial monetary judgments or settlements. Our insurance policy presently in effect does not exclude mold related claims; however, we cannot assure you we will be able
to obtain coverage in the future for such claims or at a commercially reasonable price. The presence of significant mold could expose us to liability from tenants and others if property damage, health concerns, or allegations thereof, arise.



Our environmental due diligence may be inadequate.



Our policy is to retain independent environmental
consultants to conduct Phase I environmental site assessments and asbestos surveys of properties we intend to acquire. These assessments generally include a visual inspection of the properties and the surrounding areas, an examination of current and
historical uses of the properties and the surrounding areas and a review of relevant state, federal and historical documents, but they do not involve invasive techniques such as soil and ground water sampling. Where appropriate, on a
property-by-property basis, our practice is to have these consultants conduct additional testing, including sampling for asbestos, for lead in drinking water, for soil contamination where underground storage tanks are or were located or where other
past site usages create a potential environmental problem, and for contamination in groundwater. Notwithstanding these environmental assessments, we still face the risk that:



| |  |  | the environmental assessments and updates did not identify all potential environmental liabilities;
| | - |  | ---------------------------------------------------------------------------------------------------



| |  |  | a prior owner created a material environmental condition that is not known to us or the independent consultants preparing the assessments;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | new environmental liabilities have developed since the environmental assessments were conducted; or
| | - |  | ---------------------------------------------------------------------------------------------------



| |  |  | future uses or conditions, such as changes in applicable environmental laws and regulations, could result in environmental liability for us.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------



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We may acquire properties
that are subject to liabilities for which we have no recourse, or only limited recourse, against the seller.



These liabilities can include:



| |  |  | claims by tenants, vendors or other persons dealing with the former owners of the properties;
| | - |  | ---------------------------------------------------------------------------------------------



| |  |  | liabilities incurred in the ordinary course of business; and
| | - |  | ------------------------------------------------------------



| |  |  | claims for indemnification by directors, officers and others indemnified by the former owners of the properties.
| | - |  | ----------------------------------------------------------------------------------------------------------------



If we are required to spend time and money to deal with these claims, our
intended returns from the affected property may be materially reduced.



We may change some of our policies without obtaining the approval of our stockholders.



Our board of directors determines some of our operating and financial policies, including our policies with respect to acquisitions, growth, operations, leverage, capitalization and dividends. For
example, unlike our previous certificate of incorporation and bylaws, our new organizational documents do not limit the amount of debt that we may incur. Accordingly, stockholders will have little direct control over these policies.



Risks Due to Real Estate Financing



We have a significant amount of indebtedness. As of March 31, 2003, we had
total assets of $57,915,512, total secured indebtedness of $40,699,214, total liabilities of $42,026,426 and a debt-to-total assets ratio of 73%, calculated on the basis of generally accepted accounting principles. Because this calculation method
reflects accumulated depreciation and does not reflect any appreciation of the properties beyond their cost, it may result in assets being valued at less than their fair market values as determined by the board of directors. Further, this
calculation excludes the effects, if any, of the ground lease on the Northlake Festival property.



We anticipate that future acquisitions and properties we develop, if any, will be financed under a line of credit, construction loans, other forms of secured or unsecured financing or through our
issuing additional debt or equity. We expect to review periodically our financing options regarding the appropriate mix of debt and equity financing. Equity, rather than debt, financing of future acquisitions could have a dilutive effect on the
interests of our existing stockholders.



We may incur substantial
additional indebtedness in the future.



Increased debt and
leverage can reduce cash available for distribution and cause losses.



Using debt, whether with recourse to us generally or only with respect to a particular property, to acquire properties creates an opportunity for increased net income, but at the same time creates risks. We use debt to fund
investments only when we believe it will enhance our risk-adjusted returns. We cannot be sure, however, that our use of leverage will prove to be beneficial. Additional leverage may:



| |  |  | increase our vulnerability to general adverse economic and industry conditions,
| | - |  | -------------------------------------------------------------------------------



| |  |  | limit our flexibility in planning for, or reacting to, changes in our business and the REIT industry, which may place us at a competitive disadvantage compared to
our competitors that have less debt, and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | limit, along with the possible financial and other restrictive covenants in our indebtedness, our ability to borrow additional funds.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------



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Any of the foregoing could
have a material adverse effect on us and our ability to make distributions to stockholders and to pay amounts due on our debt.



We may be unable to renew, repay or refinance our debt financing.



We are subject to the normal risks associated with debt financing, including the risk that our cash flow will be insufficient
to meet required payments of principal and interest, the risk that we will not be able to renew, repay or refinance our debt when it matures or that the terms of any renewal or refinancing will not be as favorable as the existing terms of that debt.
In most of the mortgage notes on our properties, the mortgage payment terms do not fully amortize the loan balance, and a balloon payment of the balance will be due upon its maturity. If we are unable to refinance our indebtedness on acceptable
terms, or at all, we might be forced to dispose of one or more of the properties on disadvantageous terms, which might result in losses to us. Those losses could have a material adverse effect on us and our ability to make distributions to
stockholders and pay amounts due on our debt. Furthermore, if a property is mortgaged to secure payment of indebtedness and we are unable to meet mortgage payments, the mortgagee could foreclose upon the property, appoint a receiver and receive an
assignment of rents and leases or pursue other remedies, all with a consequent loss of our revenues and asset value. Foreclosures could also create taxable income without accompanying cash proceeds, thereby hindering our ability to meet the REIT
distribution requirements of the Internal Revenue Code.



The
cost of our indebtedness may increase due to rising interest rates.



We have incurred and may in the future again incur debt that bears interest at a variable rate. If we are successful in obtaining a construction loan for the development of a shopping center on the 2.5 acres of land we own in Garden
Grove, CA, the loan may bear interest at a variable rate. Accordingly, increases in interest rates would increase our interest costs, which could have a material adverse effect on us and our ability to make distributions to stockholders. In
addition, an increase in market interest rates may lead holders of our common shares to expect a higher yield on their shares from distributions by us, which could adversely affect the market price of our common stock.



We may incur additional debt and related debt service.



We intend to fund the acquisition of additional properties partially through
borrowings and from other sources such as sales of properties that no longer meet our investment criteria or the contribution of property to joint ventures or other financing methods. Unlike our previous certificate of incorporation and bylaws, our
new organizational documents do not limit the amount of debt that we may incur.



If we incur additional debt, the agreement governing our debt could contain various covenants that limit our discretion in the operation of our business.



Any additional debt we incur will be governed by an agreement with our lenders. Typically, these types of agreements contain
various provisions that could limit our discretion in the operation of our business by restricting our ability to:



| |  |  | incur additional debt and issue preferred stock,
| | - |  | ------------------------------------------------



| |  |  | pay dividends and make other distributions,
| | - |  | -------------------------------------------



| |  |  | make investments and other payments,
| | - |  | ------------------------------------



| |  |  | redeem or repurchase our capital stock,
| | - |  | ---------------------------------------



| |  |  | consolidate or merge,
| | - |  | ---------------------



| |  |  | create liens,
| | - |  | -------------



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| |  |  | sell assets, or
| | - |  | ---------------



| |  |  | enter into certain transactions with our affiliates.
| | - |  | ----------------------------------------------------



Further, the loan documents from our August 5, 2002 refinancing contain cross-collateral provisions. If one of the loans is in default and the
lender forecloses on the property securing that loan, and the proceeds from the foreclosure are not sufficient to repay the defaulted loan in full, the lender can foreclose upon one or more of the other properties to recover the loan. Previously, we
had no such cross collateral provisions in our loans.



If we are
unable to pay our obligations to our secured lenders, they could proceed against any or all of the collateral securing our indebtedness to them. In addition, a breach of the restrictions or covenants contained in our loan documents could cause an
acceleration of our indebtedness. We may not have, or be able to obtain, sufficient funds to repay our indebtedness in full upon acceleration.



Risks Related to our Stock



The market value of our common stock could decrease based on our performance and market perception and conditions.



Although our common stock has been listed on the American Stock Exchange
since October 31, 2002, there have been relatively few trades in relatively small volumes to date. Accordingly, it is difficult to estimate the fair market value of our common stock at any particular moment. Stockholders are cautioned that prior
sales data do not necessary indicate the prices at which our common stock would trade in an active market. The market value of our common stock may be based primarily upon the markets perception of our growth potential and current and future
cash dividends, and may be secondarily based upon the real estate market value of our underlying assets. The market price of our common stock is also influenced by the dividend on our common stock relative to market interest rates. Rising interest
rates may lead potential buyers of our common stock to expect a higher dividend rate, which would adversely affect the market price of our common stock. In addition, the value of our common stock could be adversely affected by general market
conditions or market conditions of real estate companies in general.



We cannot assure stockholders that we will be able to make future dividend payments at any particular rate, or at all.



Although our board of directors currently intends to continue to declare quarterly dividends on our common stock, the declaration and payment of dividends
is subject to the discretion of our board of directors. Any determination as to the payment of dividends, as well as the level of those dividends, will depend on, among other things, general economic and business conditions, our strategic plans, our
financial results and condition, and contractual, legal and regulatory restrictions on our ability to pay dividends. We cannot assure stockholders that the current quarterly dividend level will be maintained or that we will pay dividends in any
future period.



Additional issuances of equity securities may
be dilutive to current stockholders.



The interests of our
existing stockholders could be diluted if we issue additional equity securities to finance future developments and acquisitions instead of incurring additional debt. Our ability to execute our business strategy depends on our access to an
appropriate blend of debt financing, which could include a line of credit and other forms of secured and unsecured debt, equity financing, including common and preferred equity, or joint ventures.



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Risks Due
to Becoming Self-administered and Self-managed



Until
March 31, 2002, the Advisor had managed our properties, administrated our business affairs and sold, purchased and refinanced properties, under the direction of the board of directors. Effective March 31, 2002 and subsequently, we have become
self-administered and self-managed.



We are exposed to new
risks previously assumed by the Advisor.



Becoming a
self-administered and self-advised REIT exposes us to risks to which we have not historically been exposed, such as the risks associated with our own management. In particular, becoming a self-advised and self-administered REIT has resulted in
higher expenses of administration than those previously charged by the Advisor. We now bear the following risks previously associated with the activities of the Advisor:



| |  |  | Increased fixed overhead expenses resulting from engagement of additional personnel and other costs in excess of the fee charged by the Advisor. Our ability to cover
expanded overhead may be impaired if we do not grow as we anticipate.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | If our employees fail to perform duties properly, our recourse is limited to these employees, whose liability may be limited by indemnifications from us. Previously,
the Advisor could have been liable for such failure.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



We have incurred additional expenses and may have difficulties in recruiting and retaining additional management.



Our success is, in part, dependent on the support, services and contributions of Mr. Allen K. Meredith our President and Chief Executive Officer and Mr.
Charles P. Wingard, our Secretary and Chief Financial Officer. The loss of the services of the existing management team through death, disability or otherwise could seriously harm our prospects. In August 2001, we entered into an agreement (as
amended in March 2002) with Mr. Meredith to serve as our President and Chief Executive Officer. In April 2003, we entered into an agreement with Mr. Wingard to serve as our Secretary and Chief Financial Officer. If Mr. Meredith or Mr. Wingard ceases
to perform management services for us, or we consider their performance unsatisfactory, we will be required to secure management services from other personnel. There can be no assurance in such instance that we would be able to obtain qualified
management or advisory services or that such services could be obtained on favorable terms. In addition, our agreement in conjunction with the Advisor provided for limitations of the costs in connection with our management. Under self-management,
there are no such limitations. As a result, the costs of being a self-advised and self-administered REIT could significantly exceed the fees paid to the Advisor or payable to a successor advisor.



Becoming a self-advised and self-administered REIT has increased the
influence of our current management over our affairs



Pursuant to Mr. Merediths employment agreement, on March 3, 2003 we granted Mr. Meredith options to purchase 66,667 split adjusted shares of our common stock at a strike price equal to fair market value of our stock at the
grant date. These options vest over a period of two years, calculated as if the options had been granted upon Mr. Merediths employment on August 22, 2001, thus 50,000 options are currently vested. Once the options are fully vested, and
including shares Mr. Meredith owns as of May 12, 2003, Mr. Meredith will beneficially own approximately 9.4% of our issued and outstanding common stock, assuming exercise of these options. Mr. Merediths employment agreement provides for
severance benefits to Mr. Meredith following a change of control, which would include certain changes in the composition of the board. If enough current board members resign for any reason, we may be obligated to pay these



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benefits to Mr. Meredith. Mr. Meredith may purchase additional shares. Under our restated certificate of
incorporation, Mr. Meredith is permitted to own up to 29% of our outstanding shares, and accordingly, no other stockholder may own over 5% of our outstanding shares. By assuming the services previously performed by the Advisor, and particularly if
Mr. Meredith acquires a significant ownership interest in us, Mr. Meredith and our management will be in a position to exercise greater control or significant influence over our affairs.



Provisions that Could Limit a Change in Control or Deter a Takeover



Restrictions in our organizational documents and Delaware law could limit a
change in control or deter a takeover.



A number of the
provisions in our certificate of incorporation and bylaws have or may have the effect of deterring a takeover of the company. These provisions include:



| |  |  | REIT protective provisions that limit stock ownership for anyone other than Mr. Meredith to 5.0%;
| | - |  | -------------------------------------------------------------------------------------------------



| |  |  | a classified board of directors with staggered, three-year terms;
| | - |  | -----------------------------------------------------------------



| |  |  | provisions giving the board of directors sole power to set the number of directors;
| | - |  | -----------------------------------------------------------------------------------



| |  |  | provisions giving stockholders the right to remove directors only for cause and only by the affirmative vote of a majority of the total voting power of the
outstanding shares;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | prohibition on stockholders from calling special meetings of stockholders; and
| | - |  | ------------------------------------------------------------------------------



| |  |  | establishment of advance notice requirements for stockholder proposals and nominations for election to the board of directors at stockholder meetings.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



In addition, Section 203 of the Delaware General
Corporation Law provides, in relevant part, that the corporation shall not engage in any business combination for a period of three years following the time on which such stockholder first becomes an interested stockholder unless



| | (a) |  | before the stockholder first becomes an interested stockholder, the board of directors of the corporation approved either the business combination or the
transaction which resulted in the stockholder becoming an interested stockholder,
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) |  | upon becoming an interested stockholder, the stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the
transaction commenced (excluding certain shares) or
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) |  | on or after the time on which the stockholder becomes an interested stockholder, the business combination is approved by the board of directors and
authorized at an annual or special meeting of stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder.
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



These provisions may prevent our stockholders from receiving the benefit from
any premium to the market price of our common stock offered by a bidder in a takeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the



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prevailing market price of our common stock if they are viewed as discouraging takeover attempts in the
future. These provisions may facilitate management entrenchment that may delay, defer or prevent a change in our control, which may not be in the best interests of our stockholders.



Change of control agreements could deter a change of control.



We have entered into change of control agreements with Mr. Meredith and Mr.
Wingard providing for the payment of money to them upon the occurrence of a change of control, as defined in these agreements. If, within one year following a change of control, either Mr. Meredith or Mr. Wingard resigns or is terminated, we will
make a severance payment equal to a portion of the executives base salary, his average bonus over last three years and medical and other benefits. Based upon his current salary and benefit levels, this provision would result in payments
totaling at least $200,000 and $125,000 to Mr. Meredith and Mr. Wingard, respectively. The agreements with Mr. Meredith and Mr. Wingard may deter changes of control because of the increased cost for a third party to acquire control of us, thus
limiting the opportunity for stockholders to receive a premium for our common stock over then-prevailing market prices.



Tax Risks



Although we believe we are organized and are operating so as to qualify as a REIT under the Internal Revenue Code, we cannot give assurances that we have
in fact operated or will be able to continue to operate in a manner so as to qualify or remain so qualified.



We may incur tax liabilities as a consequence of failure to qualify as a REIT.



Qualification as a REIT involves the application of highly technical and complex Internal Revenue Code provisions for which there are only limited
judicial or administrative interpretations and the determination of various factual matters and circumstances not entirely within our control. For example, to qualify as a REIT in 2003, at least 95% of our taxable gross income in any year must be
derived from qualifying sources and we must make distributions to stockholders aggregating annually at least 90% of our REIT taxable income (excluding net capital gains). Thus, to the extent revenues from non-qualifying sources represents more than
5% of our gross income in any taxable year, we will not satisfy the 95% income test and may fail to qualify as a REIT, unless certain relief provisions apply. Even if those relief provisions apply, a tax would be imposed with respect to excess net
income, which could have a material adverse effect on us and our ability to make distributions to stockholders and to pay amounts due on our debt. We cannot give assurances that new legislation, new regulations, administrative interpretations or
court decisions will not change the tax laws with respect to qualification as a REIT or the federal income tax consequences of such qualification. If we fail to qualify as a REIT, we will be subject to federal income tax (including any applicable
alternative minimum tax) on our taxable income at corporate rates, which would likely have a material adverse effect on us and our ability to make distributions to stockholders and to pay amounts due on our debt. In addition, unless entitled to
relief under certain statutory provisions, we would also be disqualified from treatment as a REIT for the four taxable years following the year during which REIT qualification is lost. This treatment would reduce funds available for investment or
distributions to stockholders because of the additional tax liability to us for the year or years involved. In addition, we would no longer be required to make, and indeed may not make, distributions to stockholders. To the extent that distributions
to stockholders would have been made in anticipation of qualifying as a REIT, we might be required to borrow funds or to liquidate certain investments to pay the applicable tax. Further, to maintain our real estate investment trust status, we may
borrow funds on a short-term basis to meet the real estate



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investment trust distribution requirements, even if the then-prevailing market conditions are not
favorable for these borrowings.



Gain on disposition of assets
deemed held for sale in the ordinary course is subject to 100% tax.



We currently are attempting to sell six of our properties. If we sell any of our properties, the Internal Revenue Service may determine that the sale is a disposition of an asset held primarily for sale to customers in the ordinary
course of a trade or business. Gain from this kind of sale generally will be subject to a 100% tax. Whether an asset is held primarily for sale to customers in the ordinary course of a trade or business depends on the particular facts
and circumstances of the sale. Although we will attempt to comply with the terms of safe-harbor provisions in the Internal Revenue Code prescribing when asset sales will not be so characterized, we cannot assure stockholders that we will be able to
do so.



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



As of March 31, 2003 and December 31, 2002, all of our debt instruments have fixed rates, and we do not have exposure to market risk for changes in interest rates. Therefore, subsequent changes in
market interest rates do not affect the rate of our debt. We have in the past and may in the future, however, enter into debt instruments that bear interest at a variable rate. We generally enter into fixed and variable rate debt obligations to
support general corporate purposes, including acquisitions, capital expenditures and working capital needs. We periodically evaluate the level of variable rate debt with respect to total debt and other factors, including our assessment of the
current and future economic environment. We did not have any derivative financial instruments on March 31, 2003 or December 31, 2002.



The fair values of our financial instruments (including such items in the financial statement captions as cash, other assets and liabilities other than
notes payable) approximate their carrying or contract values based on their nature, terms and interest rates that approximate current market rates. The fair value of notes payable is estimated based on a discounted cash flow analysis with interest
rates similar to that of current market borrowing arrangements. Under this analysis, the fair value of our notes payable exceeded their carrying value by approximately $1,836,000 at December 31, 2002.



Many of our fixed rate loans have significant balloon payments that would need
to be refinanced at maturity, possibly at unfavorable rates. We cannot predict the effect of adverse changes in interest rates on our variable rate debt and, therefore, our exposure to market risk. We can give no assurances that fixed rate,
long-term debt will be available to us at advantageous pricing.



ITEM 4. CONTROLS AND PROCEDURES



Within 90 days prior to the filing date of this quarterly report, we carried out an evaluation, under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of
the effectiveness of our disclosure controls and procedures as defined in Exchange Act Rule 13a-14. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our current disclosure controls and
procedures are effective.

Until January 2003, the Advisor provided certain accounting services to us at no cost to us beyond the termination
of their contract. These services included writing checks, billing tenants, processing payroll and journal entries. In January 2003, we took over these services. To perform this work, we have engaged an independent contractor to perform basic
accounting functions, subject to review by our management. In January 2003, as part of our assumption of the services previously



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provided by the Advisor, we changed the check signing requirement to allow for any amount of funds to be
disbursed with the signature of either the Chief Executive Officer or Chief Financial Officer. Previously, the Advisor required two authorized signatures for checks over $1,000. We believe this change does not adversely affect internal accounting
controls. There have been no significant changes in our internal controls or in other factors that could significantly affect internal controls subsequent to the date of the evaluation by our Chief Executive Officer and Chief Financial Officer.



The design of any system of controls and procedures is based in
part upon certain assumptions about the likelihood of future events. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.



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PART IIOTHER INFORMATION



ITEM 1. LEGAL PROCEEDINGS



We are a
defendant in a lawsuit entitled John Lonberg; Ruthee Goldkorn v. Sanborn Theaters, Inc. and So-Cal Cinema, Inc.; Salts, Troutman and Kaneshiro, Inc.; West Coast Realty Investors, Inc., in the U.S. District Court for the Central District of
California (Case #CV-97-6598AHM(JGx)). We were added as a defendant in the plaintiffs First Amended Complaint filed May 7, 1998.



The plaintiffs alleged violations of the federal Americans with Disabilities Act and the California Unruh Civil Rights Act with respect to their
movie-going experiences, including inadequate physical accommodations for individuals with disabilities and insensitive theater personnel. Sanborn Theaters, Inc (Sanborn) is the tenant and theater operator. Salts, Troutman and Kaneshiro,
Inc. is the architect who designed the theater and its interiors.



The plaintiffs seek actual damages of $1,000 for each violation of law; three times actual damages; and attorneys fees, expenses and costs. The plaintiffs also seek mandatory injunctive relief requiring the defendants to
reconfigure the theater.



The plaintiffs have agreed to dismiss
their claims under the Unruh Civil Rights Act.



The U.S.
Department of Justice, Civil Rights Division (DOJ) filed a Motion to Intervene in the case on March 1, 1999. DOJ has sued Sanborn only, and preliminary discussions have been held between the DOJ and Sanborn. Sanborn intends to vigorously
defend against the DOJ.



We cannot determine the likelihood of an
unfavorable outcome or range of potential loss, if any. We believe we have complied with all applicable provisions of law and intend to vigorously defend against the allegations contained in the lawsuit. We believe that the lawsuit will not have a
material impact on our continuing operations or overall financial condition.



On July 31, 2002, James E. Prock filed an action against us and our Chief Executive Officer, Mr. Allen Meredith, in Los Angeles County Superior Court. Mr. Prock was an employee of the Advisor and not an employee of West Coast Realty
Investors, Inc. He provided services as our Chief Operating Officer from 1992 to August 2001 and as Acting Chief Operating Officer from August 2001 to March 2002. The lawsuit alleges that during the fall of 2001 and winter of 2002, we purportedly
made promises to Mr. Prock that we would hire him as a full time managerial employee after we became a self-managed REIT. The lawsuit seeks damages for unspecified purported lost compensation and punitive damages, and the discovery process has
commenced. We cannot determine the likelihood of an unfavorable outcome or range of potential loss, if any. We believe the suit is without merit and intend to vigorously defend against the allegations contained in the lawsuit. We believe that the
lawsuit will not have a material impact on our continuing operations or overall financial condition.



ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS



None.



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ITEM 3. DEFAULTS UPON SENIOR SECURITIES



None.



ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS



None.



ITEM 5. OTHER INFORMATION



None.



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K



|(a) |  | EXHIBITS
|--- |  | --------



|No.  |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                            
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|4.1  |  | Share Certificate                                                                                                                                                                                                                                                                                                                                                                                                                      
|    
|10.1 |  | Lease dated February 1, 2003 between Ford Land Company, LLC and West Coast Realty
Investors, Inc.                                                                                                                                                                                                                                                                                                                                      
|    
|99.1 |  | Certification of Allen K. Meredith, the companys Chief Executive Officer and Charles P. Wingard, the
companys Chief Financial Officer, pursuant to Section 906 of the Sarbanes Oxley Act of 20002. In accordance with applicable SEC guidance, these certifications accompany this report, and are being furnished solely pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 and are not being filed as a part of this report.



|(b) |  | REPORTS ON FORM 8-K
|--- |  | -------------------



| |  |  | On February 28, 2003, we filed a Current Report on Form 8-K under Item 5 concerning a press release of our earnings for the quarter and year ended December 31, 2002.
No financial statements were filed.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | On March 21, 2003, we filed a Current Report on Form 8-K under Item 5 announcing the purchase of approximately 2.5 acres of land in Garden Grove, California. No
financial statements were filed.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | On March 31, 2003, we filed a Current Report on Form 8-K under Item 7 certifications under the Sarbanes-Oxley Act of 2002 by Allen K. Meredith and Charles P.
Wingard. No financial statements were filed.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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SIGNATURES



Pursuant to the requirements of the 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



|                    |  | MEREDITH ENTERPRISES, INC.                                           
|------------------- |  | ---------------------------------------------------------------------
|                   
|Date:  May 14, 2003 |  | /s/    CHARLES P.
WINGARD                                            
|                    |  | Charles P. Wingard                                                   
|                    |  | Vice President/Treasurer (principal financial and accounting officer)



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Certification



I, Allen K. Meredith,
certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of Meredith Enterprises, Inc, (formerly West Coast Realty Investors, Inc);
|-- |  | -----------------------------------------------------------------------------------------------------------------------------



|2. |  | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3. |  | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4. |  | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and we have:
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in which this report is being prepared;
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the
Evaluation Date); and
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c) |  | presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------



|5. |  | The registrants other certifying officer and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee
of registrants board of directors (or persons performing the equivalent function):
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to record, process, summarize
and report financial data and have identified for the registrants auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal controls; and
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



|6. |  | The registrants other certifying officer and I have indicated in this report whether or not there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Date: May 14, 2003 |  | /s/    ALLEN K.
MEREDITH                                           
|------------------ |  | -------------------------------------------------------------------
|                   |  | Allen K. Meredith                                                  
|                   |  | Chairman of the Board of Directors,                                
|                   |  | President and Chief Executive Officer (principal executive officer)



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##### Table of Contents



Certification



I, Charles P. Wingard,
certify that:



|1. |  | I have reviewed this report on Form 10-Q of Meredith Enterprises, Inc, (formerly West Coast Realty Investors, Inc);
|-- |  | -------------------------------------------------------------------------------------------------------------------



|2. |  | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3. |  | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4. |  | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and we have:
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in which this report is being prepared;
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the
Evaluation Date); and
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c) |  | presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------



|5. |  | The registrants other certifying officer and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee
of registrants board of directors (or persons performing the equivalent function):
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to record, process, summarize
and report financial data and have identified for the registrants auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal controls; and
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



|6. |  | The registrants other certifying officer and I have indicated in this report whether or not there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Date: May 14, 2003 |  | /s/    CHARLES P.
WINGARD                   
|------------------ |  | --------------------------------------------
|                   |  | Charles P. Wingard                          
|                   |  | Secretary and Chief Financial Officer       
|                   |  | (principal financial and accounting officer)



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