UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549___________________FORM 10-Q_________________________ ýQUARTERLY REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the quarterly period ended October 31, 2009 OR   ̈TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  Commission file number 0-50356  EAST COAST
DIVERSIFIED CORPORATION(Exact Name Of Registrant
As Specified In Its Charter) Nevada
    55-0840109(State of Incorporation)
    (I.R.S. Employer
    Identification No.)1475 West CypressCreekRoad, Suite 202, Ft. Lauderdale, FL
    33309(Address of Principal Executive Offices)
    (ZIP Code) Registrant's
Telephone Number, Including Area Code: (786) 777-0808 Securities
Registered Pursuant to Section 12(g) of The Act: Common Stock, $0.001 Indicate by check
mark whether the registrant (1) has filed all reports required to be filed by Section 13
or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. YesxNo ̈ On January 5, 2010,
the Registrant had 7,260,639 shares of common stock, par value $0.001 outstanding. Indicate by check
mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes  xNo  ̈ Indicate by check
mark whether the registrant is a large accelerated filer, an accelerated filer, or a
non-accelerated filer. Large accelerated
    filer  ̈
    Accelerated filer  ̈
    Non-Accelerated
    filer  ̈
    Smaller reporting
    companyx




TABLE OF CONTENTS Item
    
    Description
    Page**PART I - FINANCIAL
    INFORMATION**ITEM 1.
    
    FINANCIAL
    STATEMENTS.
    
    3ITEM 2.
    
    MANAGEMENT'S
    DISCUSSION AND ANALYSIS AND PLAN OF OPERATION.
    
    3ITEM 3.
    
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    6ITEM 4.
    
    CONTROLS
    AND PROCEDURES.
    
    6**PART II - OTHER
    INFORMATION**ITEM 1.
    
    LEGAL
    PROCEEDINGS.
    
    6ITEM 1A.
    
    RISK FACTORS
    
    6ITEM 2.
    
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
    PROCEEDS
    
    6ITEM 3.
    
    DEFAULT
    UPON SENIOR SECURITIES.
    
    6ITEM 4.
    
    SUBMISSION
    OF MATERS TO A VOTE OF SECURITY HOLDERS.
    
    6ITEM 5.
    
    OTHER
    INFORMATION.
    
    6ITEM 6.
    
    EXHIBITS.
    
    6




PART I - FINANCIAL INFORMATION ITEM
1. FINANCIAL STATEMENTSBack
to Table of Contents The Registrant's financial statements for the three and
six-month periods ended October 31, 2009 and 2008 are attached to this quarterly report. Financial Statements ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATIONBack to Table of Contents The following discussion contains
forward-looking statements. Forward-looking statements give our current expectations or
forecasts of future events. You can identify these statements by the fact that they do not
relate strictly to historical or current facts. They use of words such as
"anticipate," "estimate," "expect," "project,"
"intend," "plan," "believe," and other words and terms of
similar meaning in connection with any discussion of future operating or financial
performance. From time to time, we also may provide forward-looking statements in other
materials we release to the public. East Coast
Diversified Corp. (the "Company" or "Registrant") was incorporated
under the laws of the State of Florida on May 27, 1994 under the name Plantastic Corp. The
Company was formed for the purpose of purchasing and operating a tree farm and nursery.
The Company was unsuccessful in this venture and in March 1997, the Company amended its
articles of incorporation, reorganized its capital structure and changed its name to Viva
Golf, USA Corp. The Company then acquired the assets of Viva Golf, USA Corp., a Delaware
corporation, which consisted of a golf equipment marketing plan and other related assets.
The Company unsuccessfully engaged in the business of golf club manufacturing and
marketing and ceased those operations in 1998. In June 2003, the Company changed its name
to East Coast Diversified Corp. from Lifekeepers International, Inc. and changed its
domicile to Nevada. **Acquisition
and Divestiture ofMiami
Renaissance Group, Inc.** On April 26, 2006, the Registrant entered into a definitive Share
Exchange Agreement (the "Agreement") to acquire 100% of the issued and
outstanding shares of Miami Renaissance Group, Inc. ("MRG"), a privately-owned
Florida corporation, in exchange for the issuance of 4,635,000 restricted shares of the
Registrant's common stock and 167,650 preferred stock designated as Series A Convertible
Preferred Stock ("Preferred Stock"). The Registrant's officers and directors,
who did not own any shares of common stock of the Registrant prior to this Agreement, are
also the majority shareholders of MRG. The Agreement was adopted by the unanimous consent
of the Board of Directors of the Registrant and written consent of the majority
shareholders of the Registrant; and by unanimous consent of the Board of Directors of MRG
and by written consent of the majority shareholders of MRG.

Pursuant to the Agreement, the Registrant issued a total
of 4,635,000 shares of common stock and 158,650 shares of Preferred stock to the
shareholders of the MRG in exchange for the 20,500,000 issued and outstanding shares of
MRG. Following the closing of the Agreement, the shareholders of MRG shall own 63.75%
of the issued and outstanding shares of common stock of the Registrant. The Company entered into a Stock Sale Agreement, dated as of February 20, 2008
(Stock Sale Agreement), pursuant to which ECDC will sell and MRG Acquisition
Corp. (MRGA is a Delaware corporation and was formed for the purpose of acquiring
MRG") will acquire 100% of the capital stock of MRG (MRG Shares) ,
representing substantially all of the assets of ECDC, in consideration for the forgiveness
of liabilities in the amount of $1,051,471 owed by ECDV to certain affiliated persons. On
September 30, 2009, the Company completed the sale of MRG and its new business objective
is to seek an operating company. New Business
Objectives of the Registrant As
a result of the sale of MRG, the Registrant has no present operations and has determined
to direct its efforts and limited resources to pursue potential new business
opportunities. The Registrant does not intend to limit itself to a particular industry and
has not established any particular criteria upon which it shall consider and proceed with
a business opportunity. Following the Registrant's fiscal year ended December
31, 2001, its common stock has been subject to quotation on the pink sheets. There is
currently only a limited trading market in the Registrant's shares. There can be no
assurance that there will be an active trading market for our common stock. In the event
that an active trading market commences, there can be no assurance as to the market price
of our shares of common stock, whether any trading market will provide liquidity to
investors, or whether any trading market will be sustained. Registrant's
executive officer/director intends to devote such time as he deems necessary to carry out
the Registrant's affairs. The exact length of time required for the pursuit of any new
potential business opportunities is uncertain. No assurance can be made that the
Registrant will be successful in its efforts. We cannot project the amount of time that
our executive officer/director will actually devote to the Registrant's plan of operation. Plan of Operation We have no present operations or
revenues and our current activities are related to seeking new business opportunities,
including seeking an acquisition or merger with an operating company. If our management
seeks to acquire another business or pursue a new business opportunity, it would have
substantial flexibility in identifying and selecting a prospective business. Registrant
would not be obligated nor does management intend to seek pre-approval from our
shareholders. Under the laws of the State of Delaware, the consent of holders of a
majority of the issued and outstanding shares, acting without a shareholders meeting, can
approve an acquisition. The Registrant is entirely dependent on
the judgment of its executive officer/director in connection with pursuing a new business
opportunity or a selection process for a target operating company. In evaluating a
prospective new business opportunity or an operating company, he would consider, among
other factors, the following: (i) costs associated with effecting a transaction; (ii)
equity interest in and opportunity to control the prospective candidate; (iii) growth
potential of the target business; (iv) experience and skill of management and availability
of additional personnel; (v) necessary capital requirements; (vi) the prospective
candidate's competitive position; (vii) stage of development of the business opportunity;
(viii) the market acceptance of the business, its products or services; (ix) the
availability of audited financial statements of the potential business opportunity; and
(x) the regulatory environment that may be applicable to any prospective business
opportunity. The foregoing criteria are not intended
to be exhaustive and there may be other criteria that management may deem relevant. In
connection with an evaluation of a prospective or potential business opportunity,
management may be expected to conduct a due diligence review. Liquidity and Capital Resources We will use our limited personnel and
financial resources in connection with seeking new business opportunities, including
seeking an acquisition or merger with an operating company. It may be expected that
entering into a new business opportunity or business combination will involve the issuance
of a substantial number of restricted shares of common stock. If such additional
restricted shares of common stock are issued, our shareholders will experience a dilution
in their ownership interest in the Registrant. If a substantial number of restricted
shares are issued in connection with a business combination, a change in control may be
expected to occur. In
connection with our plan to seek new business opportunities and/or effecting a business
combination, we may determine to seek to raise funds from the sale of restricted stock or
debt securities.We have no agreements to issue any debt or equity securities and cannot
predict whether equity or debt financing will become available at terms acceptable to us,
if at all.  Ao October 31, 2009, we had $6 in current assets and had $106,862
in current liabilities. On October 31, 2009, our negative working capital was $106,856.  There
are no limitations in our articles of incorporation on our ability to borrow funds or
raise funds through the issuance of restricted common stock to effect a business
combination. Our limited resources and lack of operating history may make it difficult to
do borrow funds or raise capital. Our inability to borrow funds or raise funds through the
issuance of restricted common stock required to effect or facilitate a business
combination may have a material adverse effect on our financial condition and future
prospects, including the ability to complete a business combination. To the extent that
debt financing ultimately proves to be available, any borrowing will subject us to various
risks traditionally associated with indebtedness, including the risks of interest rate
fluctuations and insufficiency of cash flow to pay principal and interest, including debt
of an acquired business. ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKBack to Table of Contents We have not entered
into, and do not expect to enter into, financial instruments for trading or hedging
purposes. ITEM 4.
CONTROLS AND PROCEDURESBack
to Table of Contents Evaluation of disclosure controls and procedures As of October 31, 2009, the Company's chief executive
officer and chief financial officer conducted an evaluation regarding the effectiveness of
the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) or
15d-15(e) under the  Exchange Act. Based upon the evaluation of these controls and
procedures, our chief executive officer and chief financial officer concluded that our
disclosure controls and procedures were effective as of the end of the period covered by
this report. Changes in internal controls. During the quarterly period covered by this report, no changes
occurred in our internal control over financial reporting that materially affected, or is
reasonably likely to materially affect, our internal control over financial reporting. PART II - OTHER INFORMATION ITEM 1. LEGAL
PROCEEDINGSBack to Table of
Contents The Registrant's officers and directors
are not aware of any threatened or pending litigation to which the Registrant is a party
or which any of its property is the subject and which would have any material, adverse
effect on the Registrant. ITEM 1A.
RISK FACTORSBack to Table of
Contents In addition to the other
information set forth in this report, you should carefully consider the factors discussed
in Part I, Item 1. Description of Business, subheading Risk Factors in
our Annual Report on Form 10-K for the year ended April 30, 2009, which could
materially affect our business, financial condition or future results. The risks described
in our Annual Report on Form 10-K are not the only risks facing our company.
Additional risks and uncertainties not currently known to us or that we currently deem to
be immaterial also may materially adversely affect our business, financial condition
and/or operating results. ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDSBack to Table of Contents None. ITEM
3. DEFAULTS UPON SENIOR SECURITIESBack to Table of Contents None. ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSBack to Table of Contents None. ITEM
5. OTHER INFORMATIONBack
to Table of Contents None. ITEM
6. EXHIBITSBack to Table of
Contents (a) The following documents are filed as exhibits to
this report on Form 10-QSB or incorporated by reference herein. Exhibit
    No.
    Description31
    Certification of CEO pursuant
    to Rule 13a-14(a) or 15d-14(a) of the Exchange Act pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002.32
    Certification of CEO pursuant
    to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
    2002.




SIGNATURES Pursuant to the
requirements of the Securities Exchange Act of 1934, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on the date
indicated. /s/ Frank RovitoFrank Rovito
   *Chief Executive Officer and Chief Financial Officer*Dated: January 5, 2009




**EAST
    COAST DIVERSIFIED CORPORATION AND CONSOLIDATED SUBSIDIARIES**(A Development Stage Company)Back to Table of ContentsConsolidated Balance SheetsOctober 31, 2009 and April 30, 2009****
    
    **October 31, 2009**
    
    **April 30, 2009**(Audited Adjusted for 1:100 reverse
    spilt)ASSETSCurrent assets:Cash and
    equivalents
    $
    6
    $
    225Total current assets
    
    6
    
    225Leasehold improvements,
    (net of accumulated amortization of $0)
    
    -
    
    430,373Other assets:Cost of
    liquor license
    
    -
    
    93,464Total other assets
    
    -
    
    93,464**Total assets**
    $
    6
    $
    524,062LIABILITIES
    AND STOCKHOLDERS' DEFICITCurrent liabilities:Accounts and
    accrued expenses payable
    $
    76,237
    $
    1,238,626Current
    portion, convertible notes payable
    
    14,450
    
    711,269Current portion, convertible note payable, related party
    
    -
    
    408,597Accrued
    interest
    
    16,175
    
    170,696Total current liabilities
    
    106,862
    
    2,529,188Non-current liabilities:Convertible
    note payable, related party
    
    -
    
    85,897Deferred
    rent expense
    
    -
    
    85,897Total non-current
    liabilities
    
    -
    
    2,615,085**Total liabilities**
    
    106,862
    
    2,615,085Minority interest in
    Miami Renaissance Partners, Ltd., a partnership subsidiary
    
    -
    
    122Stockholders' deficit:Preferred
    stock, par value 0.001 par value, 1,000,000 authorizednone
    and 167,650 issued and outstanding, respectively
    
    -
    
    -Common stock,
    $0.001 par value, 74,000,000 shares authorized;30,081,216 and 8,816,216 shares issued and outstanding, respectively
    
    7,261
    
    363Additional
    paid-in capital
    
    4,691,645
    
    2,339,298Accumulated
    deficit
    
    (4,805,762)
    
    (4,410,306)Less: stock
    subscription receivable
    
    -
    
    (20,500)Total stockholders' deficit
    
    (106,856)
    
    (2,091,145)**Total liabilities and stockholders' deficit**
    $
    6
    $
    524,062See the summary of significant accounting policies and the accompanying notes to
    the financial statements.




EAST COAST
    DIVERSIFIED CORPORATION AND CONSOLIDATED AFFILIATE(A Development Stage Company)Back
    to Table of ContentsConsolidated Statements of Operations
    (During the Development Stage)********
    
    
    
    
    
    
    
    
    
    **For
    the Period**
    
    **For
    the Period****Three
    Months**
    
    **Three
    Months**
    
    **Six
    Months**
    
    **Six
    Months**
    
    **from
    Inception**
    
    **from
    Inception****ended**
    
    **ended**
    
    **ended**
    
    **ended**
    
    **(April
    26, 2006) to**
    
    **(April
    26, 2006) to****October 31, 2009**
    
    **October 31, 2008**
    
    **October 31, 2009**
    
    **October 31, 2008**
    
    **April 30, 2009**
    
    **October 31, 2009**Revenues
    $
    -
    $
    -
    $
    
    $
    
    $
    -
    $
    -Operating expenses:Consulting fees
    and servicessatisfied by
    issuance of common stock
    
    -
    
    -
    
    -
    
    -
    
    52,500
    
    52,500Selling, general
    and administrative
    
    105,370
    
    98,050
    
    203,179
    
    209,402
    
    1,244,663
    
    1,447,841Total operating expenses
    
    105,370
    
    98,050
    
    203,179
    
    209,402
    
    1,297,163
    
    1,500,341Net loss from
    operations during development stage
    
    (105,370)
    
    (98,050)
    
    (203,179)
    
    (209,402)
    
    (1,297,163)
    
    (1,500,341)Other income (expenses):Interest income
    
    -
    
    -
    
    -
    
    -
    
    544
    
    544Gain on settlement
    of accrued liabilities
    
    -
    
    79,339
    
    -
    
    79,339
    
    79,339
    
    79,339Loss on debt
    conversion
    
    (205,530)
    
    -
    
    (205,530)
    
    -
    
    -
    
    (205,530)Interest expense
    
    (3,133)
    
    (13,003)
    
    (16,477)
    
    (25,988)
    
    (143,421)
    
    (159,898)Total other expenses
    
    (208,663)
    
    66,336
    
    (222,007)
    
    53,351
    
    (63,538)
    
    (285,545)Net loss before minority
    interest
    
    (314,033)
    
    (31,714)
    
    (425,185))
    
    (140,265)
    
    (1,360,701)
    
    (1,785,886)Add (less): 25% minority
    interestin net profit
    (loss) of affiliate
    
    -
    
    -
    
    -
    
    -
    
    (122)
    
    (122)Net loss
    after minority interest
    $
    (314,033)
    $
    (31,714)
    $
    (425,185))
    $
    (140,265)
    $
    (1,360,823)
    $
    (1,786,008)Basic and diluted net lossper
    weighted-average sharesof common stock
    outstanding
    $
    (0.046)
    $
    (0.381)
    $
    (0.119)
    $
    (1.69)
    $
    (13.60)
    $
    (13.72)Weighted average number of
    sharesof common stock outstanding
    
    6,810,879
    
    83,134
    
    3,566,943
    
    83,134
    
    100,061
    
    130,167See
    the summary of significant accounting policies and the accompanying notes to the financial
    statements.




EAST COAST DIVERSIFIED CORPORATION AND CONSOLIDATED
    SUBSIDIARIES(A Development Stage Company)Back to Table of ContentsConsolidated Statement of
    Stockholders' Deficit (During Development Stage)For
    the period July 31, 2009and
    for the Period from inception (April 26, 2006) to October 31, 2010Additional
    
    Stock
    
    
    
    TotalPreferred
    
    Common
    
    Paid-in
    
    Subscription
    
    Accumulated
    
    stockholders'Shares
    
    Amount
    
    Shares
    
    Amount
    
    Capital
    
    Receivable
    
    Deficit
    
    deficitBalance April
    30, 2004 (adjusted for 1:100 reverse split)
    -
    $
    -
    
    88,489
    $
    88
    $
    1,982,573
    $
    -
    $
    (2,075,474)
    $
    (92,813)Net loss for the year ended
    April 30, 2005
    -
    
    -
    
    -
    
    -
    
    -
    
    -
    
    (60,353)
    
    (60,353)Balance April
    30, 2005 (adjusted for 1:100 reverse split)
    -
    
    -
    
    88,489
    
    88
    $
    1,982,573
    
    -
    
    (2,135,827)
    
    (153,166)Miami Renaissance Group's shareexchange for Registrant's
    shares (adjusted for 1:100 reverse split)
    167,650
    
    168
    
    46,350
    
    46
    
    20,286
    
    (20,500)
    
    (913,656)
    
    (913,656)Net loss for the year ended
    April 30, 2006
    -
    
    -
    
    -
    
    -
    
    -
    
    -
    
    (21,643)
    
    (21,643)Balance April
    30, 2006 (adjusted for 1:100 reverse split)
    167,650
    $
    168
    
    134,839
    $
    134
    $
    2,002,859
    $
    (20,500)
    $
    (3,071,126)
    $
    (1,088,465)Common stock issued for cash
    (adjusted for 1:100 reverse split)
    -
    
    -
    
    9,950
    
    10
    
    198,990
    
    -
    
    -
    
    199,000Common stock issued for
    services,including $40,000
    capitalizedas leasehold
    improvements (adjusted for 1:100 reverse split)
    -
    
    -
    
    5,500
    
    6
    
    92,494
    
    -
    
    -
    
    92,500Net loss for the yer ended April
    30, 2007
    -
    
    -
    
    -
    
    -
    
    -
    
    -
    
    (507,746)
    
    (507,746)Balance April
    30, 2007 (adjusted for 1:100 reverse split)
    167,650
    $
    168
    
    150,289
    $
    150
    $
    2,294,343
    $
    (20,500)
    $
    (3,578,872)
    $
    (1,304,711)Net loss for the yer ended April
    30, 2008
    -
    
    -
    
    -
    
    -
    
    -
    
    -
    
    (461,691)
    
    (461,691)Balance April
    30, 2008 (adjusted for 1:100 reverse split)
    167,650
    $
    168
    
    150,289
    $
    150
    $
    2,294,343
    $
    (20,500)
    $
    (4,040,563)
    $
    (1,766,402)Preferred shares converted to
    common stock (adjusted for 1:100 reverse split)
    (167,650)
    
    (168)
    
    167,650
    
    168
    
    -
    
    -
    
    -
    
    -Common stock issued on
    settlement ofaccrued expenses (adjusted for
    1:100 reverse split)
    -
    
    -
    
    45,000
    
    45
    
    44,955
    
    -
    
    -
    
    45,000Net loss for the yer ended April
    30, 2009
    -
    
    -
    
    -
    
    -
    
    -
    
    -
    
    (369,743)
    
    (369,743)Balance, April
    30, 2009 (adjusted for 1:100 reverse split)
    -
    $
    -
    
    362,939
    $
    363
    $
    2,339,298
    $
    (20,500)
    $
    (4,410,306)
    $
    (2,091,145)Common stock issued for debt
    conversion on notes andaccrued interest
    payable
    -
    
    -
    
    6,897,700
    
    6,898
    
    1,027,757
    
    -
    
    -
    
    1,034,655Spin off Miami Renaissance from
    ECDC
    
    
    
    
    
    
    
    
    1,324,590
    
    20,500
    
    
    
    1,345,090Net loss for the period ended
    October 31, 2009
    -
    
    -
    
    -
    
    -
    
    -
    
    -
    
    (395,456)
    
    (395,456)Balance,
    October 31, 2009 (adjusted for 1:100 reverse split)
    -
    $
    -
    
    7,260,639
    $
    7,261
    $
    4,691,645
    $
    -
    $
    (4,805,762)
    $
    (106,856)Seethe summary of significant accounting policies and the
    accompanying notes to the financial statements.




EAST COAST DIVERSIFIED
    CORPORATION AND CONSOLIDATED AFFILIATE(A Development Stage Company)Back to Table of ContentsConsolidated
    Statement of Cash Flows(During the Development Stage)For the six months ended October 31, 2009 and for the
    Period from inception (April 26, 2006) to October 31, 2009**For the
    Period**
    
    **Period from****Six Months**
    
    **From
    Inception**
    
    **Inception****Ended**
    
    **(April 26,
    2006) to**
    
    **(April 26,
    2006) to****October 31, 2008**
    
    **April 30, 2009**
    
    **October 31, 2009**Net loss
    $
    (425,185)
    $
    (1,360,823)
    $
    (1,786,008)Cash flows from operating activities:Adjustments to reconcile net loss to cash used in operating activities:Minority interest income 25% minority interest in net profit of affiliate
    
    -
    
    122
    
    122Common stock issued for consulting fees and services
    
    -
    
    52,500
    
    52,500Common
    stock issued on settlement of accrued expenses
    
    -
    
    45,000
    
    45,000Common stock issued for
    debt conversion on notes and accrued interest payable
    
    1,034,655
    
    -
    
    1,034,655Decrease in notes and
    accrued interest payable through issuance of common stock
    
    (689,769)
    
    -
    
    (689,769)Changes
    in operating assets and liabilities:Increase in accounts and accrued expenses payable
    
    186,028
    
    755,026
    
    941,054(Decrease) increase in deferred rent expense
    
    (740)
    
    -
    
    -(Decrease) increase in accrued interest
    
    (122,878)
    
    142,642
    
    19,764Net cash used in operating activities
    
    (17,889)
    
    (331,265)
    
    (349,154)Cash
    flows from investing activities:Net cash acquired in acquisition of Miami Renaissance Group, Inc.
    
    -
    
    2,451
    
    2,451Costs paid in acquiring pending liquor license
    
    -
    
    (89,964)
    
    (89,964)Acquisition of leasehold improvements
    
    -
    
    (80,469)
    
    (80,469)Net cash (used in) provided by investing activities
    
    -
    
    (167,982)
    
    (167,982)Cash
    flows from financing activities:Proceeds from issuance of convertible notes payable, related party
    
    -
    
    80,823
    
    80,823Proceeds from issuance of convertible notes payable, officers
    
    17,670
    
    188,711
    
    202,260Common stock issued for cash
    
    -
    
    199,000
    
    199,000Return of capital contributions to limited partners of 75% owned affiliate
    
    -
    
    (125,000)
    
    (125,000)Decrease in restricted cash
    
    -
    
    126,914
    
    126,914Net cash provided by financing activities
    
    17,670
    
    470,448
    
    483,997Net (decrease) increase in cash
    
    (219)
    
    225
    
    6Cash at the beginning of the period
    
    225
    
    -
    
    -Cash at end of period
    $
    6
    $
    225
    $
    6 Supplementary
    disclosure of non-cash transactions:Cash paid
    during the year for:
    
    -
    
    -
    
    -Interest expenses
    
    -
    
    -
    
    -Income taxesNon-cash
    operating, investing and financing activities:Net
    assets (liabilities) acquired as part of acquisition of Miami Renaissance Group, Inc.and its partnership subsidiary, Miami Renaissance Partners, Ltd.Assets
    acquired:Cash
    $
    -
    $
    2,451
    $
    2,451Restricted cash
    
    -
    
    126,914
    
    126,914Subscription receivable from Miami Renaissance Group, Inc. shareholder on their stock
    
    -
    
    20,500
    
    20,500Leasehold improvements
    
    -
    
    309,904
    
    309,904Legal fees paid for pending liquor license
    
    -
    
    3,500
    
    3,500-
    
    463,269
    
    463,269Liabilities
    acquired:Accounts and accrued expenses payable
    
    -
    
    354,556
    
    354,556Convertible notes payable
    
    -
    
    -
    
    -Officers
    
    -
    
    479,084
    
    479,084Related parties
    
    -
    
    327,774
    
    327,774Accrued interest expense payable
    
    -
    
    18,382
    
    18,382Deferred rent expense
    
    -
    
    51,629
    
    51,629Minority interest
    
    -
    
    125,000
    
    125,000-
    
    1,356,425
    
    1,356,425$
    -
    $
    (893,156)
    $
    (893,156)Changes
    in Companys Stockholders EquityPreferred
    stock issued at par value
    $
    
    $
    168
    $
    168Common
    stock issued at par value
    
    
    
    4,635
    
    4,635Increase
    in additional paid-in capital resulting from difference in value of shares at par
    exchanged by Company
    
    
    
    15,697
    
    15,697Accumulated
    deficit of Miami Renaissance Group at April 25, 2006
    
    -
    
    (913,656)
    
    (913,656)$
    -
    $
    (893,156)
    $
    (893,156)Restricted
    common stock issued in exchange for architectural services capitalized as leasehold
    improvements:Cost
    added to leasehold improvements as an asset
    $
    -
    $
    40,000
    $
    40,000Credited
    to stockholders deficit:Common
    stock
    
    -
    
    200
    
    200Additional
    paid in capital
    
    -
    
    39,800
    
    39,800$
    -
    $
    40,000
    $
    40,000




**EAST COAST DIVERSIFIED CORPORATION AND CONSOLIDATED AFFILIATE**(A DEVELOPMENT STAGE COMPANY)Notes to the Consolidated
Financial Statements Back to Table
of Contents Note 1 - Nature of Business / Organization

Business Description

East Coast Diversified Corporation (the Company, also
referred to as East Coast) was organized on May 24, 1994, under the laws of
the State of Florida under the name Plantastic Corp. and changed its name to Viva Golf,
USA Corp. in April 1997. The Company acquired 100% of the issued and outstanding shares of
common stock of Lifekeepers International, Inc. in exchange for 1,000,000 of its newly
issued shares under an Agreement and Plan of Reorganization on October 22, 1998. In
connection with this acquisition, the Company changed its name to Lifekeepers
International, Inc.

The Company previously held an exclusive licensing agreement to market
and distribute golf clubs and related accessories in the continental United States. After
the reorganization, the Company changed its business plan to providing mobile
non-intrusive medical testing such as ultra-sound screening and blood analysis diagnostic
testing.

On May 29, 2003, the Company changed its name to East Coast Diversified
Corporation. During the year 2001, the Company discontinued its operations, and remained
inoperative until April 26, 2006.

On April 6, 2009 the Companys Board of Directors unanimously
adopted and the consenting stockholders approved a resolution to effect a one-for-hundred
(1:100) reverse stock split (the "Reverse Split") of the Common Stock of the
Company pursuant to clearance and final approval by FINRA. The resulting share ownership
interest including resulting fractional shares for each individual shareholder shall be
rounded up to the third whole integer in such a manner that every shareholder shall own at
least 100 shares as a result of the Reverse Split.

On June 29, 2009 the Company was notified by NASDAQ that has it had
received the necessary documentation to process the Reverse Split (1 for 100) and issue a
new symbol (ECDC) and that this action would take effect at the open of
business on June 30, 2009.

Effective July 1, 2009, the Company adopted The FASB
Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting
Principles (ASC 105-10), (formerly SFAS No. 168, The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles). This
standard establishes only two levels of U.S. generally accepted accounting principles
(GAAP), authoritative and non-authoritative. The Financial Accounting Standard
Board (FASB) Accounting Standards Codification (the Codification)
became the source of authoritative, nongovernmental GAAP, except for rules and
interpretive releases of the SEC, which are sources of authoritative GAAP for SEC
registrants. All other non-grandfathered, non-SEC accounting literature not included in
the Codification became non-authoritative. The Company began using the new guidelines and
numbering system prescribed by the Codification when referring to GAAP in the second
quarter of fiscal year 2009. As the Codification was not intended to change or alter
existing GAAP, it did not have any impact on the Companys condensed consolidated
financial statements.

Acquisition of Miami Renaissance Group, Inc. subsidiary and its partnership subsidiary,
Miami Renaissance Group, Limited

Miami Renaissance Group, Inc. (MRG) was incorporated in
February 2004 as a Florida corporation. Upon incorporation, 50,000,000 shares of $.001 par
value common stock were authorized. On June 4, 2004, MRG issued 18,860,000 shares of stock
to its founders in exchange for a stock subscriptions receivable. On March 1, 2005, MRG
issued 1,640,000 shares of stock to its founders in exchange for a stock subscriptions
receivable. The stock subscriptions receivable are discussed in detail in Note 10.

On April 26, 2006 the Company acquired 100% of the issued and
outstanding shares of common stock of Miami Renaissance Group, Inc. (MRG,) a
development stage company. As a result, effective April 26, 2006, MRG became a
wholly-owned subsidiary of the Company. The majority shareholders of MRG exchanged all of
their shares in MRG for 4,635,000 newly issued shares of the Companys $.001 par
value common stock, and 167,650 new issued shares of the Companys $.001 par value
Series A Convertible Preferred Stock. Each share of Series A Preferred Stock is
convertible into 100 shares of the Companys common stock. As a result, MRG became a
wholly-owned subsidiary of the Company.

The majority shareholders of MRG, namely the key officers in MRG and
its partnership subsidiary (and who will be discussed two paragraphs below), have also
become key officers in East Coast since their appointment and replacement of the previous
management team in April 25, 2005. In addition, prior to this acquisition, the
Companys publicly traded securities have often been thinly traded in the stock
market and can therefore be characterized as a stock subject to penny stock rules.
Consequently, the shares exchanged between the Company and MRG were valued based on the
par value of the respective shares exchanged, with the difference in aggregate value of
$15,697 reflected in additional paid-in capital in a recapitalization in which MRG is
identified as the "accounting acquirer.

MRG was incorporated in Florida in February 2004. MRG has been renting
a facility in Miami, Florida to be renovated for the purpose of operating a combined
restaurant, nightclub, and parking lot on the premises. MRG began the process of making
renovations in 2004, soon after entering into a lease on the premises as described in Note
11. As of April 30, 2009, the renovations on the property were still in progress and the
facility had not yet opened to the public. Management expects the completed facility to be
open to the public in early 2010.

Pursuant to the terms of a private placement offering described in Note
3, on April 1, 2005, MRG formed a Florida limited partnership, Miami Renaissance Partners,
Ltd, ("the Partnership" or "MRP"), in which MRG was the general
partner and manager, to raise working capital for the entertainment facility renovation
and creation project. MRG was to enter into a sublease agreement with MRP for the
completed Florida facility. MRG was to retain a 75% interest in the partnership, with the
remainder interest divided amongst limited partners. These financial statements will
include the accounts of East Coast, MRG, and MRP, and include the 25% minority interest
representing the remainder third party limited partner interests. Since the acquisition
took place on April 26, 2006, operations during the development stage were negligible
during the year ended April 30, 2006.

Effective April 26, 2006, the Company is considered to
be a development stage company. Effective September 30, 2009, the Company completed the
divestiture of MRG and as of such date the Company became a non-operating company

**Note 2 - Summary of Significant Accounting Policies**

Interim Financial Statements

In the opinion of management, the accompanying consolidated financial
statements reflect all adjustments (consisting of normal recurring accruals) necessary to
present fairly the Company's financial position as of October 31, 2009 and the results of
its operations, changes in stockholders' (deficit) equity , and cash flows for the three
and six months periods ended October 31, 2009 and 2008 , respectively and for the period
from the commencement of the development stage (April 26, 2006) to October 31, 2009, and
for the period from the commencement of the development stage (April 26, 2006) to April
30, 2009. Although management believes that the disclosures in these consolidated
financial statements are adequate to make the information presented not misleading,
certain information and footnote disclosures normally included in financial statements
that have been prepared in accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted pursuant to the rules and
regulations of the Securities Exchange Commission.

The results of operations for the three and six months ended October
31, 2009 are not necessarily indicative of the results that may be expected for the full
year ending April 30, 2010. The accompanying consolidated financial statements should be
read in conjunction with the more detailed consolidated financial statements, and the
related footnotes thereto, filed with the Companys Annual Report on Form 10K for the
year ended April 30, 2009 filed on August 13, 2009.

Principles of consolidation:

These financial statements included the
accounts of East Coast Diversified Corporation, MRG, and MRP and include a 25% minority
interest representing the remainder limited partner interest through the period ended
September 30, 2009. For the period from October 1, 2009 through October 31, 2009, the
financial statements included the accounts of East Coast Diversified Corporation only. All
significant inter-company balances and transactions have been eliminated in consolidation.

Development Stage Company:

The accompanying financial statements have been prepared in accordance
with the FASB Accounting Standards Codification No 915, Development Stage Entities. A
development stage enterprise is one in which planned and principal operations have not
commenced or, if its operations have commenced, there has been no significant revenue
there from.  Development-stage companies report cumulative costs from the
enterprises inception.

Income taxes:

The Company follows FASB Accounting Standards Codification No 740,
Income Taxes. Deferred tax assets or liabilities are recorded to reflect the future tax
consequences of temporary differences between the financial reporting basis of assets and
liabilities and their tax basis at each year-end. These amounts are adjusted, as
appropriate, to reflect enacted changes in tax rates expected to be in effect when the
temporary differences reverse.

The Company records deferred tax assets and liabilities based on the
differences between the financial statement and tax bases of assets and liabilities and on
operating loss carryforwards using enacted tax rates in effect for the year in which the
differences are expected to reverse. A valuation allowance is provided when it is more
likely than not that some portion or all of a deferred tax asset will not be realized.

Straight-line lease:

For financial statement purposes, rent expense is recorded on a
straight-line basis over the lease term. The difference between the rent expense incurred
and the amount paid is recorded as deferred rent and is being amortized over the lease
term.

Segment information:

The Company will operate in one segment.

Fair value of financial instruments:

Carrying amounts of certain of the Companys financial
instruments, including cash, cash equivalents, restricted cash, short-term investments,
accounts receivable, notes receivable, accrued payroll, and other

accrued liabilities, approximate fair value due to their short
maturities. The fair values of investments are determined using quoted market prices for
those securities or similar financial instruments.

Leasehold improvements:

Leasehold improvements are stated at cost and include architect and
design fees to renovate and create the entertainment facility. Leasehold improvements will
be amortized using the straight-line method (half-year convention) over the shorter of the
estimated useful life or lease term. Amortization will commence once the business
operations begins.

Florida Liquor License:

On August 24, 2006, the Company acquired a Florida
liquor license for a purchase price of $89,000. At April 30, 2009, the cost of the
acquired Liquor License, and related legal fees of $4,464 incurred to acquire it, have
been capitalized in the Companys Balance Sheet as an indefinite life intangible
asset. Effective September 30, 2009, the Company assigned the liquor license to MRG in
connection with the divestiture of MRG.

Impairment of long-lived assets:

The Company reviews the carrying value of both its long-lived and other intangible
assets annually, and whenever events or changes in circumstances indicate that the
historical cost-carrying value of an asset may no longer be appropriate. The Company
assesses recoverability of the carrying value of the asset by estimating the future net
cash flows expected to result from the asset, including eventual disposition. If the
future net cash flows are less than the carrying value of the asset, an impairment loss is
recorded equal to the difference between the assets carrying value and fair value.
At April 30, 2009, the Companys evaluation determined that no provision for
impairment of either its other intangible assets (the "Liquor License") or its
Leasehold Improvements was required at that date.

Consideration of Other Comprehensive Income Items:

FASB Accounting Standard Codification No 220, Comprehensive Income, requires companies
to present comprehensive income (consisting primarily of net income plus other direct
equity changes and credits) and its components as part of the basic financial statements.
For the period from inception (April 26, 2006) to October 31, 2009, the Companys
consolidated financial statements do not contain any changes in equity that are required
to be reported separately in comprehensive income.

Use of estimates:

The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date of the
consolidated financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results may differ from those estimates.

Accounting basis:

The Company uses the accrual basis of accounting for financial
statement reporting. Accordingly, expenses are realized when the obligation is incurred.
The Company is in the development stage and has not generated any revenues to date.

Loss per Share:

The Company complies with the requirements of the FASB Accounting
Standard Codification No 260, Earnings Per Share. FASB No. 260 specifies the compilation,
presentation and disclosure requirements for earning per share for entities with publicly
held common stock or potentially common stock. Net loss per common share, basic and
diluted, is determined by dividing the net loss by the weighted average number of common
shares outstanding. As of October 31, 2007, the effect of issuing convertible preferred
stock in connection with the Companys acquisition of MRG on April 26, 2006 has had a
negligible dilutive impact on the calculations of earnings per share.

Effective July 1, 2009, the Company adopted The FASB
Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting
Principles (ASC 105-10), (formerly SFAS No. 168, The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles). This
standard establishes only two levels of U.S. generally accepted accounting principles
(GAAP), authoritative and non-authoritative. The Financial Accounting Standard
Board (FASB) Accounting Standards Codification (the Codification)
became the source of authoritative, nongovernmental GAAP, except for rules and
interpretive releases of the SEC, which are sources of authoritative GAAP for SEC
registrants. All other non-grandfathered, non-SEC accounting literature not included in
the Codification became non-authoritative. The Company began using the new guidelines and
numbering system prescribed by the Codification when referring to GAAP in the third
quarter of fiscal 2009. As the Codification was not intended to change or alter existing
GAAP, it did not have any impact on the Companys condensed consolidated financial
statements.

In June 2009, the FASB issued FASB Accounting Standards Codification No
810, Consolidation. FASB Accounting Standards Codification No 810 improves financial
reporting by enterprises involved with variable interest entities. FASB Accounting
Standards Codification No 810 is effective as of the beginning of each reporting
entitys first annual reporting period that begins after November 15, 2009, for
interim periods within that first annual reporting period, and for interim and annual
reporting periods thereafter. The Company is evaluating the impact the adoption of FASB
Accounting Standards Codification No 810 will have on its financial statements.

In June 2009, the FASB issued FASB Accounting Standards Codification No
860, Transfers and Servicing. FASB Accounting Standards Codification No 860 improves the
relevance, representational faithfulness, and comparability of the information that a
reporting entity provides in its financial statements about a transfer of financial
assets; the effects of a transfer on its financial position, financial performance, and
cash flows; and a transferors continuing involvement, if any, in transferred
financial assets. FASB Accounting Standards Codification No 860 is effective as of the
beginning of each reporting entitys first annual reporting period that begins after
November 15, 2009, for interim periods within that first annual reporting period and for
interim and annual reporting periods thereafter. The Company is evaluating the impact the
adoption of FASB Accounting Standards Codification No 860 will have on its financial
statements.

Effective for the interim reporting period ending October 31, 2009, the Company adopted
two new accounting standard updates which were intended to provide additional application
guidance and enhanced disclosures regarding fair value measurements and impairments of
securities as codified in ASC 820 Interim Disclosures about Fair Value of Financial
Instruments. ASC 820 requires disclosures about fair value of financial instruments
for interim reporting periods of publicly traded companies as well as in annual financial
statements. ASC 820 requires related disclosures in summarized financial information at
interim reporting periods. ASC 820 was effective for the interim reporting period ending
October 31, 2009. The adoption of ASC 820 did not have a material impact on the
Companys condensed consolidated financial statements.

Effective June 15, 2009, the Company adopted a new accounting standard for subsequent
events, as codified in ASC 855. The update modifies the names of the two types of
subsequent events either as recognized subsequent events (previously referred to in
practice as Type I subsequent events) or non-recognized subsequent events (previously
referred to in practice as Type II subsequent events). In addition, the standard modifies
the definition of subsequent events to refer to events or transactions that occur after
the balance sheet date, but before the financial statements are issued (for public
entities) or available to be issued (for nonpublic entities). It also requires the
disclosure of the date through which subsequent events have been evaluated. The update did
not result in significant changes in the practice of subsequent event disclosures, and
therefore the adoption did not have any impact on our condensed consolidated financial
statements. In accordance with ASC 855, the Company evaluated all events or transactions
that occurred after October 31, 2009 up through December 30, 2009, the date the Company
issued these condensed consolidated financial statements .During this period, the Company
had material subsequent events as set forth in Note 11 to these condensed consolidated
financial statements. In June 2008, FASB ratified Accounting Standards Codification No
815, Determining Whether an Instrument (or Embedded Feature) Is Indexed to an
Entity's Own Stock). ASC 815 mandates a two-step process for evaluating whether an
equity-linked financial instrument or embedded feature is indexed to the entity's own
stock. Warrants that a company issues that contain a strike price adjustment feature, upon
the adoption of ASC 815, results in the instruments no longer being considered indexed to
the company's own stock. On January 1, 2009, the Company adopted ASC 815 and re-evaluated
its issued and outstanding warrants that contain a strike price adjustment feature. The
Company reclassified certain warrants from equity to a derivative liability and used the
Black-Scholes valuation model to determine the fair market value of the warrants. Based
upon the Companys re-evaluation, ASC 815 has had no material impact on the
Companys condensed consolidated financial statements.

In June 2008, the FASB issued FASB Accounting Standards Codification No 260
Determining Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities. Under the FSP, unvested share-based payment awards that
contain rights to receive non-forfeitable dividends (whether paid or unpaid) are
participating securities, and should be included in the two-class method of computing EPS.
The FSP is effective for fiscal years beginning after December 15, 2008, and interim
periods within those years, and did not expect to have a significant impact on the
Companys results of operations, financial condition or cash flows.

In May 2008, the FASB issued FASB Accounting Standards Codification No 944-605,
Financial Guarantee Insurance Contracts. Diversity exists in practice in accounting for
financial guarantee insurance contracts by insurance enterprise in FASB Accounting
Standards Codification No 944-605. This results in inconsistencies in the recognition and
measurement of claim liabilities. This Statement requires that an insurance enterprise
recognize a claim liability prior to an event of default (insured event) when there is
evidence that credit deterioration has occurred in an insured financial obligation. This
Statement requires expanded disclosures about financial guarantee insurance contracts. The
accounting and disclosure requirements of the Statement will improve the quality of
information provided to users of financial statements. The adoption of FASB Accounting
Standards Codification No 944-605 is not expected to have a material impact on the
Companys financial position.

In March 2008, ASC issued ASC 815, Disclosures about Derivative Instruments and Hedging
Activities, (ASC 815). ASC 815 requires enhanced disclosures about an
entitys derivative and hedging activities. These enhanced disclosures will discuss:
how and why an entity uses derivative instruments; how derivative instruments and related
hedged items are accounted for and its related interpretations; and how derivative
instruments and related hedged items affect an entitys financial position, financial
performance, and cash flows. ASC 815 is effective for financial statements issued for
fiscal years and interim periods beginning after November 15, 2008. The Company does not
believe that ASC 815 will have an impact on their results of operations or financial
position.

In December 2007, the FASB issued FASB Accounting Standards
Codification No 810-10-65, Non-controlling Interests in Consolidated Financial
Statements - an amendment of ARB No. 51.  FASB Accounting Standards
Codification No 810-10-65 requires that the ownership interests in subsidiaries held by
parties other than the parent be clearly identified, labeled, and presented in the
consolidated statement of financial position within equity, in the amount of consolidated
net income attributable to the parent and to the non-controlling interest on the face of
the consolidated statement of income, and that entities provide sufficient disclosures
that clearly identify and distinguish between the interests of the parent and the
interests of the non-controlling owners.  FASB Accounting Standards Codification No
810-10-65 is effective for fiscal years, beginning on or after December 15, 2008 and
cannot be applied earlier.

In December 2007, the Company adopted ASC 805,Business Combinations
(ASC 805). ASC 805 retains the fundamental requirements that the acquisition
method of accounting be used for all business combinations and for an acquirer to be
identified for each business combination. ASC 805 defines the acquirer as the entity that
obtains control of one or more businesses in the business combination and establishes the
acquisition date as the date that the acquirer achieves control.  ASC 805 will
require an entity to record separately from the business combination the direct costs,
where previously these costs were included in the total allocated cost of the
acquisition.  ASC 805 will require an entity to recognize the assets acquired,
liabilities assumed, and any non-controlling interest in the acquired at the acquisition
date, at their fair values as of that date.  ASC 805 will require an entity to
recognize as an asset or liability at fair value for certain contingencies, either
contractual or non-contractual, if certain criteria are met.  Finally, ASC 805
will require an entity to recognize contingent consideration at the date of acquisition,
based on the fair value at that date.  This will be effective for business
combinations completed on or after the first annual reporting period beginning on or after
December 15, 2008.  Early adoption is not permitted and the ASC is being applied
prospectively only.  Upon adoption of this ASC, there would be no impact to the
Companys results of operations and financial condition for acquisitions previously
completed.  The adoption of ASC 805 is not expected to have a material effect on
the Companys financial position, results of operations or cash flows.

The Company does not anticipate that the adoption of FASB Accounting
Standards Codification No 805 and FASB Accounting Standards Codification No 810-10-65 will
have an impact on the Company's overall results of operations or financial position,
unless the Company makes a business acquisition in which there is a non-controlling
interest.

In February 2007, ASC issued 825-10, The Fair Value Option for
Financial Assets and Financial Liabilities  Including an amendment of ASC 320-10,
(ASC 825-10) which permits entities to choose to measure many financial
instruments and certain other items at fair value at specified election dates. A business
entity is required to report unrealized gains and losses on items for which the fair value
option has been elected in earnings at each subsequent reporting date. This statement is
expected to expand the use of fair value measurement. ASC 825-10 is effective for
financial statements issued for fiscal years beginning after November 15, 2007, and
interim periods within those fiscal years. The Company does not expect that the adoption
of FASB Accounting Standards Codification No 825 will have a material effect on the
Company's consolidated financial statements.

In September 2006, the FASB issued ASC 820. ASC 820 defines fair value,
establishes a framework for measuring fair value under GAAP and expands disclosures about
fair value measurements. ASC 820 applies under other accounting pronouncements that
require or permit fair value measurements. Accordingly, ASC 820 does not require any new
fair value measurements.  However, for some entities, the application of ASC 820 will
change current practice.  The changes to current practice resulting from the
application of ASC 820 relate to the definition of fair value, the methods used to measure
fair value and the expanded disclosures about fair value measurements.  The
provisions of ASC 820 are effective as of January 1, 2008, with the cumulative effect of
the change in accounting principle recorded as an adjustment to opening retained
earnings.  However, delayed application of this statement is permitted for
nonfinancial assets and nonfinancial liabilities, except for items that are recognized or
disclosed at fair value in the financial statements on a recurring basis (at least
annually), until fiscal years beginning after November 15, 2008, and interim periods
within those fiscal years.  The Company adopted ASC 820 effective January 1, 2008 for
financial assets and the adoption did not have a significant effect on its financial
statements.  The Company has adopted the remaining provisions of ASC 820 beginning in
2009. The adoption of SFAS No. 157 did not have a material impact on the Companys
consolidated results of operations or financial condition.

**Note 3  MRG Pre-Merger Private Placement Offering and Related Restricted
Cash**

On May 13, 2005, MRG made a private placement offering for up to 120 investment units
in the Partnership, Miami Renaissance Partners, Ltd, at a subscription price of $25,000
each. Each unit in this non-public offering was to initially represent a 0.002% to 0.007%
partnership interest depending on the number of units sold. The offering was made to
accredited investors as defined in Rule 501 (a) under the Securities Act of 1933, as
amended. The offering was made for a minimum of 30 units, for total proceeds of $750,000,
and a maximum of 120 units, for total proceeds of $3,000,000, with the offering to
terminate at December 31, 2005 if the minimum units had not been sold. In accordance with
the Partnership formation documents, limited partner capital contributions do not bear
interest.

Miami Renaissance Partners, Ltd, ("MRP") had received cash contributions from
the sale of partnership units to limited partners of $125,000 prior to the MRG merger with
East Coast. Accordingly, at April 30, 2006, the Company had recorded $126,914, including
interest income earned previously from restricted cash on its balance sheets. Under the
terms of the private placement agreement, MRP had not reached the minimum threshold of 30
units sold to access the capital.

During June and July of 2006, MRP returned the $125,000 of cash contributions received
from the limited partners.

Note 4  Income Taxes

The significant components of the Company's deferred tax assets are as
follows:
**October 31, 2009**
    
    **April 30, 2009**Net operating loss
    carryforward
    $
    1,644,067
    $
    1,499,504Less valuation
    allowance
    
    (1,644,067)
    
    (1,499,504)Net deferred tax
    assets
    $
    0
    $
    0

The Company has provided for a valuation allowance against the full
amount of the deferred tax asset due to management's uncertainty about its realization.
The difference between the federal statutory tax rate of 34% and the effective rate of 0%
reflected in the accompanying financial statements is attributable to no tax benefit being
recorded for the future utilization of the net operating loss carryforwards.

The Company incurred no federal or state income tax expense for the six
months ended October 31, 2009 and 2008, and for period from inception (April 26, 2006) to
October 31, 2009, and utilized no tax carryforward losses.

As of October 31, 2009 the Company has available net operating loss carryforwards of
$4,835,491 that expire through 2030. The Company has provided a valuation allowance
against the full amount of the deferred tax asset due to managements uncertainty
about its realization.

**Note 5  Convertible Notes Payable, Related Party**

On August 30, 2005, MRG issued a
convertible note payable to Brickell North Investments, Inc. (Brickell), in
settlement of outstanding sums owed for 2004 and 2005 rent and 2004 real estate taxes in
the aggregate amount of approximately $327,774. The note will be adjusted upward for any
additional 2005 real estates taxes once that amount has been determined. $110,500 of rent
due for the period during the development stage of MRG, (February 25, 2004) to December
31, 2005 was forgiven by Brickell (see Note 7).

The note is convertible to shares of the
Companys common stock at a rate of $.327.

In the event that the Landlord-Holder
Brickell did not convert the principal or adjusted principal of the debt to common stock
of the Company the note was to be payable in 24 equal monthly installments commencing on
June 15, 2006, together with any rent and real estate taxes due on the leased property. In
the event of a failure to pay the note or an inability on the part of Brickell to exercise
its conversion rights, the principal of the note was to become immediately due and payable
together with interest thereon at the rate 6% per annum from the original date of the
note. The parties to the convertible note had mutually agreed to extend the time of
payment and adjust the date when Brickell may elect to exercise its conversion rights from
June 15, 2006 to January 31, 2010. Effective September , 2009, the debt was forgiven in
connection with the divestiture of MRG.

Brickell is a related party, as
described in Note 7.

On October 31, 2006, in consideration
for cash proceeds of a loan from James Goldstein, the Company issued a $80,823 convertible
note payable to him that accrues interest at 12% per annum and was due October 31, 2007.
The loan holder has agreed to extend the maturity date of the obligation to January 31,
2010. The note was convertible into shares of common stock of the Company at a conversion
price of $.002. Effective September 30, 2009, the note was forgiven by Mr. Goldstein
pursuant to a letter dated October 1, 2009. In connection with the forgiveness the
principal amount of the note, Mr. Goldstein also forgave the accrued interest on the note.

James Goldstein is a related party, as
described in Note 7.

As of October 31, 2009 and April 30,
2009, the Company had recorded $0 and $26,306 of accrued interest on the convertible notes
payable to related party, respectively. Interest expense on this note was $4,848 and
$4,848 for the six months ended October 31, 2009 and 2008, respectively, and $ 31,154 for
the period from inception (April 26, 2006) to October 31, 2009.

**Note 6  Convertible Notes Payable to Officers**

Convertible notes payable to officers are as follows:

Holder
    Terms
    
    October 31, 2009 Balance
    
    April 30, 2009 BalanceRichard Margulies, Former President/CEO and Chairman of the
    Board of Directors and shareholder
    $54,104 note which accrues interest at
    6% per annum and was due December 31, 2007. The note is convertible into shares of common
    stock of the Company at a conversion price of $.50. The shareholder has agreed to extend
    the maturity date of the obligation to October 31, 2009.*
    $
    0
    $
    54,104Richard Margulies, Former President/CEO and Chairman of the
    Board of Directors and shareholder
    $4,140 note which accrues interest at 6% per annum and was
    due April 25, 2008. The note is convertible into shares of common stock of the Company at
    a conversion price of $.50. The shareholder has agreed to extend the maturity date of the
    obligation to October 31, 2009.*
    
    0
    
    4,140Richard Margulies, Former President/CEO and Chairman of the
    Board of Directors and shareholder
    $1,463 note which accrues interest at 6% per annum and is
    due April 30, 2009. The note is convertible into shares of common stock of the Company at
    a conversion price of $0.20. The shareholder has agreed to extend the maturity date of the
    obligation to October 31, 2009. *
    
    0
    
    1,463Richard Margulies, Former President/CEO and Chairman of the
    Board of Directors and shareholder
    $6,500 note which accrues interest at 6% per annum and was
    due October 31, 2008. The note is convertible into shares of common stock of the Company
    at a conversion price of $.20. The shareholder has agreed to extend the maturity date of
    the obligation to October 31, 2009.*
    
    0
    
    6,500Richard Margulies, Former President/CEO and Chairman of the
    Board of Directors and shareholder
    $570 note which accrues interest at 6% per annum and is due
    October 31, 2009. The note is convertible into shares of common stock of the Company at a
    conversion price of $.20.*
    
    0
    
    570Richard Margulies, Former President/CEO and Chairman of the
    Board of Directors and shareholder
    $2,170 note which accrues interest at 6% per annum and is
    due January 31, 2009. The note is convertible into shares of common stock of the Company
    at a conversion price of $.20. The shareholder has agreed to extend the maturity date of
    the obligation to October 31, 2009.*
    
    0
    
    2,170Richard Margulies, Former President/CEO and Chairman of the
    Board of Directors and shareholder
    $5,910 note which accrues interest at 6% per annum and was
    due October 31, 2008. The note is convertible into shares of common stock of the Company
    at a conversion price of $.20. The shareholder has agreed to extend the maturity date of
    the obligation to October 31, 2009.*
    
    0
    
    5,910Richard Margulies, Former President/CEO and Chairman of the
    Board of Directors and shareholder
    $280 note which accrues interest at 6% per annum and was
    due October 31, 2008. The note is convertible into shares of common stock of the Company
    at a conversion price of $.20. The shareholder has agreed to extend the maturity date of
    the obligation to October 31, 2009.*
    
    0
    
    280Richard Margulies, Former President/CEO and Chairman of the
    Board of Directors and shareholder
    $4,205 note which accrues interest at 6% per annum and is
    due October 31, 2009. The note is convertible into shares of common stock of the Company
    at a conversion price of $.20.*
    
    0
    
    4,205Richard Margulies, Former President/CEO and Chairman of the
    Board of Directors and shareholder
    $1,725 note which accrues interest at 6% per annum and is
    due October 31, 2009. The note is convertible into shares of common stock of the Company
    at a conversion price of $.20.**
    
    0
    
    1,725Richard Margulies, Former President/CEO and Chairman of the
    Board of Directors and shareholder
    $1,850 note which accrues interest at 6% per annum and is
    due October 31, 2009. The note is convertible into shares of common stock of the Company
    at a conversion price of $.20. On August 7, 2009 the note was converted into common
    stock.*
    
    0
    
    1,850Richard Margulies, Former President/CEO and Chairman of the
    Board of Directors and shareholder
    $4,110 note which accrues interest at 6% per annum and was
    due October 31, 2008. The note is convertible into shares of common stock of the Company
    at a conversion price of $.20. The shareholder has agreed to extend the maturity date of
    the obligation to October 31, 2009.*
    
    0
    
    4,110Ivo Heiden
    $5,515 note which accrues interest at 10% per annum and was
    due April 30, 2004. The note was convertible into shares of common stock of the Company at
    the conversion price of $.002. The shareholder has agreed to extend the maturity date of
    the obligation to January 31, 2010.
    
    5,515
    
    5,515Ivo Heiden
    $4,750 note which accrues interest at 10% per annum and was
    due April 30, 2004. The note was convertible into shares of common stock of the Company at
    the conversion price equal to the closing bid price of the shares on the date of
    conversion, but not less than the par value of $.001. The shareholder has agreed to extend
    the maturity date of the obligation to January 31, 2010.
    
    4,750
    
    4,750Ivo Heiden
    $4,185 note which accrues interest at 10% per annum and was
    due February 3, 2006. The note is convertible into shares of common stock of the Company
    at the conversion price of $.002. The shareholder has agreed to extend the maturity date
    of the obligation to January 31, 2010.
    
    4,185
    
    4,185Richard Margulies, Former President/CEO and Chairman of the
    Board of Directors and shareholder
    $125 note which accrues interest at 6% per annum and was
    due July 31, 2008. The note is convertible into shares of common stock of the Company at a
    conversion price of $.20. The shareholder has agreed to extend the maturity date of the
    obligation to October 31, 2009.*
    
    0
    
    125Richard Margulies, Former President/CEO and Chairman of the
    Board of Directors and shareholder
    $2,005 note which accrues interest at 6% per annum and was
    due December 31, 2006. The note is convertible into shares of common stock of the Company
    at a conversion price of $.20. The shareholder has agreed to extend the maturity date of
    the obligation to October 31, 2009.*
    
    0
    
    2,005Richard Margulies, Former President/CEO and Chairman of the
    Board of Directors and shareholder
    $176 note which accrues interest at 6%
    per annum and was due October 31, 2008. The note is convertible into shares of common
    stock of the Company at a conversion price of $.20. The shareholder has agreed to extend
    the maturity date of the obligation to October 31, 2009.*
    $
    0
    $
    176Richard Margulies, Former President/CEO and Chairman of the
    Board of Directors and shareholder
    $360 note which accrues interest at 6%
    per annum and is due January 31, 2009. The note is convertible into shares of common stock
    of the Company at a conversion price of $.20. The shareholder has agreed to extend the
    maturity date of the obligation to October 31, 2009.*
    
    0
    
    360Richard Margulies, Former President/CEO and Chairman of the
    Board of Directors and shareholder
    $3,590 note which accrues interest at 6%
    per annum and was due July 31, 2008. The note is convertible into shares of common stock
    of the Company at a conversion price of $.20. The shareholder has agreed to extend the
    maturity date of the obligation to October 31, 2009.*
    
    0
    
    3,590Frank Rovito, CEO, CFO and shareholder
    $29,980 note which accrues interest at
    6% per annum and was due December 31, 2007. The note is convertible into shares of common
    stock of the Company at a conversion price of $.50. The shareholder has agreed to extend
    the maturity date of the obligation to October 31, 2009.*
    
    0
    
    29,980Frank Rovito, CEO, CFO and shareholder
    $1,600 note which accrues interest at 6%
    per annum and was due April 25, 2008. The note is convertible into shares of common stock
    of the Company at a conversion price of $.50. The shareholder has agreed to extend the
    maturity date of the obligation to October 31, 2009.*
    
    0
    
    1,600Frank Rovito, CEO, CFO and shareholder
    $2,100 note which accrues interest at 6%
    per annum and was due October 31, 2008. The note is convertible into shares of common
    stock of the Company at a conversion price of $.20. The shareholder has agreed to extend
    the maturity date of the obligation to October 31, 2009.**
    
    0
    
    2,100Frank Rovito, CEO, CFO and shareholder
    $2,112 note which accrues interest at 6%
    per annum and was due July 31, 2008. The note is convertible into shares of common stock
    of the Company at a conversion price of $.20. The shareholder has agreed to extend the
    maturity date of the obligation to October 31, 2009.*
    
    0
    
    2,112Frank Rovito, CEO, CFO and shareholder
    $3,900 note which accrues interest at 6%
    per annum and is due October 31, 2009. The note is convertible into shares of common stock
    of the Company at a conversion price of $.20.*
    
    0
    
    3,900Frank Rovito, CEO, CFO and shareholder
    $1,600 note which accrues interest at 6%
    per annum and is due January 31, 2009. The note is convertible into shares of common stock
    of the Company at a conversion price of $.20. The shareholder has agreed to extend the
    maturity date of the obligation to October 31, 2009.*
    
    0
    
    1,600Frank Rovito, CEO, CFO and shareholder
    $660 note which accrues interest at 6%
    per annum and was due October 31, 2008. The note is convertible into shares of common
    stock of the Company at a conversion price of $.20. The shareholder has agreed to extend
    the maturity date of the obligation to October 31, 2009.*
    
    0
    
    660Frank Rovito, CEO, CFO and shareholder
    $1,000 note which accrues interest at 6%
    per annum and is due October 31, 2009. The note is convertible into shares of common stock
    of the Company at a conversion price of $.20.*
    
    0
    
    1,000Frank Rovito, CEO, CFO and shareholder
    $970 note which accrues interest at 6%
    per annum and is due January 31, 2010. The note is convertible into shares of common stock
    of the Company at a conversion price of $.20. On August 7, 2009 the note was converted
    into common stock*
    
    0
    
    970Frank Rovito, CEO, CFO and shareholder
    $100 note which accrues interest at 6%
    per annum and is due October 31, 2009. The note is convertible into shares of common stock
    of the Company at a conversion price of $.20. On August 7, 2009 the note was converted
    into common stock*
    
    0
    
    100Aaron Goldstein, a Director (Secretary) and shareholder
    $134,737 note which accrues interest at
    6% per annum and was due April 25, 2008. The note is convertible into shares of common
    stock of the Company at a conversion price of $.50. The shareholder has agreed to extend
    the maturity date of the obligation to October 31, 2009.*
    
    0
    
    134,737Aaron Goldstein, a Director (Secretary) and shareholder
    $10,000 note which accrues interest at
    6% per annum and was due December 31, 2006. The note is convertible into shares of common
    stock of the Company at a conversion price of $.20. The shareholder has agreed to extend
    the maturity date of the obligation to October 31, 2009.*
    
    0
    
    10,000Aaron Goldstein, a Director (Secretary) and shareholder
    $75,000 note which accrues interest at
    6% per annum and was due December 31, 2007. The note is convertible into shares of common
    stock of the Company at a conversion price of $.50. The shareholder has agreed to extend
    the maturity date of the obligation to October 31, 2009.*
    
    0
    
    75,000Aaron Goldstein, a Director (Secretary) and shareholder
    $2,000 note which accrues interest at 6%
    per annum and was due July 31, 2008. The note is convertible into shares of common stock
    of the Company at a conversion price of $.20. The shareholder has agreed to extend the
    maturity date of the obligation to October 31, 2009.*
    
    0
    
    2,000Aaron Goldstein, a Director (Secretary) and shareholder
    $13,000 note which accrues interest at
    6% per annum and was due January 31, 2008. The note is convertible into shares of common
    stock of the Company at a conversion price of $.20. The shareholder has agreed to extend
    the maturity date of the obligation to October 31, 2009.*
    
    0
    
    13,000Aaron Goldstein, a Director (Secretary) and shareholder
    $179,523 note which accrues interest at
    6% per annum and was due December 31, 2007. The note is convertible into shares of common
    stock of the Company at a conversion price of $.50. The shareholder has agreed to extend
    the maturity date of the obligation to October 31, 2009.*
    
    0
    
    179,523Aaron Goldstein, a Director (Secretary) and shareholder
    $5,097 note which accrues interest at 6%
    per annum and was due October 31, 2008. The note is convertible into shares of common
    stock of the Company at a conversion price of $.20. The shareholder has agreed to extend
    the maturity date of the obligation to October 31, 2009.*
    
    0
    
    5,097Aaron Goldstein, a Director (Secretary) and shareholder
    $15,000 note which accrues interest at
    6% per annum and was due April 30, 2008. The note is convertible into shares of common
    stock of the Company at a conversion price of $.20. The shareholder has agreed to extend
    the maturity date of the obligation to October 31, 2009.*
    
    0
    
    15,000Aaron Goldstein, a Director (Secretary) and shareholder
    $2,800 note which accrues interest at 6%
    per annum and was due July 31, 2008. The note is convertible into shares of common stock
    of the Company at a conversion price of $.20. The shareholder has agreed to extend the
    maturity date of the obligation to October 31, 2009.*
    
    0
    
    2,800Aaron Goldstein, a Director (Secretary) and shareholder
    $33,000 note which accrues interest at
    6% per annum and is due October 31, 2009. The note is convertible into shares of common
    stock of the Company at a conversion price of $.20. The shareholder has agreed to extend
    the maturity date of the obligation to October 31, 2009.*
    
    0
    
    33,000Aaron Goldstein, a Director (Secretary) and shareholder
    $794 note which accrues interest at 6%
    per annum and was due October 31, 2008. The note is convertible into shares of common
    stock of the Company at a conversion price of $.20. The shareholder has agreed to extend
    the maturity date of the obligation to October 31, 2009.*
    
    0
    
    794Aaron Goldstein, a Director (Secretary) and shareholder
    $5,200 note which accrues interest at 6%
    per annum and was due October 31, 2009. The note is convertible into shares of common
    stock of the Company at a conversion price of $.20. On August 7, 2009 the note was
    converted into common stock*
    
    0
    
    5,200Aaron Goldstein, a Director (Secretary) and shareholder
    $2,500 note which accrues interest at 6%
    per annum and was due October 31, 2009. The note is convertible into shares of common
    stock of the Company at a conversion price of $.20. *
    
    0
    
    2,500Aaron Goldstein, a Director (Secretary) and shareholder
    $10,500 note which accrues interest at
    6% per annum and was due January 31, 2010. The note is convertible into shares of common
    stock of the Company at a conversion price of $.20. On August 7, 2009 the note was
    converted into common stock*
    
    0
    
    -Aaron Goldstein, a Director (Secretary) and shareholder
    $6,700 note which accrues interest at 6%
    per annum and was due October 31, 2009. The note is convertible into shares of common
    stock of the Company at a conversion price of $.20.*
    
    0
    
    6,700Aaron Goldstein, a Director (Secretary) and shareholder
    $6,100 note which accrues interest at 6%
    per annum and was due October 31, 2009. The note is convertible into shares of common
    stock of the Company at a conversion price of $.20. On August 7, 2009 the note was
    converted into common stock*
    
    0
    
    -Aaron Goldstein, a Director (Secretary) and shareholder
    $66,000 note which accrues interest at
    6% per annum and was due October 31, 2007. The note is convertible into shares of common
    stock of the Company at a conversion price of $.20. The shareholder has agreed to extend
    the maturity date of the obligation to October 31, 2009.*
    
    0
    
    60,000Aaron Goldstein, a Director (Secretary) and shareholder
    $15,233 note which accrues interest at
    6% per annum and was due October 31, 2008. The note is convertible into shares of common
    stock of the Company at a conversion price of $.20. The shareholder has agreed to extend
    the maturity date of the obligation to October 31, 2009.*
    
    0
    
    15,23314,450
    
    711,269Less: current portion
    
    0
    
    711,269$
    14,450
    $
    -* Notes payable to the above officers and
former officers in the aggregate amount of $689,769 were converted into shares of common
stock on August 7, 2009.
** These notes payable were forgiven in connection with the divestiture of MRG.

As of October 31, 2009 future maturities of debt for the
next two years are as follows:
**Years ending October 31:**2010
    
    39,170

As of October 31, 2009 and April 30,
2009, the Company had recorded $156,018 and $144,390 of accrued interest on the
convertible notes payable to officers, respectively. Interest expense on these notes was
$11,628 and $4,849 for the six months ended October 31, 2009 and 2008, respectively, and
$128,432 for the period from inception (April 26, 2006) to October 31, 2009. On August 7,
2009, the notes in the aggregate amount of $728,939 were converted into Common shares of
the Company, and the Company agreed to waive $139,355 of the accrued interest payable on
such notes, leaving accrued interest payable of $16,662 as of October 31, 2009.

**Note 7  Related Party Transactions**

James Goldstein, the father of Aaron Goldstein, who is
an officer and director of the Company, is one of the principal owners of Brickell North
Investments, Inc. ("Brickell"), the landlord for the Florida entertainment
facility lease, and is the holder of the related convertible note payable for $327,774
discussed in Note 5. The note was issued to pay accrued rent for 2005 and 2004 of $207,570
and $8,500, respectively, and real estate taxes of $111,704 during the development stage
of MRG (February 25, 2004) to December 31, 2004). $110,500 of rent due for the period from
February 25, 2004 to December 31, 2004 was forgiven by Brickell in 2005.

For the period during the development stage of MRG
(February 25, 2004) through October 31, 2009, MRG incurred $1,910,466 of rent and real
estate taxes under the lease, of which basic rent incurred to Brickell totaled $1,273,259.
The Companys Consolidated Statements of Operations each of the six months ended
October 31, 2009 and 2008 includes $116,934 of basic rent, and $55,852 of real estate
taxes incurred by MRG under the lease.

The sub-landlord for the office lease, Comp Tech
Technologies, is a company principally owned by Frank Rovito, an officer and director of
the Company. For the period from February 25, 2004 to April 30, 2009, MRG incurred $63,600
of rent expense under the sublease. The Companys Consolidated Statements of
Operations for the years ended April 30, 2009 and 2008, and for the period from inception
(April 26, 2006) to April 30, 2009, respectively includes $7,200 and $14,400 and $50,400
of rent expense incurred by MRG under the sublease. On October 31, 2008 the Company
terminated the sub-lease agreement with Comp Tech Technologies, Inc.

On March 1, 2005, MRG issued 1,025,000 shares of its
common stock to Robert Margulies, the brother of the former officer and director Richard
Margulies.

As of October 31, 2009 future maturities of related
party debts are as follows:

Years ending October 31:

2010 $0 **Note 8  Equity Transactions** During the six months ended October 31, 2006, the
Company issued 895,000 shares of common stock pursuant to a private offering to accredited
investors that was to expire June 30, 2006 at $.20 per share (with gross proceeds of
$179,000), in accordance with Regulation D of the Securities Act of 1933, as amended, and
Rule 501 promulgated there under. The Company's officers and directors directed the sale
and received no commissions or other remuneration. In addition, the Company received
$20,000 for 100,000 shares of common stock to be issued in the future under this offering.
The 100,000 shares were issued on November 27, 2006. On May 24, 2006, the Company issued 200,000 shares of
common stock to Les Beilinson, subject to Rule 144 restrictions, in consideration of
architectural services. The Company has capitalized $40,000 in the cost of leasehold
improvements related to this stock issuance, based on the $.20 share price received by the
Company in the Private Placement described in the preceding paragraph. On December 18, 2006, the Company issued 350,000 shares
of common stock to S. G. Martin Securities, LLC subject to Rule 144 restrictions, in
consideration of professional services. The Company has expensed $52,500 in the statement
of operations related to this stock issuance, based on the $.15 share price of the
Companys common stock on that date. On April 15, 2009 the Board of Directors unanimously adopted Resolutions
calling for the acceptance of the conversion of certain Promissory Notes payable to
Richard Margulies, Frank Rovito and Aaron Goldstein, in the aggregate amount(s) of $91,433
$42,953 and $555,384 respectively into shares of the Corporations common stock,
based upon a post-reverse conversion price of $0.10 per share again pursuant to pursuant
to clearance and final approval by FINRA . On August 7, 2009 the Company, pursuant to the conversion of the
Promissory Notes was then able to and issued shares of common stock, with restrictive
legend, as follows: Richard Margulies  914,330 shares of common stock; Frank Rovito
- 429,530 shares of common stock; and Aaron Goldstein  5,553,840 shares of common
stock. The Market price on the date of the noted conversion was $.15 and the shares were
converted for $.10, as part of the conversion the noted holders waived all the accrued
interest payable on those notes. For the difference the Company recorded a loss on debt
conversion for $205,530. Preferred shares converted to common On September 12, 2008, the Board of Directors of the
Company adopted resolutions calling for the Corporations acceptance and for the
conversion of all the 167,650 issued and outstanding preferred stock of the Company into
common stock at the ratio of 100 shares of common stock for each share of preferred stock
as set forth in the schedule below. Based upon the conversion by holders of the
Companys preferred stock as set forth on the schedule below, a total
of 16,045,000 restricted shares of common stock of the Company to the Companys
affiliates and 720,000 shares to Robert Margulies, a non-affiliated party as follows: Name
    Number of Preferred Shares Being Converted
    Number of Shares of Common Stock to be IssuedRichard
    Margulies
    78,700
    7,870,000Aaron 
    M. Goldstein
    78,700
    7,870,000Frank Rovito
    3,050
    305,000Robert
    Margulies (Non-Affiliate)
    7,200
    720,000Total
    167,650
    16,765,000 Common stock issued on settlement of
accrued expenses On September 12, 2008 the Board of
Directors of the Company agreed and resolved to convert and as a result to issue 4,500,000
shares of the Companys common stock in consideration of certain amounts of accrued
and deferred compensation due and payable to 3 shareholders for an amount of $115,000.
This resulted in the recognition of a gain reflected in the Statement of Operations for
the period ended September 30, 2008 in the amount of $79,339. **Note 9  Going Concern** These consolidated financial statements are presented on
the basis that the Company is a going concern. Going concern contemplates the realization
of assets and the satisfaction of liabilities in the normal course of business over a
reasonable period of time. As shown in the accompanying consolidated financial
statements, the Company had incurred cumulative losses of $4,835,491 from inception. The
Company's existence in the current period has been dependent upon advances from related
parties and other individuals, and the sale of convertible notes payable. The consolidated financial statements do not include any
adjustments that might be necessary if the Company is unable to continue as a going
concern. **Note 10 - Stock Subscription Receivable** MRG issued 18,860,000 and 1,640,000 shares of common stock respectively
in 2005 and 2004 to various individuals, and directors of MRG in exchange for stock
subscription agreements. The amounts due on the stock subscription agreements were $20,500
at July 31, 2007. The amounts are non-interest bearing and due on demand. The stock
subscription receivable amounts have been offset against stockholders' deficit. **Note 11- Commitments and Other Matters** [1] The Company has no current pending litigation. [2] On June 15, 2004, MRG entered into a lease with
Brickell North Investments, Inc., a related party, for the parcels of land and buildings
for use in the entertainment facility. The lease term is ten years, with annual increases
based on the consumer price index, approximately 3% per year. [3] In February 2004, MRG entered into a sublease with a
related party for office space in Edison, NJ for $1,200 per month. Since the lease
expiration in October 2004, the Company has continued to lease the space under a
month-to-month arrangement. Management does not consider use of this office space
essential to business operations. On October 31, 2008 the Company terminated the sub-lease
agreement with Comp Tech Technologies, Inc. [4] 5 Year Table of obligations under leases: The minimum future obligations for rent under agreements
outlined in [2] are as follows: **Years
    Ending October 31,**
    
    **Amounts**2010
    
    239,4512011
    
    246,6332012
    
    254,0312013
    
    261,650Thereafter
    
    155,267$
    1,157,032
 SALE OF MRG SUBSIDIARY TO CERTAIN AFFILIATED PARTIES On February 8, 2008, the Company's board
of directors approved the sale of MRG to certain affiliated parties. The decision to sell
MRG was based mainly due to lack of funding availability and restrictions in building
permits issuance in Miami, which have been in place for some time. The board decided to
solicit shareholder approval to divest MRG. Effective September 30, 2009, the Company
completed the divestiture of MRG.