UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549___________________FORM 10-QSB_________________________ ýQUARTERLY REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the quarterly period ended October 31, 2007 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 December 14,
2007, the Registrant had 8,816,216 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  ̈No x 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 x




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.
    
    CONTROLS AND PROCEDURES.
    
    
    4**PART II - OTHER INFORMATION**ITEM 1.
    
    LEGAL PROCEEDINGS.
    
    
    4ITEM 2.
    
    CHANGES IN SECURITIES.
    
    
    4ITEM 3.
    
    DEFAULT UPON SENIOR SECURITIES.
    
    
    4ITEM 4.
    
    SUBMISSION OF MATERS TO A VOTE OF SECURITY HOLDERS.
    
    
    4ITEM 5.
    
    OTHER INFORMATION.
    
    
    4ITEM 6.
    
    EXHIBITS AND REPORTS ON FORM 8-K.
    
    
    4




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, 2007 and 2006 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. Overview The Company has not generated any revenues from its operations
during the three ans six month period ended October 31, 2007 and 2006. General and Administrative Expenses


During the three and six-month period ended October 31, 2007, the
Company had operating expenses of $114,059 and $209,402 compared to $108,185 and 217,385
during the same periods in the prior year. Our operating expenses consist mainly of
professional fees, general and administrative expenses.

Interest Expense

We had interest expenses during the three and six-month period ended
Ocotber 31, 2007 of $11,927 and $23,752, respectively. Our interest expenses for the three
and six months ended Ocotber 31, 2006 were $10,429 and $18,316, respectively.
Net Loss


Our net loss during the three and six-month period ended Ocotber 31, 2007 was $125,986
and $233,154, respectively, as compared to net loss of $118,608 and $235,279 during the
same periods in the prior year.

Liquidity and Capital Resources While we are dependent upon interim funding provided by management
and/or affiliated parties to pay professional fees and expenses, we have no written
finance agreement with management and/or affiliated parties to provide any continued
funding. However, we
may need to raise additional funds through a the issuance of debt or equity securities if
additional funds are required to execute our business plan. During the six-month period
ended October 31, 2007, we received proceeds of $34,705 through the issuance of
convertible notes to management. At October 31, 2007, we had $678 in current assets and had
$1,65,587 in current liabilities. On October 31, 2007, our negative working capital was
$1,651,909. We had $524,515 in total assets and $2,062,258 in total liabilities at October
31, 2007. There are no limitations in the
Company's articles of incorporation on the Company's ability to borrow funds or raise
funds through the issuance of restricted common stock. The Company's limited resources and
lack of having cash-generating business operations may make it difficult to borrow funds
or raise capital. The Company's limitations to borrow funds or raise funds through the
issuance of restricted capital stock may have a material adverse effect on the Company's
financial condition and future prospects, including the ability to execute its business
plan. 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. ITEM 3.
CONTROLS AND PROCEDURESBack to Table of Contents Evaluation of disclosure controls and procedures As of October 31, 2007, 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 2. CHANGES
IN SECURITIESBack 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. EXHIBITS AND REPORTS ON FORM 8-KBack 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.
    Description31.1
    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 2002.31.2
    Certification of CFO pursuant
    to Rule 13a-14(a) or 15d-14(a) of the Exchange Act pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002.32.1
    Certification of CEO pursuant
    to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
    2002.32.2
    Certification of CFO pursuant
    to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
    2002. (b) Reports on Form 8-K during the quarter covered by this report:
The Registrant did not file a Form 8-K during the quarter ended October 31, 2007.




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/ Richard
MarguliesRichard MarguliesChief Executive Officer
  Dated: December 19, 2007 /s/ Frank RovitoFrank Rovito
   *Chief Financial Officer*Dated: December 19, 2007




**EAST
    COAST DIVERSIFIED CORPORATION AND CONSOLIDATED SUBSIDIARIES**(A Development Stage Company)Back to Table of ContentsConsolidated Balance SheetsOctober 31, 2007 and April 30,
    2007****
    
    **October
    31, 2007**
    
    **April
    30, 2007**ASSETSCurrent assets:Cash and
    equivalents
    $
    678
    $
    2,070Total
    current assets
    
    678
    
    2,070Leasehold improvements, (net of
    accumulated amortization of $0)
    
    430,373
    
    430,373Other assets:Restricted cash
    
    -
    
    -Cost of liquor
    license
    
    93,464
    
    93,464Total
    other assets
    
    93,464
    
    93,464**Total assets**
    $
    524,515
    $
    525,907LIABILITIES
    AND STOCKHOLDERS' DEFICITCurrent liabilities:Accounts and
    accrued expenses and compensation payable
    $
    843,995
    $
    676,578Current portion,
    convertible notes payable, officers
    
    633,272
    
    595,002Current portion,
    convertible note payable, related party
    
    80,823
    
    80,823Accrued interest
    
    94,497
    
    70,870Total current liabilities
    
    1,652,587
    
    1,423,273Non-current liabilities:Convertible note
    payable, related party
    
    327,774
    
    327,774Convertible notes
    payable, officers
    
    6,293
    
    9,858Deferred rent
    expense
    
    75,604
    
    69,591Total non-current liabilities
    
    409,671
    
    407,223**Total liabilities**
    
    2,062,258
    
    1,830,496Minority interest in Miami
    Renaissance Partners, Ltd., a partnership subsidiary
    
    122
    
    122Stockholders' deficit:Preferred stock,
    par value 0.001 par value, 1,000,000 authorized167,650
    and 0 issued and outstanding, respectively
    
    168
    
    168Common stock,
    $0.001 par value, 74,000,000 shares authorized;8,816,216  shares issued and outstanding
    
    8,816
    
    8,816Additional paid-in
    capital
    
    2,285,677
    
    2,285,677Accumulated deficit
    
    (3,812,026)
    
    (3,578,872)Less: stock
    subscription receivable
    
    (20,500)
    
    (20,500)Total
    stockholders' deficit
    
    (1,537,865)
    
    (1,304,711)**Total liabilities and stockholders' deficit**
    $
    524,515
    $
    525,907See
    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 Contents****Consolidated Statements of Operations
    (During the Development Stage)****
    
    
    
    
    
    
    
    
    
    **For the
    Period****Three
    Months**
    
    **Three
    Months**
    
    **Six Months**
    
    **Six Months**
    
    **From
    Inception****ended**
    
    **ended**
    
    **ended**
    
    **ended**
    
    **(April 26,
    2006) to****October 31, 2007**
    
    **October 31, 2006**
    
    **October 31, 2007**
    
    **October 31, 2006**
    
    **April 30, 2007**Revenues
    $
    -
    $
    -
    $
    
    $
    -
    $
    -Operating expenses:Consulting fees and
    servicessatisfied by
    issuance of common stock
    
    -
    
    -
    
    -
    
    -
    
    52,500Selling, general
    and administrative
    
    114,059
    
    108,185
    
    209,402
    
    217,385
    
    434,028Total operating expenses
    
    114,059
    
    108,185
    
    209,402
    
    217,385
    
    486,528Net loss from
    operations during development stage
    
    (114,059)
    
    (108,185)
    
    (209,402)
    
    (217,385)
    
    (486,528)Other income (expenses):Interest income
    
    -
    
    4
    
    -
    
    544
    
    544Interest expense
    
    (11,927)
    
    (10,433)
    
    (23,752)
    
    (18,316)
    
    (43,283)Total other expenses
    
    (11,927)
    
    (10,429)
    
    (23,752)
    
    (17,772)
    
    (42,739)Net loss before minority
    interest
    
    (125,986)
    
    (118,614)
    
    (233,154)
    
    (235,159)
    
    (529,267)Add (less): 25% minority
    interestin net profit
    (loss) of affiliate
    
    -
    
    6
    
    -
    
    122
    
    (122)Net loss after
    minority interest
    $
    (125,986)
    $
    (118,608)
    $
    (233,154)
    $
    (235,279)
    $
    (529,389)Basic and diluted net lossper
    weighted-average sharesof common stock
    outstanding
    $
    (0.015)
    $
    (0.015)
    $
    (0.028)
    $
    (0.03)
    $
    (0.064)Weighted average number of
    sharesof common stock outstanding
    $
    8,313,378
    
    7,881,705
    
    8,313,378
    
    7,936,461
    
    8,313,378See
    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 from inception (April 26, 2006) to October 31, 2007Additional
    
    Stock
    
    
    
    TotalPreferred
    
    Common
    
    Paid-in
    
    Subscription
    
    Accumulated
    
    stockholders'Shares
    
    Amount
    
    Shares
    
    Amount
    
    Capital
    
    Receivable
    
    Deficit
    
    deficitBalance April
    30, 2004
    -
    $
    -
    
    2,636,216
    $
    2,636
    $
    1,980,025
    $
    -
    $
    (2,075,474)
    $
    (92,813)Net loss for the year ended
    April 30, 2005
    -
    
    -
    
    -
    
    -
    
    -
    
    -
    
    (60,353)
    
    (60,353)Balance April
    30, 2005
    -
    
    -
    
    2,636,162
    
    2,636
    $
    1,980,025
    
    
    
    (2,135,827)
    
    (153,166)Miami Renaissance Group's shareexchange for Registrant's
    shares
    167,650
    
    168
    
    4,635,000
    
    4,635
    
    15,697
    
    (20,500)
    
    (913,656)
    
    (913,656)Net loss for the year ended
    April 30, 2006
    -
    
    -
    
    -
    
    -
    
    -
    
    -
    
    (21,643)
    
    (21,643)Balance April
    30, 2006
    167,650
    $
    168
    
    7,271,216
    $
    7,271
    $
    1,995,722
    $
    (20,500)
    $
    (3,071,126)
    $
    (1,088,465)Common stock issued for cash
    -
    
    -
    
    995,000
    
    995
    
    198,005
    
    -
    
    -
    
    199,000Common stock issued for
    services,including $40,000
    capitalizedas leasehold
    improvements
    -
    
    -
    
    550,000
    
    550
    
    91,950
    
    -
    
    -
    
    92,500Net loss for the year ended
    April 30, 2007
    -
    
    -
    
    -
    
    -
    
    -
    
    -
    
    (507,746)
    
    (507,746)Balance April
    30, 2007
    167,650
    $
    168
    
    8,816,216
    $
    8,816
    $
    2,285,677
    $
    (20,500)
    $
    (3,578,872)
    $
    (1,304,711)Net loss for the six monthsended October 31, 2007
    -
    
    -
    
    -
    
    -
    
    -
    
    -
    
    (233,154)
    
    (233,154)Balance,
    October 31, 2007
    167,650
    $
    168
    
    8,816,216
    $
    8,816
    $
    2,285,677
    $
    (20,500)
    $
    (3,812,026)
    $
    (1,537,865)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, 2007 and for the
    Period from inception (April 26, 2006) to October 31, 2007**For the Period**
    
    **Period from****Six Months**
    
    **From Inception**
    
    **Inception****Ended**
    
    **(April 26, 2006) to**
    
    **(April 26, 2006) to****October 31, 2007**
    
    **April 30, 2007**
    
    **October 31, 2007**Net loss
    before minority interest
    $
    (233,154)
    $
    (529,389)
    $
    (762,543)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
    
    52,500Changes
    in operating assets and liabilities:Increase in accounts and accrued expenses payable
    
    167,417
    
    192,978
    
    360,395Increase in deferred rent expense
    
    6,013
    
    17,962
    
    23,975Increase in accrued interest
    
    23,627
    
    42,816
    
    66,443Net cash used in operating activities
    
    (36,097)
    
    (223,011)
    
    (259,108)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
    
    34,705
    
    111,326
    
    146,031Common 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
    
    34,705
    
    393,063
    
    427,768Net (decrease) increase in cash
    
    (1,392)
    
    2,070
    
    678Cash at the beginning of the period
    
    2,070
    
    -
    
    -Cash at end of period
    $
    678
    $
    2,070
    $
    678 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 A - ADJUSTMENTS


In the opinion of management, all adjustments consisting only of normal
recurring adjustments necessary for a fair statement of (a) results of operations for the
three months and six months periods ended October 31, 2007 and for the period from
inception (April 26, 2006) to October 31, 2007, (b) the financial position at October 31,
2007, (c) the statements of cash flows for the six month period ended October 31, 2007 and
for the period from inception (April 26, 2006) to October 31, 2007, and (d) the changes in
stockholders' deficit for the six month period ended October 31, 2007 and for the period
from inception (April 26, 2006) to October 31, 2007 have been made. The results of
operations for the three and six months ended October 31, 2007 are not necessarily
indicative of the results to be expected for the full year.
NOTE B  UNAUDITED INTERIM FINANCIAL INFORMATION


The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim financial
information. Accordingly, they do not include all the information and footnotes required
by generally accepted accounting principles for financial statements. For further
information, refer to the audited consolidated financial statements and notes thereto for
the year ended April 30, 2007 included in the Company's Form 10-KSB filed with the
Securities and Exchange Commission on August 29, 2007.

The Company's consolidated financial statements have been presented on
a going concern basis, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. The liquidity of the Company has been
adversely affected in recent years by significant losses from operations. As further
discussed in Note 9, the Company incurred losses of $233,154 for the six months ended
October 31, 2007 and losses during the development stage of Miami Renaissance Group, Inc.
("MRG"), the acquirer/survivor entity in the merger described in Note 1, for the
period from the inception of their development stage (February 25, 2004) to April 30,
2006, of $914,049.

At October 31, 2007, the current consolidated Company has limited cash
reserves, with its current liabilities exceeding its cash by $1,651,909. In addition, the
Company has substantial non-current liabilities, including convertible notes payables, of
$409,671, as well as Total Stockholders Deficit at that date of $1,537,865.

The aforementioned financial condition indicates that the Company will
have substantial difficulty meeting its financial obligations for the balance of this
fiscal year. These factors raise substantial doubt as to the Company's ability to continue
as a going concern. Recently, operations have been funded by loans in the form of
convertible debts issued to officers and other related parties and occasional private
placements of common stock.

As further discussed below in Note 1, management is in the process of
getting the facility in which it will operate a night club ready for use and will need to
seek additional financing in one form or another. The Company is hopeful it will continue
to be able to find sufficient financing to complete construction of the nightclub, and
begin its operations, and continue as a going concern in its present form. Accordingly,
the consolidated financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the amount and
classification of liabilities or any other adjustments that might be necessary should the
Company be unable to continue as a going concern in its present form.
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.
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 October 31, 2007, 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 2008.

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.

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

Principles of consolidation:

These financial statements will include the accounts of East Coast
Diversified Corporation, MRG, and MRP and include a 25% minority interest representing the
remainder limited partner interest. All significant inter-company balances and
transactions have been eliminated in consolidation.

Income taxes:

The Company follows SFAS No. 109, "Accounting for Income
Taxes." Under the asset and liability method of SFAS No. 109, deferred tax
assets and liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. A valuation allowance has been provided for
the Company's net deferred tax asset, due to uncertainty of realization.

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 October 31, 2007, 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.

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 October 31, 2007, 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.

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 Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No. 128, "Earning
per share" ("SFAS No. 128"). SFAS No. 128 specifies the compilation,
presentation and disclosure requirements for earnings 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.

Consideration of Other Comprehensive Income Items:

SFAS No. 130, "Reporting 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. The Company's consolidated financial statements do not contain any changes in
equity that are required to be reported separately in comprehensive income.

In May 2005, the FASB issued SFAS 154, Accounting Changes and
Error Corrections, that applies to all voluntary changes in accounting principle.
This Statement requires retrospective application to prior periods financial
statements of changes in accounting principle, unless it is impracticable to determine
either the period-specific effects or the cumulative effect of the change. When it is
impracticable to determine the period-specific effects of an accounting change on one or
more individual prior periods presented, this Statement requires that the new accounting
principle be applied to the balances of assets and liabilities as of the beginning of the
earliest period for which retrospective application is practicable and that a
corresponding adjustment be made to the opening balance of retained earnings (or other
appropriate components of equity or net assets in the statement of financial position) for
that period rather than being reported in an income statement. When it is impracticable to
determine the cumulative effect of applying a change in accounting principle to all prior
periods, this Statement requires that the new accounting principle be applied as if it
were adopted prospectively from the earliest date practicable. SFAS 154 will be effective
for the Company for fiscal year ended December 31, 2007. The Company does not anticipate
that the adoption of SFAS No. 154 will have an impact on the Companys overall
results of operations or financial position.

In February 2006, the FASB issued SFAS 155, Accounting for
Certain Hybrid Financial Instruments--an amendment of FASB Statements No. 133 and
140, that allows a preparer to elect fair value measurement at acquisition, at
issuance, or when a previously recognized financial instrument is subject to a
re-measurement (new basis) event, on an instrument-by-instrument basis, in cases in which
a derivative would otherwise have to be bifurcated. It also eliminates the exemption from
applying Statement 133 to interests in securitized financial assets so that similar
instruments are accounted for similarly regardless of the form of the instruments. This
Statement is effective for all financial instruments acquired or issued after the
beginning of an entity's first fiscal year that begins after September 15, 2006. The
Company does not anticipate that the adoption of SFAS No. 155 will have an impact on the
Company's overall results of operations or financial position.

Recent Accounting Pronouncements

In March 2006, the FASB issued SFAS 156, Accounting for Servicing
of Financial Assets--an amendment of FASB Statement No. 140, that applies to the
accounting for separately recognized servicing assets and servicing liabilities. This
Statement requires that all separately recognized servicing assets and servicing
liabilities be initially measured at fair value, if practicable. An entity should adopt
this Statement as of the beginning of its first fiscal year that begins after September
15, 2006. The Company does not anticipate that the adoption of SFAS No. 156 will have an
impact on the Company's overall results of operations or financial position.

In July 2006, the FASB issued FASB Interpretation No. 48, Accounting
for Uncertainty in Income Taxes. The Interpretation clarifies the way companies are to
account for uncertainty in income tax reporting and filing and prescribes a consistent
recognition threshold and measurement attribute for recognizing, derecognizing, and
measuring the tax benefits of a tax position taken, or expected to be taken, on a tax
return. The Interpretation is effective for fiscal years beginning after December 15,
2006, although early adoption is possible. The Company does not plan to adopt early and
the Company is currently in the process of evaluating the impact, if any, the adoption of
the Interpretation will have on the 2007 financial statements.

In September 2006, the FASB issued SFAS 157, Fair Value
Measurements, which defines fair value, establishes a framework for measuring fair
value in generally accepted accounting principles (GAAP), and expands disclosures about
fair value measurements. This Statement applies under other accounting pronouncements that
require or permit fair value measurements, the Board having previously concluded in those
accounting pronouncements that fair value is the relevant measurement attribute.
Accordingly, this Statement does not require any new fair value measurements. The adoption
of SFAS No. 157 will not have an impact on the Company's overall results of operations or
financial position.

In September 2006, the Financial Accounting Standards Board
(FASB) the issued SFAS No. 158, Employers Accounting for Defined
Benefit Pension and Other Postretirement Plans, an Amendment of FASB Statements No. 87,
88, 106, and 132(R) (SFAS No. 158). SFAS No. 158 requires companies to
report the funded status of their defined benefit pension and other postretirement benefit
plans on their balance sheets as a net liability or asset as of December 31, 2006. The new
standard does not address the accounting treatment for pension and postretirement benefits
in the income statement. This will have no impact on the Companys results of
operations or financial position.

In February 2007, the Financial Accounting Standards Board
(FASB) issued SFAS No.159, The Fair Value Option for Financial Assets
and Financial Liabilities - Including an amendment of FASB Statement No.115. SFAS
No.159 permits entities to choose to measure eligible financial instruments and other
items at fair value at specified election dates. A business entity shall report unrealized
gains and losses on items for which the fair value option has been elected in earnings at
each subsequent reporting date. The fair value option may be applied instrument by
instrument but only upon the entire instrument - not portions of the instrument. SFAS
No.159 is effective as of the beginning of an entitys first fiscal year that begins
after November 15, 2007. The Company does not anticipate that the adoption of SFAS No. 159
will have an impact on the Company's overall results of operations or financial position.

**Notes 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, 2007**
    
    **April 30, 2006**Net operating loss
    carryforward
    $
    1,296,089
    $
    1,216,816Less valuation allowance
    
    (1,296,089)
    
    (1,216,816)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 carry forwards.

The Company incurred no federal or state income tax expense for the six
months ended October 31, 2007 and for period from inception (April 26, 2006) to October
31, 2007, and utilized no tax carry forward losses.

As of October 31, 2007 the Company has available net operating loss
carry forwards of $3,812,026 that expire through 2028. 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 have 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, 2008. Accordingly, this debt has been presented as a current liability at October 31,
2007.

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 on October 31, 2007. The loan holder has agreed to
extend the maturity date of the obligation to October 31, 2008. The note is convertible
into shares of common stock of the Company at a conversion price of $.002.

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

As of October 31, 2007 and April 30, 2007, the Company had recorded
$11,758 and $6,909 of accrued interest on the convertible notes payable to related party,
respectively. Interest expense on this note was $4,849 and $2,099 for the six months ended
October 31, 2007 and 2006, respectively, and $11,758 for the period from inception (April
26, 2006) to October 31, 2007. **Note 6  Convertible Notes Payable
to Officers and Shareholder** Convertible notes payable to
officers are as follows: Holder
    Terms
    
    October 31, 2007 Balance
    
    April 30, 2007 BalanceRichard Margulies, President/CEO and Chairman of the Board
    of Directors and shareholder
    $54,104 note which accrues interest at
    6% per annum and is due December 31, 2007. The note is convertible into shares of common
    stock of the Company at a conversion price of $.50.
    $
    54,104
    $
    54,104Richard Margulies, President/CEO and Chairman of the Board
    of Directors and shareholder
    $4,140 note which accrues interest at 6% per annum and is
    due April 25, 2008. The note is convertible into shares of common stock of the Company at
    a conversion price of $.50.
    
    4,140
    
    4,140Richard Margulies, 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 $.002.
    
    1,463
    
    1,463Richard Margulies, President/CEO and Chairman of the Board
    of Directors and shareholder
    $6,500 note which accrues interest at 6% per annum and is
    due October 31, 2008. The note is convertible into shares of common stock of the Company
    at a conversion price of $.002.
    
    6,500
    
    -Richard Margulies, 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 $.002.
    
    570
    
    -Ivo Heiden, Shareholder
    $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 another extention of the
    maturity date of the obligation to December 31, 2007.
    
    5,515
    
    5,515Ivo Heiden, Shareholder
    $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
    another extention of the maturity date of the obligation to December 31, 2007.
    
    4,750
    
    4,750Ivo Heiden, Shareholder
    $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 another extention of the
    maturity date of the obligation to December 31, 2007.
    
    4,185
    
    4,185Richard Margulies, President/CEO and Chairman of the Board
    of Directors and shareholder
    $125 note which accrues interest at 6% per annum and is due
    July 31, 2008. The note is convertible into shares of common stock of the Company at a
    conversion price of $.002.
    
    125
    
    125Richard Margulies, 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 $.002. The shareholder has agreed to extend the maturity date of
    the obligation to December 31, 2007.
    
    2,005
    
    2,005 Richard Margulies, President/CEO and Chairman of the Board
    of Directors and shareholder
    $176 note which accrues interest at 6%
    per annum and is due October 31, 2008. The note is convertible into shares of common stock
    of the Company at a conversion price of $.002.
    $
    176
    $
    176Richard Margulies, 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 $.002.
    
    360
    
    360Richard Margulies, President/CEO and Chairman of the Board
    of Directors and shareholder
    $3,590 note which accrues interest at 6% per annum and is
    due July 31, 2008. The note is convertible into shares of common stock of the Company at a
    conversion price of $.002.
    
    3,950
    
    -Frank Rovito, CFO, and a Director (Treasurer) and
    shareholder
    $29,980 note which accrues interest at
    6% per annum and is due December 31, 2007. The note is convertible into shares of common
    stock of the Company at a conversion price of $.50.
    
    29,980
    
    29,980Frank Rovito, CFO, and a Director (Treasurer) and
    shareholder
    $1,600 note which accrues interest at 6%
    per annum and is due April 25, 2008. The note is convertible into shares of common stock
    of the Company at a conversion price of $.50.
    
    1,600
    
    1,600Frank Rovito, CFO, and a Director (Treasurer) and
    shareholder
    $2,100 note which accrues interest at 6%
    per annum and is due October 31, 2008. The note is convertible into shares of common stock
    of the Company at a conversion price of $.002.
    
    2,100
    
    2,100Aaron Goldstein, a Director (Secretary) 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 $.002.
    
    3,900
    
    -Aaron Goldstein, a Director (Secretary) and shareholder
    $134,737 note which accrues interest at
    6% per annum and is due April 25, 2008. The note is convertible into shares of common
    stock of the Company at a conversion price of $.50.
    
    134,737
    
    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 $.002. The shareholder has agreed to extend
    the maturity date of the obligation to December 31, 2007.
    
    10,000
    
    10,000Aaron Goldstein, a Director (Secretary) and shareholder
    $75,000 note which accrues interest at
    6% per annum and is due December 31, 2007. The note is convertible into shares of common
    stock of the Company at a conversion price of $.50.
    
    75,000
    
    75,000Aaron Goldstein, a Director (Secretary) and shareholder
    $2,000 note which accrues interest at 6%
    per annum and is due July 31, 2008. The note is convertible into shares of common stock of
    the Company at a conversion price of $.002.
    
    2,000
    
    2,000Aaron Goldstein, a Director (Secretary) and shareholder
    $13,000 note which accrues interest at
    6% per annum and is due January 31, 2008. The note is convertible into shares of common
    stock of the Company at a conversion price of $.002.
    
    13,000
    
    13,000Aaron Goldstein, a Director (Secretary) and shareholder
    $179,523 note which accrues interest at
    6% per annum and is due December 31, 2007. The note is convertible into shares of common
    stock of the Company at a conversion price of $.50.
    
    179,523
    
    179,523Aaron Goldstein, a Director (Secretary) and shareholder
    $5,097 note which accrues interest at 6%
    per annum and is due October 31, 2008. The note is convertible into shares of common stock
    of the Company at a conversion price of $.002.
    
    5,097
    
    5,097Aaron Goldstein, a Director (Secretary) and shareholder
    $15,000 note which accrues interest at
    6% per annum and is due April 30, 2008. The note is convertible into shares of common
    stock of the Company at a conversion price of $.002.
    
    15,000
    
    15,000Aaron Goldstein, a Director (Secretary) and shareholder
    $2,800 note which accrues interest at 6% per annum and is
    due July 31, 2008. The note is convertible into shares of common stock of the Company at a
    conversion price of $.002.
    
    2,800
    
    -Aaron Goldstein, a Director (Secretary) and shareholder
    $60,000 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 $.002. The shareholder has agreed to extend the maturity date of
    the obligation to October 31, 2008.
    
    60,000
    
    -Aaron Goldstein, a Director (Secretary) and shareholder
    $15,233 note which accrues interest at 6% per annum and is
    due October 31, 2008. The note is convertible into shares of common stock of the Company
    at a conversion price of $.002.
    
    15,233
    
    -639,565
    
    604,860Less: current portion
    
    633,272
    
    595,002$
    6,293
    $
    9,858 As of October 31, 2007 future maturities of debt for the next two years
are as follows:

Years ending October 31: 2008
    $
    633,2722009
    
    6,293 As of October 31 2007 and April 30, 2007, the Company had recorded
$82,739 and $63,961 of accrued interest on the convertible notes payable to officers,
respectively. Interest expense on these notes was $18,903 and $16,092 for the six months
ended October 31, 2007 and 2006, respectively, and $55,277 for the period from inception
(April 26, 2006) to October 31, 2007. **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, 2007, MRG incurred $1,219,321 of rent and real estate taxes under the
lease, of which basic rent incurred to Brickell totaled $805,522. The Companys
Consolidated Statements of Operations for the six months ended October 31, 2007 includes
$116,928 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 October 31, 2007, MRG incurred $49,200 of rent expense
under the sublease. The Companys Consolidated Statements of Operations for the six
months ended October 31, 2007, $7,200 of rent expense incurred by MRG under the sublease.

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

**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 thereunder. 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.

**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 $3,812,026 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 Subscripton 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 October 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.

[4] 5 Year Table of obligations under leases:

The minimum future obligations for rent under agreements outlined in
[2] are as follows: **Years Ending
    Octobewr 31,**
    
    **Amounts**2008
    $
    226,2602009
    
    233,0522010
    
    240,0422011
    
    247,2422012
    
    254,658Thereafter
    
    395,382$
    1,596,636