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 January 31, 2010 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 March 2, 2010,
the Registrant had 47,660,639 shares of common stock, par value $0.001, issued and
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
nine-month periods ended January 31, 2010 and 2009 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. to engage in the business of purchasing and
operating a tree farm and nursery, which venture. was unsuccessful. In. March 1997, the
Company amended its articles of incorporation, reorganized its capital structure and
changed its name to Viva Golf, USA Corp., acquiring The Company the assets of Viva Golf,
USA Corp., a golf equipment marketing plan and other related assets which was
also.unsuccessful 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 of Miami 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, were 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 agreed to sell and MRG
Acquisition Corp. (MRGA is a Delaware corporation and was formed for the purpose of
acquiring MRG") agreed to 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 ECDC to certain
affiliated persons.

On September 30, 2009, the Company completed the sale of MRG following which its new
business objective was to seek an operating company.
New Business Objectives of the Registrant


As a result of the sale of MRG, the Registrant no longer had any business operations
and determined to direct its efforts and limited resources to pursue potential new
business opportunities. During the period that the Company had no operationsthere was,only
a limited trading market in the Registrant's shares. There can be no assurance that in the
future 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 officers and/directors devoted their efforts to evaluate potential
business combination candidates,with no assurance that the Registrant would be successful
in its efforts.
Plan of Operation


From September 2009 through December 2009, the Registrant had no operations or revenues
and its activities were related to seeking new business opportunities, including seeking
an acquisition or merger with an operating company.

The Registrant was entirely dependent on the judgment of its officers and directors in
connection with its efforts to pursue a new business opportunity or a selection process
for a target operating company. In evaluating a prospective new business opportunity or an
operating company,they considered, among other factors, the following: (i) costs
associated with effecting a transaction; (ii) growth potential of the target business;
(iii) experience and skill of management and availability of additional personnel; (iv)
necessary capital requirements; (v) the prospective candidate's competitive position; (vi)
stage of development of the business opportunity; (vii) the market acceptance of the
business, its products or services; (vii) the availability of audited financial statements
of the potential business opportunity; and (ix) the regulatory environment that may be
applicable to any prospective business opportunity.

The foregoing criteria were not intended to be exhaustive and there other criteria
could have evolved that management may have deemed relevant. In connection with an
evaluation of a prospective or potential business opportunity, management was expected to
conduct a due diligence review.
Recent Developments


On December 18, 2009, the Company's principal shareholders, Frank Rovito, Aaron
Goldstein and Green Energy Partners, LLC (the"Sellers")
and entered into a Securities Purchase Agreement (the
Agreement) with Kayode Aladesuyi (the Buyer) pursuant to
which Sellers, owners of record and beneficially an aggregate of 7,029,950 shares of
Common Stock, par value $0.001 per share (Common Stock) of ECDC, agreed
to sell and transfer Sellers' 7,029,950 shares of  Common Stock (the "Sellers
Shares) to the Buyer for total consideration of Three Hundred Thousand
($300,000) Dollars. The Agreement also provides that the Company will enter into a share
exchange agreement with EarthSearch Communications International, Inc.
("EarthSearch") EarthSearch offers a portfolio of GPS devices, RFID
interrogators, integrated GPS/RFID technologies and Tag designs. These solutions help
businesses worldwide to increase asset management, provide safety and security, increase
productivity, and deliver real-time visibility of the supply chain through automation.

On January 15, 2010, ECDC and EarthSearch executed a Share Exchange
Agreement  pursuant to which the Company agreed to issue 35,000,000 million
restricted shares to the shareholders of EarthSearch. Mr. Aladesuyi is the CEO, Chairman
and control shareholder of EartherSearch. The Agreement is subject to closing conditions
and the parties expect the closing to take place on or around March 31, 2010.
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.

On January 31, 2010, we had $6 in current assets and had $92,652 in liabilities. On
January 31, 2010, our negative working capital was $92,646.

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 January 31, 2010, 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-Q 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: March 22, 2010




**EAST
    COAST DIVERSIFIED CORPORATION AND CONSOLIDATED SUBSIDIARIES**(A Development Stage Company)Back to Table of ContentsConsolidated Balance SheetsJanuary 31, 2010 and April 30, 2009****
    
    **January 31, 2010**
    
    **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 note
    
    16,415
    
    711,269Current portion,
    convertible note, related party
    
    -
    
    408,597Accrued
    interest
    
    -
    
    170,696Total current liabilities
    
    92,652
    
    2,529,188Non-current liabilities:Deferred
    rent expense
    
    -
    
    85,897Total non-current
    liabilities
    
    -
    
    85,897**Total liabilities**
    
    92,652
    
    2,615,085Non-controlling interest
    in consolidated affiliate
    
    -
    
    122Stockholders' deficit:Preferred
    stock, par value 0.001 par value, 1,000,000 authorizednone
    issued and outstanding
    
    -
    
    -Common stock,
    $0.001 par value, 74,000,000 shares authorized;47,660,639 and 362,939 shares issued and outstanding, respectively
    
    47,661
    
    363Additional
    paid-in capital
    
    7,891,245
    
    2,339,298Accumulated
    deficit
    
    (8,031,552)
    
    (4,410,306)Less: stock
    subscription receivable
    
    -
    
    (20,500)Total stockholders' deficit
    
    (92,646)
    
    (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 Periods Ended January 31, 2010 and 2009And
    for the Period from Inception (April 30, 2006) to January 31, 2010 and April 30, 2009********
    
    
    
    
    
    
    
    
    
    **For
    the Period**
    
    **For
    the Period****Three
    Months**
    
    **Three
    Months**
    
    **Nine
    Months**
    
    **Nine
    Months**
    
    **from
    Inception**
    
    **from
    Inception****ended**
    
    **ended**
    
    **ended**
    
    **ended**
    
    **(April
    26, 2006) to**
    
    **(April
    26, 2006) to****January 31, 2010**
    
    **January 31, 2009**
    
    **January 31, 2010**
    
    **January 31, 2009**
    
    **April 30, 2009**
    
    **January 31, 2010**Revenues
    $
    -
    $
    -
    $
    
    $
    
    $
    -
    $
    -Operating expenses:Consulting fees and
    servicessatisfied by
    issuance of common stock
    
    -
    
    -
    
    -
    
    -
    
    52,500
    
    52,500Selling, general
    and administrative
    
    -
    
    95,086
    
    174,378
    
    288,702
    
    1,244,663
    
    1,419,041Total operating expenses
    
    -
    
    95,086
    
    174,378
    
    288,702
    
    1,297,163
    
    1,471,541Net loss from
    operations during development stage
    
    -
    
    (95,086)
    
    (174,378)
    
    (288,702)
    
    (1,297,163)
    
    (1,471,541)Other income (expenses):Interest income
    
    -
    
    -
    
    -
    
    -
    
    544
    
    544Gain on settlement
    of accrued liabilities
    
    -
    
    -
    
    -
    
    79,339
    
    79,339
    
    79,339Loss on debt
    conversion
    
    (3,225,551)
    
    -
    
    (3,431,081)
    
    -
    
    -
    
    (3,431,081)Interest expense
    
    (240)
    
    (13,153)
    
    (15,909)
    
    (39,141)
    
    (143,421)
    
    (159,330)Total other expenses
    
    (3,225,791)
    
    (13,153)
    
    (3,446,990)
    
    40,198
    
    (63,538)
    
    (3,510,528)Net loss before non-controlling
    interest in consolidated affiliate
    
    (3,225,791)
    
    (108,239)
    
    (3,621,368)
    
    (248,504)
    
    (1,360,701)
    
    (4,982,069)Add (less): 25% non-controlling
    interestin net profit
    (loss) of consolidated affiliate
    
    -
    
    -
    
    122
    
    -
    
    (122)
    
    -Net loss
    after non-controlling interest
    $
    (3,225,791)
    $
    (108,239)
    $
    (3,621,246)
    $
    (248,504)
    $
    (1,360,823)
    $
    (4,982,069)Basic and diluted net lossper
    weighted-average sharesof common stock
    outstanding (adjusted for 1:100 reverse split)
    $
    (0.408)
    $
    (0.359)
    $
    (0.722)
    $
    (1.25)
    $
    (13.60)
    $
    -Weighted average number of
    sharesof common stock outstanding (adjusted for 1:100 reverse split)
    
    7,906,381
    
    300,812
    
    5,013,392
    
    198,340
    
    100,061
    
    -See
    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 January 31, 2010and
    for the Period from inception (April 26, 2006) to January 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
    
    -
    
    -
    
    1,034,655Common stock issued fro debt
    conversion
    -
    
    -
    
    5,400,000
    
    5,400
    
    3,234,600
    
    -
    
    -
    
    3,240,000Common stock issued for share
    exchange
    -
    
    -
    
    35,000,000
    
    35,000
    
    (35,000)
    
    -
    
    -
    
    -Spin off Miami Renaissance from
    ECDC
    
    
    
    
    
    
    
    
    1,324,590
    
    20,500
    
    
    
    1,345,090Net loss for the period ended
    October 31, 2009
    -
    
    -
    
    -
    
    -
    
    -
    
    -
    
    (3,621,246)
    
    (3,621,246)Balance,
    October 31, 2009 (adjusted for 1:100 reverse split)
    -
    $
    -
    
    47,660,639
    $
    47,661
    $
    7,891,245
    $
    -
    $
    (8,031,552)
    $
    (92,646)Seethe summary of significant accounting policies and the
    accompanying notes to the financial statements.




EAST COAST DIVERSIFIED CORPORATION AND CONSOLIDATED
    AFFILIATEConsolidated Statement of Cash Flows(During
    the Development Stage) Back to Table of ContentsFor
    the nine months ended January 31, 2010 and for the Period from inception (April 26, 2006)
    to January 31, 2010For the Period
    
    Period fromNine Months
    
    From Inception
    
    InceptionEnded
    
    (April 26, 2006)
    to
    
    (April 26, 2006)
    toJanuary 31, 2010
    
    April 30, 2009
    
    January 31, 2010Net loss
    $
    (3,621,246)
    $
    (1,360,823)
    $
    (4,982,069)Cash flows from
    operating activities:Adjustments to reconcile
    net loss to cash used in operating activities:25% non-controlling
    interest in net profit of consolidated affiliate
    
    (122)
    
    122
    
    -Common stock issued for
    consulting fees and services
    
    -
    
    52,500
    
    52,500Common stock issued
    on settlement of accrued expenses
    
    -
    
    45,000
    
    45,000Loss on spin-off of Miami
    Renaissance from ECDC
    
    1,345,090
    
    
    
    1,345,090Common stock issued for
    debt conversion on notes and accrued interest payable
    
    1,034,655
    
    -
    
    1,034,655Common stock issued for
    debt conversion
    
    3,240,000
    
    -
    
    3,240,000Issuance of convertible
    note for accrued interest
    
    16,415
    
    -
    
    16,415Decrease in notes and
    accrued interest payable through issuance of common stock
    
    (1,123,086)
    
    -
    
    (1,123,086)Decrease in notes payable
    through issuance of common stock for debt conversion
    
    (14,450)
    
    
    
    (14,450)Changes
    in operating assets and liabilities:(Decrease) increase in
    accounts and accrued expenses payable
    
    (1,162,389)
    
    755,026
    
    (407,363)(Decrease) increase in
    deferred rent expense
    
    (85,897)
    
    34,268
    
    (51,629)(Decrease) increase in
    accrued interest
    
    (170,696)
    
    142,642
    
    (28,054)Net cash used in operating activities
    
    (541,726)
    
    (331,265)
    
    (872,991)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)Decrease in cost of
    liquor license and leasehold improvements
    
    523,837
    
    -
    
    523,837Net cash (used in) provided by investing activities
    
    523,837
    
    (167,982)
    
    355,855Cash 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
    
    217,735
    
    235,405Common stock issued
    for cash
    
    -
    
    199,000
    
    199,000Return of capital
    contributions to limited partners of non-controlling interest
    
    -
    
    (125,000)
    
    (125,000)Decrease in
    restricted cash
    
    -
    
    126,914
    
    126,914Net cash provided by financing activities
    
    17,670
    
    499,472
    
    517,142Net (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 MRGand its partnership
    subsidiary, Miami Renaissance Partners, Ltd.Assets acquired:Cash
    $
    -
    $
    2,451
    $
    2,451Restricted cash
    
    -
    
    126,914
    
    126,914Subscription
    receivable from MRG 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
    
    51,629Non-controlling
    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 due to 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 shares issued 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% non-controlling 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. On September 30, 2009, the
Company spun-off MRG. Effective April 26, 2006, the Company is
considered to be a development stage 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 January 31, 2010 and the results of its operations, changes in stockholders' (deficit)
equity , and cash flows for the three and nine months periods ended January 31, 2010 and
2009 , respectively and for the period from the commencement of the development stage
(April 26, 2006) to January 31, 2010, 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 nine months ended January 31, 2010 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 for
the year ended April 30, 2009 will include the accounts of East Coast Diversified
Corporation, MRG, and MRP and include a 25% non-controlling interest representing the
remainder limited partner interest. All significant inter-company balances and
transactions have been eliminated in consolidation. For the period ended January 31, 2010,
the financial statements do not include the accounts of MRG, MRP and the 25%
non-controlling interest. **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. **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
consideration for the forgiveness of debt. **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 January 31, 2010, 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. **Recent Accounting
Pronouncements** 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: **January 31, 2010**
    
    **April 30, 2009**Net operating loss
    carryforward
    $
    2,730,728
    $
    1,499,504Less valuation allowance
    
    (2,730,728)
    
    (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 nine months ended January 31, 2010 and 2009, and for
period from inception (April 26, 2006) to January 31, 2010, and utilized no tax
carryforward losses. As of January 31, 2010 the Company has available
net operating loss carryforwards of $8,031,552 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 was 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 consideration for the assignment by the Company of certain assets
including leasehold improvements and the liquor license to MRG. Brickell was 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 an
$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 was a related
party, as described in Note 7. As of January 31, 2010 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 $4,041 and
$4,848 for the nine months ended January 31, 2010 and 2009, respectively, and $30,347 for
the period from inception (April 26, 2006) to January 31, 2010. Effective September, 2009,
$30,347 of accrued interest was forgiven in consideration for the assignment by the
Company of certain assets including leasehold improvements and the liquor license to MRG **Note 6  Convertible Notes Payable
to Officers, shareholders and Note Holders** Convertible notes payable to
officers, shareholders and note holders  are as follows: Holder
    Terms
    
    January 31, 2010 Balance
    
    April 30, 2009 BalanceRichard Margulies, former shareholder
    $54,104 note which accrued interest
    at 6% per annum and was due December 31, 2007. The note was convertible into shares of
    common stock of the Company at a conversion price of $.50. The shareholder had agreed to
    another extension of the maturity date of the obligation to October 31, 2009. On August 7,
    2009 the note was converted into common stock.*
    $
    0
    $
    54,104Richard Margulies, former shareholder
    $4,140 note which accrued interest at 6% per annum and was
    due April 25, 2008. The note was convertible into shares of common stock of the Company at
    a conversion price of $.50. The shareholder had agreed to another extension of the
    maturity date of the obligation to October 31, 2009. On August 7, 2009 the note was
    converted into common stock.*
    
    0
    
    4,140Richard Margulies, former shareholder
    $1,463 note which accrued interest at 6% per annum and was
    due April 30, 2009. The note was convertible into shares of common stock of the Company at
    a conversion price of $.002. The shareholder had agreed to another extension of the
    maturity date of the obligation to October 31, 2009. On August 7, 2009 the note was
    converted into common stock.*
    
    0
    
    1,463Richard Margulies, former shareholder
    $6,500 note which accrued interest at 6% per annum and was
    due October 31, 2008. The note was convertible into shares of common stock of the Company
    at a conversion price of $.002. The shareholder had agreed to another extension of the
    maturity date of the obligation to October 31, 2009. On August 7, 2009 the note was
    converted into common stock.*
    
    0
    
    6,500Richard Margulies, former shareholder
    $570 note which accrued interest at 6% per annum and was
    due October 31, 2009. The note was convertible into shares of common stock of the Company
    at a conversion price of $.002. On August 7, 2009 the note was converted into common stock
    
    0
    
    570Richard Margulies, former shareholder
    $2,170 note which accrued interest at 6% per annum and was
    due January 31, 2009. The note was convertible into shares of common stock of the Company
    at a conversion price of $.002. The shareholder had agreed to extend the maturity date of
    the obligation to October 31, 2009. On August 7, 2009 the note was converted into common
    stock.*
    
    0
    
    2,170Richard Margulies, former shareholder
    $5,910 note which accrued interest at 6% per annum and was
    due October 31, 2008. The note was convertible into shares of common stock of the Company
    at a conversion price of $.002. The shareholder had agreed to extend the maturity date of
    the obligation to October 31, 2009. On August 7, 2009 the note was converted into common
    stock.*
    
    0
    
    5,910Richard Margulies, former shareholder
    $280 note which accrued interest at 6% per annum and was
    due October 31, 2008. The note was convertible into shares of common stock of the Company
    at a conversion price of $.002. The shareholder had agreed to another extension of the
    maturity date of the obligation to October 31, 2009. On August 7, 2009 the note was
    converted into common stock.*
    
    0
    
    280Richard Margulies, former shareholder
    $4,205 note which accrued interest at 6% per annum and was
    due October 31, 2009. The note was convertible into shares of common stock of the Company
    at a conversion price of $.002. On August 7, 2009 the note was converted into common
    stock.*
    
    0
    
    4,205Richard Margulies, former shareholder
    $1,725 note which accrued interest at 6% per annum and was
    due October 31, 2009. The note was convertible into shares of common stock of the Company
    at a conversion price of $.002. On August 7, 2009 the
    note was converted into common stock.*
    
    1,725
    
    1,725Richard Margulies, former shareholder
    $1,850 note which accrued interest at 6% per annum and was
    due October 31, 2009. The note was convertible into shares of common stock of the Company
    at a conversion price of $.002.On August 7, 2009 the note was converted into common
    stock.*
    
    0
    
    1,850Richard Margulies, former shareholder
    $4,110 note which accrued interest at 6% per annum and was
    due October 31, 2008. The note was convertible into shares of common stock of the Company
    at a conversion price of $.002. On August 7, 2009 the note was converted into common
    stock.*
    
    0
    
    4,110Ivo Heiden, note holder
    $5,515 note which accrued 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 had agreed to another extension
    of the maturity date of the obligation to January 31, 2010. On January 21, 2010 the note
    was sold to an unaffiliated third party at face value pursuant to a debt purchase
    agreement.
    
    0
    
    5,515Ivo Heiden, note holder
    $4,750 note which accrued 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 had agreed to
    another extension of the maturity date of the obligation to January 31, 2010. On January
    21, 2010 the note was sold to an unaffiliated third party at face value pursuant to a debt
    purchase agreement.
    
    0
    
    4,750Ivo Heiden, note holder
    $4,185 note which accrued interest at 10% per annum and
    was due February 3, 2006. The note was convertible into shares of common stock of the
    Company at the conversion price of $.002. The shareholder had agreed to another extension
    of the maturity date of the obligation to January 31, 2010. On January 21, 2010 the note
    was sold to an unaffiliated third party at face value pursuant to a debt purchase
    agreement.
    
    0
    
    4,185Ivo Heiden, note holder
    On January 22, 2010, the former note
    holder was issued a convertible promissory note to convert accrued interest of $16,415
    into a convertible promissory note which is due and payable before July 31, 2010. The note
    is convertible into shares of common stock of the Company at the conversion price of
    $0.20.
    
    16,415
    
    -Richard Margulies, former shareholder
    $125 note which accrued interest at 6% per annum and was
    due July 31, 2008. The note was convertible into shares of common stock of the Company at
    a conversion price of $.002. The shareholder had agreed to another extension of the
    maturity date of the obligation to October 31, 2009. On August 7, 2009 the note was
    converted into common stock.*
    
    0
    
    125Richard Margulies, former shareholder
    $2,005 note which accrued interest at 6% per annum and was
    due December 31, 2006. The note was convertible into shares of common stock of the Company
    at a conversion price of $.002. On August 7, 2009 the note was converted into common
    stock.*
    
    0
    
    2,005  EAST COAST DIVERSIFIED CORPORATION AND
CONSOLIDATED AFFILIATE 
(A DEVELOPMENT STAGE COMPANY) Notes to the Consolidated Financial Statements Note 6  Convertible Notes Payable to
Officers, Shareholder and Note Holder Richard Margulies, former shareholder
    $176 note which
    accrued interest at 6% per annum and was due October 31, 2008. The note was convertible
    into shares of common stock of the Company at a conversion price of $.002. The shareholder
    had agreed to another extension of the maturity date of the obligation to October 31,
    2009. On August 7, 2009 the note was converted into common stock.*
    $
    0
    $
    176Richard Margulies, former shareholder
    $360 note which accrued interest at 6% per
    annum and was due January 31, 2009. The note was convertible into shares of common stock
    of the Company at a conversion price of $.002. On August 7, 2009 the note was converted
    into common stock.*
    
    0
    
    360Richard Margulies, former shareholder
    $3,590 note which
    accrued interest at 6% per annum and was due July 31, 2008. The note was convertible into
    shares of common stock of the Company at a conversion price of $.002. On August 7, 2009
    the note was converted into common stock.*
    
    0
    
    3,590Frank Rovito, CEO, CFO and shareholder
    $29,980 note which
    accrued interest at 6% per annum and was due December 31, 2007. The note was convertible
    into shares of common stock of the Company at a conversion price of $.50. On August 7,
    2009 the note was converted into common stock.*
    
    0
    
    29,980Frank Rovito, CEO, CFO and shareholder
    $1,600 note which
    accrued interest at 6% per annum and was due April 25, 2008. The note was convertible into
    shares of common stock of the Company at a conversion price of $.50. On August 7, 2009 the
    note was converted into common stock.*
    
    0
    
    1,600Frank Rovito, CEO, CFO and shareholder
    $2,100 note which
    accrued interest at 6% per annum and was due October 31, 2008. The note was convertible
    into shares of common stock of the Company at a conversion price of $.002. On August 7,
    2009 the note was converted into common stock.*
    
    0
    
    2,100Frank Rovito, CEO, CFO and shareholder
    $2,112 note which
    accrued interest at 6% per annum and was due July 31, 2008. The note was convertible into
    shares of common stock of the Company at a conversion price of $.002. On August 7, 2009
    the note was converted into common stock.*
    
    0
    
    2,112Frank Rovito, CEO, CFO and shareholder
    $3,900 note which
    accrued interest at 6% per annum and is due October 31, 2009. The note was convertible
    into shares of common stock of the Company at a conversion price of $.002. On August 7,
    2009 the note was converted into common stock.*
    
    0
    
    3,900Frank Rovito, CEO, CFO and shareholder
    $1,600 note which accrued interest at 6%
    per annum and was due January 31, 2009. The note was convertible into shares of common
    stock of the Company at a conversion price of $.002. The shareholder had agreed to extend
    the maturity date of the obligation to October 31, 2009. On August 7, 2009 the note was
    converted into common stock.*
    
    0
    
    1,600Frank Rovito, CEO, CFO and shareholder
    $660 note which
    accrued interest at 6% per annum and was due October 31, 2008. The note was convertible
    into shares of common stock of the Company at a conversion price of $.002. On August 7,
    2009 the note was converted into common stock.*
    
    0
    
    660Frank Rovito, CEO, CFO and shareholder
    $1,000 note which
    accrued interest at 6% per annum and was due October 31, 2009. The note was convertible
    into shares of common stock of the Company at a conversion price of $.002. On August 7,
    2009 the note was converted into common stock.*
    
    0
    
    1,000Frank Rovito, CEO, CFO and shareholder
    $970 note which accrued interest at 6% per
    annum and was due January 31, 2010. The note was 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
    
    -Frank Rovito, CEO, CFO and shareholder
    $100 note which accrued interest at 6% per
    annum and was due October 31, 2009. The note was 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 and
    shareholder
    $134,737 note which
    accrued interest at 6% per annum and was due April 25, 2008. The note was convertible into
    shares of common stock of the Company at a conversion price of $.50. The shareholder had
    agreed to another extension of the maturity date of the obligation to October 31, 2009. On
    August 7, 2009 the note was converted into common stock.*
    
    0
    
    134,737Aaron Goldstein, a Director and
    shareholder
    $10,000 note which
    accrued interest at 6% per annum and was due December 31, 2006. The note was convertible
    into shares of common stock of the Company at a conversion price of $.002. The shareholder
    had agreed to another extension of the maturity date of the obligation to October 31, 2009
    On August 7, 2009 the note was converted into common stock.*
    $
    0
    
    10,000Aaron Goldstein, a Director and
    shareholder
    $75,000 note which
    accrued interest at 6% per annum and was due December 31, 2007. The note was convertible
    into shares of common stock of the Company at a conversion price of $.50. The shareholder
    had agreed to another extension of the maturity date of the obligation to October 31,
    2009. On August 7, 2009 the note was converted into common stock.*
    
    0
    
    75,000Aaron Goldstein, a Director and
    shareholder
    $2,000 note which accrued interest at 6%
    per annum and was due July 31, 2008. The note was convertible into shares of common stock
    of the Company at a conversion price of $.002. On August 7, 2009 the note was converted
    into common stock.*
    
    0
    
    2,000Aaron Goldstein, a Director and
    shareholder
    $13,000 note which
    accrued interest at 6% per annum and was due January 31, 2008. The note was convertible
    into shares of common stock of the Company at a conversion price of $.002. On August 7,
    2009 the note was converted into common stock.*
    
    0
    
    13,000Aaron Goldstein, a Director and
    shareholder
    $179,523 note which
    accrued interest at 6% per annum and is due December 31, 2007. The note was convertible
    into shares of common stock of the Company at a conversion price of $.50. On August 7,
    2009 the note was converted into common stock.*
    
    0
    
    179,523Aaron Goldstein, a Director and
    shareholder
    $5,097 note which
    accrued interest at 6% per annum and was due October 31, 2008. The note was convertible
    into shares of common stock of the Company at a conversion price of $.002. The shareholder
    had agreed to another extension of the maturity date of the obligation to October 31,
    2009. On August 7, 2009 the note was converted into common stock.*
    
    0
    
    5,097Aaron Goldstein, a Director and
    shareholder
    $15,000 note which
    accrued interest at 6% per annum and was due April 30, 2008. The note was convertible into
    shares of common stock of the Company at a conversion price of $.002. On August 7, 2009
    the note was converted into common stock.*
    
    0
    
    15,000Aaron Goldstein, a Director and
    shareholder
    $2,800 note which
    accrued interest at 6% per annum and was due July 31, 2008. The note was convertible into
    shares of common stock of the Company at a conversion price of $.002. On August 7, 2009
    the note was converted into common stock.*
    
    0
    
    2,800Aaron Goldstein, a Director and
    shareholder
    $33,000 note which
    accrued interest at 6% per annum and was due October 31, 2008. The note was convertible
    into shares of common stock of the Company at a conversion price of $.002. On August 7,
    2009 the note was converted into common stock.*
    
    0
    
    33,000Aaron Goldstein, a Director and
    shareholder
    $794 note which
    accrued interest at 6% per annum and was due October 31, 2008. The note was convertible
    into shares of common stock of the Company at a conversion price of $.002. On August 7,
    2009 the note was converted into common stock.*
    
    0
    
    794Aaron Goldstein, a Director and
    shareholder
    $5,200 note which accrued interest at 6%
    per annum and was due October 31, 2009. The note was convertible into shares of common
    stock of the Company at a conversion price of $.002. On August 7, 2009 the note was
    converted into common stock.*
    
    0
    
    5,200Aaron Goldstein, a Director and
    shareholder
    $2,500 note which
    accrued interest at 6% per annum and was due October 31, 2009. The note was convertible
    into shares of common stock of the Company at a conversion price of $.002 On August 7,
    2009 the note was converted into common stock.*
    
    0
    
    2,500Aaron Goldstein, a Director and
    shareholder
    $10,500 note which accrued interest at 6%
    per annum was due January 31, 2010. The note was 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 and
    shareholder
    $6,700 note which
    accrued interest at 6% per annum and was due October 31, 2009. The note was convertible
    into shares of common stock of the Company at a conversion price of $.002. On August 7,
    2009 the note was converted into common stock.*
    
    0
    
    6,700Aaron Goldstein, a Director and
    shareholder
    $6,100 note which accrued interest at 6%
    per annum and was due October 31, 2009. The note was 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 and
    shareholder
    $60,000 note which
    accrued interest at 6% per annum and was due on October 31, 2007. The note was convertible
    into shares of common stock of the Company at a conversion price of $.002. The shareholder
    had agreed to another extension of the maturity date of the obligation to October 31,
    2009. On August 7, 2009 the note was converted into common stock.*
    
    0
    
    60,000Aaron Goldstein, a Director and
    shareholder
    $15,233 note which
    accrued interest at 6% per annum and was due October 31, 2008. The note was convertible
    into shares of common stock of the Company at a conversion price of $.002. On August 7,
    2009 the note was converted into common stock.*
    
    0
    
    15,2330
    
    711,269Less: current portion
    
    
    
    711,269Remaining balance on notes payable
    reflected as current portion of notes payable
    $
    16,415
    $
    - * 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. As of January 31, 2010 future
maturities of debt are as follows: Years ending January 31:
2011
                                        
$16,415 As of January 31, 2010 and April
30, 2009, the Company had recorded $0 and $144,390 of accrued interest on the convertible
notes payable to officers, respectively. Interest expense on these notes was $11,868 and
$4,849 for the nine months ended January 31, 2010 and 2009, respectively, and $128,672 for
the period from inception (April 26, 2006) to January 31, 2010. On August 7, 2009, the
notes in the aggregate amount of $689,769 were converted into Common shares of the
Company, and the note holders agreed to waive $139,355 of the accrued interest payable on
such notes, leaving accrued interest payable of $16,175 as of October 31, 2009. On January
22, 2010 the Company entered into convertible promissory note agreement for accrued
interest of $16,415 which is due and payable on or before July, 31, 2010. The note is
convertible into Companys common stock at a conversion price of $0.20. **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 was 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 January 31, 2010, MRG incurred
$1,881,668 of rent and real estate taxes under the lease, of which basic rent incurred to
Brickell totaled $1,253,770. The Companys Consolidated Statements of Operations each
of the nine months ended January 31, 2010 and 2009 includes $97,445of basic rent, and
$46,543 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 January 31, 2010 future
maturities of related party debts are as follows: Years ending January 31:
2011
                                       
$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. On January 21, 2010, a note holder sold his
convertable promissory notes dated March 2, 2003, August 1, 2003 and February 3, 2005
totaling $14,500 to Charms Investments Ltd., a third party not affiliated with the note
holder, for $14,450 under a debt purchase agreement. On January 21, 2010, the Company and Charms
Investments Ltd., a new note holder, agreed to the conversion of $14,450 in notes into
5,400,000 shares of common stock. The market price on the date of note conversion was
$0.61. In conjunction with this transaction the Company recorded a loss on debt conversion
for $3,225,551. On December 18, 2009, the Company's principal
shareholders, Frank Rovito, Aaron Goldstein and Green Energy Partners, LLC (the"Sellers")  entered into a Securities Purchase
Agreement (the Agreement) with Kayode Aladesuyi (the
Buyer) pursuant to which Sellers, owners of record of an aggregate of
7,029,950 shares of Common Stock, par value $0.001 per share (Common Stock) of,
the Company agreed to sell and transfer to the Buyer  7,029,950 shares of 
Common Stock (the "Sellers Shares) for total consideration of Three
Hundred Thousand Dollars ($300,000). The Agreement also provides that the Company will
enter into a share exchange agreement with EarthSearch Communications International, Inc.
(EarthSearch). On January 15, 2010, the Company and EarthSearch
executed a Share Exchange Agreement pursuant to which the Company agreed to issue
35,000,000 million restricted shares to the shareholders of EarthSearch. The Share
Exchange Agreement is subject to closing conditions and the parties expect the closing to
take place on or around March 31, 2010. Preferred shares converted to common stock 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 April 30, 2009 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
$8,031,552 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. Effective September, 2009 the
stock subscription receivable was forgiven in consideration for the assignment by the
Company of certain assets including leasehold improvements and the liquor license to MRG **Note 11- Commitments and
Other Matters**  None SUBSEQUENT EVENT On March 8, 2010 the Company
filed Form 8-K announced that it had concluded the initial closing of the
Private Stock Purchase Agreement with Kay Aladesuyi, Chairman/CEO of EarthSearch.
 Upon the final closing, which is expected to occur on or about march 31, 2010, Mr.
Aladesuyi will become the control shareholder of the Company and the Company shall
complete its Share Exchange Agreement with EarthSearch.