**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 **Washington,
        DC 20549**
 
 **FORM
        10-QSB**
 
 x
              **QUARTERLY
                  REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
                  ACT OF
                  1934**
 
 For
        the
        quarterly period ended September 30, 2007
 
 o
              **TRANSITION
                  REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
                  ACT OF
                  1934**
 
 For
        the
        transition period from _______________ to ________________
 
 Commission
        file number 000-31143
 
 **DCI
        USA, INC.**
 (Exact
        name of small business as specified in its charter)
 
 Delaware
              22-3742159(State
                  or other jurisdiction of incorporation or organization)
              (IRS
                  Employer Identification Number)
 
 8
        Bond
        Street
 Great
        Neck, New York 11021
 (Address
        of principal executive offices)
 
 (212)
        994-9594
 (Issuer's
        telephone number, including area code)
 
 Indicate
        by check mark whether the issuer (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.
 Yes x No o
  Indicate
        by check mark whether the registrant is a shell company (as defined in Rule
        12b-2 of the Exchange Act).
 Yes o No x
  As
        of
        November 14, 2007,54,554,801shares of Common Stock, par value $0.001 per
        share,
        were outstanding.
  Transitional
        Small Business Disclosure Format (check one): Yes o No x
  
  **TABLE
        OF CONTENTS**
  PART
                    I - Financial Information
                PageItem
                    1. Financial Statements
                1Item
                    2. Management’s Discussion and Analysis or Plan of
                    Operation
                2Item
                    3. Controls and Procedures
                6PART
                    II - Other Information
                7Item
                    1. Legal Proceedings
                7Item
                    2. Unregistered Sales of Equity Securities and Use of
                    Proceeds
                7Item
                    3. Defaults Upon Senior Securities
                7Item
                    4. Submission of Matters to a Vote of Security Holders
                7Item
                    5. Other Information
                7Item
                    6. Exhibits
                8SIGNATURES
                9
  
  **PART
        1**
 **FINANCIAL
        INFORMATION**
 
 **Item
        1.**  **Financial
        Statements.**
 
 **DCI
          USA, INC.**
 
 **For
          the quarterly period ended September 30, 2007**
 
 
 
 
 1
 
 **DCI
          USA, INC. AND SUBSIDIARIES**
 
 **INDEX
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **Page(s)**Consolidated
                    Balance Sheets as of September 30, 2007 (unaudited) andDecember
                    31, 2006 (audited)
                F-2
                    - F-3Consolidated
                    Statements of Operations for the three and nine months endedSeptember
                    30, 2007 (unaudited) and 2006 (unaudited)
                F-4Consolidated
                    Statements of Cash Flows for the nine months ended September
                    30,
                    2007(unaudited)
                    and 2006 (unaudited)
                F-5Notes
                    to Consolidated Financial Statements
                F-6
                    - F-13
 
 F-1
 
 **DCI
          USA, INC. AND SUBSIDIARIES**
 **CONSOLIDATED
          BALANCE SHEETS**
 
 **September
                    30,**
                
                **December
                    31,****2007**
                
                **2006****(unaudited)**
                
                **(audited)**ASSETSCurrent
                    Assets:Cash
                
                $
                10,123
                
                $
                74,755Prepaid
                    expense
                
                
                -
                
                
                8,002Interest
                    receivable -related party
                
                
                11,920
                
                
                8,798Interest
                    receivable
                
                
                2,449
                
                
                -Loan
                    receivable- related party
                
                
                324,297
                
                
                55,000Loan
                    receivable - Gunther
                
                
                -
                
                
                630,000Note
                    receivable - net of discount
                
                
                -
                
                
                142,485Loan
                    receivable - Senergy
                
                
                100,000
                
                
                -Total
                    current assets
                
                
                448,789
                
                
                919,040Fixed
                    assets, net
                
                
                2,707
                
                
                3,225Investment
                    in 231 NAPD
                
                
                1,294,197
                
                
                1,355,998Investment
                    in ARI, Ltd.
                
                
                2,346,228
                
                
                -Goodwill
                
                
                219,589
                
                
                -Noncurrent
                    notes receivable
                
                
                -
                
                
                70,000Total
                    assets
                
                $
                4,311,510
                
                $
                2,348,263
 
 
 See
          accompanying notes to consolidated financial statements.
  F-2
  **DCI
          USA, INC. AND SUBSIDIARIES**
 **CONSOLIDATED
          BALANCE SHEETS - (CONTINUED)**
 
 **September
                    30,**
                
                **December
                    31,****2007**
                
                **2006****(unaudited)**
                
                **(audited)**LIABILITIES
                    AND STOCKHOLDERS' EQUITYCurrent
                    Liabilities:Short-term
                    bank credit
                
                $
                13,410
                
                $
                -Loan
                    payable - Hypothicators
                
                
                334,875
                
                
                400,000Loan
                    payable - officer
                
                
                913,963
                
                
                -Accounts
                    payable and accrued expenses
                
                
                123,367
                
                
                63,200Accrued
                    interest
                
                
                84,512
                
                
                20,620Due
                    to ARI, Ltd.
                
                
                144,292
                
                
                -Amount
                    due on option to repurchase commonstock,
                    current
                
                
                -
                
                
                81,768Convertible
                    notes
                
                
                465,000
                
                
                465,000Convertible
                    debentures
                
                
                600,000
                
                
                600,000Current
                    maturities of long term bank loan
                
                
                155,418
                
                
                -Total
                    current liabilities
                
                
                2,834,837
                
                
                1,630,588Commitments
                    and contingenciesLong
                    term bank loan
                
                
                1,270,461
                
                
                -Amount
                    due on option to repurchase common stock, netof
                    current
                
                
                -
                
                
                30,732Total
                    liabilities
                
                $
                4,105,298
                
                $
                1,661,320Stockholders'
                    equityPreferred
                    Stock, par value $.001, authorized 1,000,000shares
                    Series A Preferred, 200,000 sharesauthorized
                    none issued and outstanding
                
                
                -
                
                
                -Common
                    Stock, par value $.001,authorized 100,000,000shares;
                    53,917,681 shares issued, and53,554,801
                    shares outstanding as of September 30,2007;
                    53,292,681 shares issued and outstanding as ofDecember
                    31, 2006
                
                
                53,917
                
                
                53,292Additional
                    paid-in-capital
                
                
                2,852,802
                
                
                2,526,671Accumulated
                    deficit
                
                
                (2,618,859
                )
                
                (1,893,020
                )Treasury
                    stock, at per - 362,880 common stock shares
                
                
                (81,648
                )Total
                    stockholders' equity
                
                
                206,212
                
                
                686,943Total
                    liabilities and stockholders' equity
                
                $
                4,311,510
                
                $
                2,348,263
 
 
 See
          accompanying notes to consolidated financial statements.
  F-3
  **DCI
          USA, INC. AND SUBSIDIARIES**
 **CONSOLIDATED
          STATEMENTS OF OPERATIONS**
 
 **Nine
                    Months ended September 30,**
                
                **Three
                    Months ended September 30,****2007**
                
                **2006**
                
                **2007**
                
                **2006****(unaudited)**
                
                **(unaudited)**Operating
                    Income:Revenue
                
                $
                -
                
                $
                -
                
                $
                -
                
                $
                -Interest
                    income
                
                
                19,425
                
                
                135,179
                
                
                6,342
                
                
                45,554Total
                    income
                
                
                19,425
                
                
                135,179
                
                
                6,342
                
                
                45,554Expenses:General
                    and administrative expense
                
                
                251,194
                
                
                178,076
                
                
                121,980
                
                
                71,996Interest
                    expense
                
                
                173,872
                
                
                157,248
                
                
                61,832
                
                
                42,921Professional
                    fees
                
                
                154,614
                
                
                51,031
                
                
                71,491
                
                
                14,173Consulting
                    fees
                
                
                96,107
                
                
                -
                
                
                4,851
                
                
                -Income
                    taxes
                
                
                3,545
                
                
                2,485
                
                
                2,953
                
                
                -Total
                    expenses
                
                
                679,334
                
                
                388,840
                
                
                263,108
                
                
                129,090Loss
                    from operations
                
                
                (659,908
                )
                
                (253,661
                )
                
                (256,766
                )
                
                (83,536
                )Other
                    expense:Net
                    loss on investment
                
                
                65,931
                
                
                -
                
                
                19,993
                
                
                -Total
                    other expense
                
                
                65,931
                
                
                -
                
                
                19,993
                
                
                -Net
                    loss
                
                $
                (725,839
                )
                $
                (253,661
                )
                $
                (276,759
                )
                $
                (83,536
                )Basic
                    and Diluted loss per share
                
                
                ($0.01
                )
                
                ($0.01
                )
                
                ($0.01
                )
                
                ($0.00
                )Weighted
                    average number ofCommon
                    Stock outstanding
                
                
                53,537,835
                
                
                37,696,855
                
                
                53,857,866
                
                
                40,062,108
   See
          accompanying notes to consolidated financial statements.
  F-4
  **DCI
          USA, INC. AND SUBSIDIARIES**
 **CONSOLIDATED
          STATEMENTS OF CASH FLOWS**
 
 **Nine
                    Months ended September 30,****2007**
                
                **2006****(unaudited)****Cash
                    flows from operating Activities**Net
                    loss for the period
                
                $
                (725,839
                )
                $
                (253,661
                )Adjustments
                    required to reflect cash flows from Operating ActivitiesAmortization
                    of loan cost
                
                
                
                
                
                31,875Cost
                    of stock option
                
                
                89,256Net
                    loss on equity investments
                
                
                65,931
                
                
                -Amortization
                    of discounts
                
                
                
                
                
                43,125Depreciation
                
                
                518Amortization
                    of note receivable discount
                
                
                (7,515
                )Changes
                    in operating liabilities and assetsAccount
                    receivables
                
                
                214,337Short-term
                    bank credit
                
                
                13,410Prepaid
                    expense
                
                
                (3,646
                )
                
                4,930Interest
                    receivable
                
                
                (5,571
                )
                
                1,668Restricted
                    cash
                
                
                -
                
                
                (180,000
                )Due
                    to ARI, Ltd.
                
                
                72,759Accounts
                    payable and accrued expenses
                
                
                78,563
                
                
                (3,241
                )Net
                    cash used in operating activities
                
                
                (207,798
                )
                
                (355,304
                )**Cash
                    flows from investing activities**Proceeds
                    from loan receivable
                
                
                150,000
                
                
                -Investment
                    in ARI, Ltd.
                
                
                (160,000
                )Loans
                    to third parties
                
                
                (369,297
                )Loans
                    to related parties
                
                
                (416,400
                )
                
                -Net
                    cash used in investing activities
                
                
                (795,697
                )
                
                -**Cash
                    flows from financing activities**Proceeds
                    from loans
                
                
                913,963
                
                
                360,000Payment
                    of loan payable
                
                
                (65,125
                )Issuance
                    of common stock
                
                
                125,000Payment
                    of long term bank loan
                
                
                (34,976
                )Net
                    cash used by financing activities
                
                
                938,862
                
                
                360,000Increase
                    (decrease) in cash
                
                
                (64,632
                )
                
                4,696**Cash
                    at the beginning of the period**
                
                
                74,755
                
                
                5,877**Cash
                    at the end of the period**
                
                $
                10,123
                
                $
                10,573**Supplemental
                    disclosures:**Interest
                    paid
                
                $
                60,829
                
                $
                59,000Cash
                    paid for income taxes
                
                
                3,545
                
                
                2,485**Non-cash
                    disclosures of investing and financing
                    activities:**Loans
                    to Gunther Wind Energy, Ltd. converted to investment
                
                
                1,055,384Repayment
                    of loan through issuance of shares
                
                
                
                
                
                160,000Repurchase
                    of 362,880 shares of the company to pay off promissory
                    note
                
                
                81,648Issuance
                    of shares through common stock subscription
                
                
                
                
                
                300,000Conversion
                    of debt to equity
                
                
                
                
                
                13,500
  See
          accompanying notes to consolidated financial statements.
  F-5
  **DCI
          USA, INC. AND SUBSIDIARIES**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 
 **NOTE
          1 - DESCRIPTION OF THE COMPANY**
 
 The
          accompanying un-audited interim consolidated financial statements of DCI
          USA,
          INC. (“the Company”) have been prepared in accordance with accounting principles
          generally accepted in the United States of America and the rules of the
          Securities and Exchange Commission (“SEC”), and should be read in conjunction
          with the audited consolidated financial statements and notes thereto contained
          in the Company’s Annual Report filed with the SEC on Form 10-KSB. In the opinion
          of management, all adjustments, consisting of normal recurring adjustments,
          necessary for a fair presentation of financial position and the results
          of
          operations for the interim periods presented have been reflected herein.
          The
          results of operations for interim periods are not necessarily indicative
          of the
          results to be expected for the full year. Notes to the consolidated financial
          statements that would substantially duplicate the disclosures contained
          in the
          audited financial statements for 2006 as reported in the 10-KSB have been
          omitted.
  The
          unaudited consolidated financial statements include the accounts of the
          Company
          and our wholly-owned subsidiaries. All inter-company accounts and transactions
          have been eliminated. We operate in one business segment, which is the
          development of clean energy technologies and the renovation and conversion
          of
          buildings to commercial condominiums.
 
 Our
          cash
          as of September 30, 2007 was $10,123. We believe that we will be able to
          meet
          our cash requirements during 2007 principally through loans from our Chairman
          and additional third parties financings. Over the next twelve months, we
          will
          need additional financing to expand our business, to carry out our business
          plan
          and to reduce our debt. The Company estimates that such financing will
          enable it
          to meet its ongoing operating cash flow needs.  Management estimates that
          the Company will have sufficient resources to fund its planned operations
          beyond
          September 30, 2008.
 
 **NOTE
          2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
 
 **USE
          OF ESTIMATES**
 In
          preparing financial statements in accordance with accounting principles
          generally accepted in the United States of America, management makes certain
          estimates and assumptions, where applicable, that affect the reported amounts
          of
          assets and liabilities and disclosures of contingent assets and liabilities
          at
          the date of the financial statements, as well as the reported amounts of
          revenues and expenses during the reporting period. While actual results
          could
          differ from those estimates, management does not expect such variances,
          if any,
          to have a material effect on the financial statements.
 
 **NET
          LOSS PER SHARE**
 Basic
          net
          loss per share is computed on the basis of the weighted average number
          of shares
          outstanding each period and excludes any dilutive effects of options, warrants,
          and convertible securities. Dilutive earnings per share is computed giving
          effects to dilutive stock equivalents. There were 27,300,000 and 16,987,013
          potentially dilutive common shares outstanding on September 30, 2007 and
          2006,
          respectively, which were excluded from the calculation of diluted earnings
          per
          share, consisting primarily of shares issuable upon the conversion of debt
          and
          equity and the exercise of stock options.
 .
 **NOTE
          3 - ASSIGNMENT OF SHARES OF MAJOR SHAREHOLDER**
 
 As
          of
          March 24, 2006, the Chairman and Director, Jonathan Ilan Ofir (“Mr. Ofir”)
          acquired 28,350,000 shares of our Common Stock from Uri Rosin and Gunther
          Frantz, Ltd. ("Gunther Frantz") pursuant to an Assignment and Assumption
          of
          contract ("Assignment and Assumption of Contract") whereby Mr. Ofir assumed
          the
          obligations of Mr. Rosin and Gunther Frantz under a Share Sale Agreement
          dated
          February 1, 2006 ("the Share Sale Agreement"). The purchase price of $1,170,004
          (or $0.04127 per share) is required to be paid by Mr. Ofir by December
          31, 2007.
          The right to purchase such 28,350,000 shares from Direct
  F-6
  **DCI
          USA, INC. AND SUBSIDIARIES**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)**
 **(UNAUDITED)**
 
 **NOTE
          3 - ASSIGNMENT OF SHARES OF MAJOR SHAREHOLDER -
          (CONTINUED)**
 
 Capital
          Investments, Ltd. had been held by Mr. Rosin and Gunther Frantz, the former
          controlling shareholders of Direct Capital Investments, Ltd., Pursuant
          to the
          Share Sale Agreement. Mr. Rosin and Gunther Frantz, however, assigned all
          of the
          rights and obligations under the Share Sale Agreement to Mr. Ofir. Mr.
          Rosin is
          Mr. Ofir's father in-law. With respect to the 3,150,000 shares of our Common
          Stock still held by Direct Capital Investments, Ltd., (i) the holder has
          the
          right, from December 31, 2007 to June 30, 2008, to require Mr. Ofir to
          purchase
          such shares for the aggregate price of $130,000 (or $0.04127 per share);
          and
          (ii) Mr. Ofir has the right, from February 1, 2006 to June 30, 2008, to
          require
          the holder to sell such shares to him for the aggregate price of $390,000
          (or
          $0.1238 per share).
 
 On
          August
          6, 2007 Bartram Holdings, Inc. ("Bartram") exercised its options to pay
          off the
          $70,000 principal amount promissory note the company holds by delivering
          362,880
          shares of the company, held by Bartram, by Henry Santorow, and Stehem Robinson.
          On August 15, 2007 the shares where surrendered.
 
 **NOTE
          4 - PURCHASE AND STRATEGIC RELATIONSHIP AGREEMENT**
 
 **GUNTHER
          WIND ENERGY, LTD.**
 On
          August
          1, 2006 we entered into a loan, pledge and option agreement with Gunther
          Wind
          Energy, Ltd. (“Gunther”) in Israel to invest in the upgrade of an existing wind
          farm at Tel Assaniya and in the development of a new site, Nimrod. On June
          20,
          2007, the Company exercised its option to purchase all the outstanding
          shares of Gunther pursuant to and in accordance with the loan, pledge and
          option
          agreement. In consideration therefore, the Company cancelled the outstanding
          balance of certain loans previously made by the Company to Gunther in the
          amount
          of $1,055,384. The Company transferred $110,459 in September 2007 and an
          additional $334,157 of the balance of the $1,500,000 purchase price remains
          due
          from the Company to Gunther. These funds will be loaned to Mr. Ofir, in
          accordance with his commitment to lend the Company of up to an aggregate
          of
          $1,000,000. Upon receipt of said funds from Mr. Ofir, the Company will
          pay to
          Gunther $334,157, representing the balance of the purchase price outstanding.
          As
          a result of the exercise of its option as described above, the Company
          acquired
          all the outstanding shares of Gunther, which thereby became a wholly-owned
          subsidiary of the Company
 
 Through
          its purchase of 334 shares of preferred stock of ARI, Ltd. (“ARI”), Gunther owns
          25% of the outstanding shares of capital stock of ARI. The purchase price
          for
          these shares is $3,000,000. As of September 30, 2007, Gunther had paid
          an
          aggregate of $2,360,000 of the purchase price to ARI using funds previously
          loaned to Gunther by the Company, together with a payment from Gunther
          using
          proceeds from a bank loan to Gunther of $1,500,000. Gunther owes an additional
          $640,000 to ARI to complete the transaction which it expects to pay by
          December
          31, 2007. On September 13, 2006, ARI signed an agreement to purchase a
          wind farm
          known as Tel Assaniya Windfarm, which is located in Northern Israel. The
          completion of the purchase agreement is expected by December 31, 2007 upon
          payment of the outstanding balance. The Tel Assaniya Windfarm is planned
          to be
          upgraded from the current capacity of 6MW to seven wind turbines with a
          capacity
          of 2.3MW each. We expect this upgrade to be completed between April and
          June
          2008. Until such upgrade is completed, Gunther will receive a minimum of
          a 10%
          preferred return on its investment on quarterly installments in anticipation
          of
          the payment of future dividend. Payments have been made for the quarterly
          periods ending June 30, 2007 and September 30, 2007. After the upgrade
          is
          completed, Gunther will receive a minimum of a 12.5% preferred return.
          . As of
          November 14, 2007, Gunther has appointed one director and has not yet exercised
          its right to appoint a second director.
 
 The
          investment in Gunther is recorded in our financial statements included
          herein at
          the aggregate purchase price and its results of operations from the date
          of
          acquisition are reflected in our statement of operations for the periods
          ended
          September 30, 2007.
  F-7
  **DCI
          USA, INC. AND SUBSIDIARIES**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)**
 **(UNAUDITED)**
 
 **NOTE
          4 - PURCHASE AND STRATEGIC RELATIONSHIP AGREEMENT-
          (CONTINUED)**
 
 The
          following table summarized the estimated fair values of the assets acquired
          and
          liabilities assumed at the date of acquisition :
  Cash
                
                $
                8,984Account
                    receivables
                
                
                214,337Investment
                    in ARI,Ltd.
                
                
                2,190,358Goodwill
                
                
                219,589Total
                    assets
                
                
                2,633,268Accounts
                    payable
                
                
                45,496Current
                    maturities of long term bank loan
                
                
                152,242Long
                    term bank loan
                
                
                1,308,613Due
                    to ARI, Ltd.
                
                
                71,533Total
                    liabilities
                
                
                1,577,884Net
                    assets acquired
                
                $
                1,055,384
 
 **SENERGY,
          LTD.**
 In
          January 2007, the Company entered into a Purchase and Strategic Relationship
          Agreement with Senergy, Ltd. (“Senergy”), an Israeli limited liability company
          that operates in the areas of solar heating and cooling and solar-based
          energy
          generation (the “Senergy Agreement”). Pursuant to the agreement, the Company,
          through a new, to-be-formed subsidiary, is to make investments in three
          installments totaling $500,000 in Senergy. In return for the investment,
          the
          Company receives promissory notes totaling $500,000 and a 60% equity interest
          in
          Senergy. The Promissory notes incur interest at the rate of 6% and are
          due 18
          months after the date of the note. As of June 30, 2007, the Company made
          the
          first required installment of $100,000. The Company has requested that
          the terms
          of the Senergy Agreement be renegotiated and Synergy has agreed to such
          renegotiation. If we are able to successfully conclude our negotiations,
          we will
          be in charge of managing fund-raising activities at Senergy and establishing
          strategic partnerships for Senergy.
 
 **231
          NORMAN AVE, LLC**
 The
          Company remains involved in the renovation and conversion of buildings
          to
          commercial condominiums. Our development at 231 Norman Avenue, in Brooklyn,
          New
          York is the underlying asset comprising the collateral on the loan discussed
          below. Construction is being completed and inspections are currently being
          conducted. Approvals needed for the commercial condominium plan offering
          have
          been obtained and the 68 commercial condos are currently on the market
          for sale.
          The Company is actively involved in managing the construction, financing,
          and
          sales of the 231 Norman Avenue Project.
 
 The
          Company lent $1,370,000 to 231 Norman Ave, LLC (“Norman LLC”) in part pursuant
          to an agreement which provided the Company the option of supplanting the
          100%
          membership interest holder in Norman LLC. The Company exercised this option
          as
          of November 2006 and now owns 100% interest in Norman LLC. As a result
          of the
          Company acquiring Norman LLC, the Company controls 30% of the membership
          interests of 231 Norman Avenue Property Development, LLC (“231 NAPD”).
  F-8
  **DCI
          USA, INC. AND SUBSIDIARIES**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)**
 **(UNAUDITED)**
 
 **NOTE
          4 - PURCHASE AND STRATEGIC RELATIONSHIP AGREEMENT-
          (CONTINUED)**
 
 In
          November 2006, the Company purchased an option to acquire an additional
          20%
          interest in 231 NAPD for $100,000. The option price was required to be
          paid by
          December 31, 2006. The option, which if exercised prior to March 30, 2007,
          gives
          the Company the right to purchase the 20% interest in exchange for 18,000,000
          shares of the Company’s common stock and a promissory note in the amount of
          $1,400,000. The promissory note would bear interest at the rate of 8% and
          is due
          in November 2011. The payment of the option price has been extended to
          June 30,
          2007 and the exercise of the option has been extended to July 31, 2007.
          The
          Company did not exercise the option prior to its expiration on July 31,
          2007.
 
 231
          NAPD
          is a New York limited liability company engaged in owning, developing and
          operating income producing real property. 231 NAPD owns fee simple title
          to the
          real property located at 231 Norman Avenue, Brooklyn, New York. In March
          2005,
          231 NAPD consummated a $10,000,000 refinancing and construction loan with
          Washington Mutual with respect to the property at 231 Norman Avenue and
          received
          capital contributions from investors of $1,750,000. The project at 231
          Norman
          Avenue, the conversion of the existing building to condominiums has been
          completed. 231 NAPD is now in the process of obtaining a Temporary Certificate
          of Occupancy. As a result of the Company acquiring Norman LLC, the Company
          controls 30% of the membership interests of 231 NAPD.
 
 The
          Company and Mr. Ofir, guaranteed to North Fork Bank the obligations of
          231 NAPD.
          On September 5, 2007, 231 NAPD entered into a Consolidated Mortgage Extension
          and Security Agreement (the “Agreement”) with North Fork Bank pursuant to which
          231 NAPD borrowed the principal sum of $2,426,497 from said bank and
          consolidated a previous loan of $11,411,003, for an aggregate consolidated
          principal loan amount of $13,837,500 (the “North Fork Loan”).
 
 On
          September 5, 2007, and simultaneous with the execution of the Agreement,
          231
          NAPD issued a Restated Promissory Note to North Fork Bank in the aggregate
          principal amount of $13,837,500 (the “Note”). Pursuant to the Note, principal
          plus all accrued and unpaid interest thereon shall be paid on March 5,
          2009.
          Interest accrues on the principal amount at a daily rate of interest equal
          to
          7.25% to be computed on 360-day basis, and is to be paid on a monthly basis.
          Under specified conditions, 231 NAPD may, at its option, extend the loan
          for an
          additional six months in which case the rate of interest shall be 2% above
          the
          one year Treasury Index as of the three days prior to the Maturity Date.
          Upon
          providing 10 days prior written notice, 231 NAPD has the right to prepay
          the
          North Form Bank Loan, in multiples of $25,000 or more, at any time, without
          penalty. The obligations to North Fork Bank are secured by a lien on the
          property owned by 231 NAPD.
 
 In
          connection with the consolidation of the loan with North Fork, the Company,
          Mr.
          Ofir, Amir Yerushalmi, Vision Real Estates Group, LLC and YIZ Oxford Capital,
          LLC, collectively, executed a Guaranty in favor of North Fork Bank (the
          “Guaranty”). In accordance with the Guaranty, the Guarantors guaranteed full
          performance of 231 NAPD’s obligations to North Fork Bank. In the event 231 NAPD
          defaults under the terms and provisions of the Agreement, upon written
          demand,
          the Guarantors, jointly and severally, shall pay to North Fork Bank all
          amounts
          remaining unpaid under the Agreement. As added security for the North Fork
          Loan,
          and in accordance with the Guaranty, all property of the Guarantors held
          by
          North Fork Bank shall be subject to a lien as security for the liabilities
          of
          the Guarantors. In the event the Guarantors fail to make payment to North
          Fork
          Bank when due, any such payment shall bear interest at the rate of 24%
          per
          annum.
 
 F-9
 
 **DCI
          USA, INC. AND SUBSIDIARIES**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)**
 **(UNAUDITED)**
 
 **NOTE
          5 - NOTES PAYABLE**
 
 In
          November 2004, the Company entered into an agreement with Norman Property
          LLC
          regarding the assignment to the Company of a promissory note payable to
          Hypothecators Mortgage Company (“Hypothecators”) totaling $400,000. Pursuant to
          the assignment agreement, the Company received $400,000 from Norman Property
          LLC. The promissory note accrues interest at the rate of 15% per annum
          and is
          due June 15, 2006. The note was extended to October 31, 2006. The Company
          entered into an arrangement with Hypothecators whereby the Company would
          make
          monthly payments of $50,000 of principal and interest through October 2007.
          In
          the first quarter of 2007, the Company paid an amount of approximately
          $65,000
          and is currently negotiating the amendment of the agreement.
 
 **NOTE
          6 - CONVERTIBLE NOTE PAYABLE- OFFICER**
 As
            of
            September 30, 2007, the Company has a balance payable to Mr. Ofir, in
            an
            aggregate amount of $914,000, bearing interest at 6% per annum. Principal
            and
            interest will be paid at the loan maturity date.
  **NOTE
          7 - CONVERTIBLE NOTE**
 
 In
          October 2006, the Company initiated a convertible note offering whereby
          the
          Company would issue up to $1,300,000 of convertible notes. The notes incur
          interest at the rate of 10% per annum, payable quarterly, and are due November
          25, 2007. The notes can be converted at anytime at the option of the note
          holder
          at a conversion price of $.05 per share, plus an adjustment based upon
          the
          profitability of 231NAPD. The Company can force conversion of the notes
          anytime
          the shares are registered and the average computed market price is greater
          than
          250% of the conversion price. The Company measured for a beneficial conversion
          feature on the date of issuance and on December 31, 2006 and determined
          there to
          be no beneficial conversion feature on those dates. Since the conversion
          price
          can vary over time based on the profitability of Norman Property LLC, the
          Company is required to determine whether a beneficial conversion feature
          exists
          for each reporting period the notes are outstanding. At September 30, 2007,
          there was $465,000 in convertible notes outstanding. The Company did not
          make
          the quarterly payments of December 31, 2006 and of March 31, 2007 of interest
          timely, causing a default on the notes. However, such interest payments
          were
          made during January and May, 2007, respectively. None of the note holders
          has
          notified the Company of their intention to exert any of their rights regarding
          this default. Interest payments for June and September 2007 were made in
          a
          timely manner. Accordingly, the Company is current on its payments.
 
 **NOTE
          8 - DEBENTURES**
 
 On
          November 1, 2006, four parties acquired the debentures in the principal
          amount
          of $250,000 and $236,500, with interest accrued to that date, (the “Debentures”)
          previously held by Cornell Capital Partners LP (“Cornell”). Concurrently with
          such acquisitions the Company and such individuals entered into a Debenture
          Modification Agreement wherein the parties modified certain terms of the
          Debentures. Specifically, the parties agreed that the Debentures will no
          longer
          be secured by a lien on any of the Company’s assets, that the due date of the
          Debentures shall be June 4, 2007, and that the interest rate on the Debentures
          shall be eight percent (8%) per annum until the due date, and paid at the
          due
          date, increasing to fourteen (14%) per annum until such time as the Debentures
          are paid in full. At September 30, 2007, there was $600,000 outstanding
          on the
          Debentures. The agreement was amended to extend the due date to December
          31,
          2007.
  F-10
  **DCI
          USA, INC. AND SUBSIDIARIES**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)**
 **(UNAUDITED)**
 
 **NOTE
          9 - LONG-TERM BANK LOAN**
 
 On
          March
          5, 2007, Gunther obtained a $1,500,000 bank loan from Bank Hapoalim, Ltd.,
          which
          matured on January 3, 2015. The bank loan bears interest at the Israeli
          prime
          rate plus 2% per annum. Principal and interest payments on the bank loan
          are due
          quarterly.
 
 **NOTE
          10 - STOCKHOLDERS' EQUITY**
 
 **PREFERRED
          STOCK**
 On
          December 6, 2004, upon the execution of the Standby Equity Distribution
          agreement with Cornell the Company issued 200,000 shares of Series A Preferred
          Stock to Cornell as a commitment fee. Holders of the Series A Preferred
          Stock
          are entitled to receive an annual 5% dividend payable semi-annually. The
          5%
          dividend may be paid in either cash or shares of our common stock in the
          discretion of the Board of Directors. In the event of a dissolution or
          liquidation of the Company's business, the Series A Preferred Stock ranks
          senior
          to the Company's common stock and all other classes of equity securities
          that
          may be outstanding which by their terms do not rank senior to the Series
          A
          Preferred Stock, and the Series A Preferred Stock is subordinate and ranks
          junior to all debt. The Company has the right to redeem the Series A Preferred
          Stock at a price of $1 per share plus an annual premium of 5%. The Series
          A
          Preferred Stock is convertible into shares of our common stock at conversion
          ratios equal to the lesser of: (a) $1, or (b) $1 and all accrued but unpaid
          dividends divided by the average closing bid price of our common stock
          as quoted
          by Bloomberg L.P. for 20 trading days immediately preceding the conversion
          notice date.
  The
          Company issued these shares pursuant to an agreement (the "Waiver Agreement"),
          dated as of June 2, 2006, between the Company and Cornell, which provided
          for
          the waiver by Cornell of certain defaults under the $250,000 principal
          amount
          Debentures (each a "Debenture") which the Company had issued to Cornell
          in each
          of December 2004 and February 2005, and under the documents related to
          such
          Debentures. Pursuant to the Waiver Agreement, Cornell became obligated
          to cancel
          the 200,000 shares of the Company’s Series A Preferred Stock ("Preferred Stock")
          which the Company had issued to Cornell in December 2004 as a commitment
          fee
          under the Standby Equity Distribution Agreement, dated December 13, 2004,
          between the Company and Cornell. In return, the Company became obligated
          to
          issue to Cornell 1,500,000 shares of its Common Stock and grant to Cornell
          a put
          option to sell such 1,500,000 shares back to the Company at the price of
          seven
          and one-half cents ($0.075) per share. The put option has a duration of
          three
          years and may be exercisable by Cornell at any time. As a result of Cornell
          being able to require the Company to repurchase the shares, as of December
          31,
          2006 the Company has reflected the amount of the repurchase as a liability
          on
          the Company’s balance sheet as amount due on option to repurchase common stock.
          Under the Waiver Agreement, the Company also agreed that the interest rate
          under
          the Debentures would be raised from 8% to 12% per annum, retroactive to
          the
          original dates as of which the Debentures were issued. In addition, subject
          to
          the Company’s compliance with the terms of the Waiver Agreement, Cornell agreed
          that, until November 2, 2006, it would (i) not convert any additional amount
          of
          the Debentures into shares of our Common Stock, and (ii) forebear from
          exercising its rights and remedies under the Debentures and the related
          documents.
 
 On
          July
          28, 2006, the Company issued 1,350,000 restricted shares of its Common
          Stock to
          Cornell and 150,000 restricted shares of its Common Stock to an individual
          designee of Cornell. The certificates representing such shares were dated
          as of
          June 20, 2006. The Company believes such issuances were exempt from registration
          under Section 4(2) of the Securities Act of 1933, as amended. As of June
          30,
          2007 Cornell sold all of its shares to third parties has no outstanding
          put
          option.
  F-11
  **DCI
          USA, INC. AND SUBSIDIARIES**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)**
 **(UNAUDITED)**
 
 **NOTE
          10 - STOCKHOLDERS' EQUITY - (CONTINUED)**
 
 **ADDITIONAL
          ISSUANCES OF COMMON STOCK**
 In
          June
          2007, the Company issued 625,000 shares of its common stock for $.20 per
          share
          to two purchasers.
 
 **BARTRAM**
 On
          August
          6, 2007 Bartram Holdings, Inc. ("Bartram") exercised its options to pay off the
          $70,000 principal amount promissory note the company holds by delivering
          362,880
          shares of the company, held by Bartram, by Henry Santorow, and Stehem Robinson.
          On August 15, 2007 the shares where surrendered.
  **NOTE
          11 - OPTION GRANT**
 
 The
          Company granted an additional option to one of the principles of Senergy
          for the
          purchase of up to 6,000,000 shares of the Company common stock at exercise
          prices ranging from $10 to $20 per share. The Company valued the cost of
          these
          options at $89,256 based upon the Black Scholes options pricing model and
          has
          reflected these as consulting expenses during the quarter ended March 31,
          2007.
  **NOTE
          12 - RELATED PARTY TRANSACTIONS**
 
 Interest
          income for the three and nine months ended September 30, 2007 in amounts
          of
          $6,342 and $19,425, respectively, and for the three and nine months ended
          September 30, 2006 in amounts of $45,554 and $135,179, respectively, earned
          from
          notes receivable from related parties. We believe that the transactions
          set
          forth above were made on terms no less favorable to us than could have
          been
          obtained from unaffiliated third parties. In addition, we intend that all
          such
          transactions be on terms no less favorable to us than could be obtained
          from
          unaffiliated third parties.
 
 **NOTE
          13 - SUBSEQUENT EVENTS**
 
 On
          October 29, 2007 the Company issued 1,000,000 shares of common stock to
          one of
          the Company’s Directors in consideration for past service such Director has
          rendered to the Company in the year 2007. The shares of Common Stock, upon
          their
          issuance, shall be validly issued, fully paid, and non-assessable.
 
 On
          November 14, 2007, Mr. Ofir, Jonathan Rigbi, the Company’s Chief Financial
          Officer entered into a Purchase Agreement, with TSSS, Inc. a Delaware
          corporation (“TSSS”). Pursuant to the Purchase Agreement, Mr. Ofir sold all
          30,952,997 shares of the Company’s common stock owned by him to TSSS and
          assigned to TSSS an aggregate principal amount of $976,963 plus accrued
          interest
          of $19,868 relating to a series of loans Mr. Ofir made to the Company.
          In
          addition, Mr. Rigbi sold all 6,135,000 shares of the Company’s common stock to
          TSSS. In consideration for the sale of the shares of common stock, TSSS
          paid
          cash in the amount of $0.07 per share, amounting in the aggregate to $2,596,160.
          In addition, pursuant to the Purchase Agreement and in connection with
          the
          assignment of the loans, TSSS issued Mr. Ofir a promissory note in the
          amount of
          $846,831, representing the aggregate principal loan amount plus accrued
          interest, less $150,000. In accordance with the promissory note, interest
          accrues at a rate of one percent per month. Principal and interest are
          due and
          payable on or before May 14, 2008. In the event TSSS fails to make payments
          when
          due, interest shall accrued at a rate of two percent per month. TSSS has
          the
          right to prepay all or a portion of the note without penalty or premium.
          The
          note is secured by personal guarantee of a principal of TSSS. Simultaneously
          with the execution of the Purchase Agreement and promissory note, Mr. Ofir
          and
          TSSS entered into an Assignment and Indemnification Agreement whereby Mr.
          Ofir
          assigned and TSSS accepted the loans and agreed to indemnify Mr. Ofir against
          any and all claims and damages
  F-12
  **DCI
          USA, INC. AND SUBSIDIARIES**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)**
 **(UNAUDITED)**
 
 **NOTE
          13 - SUBSEQUENT EVENTS - (CONTINUED)**
 
 arising
          in connection with the loans. The Company was a signatory to the Assignment
          and
          Indemnification Agreement.
 
 Pursuant
          to the purchase agreement, Mr. Ofir resigned from his position as Chairman
          and
          Director of the Company.
 
 F-13
 **Item
        2. Management’s Discussion and Analysis or Plan of
        Operation.**
 
 As
        used
        throughout this report, the terms "DCI," the "Company," "we," "us," and "our"
        refer to DCI USA, Inc., and unless indicated otherwise, includes our
        subsidiaries.
 
 This
        Management’s Discussion and Analysis or Plan of Operations should be read in
        conjunction with the financial statements and the notes thereto.
 
 **Forward
        Looking Statements**
 
 This
        report on Form 10-QSB (the “Report”) contains a number of forward-looking
        statements that reflect management's current views and expectations with
        respect
        to our business, strategies, future results and events and financial
        performance. All statements made in this Report other than statements of
        historical fact, including statements that address operating performance,
        events
        or developments that management expects or anticipates will or may occur
        in the
        future, including statements related to distributor channels, volume growth,
        revenues, profitability, adequacy of funds from operations, statements
        expressing general optimism about future operating results and non-historical
        information, are forward looking statements. In particular, the words "believe,"
        "expect," "intend," " anticipate," "estimate," "may," "will," variations
        of such
        words, and similar expressions identify forward-looking statements, but are
        not
        the exclusive means of identifying such statements and their absence does
        not
        mean that the statement is not forward-looking. These forward-looking statements
        are subject to certain risks and uncertainties, including those discussed
        below.
        Our actual results, performance or achievements could differ materially from
        historical results as well as those expressed in, anticipated or implied
        by
        these forward-looking statements. We do not undertake any obligation to revise
        these forward-looking statements to reflect any future events or
        circumstances.
 
 Readers
        should not place undue reliance on these forward-looking statements, which
        are
        based on management's current expectations and projections about future events,
        are not guarantees of future performance, are subject to risks, uncertainties
        and assumptions (including those described below) and apply only as of the
        date
        of this Report. Our actual results, performance or achievements could differ
        materially from the results expressed in, or implied by, these forward-looking
        statements. Factors that could cause or contribute to such differences include,
        but are not limited to, those discussed in "Risk Factors" on the Company’s
        Annual Report of Form 10-KSB filed with the Securities and Exchange Commission
        (the “SEC”) on April 17, 2007, as amended on May 4, 2007, as well as those
        discussed elsewhere in this Report, and the risks discussed in our press
        releases and other communications to shareholders issued by us from time
        to time
        which attempt to advise interested parties of the risks and factors that
        may
        affect our business. We undertake no obligation to publicly update or revise
        any
        forward-looking statements, whether as a result of new information, future
        events or otherwise.
 
 **Overview**
 
 We
        are
        presently engaged in two lines of business: (i) the development of clean
        energy
        technologies; and (ii) the renovation and conversion of buildings to commercial
        condominiums.
  **Gunther
        Wind Energy, Ltd.**
 
 On
        August
        1, 2006, we entered into a loan, pledge and option agreement with Gunther
        Wind
        Energy, Ltd. (“Gunther”) in Israel to invest in the upgrade of an existing wind
        farm at Tel Assaniya and in the development of a new site, Nimrod. On June
        20,
        2007, the Company exercised its option to purchase all the outstanding
        shares of Gunther pursuant to and in accordance with the loan, pledge and
        option
        agreement. In consideration therefor, the Company cancelled the outstanding
        balance of certain loans previously made by the Company to Gunther in the
        amount
        of $1,055,384. (The Company’s Current Report of Form 8-K filed with the SEC on
        June 28, 2007 misstated the amount of loan cancellations as $1,468,000).
        The
        Company transferred $110,459 in September 2007 and an additional $334,157
        of the
        balance of the $1,500,000 purchase price remains due from the Company to
        Gunther. The Company will pay to Gunther the sum of $334,157, representing
        the balance of the purchase price outstanding by no later than December 31,
        2007. As a result of the exercise of its option as described above, the Company
        acquired all the outstanding shares of Gunther, which thereby became a
        wholly-owned subsidiary of the Company.
  2
  Through
        its purchase of 334 shares of preferred stock of ARI, Ltd. (“ARI”), Gunther owns
        25% of the outstanding shares of capital stock of ARI. The purchase price
        for
        these shares was $3,000,000. As of September 30, 2007, Gunther had paid an
        aggregate of $2,360,000 of the purchase price to ARI. using funds previously
        loaned to Gunther by the Company, together with a payment from Gunther using
        proceeds from a bank loan to Gunther of $1,500,000. Gunther owes an additional
        $640,000 to ARI. to complete the transaction, which it expects to pay by
        December 31, 2007. Pursuant to the terms and provisions of the agreement,
        the
        Company’s purchase of the preferred shares of ARI provides Gunther with the
        right to appoint one board member for every 12.5% of ARIs outstanding capital
        stock owned. As of November 14, 2007, Gunther has appointed one director
        of ARI
        and has not yet exercised its right to appoint a second director.
 
 On
        September 13, 2006, ARI signed an agreement to purchase a wind farm know
        as the
        Tel Assaniya Windfarm, located in Northern Israel. The completion of the
        purchase agreement is expected by December 31, 2007, upon payment of the
        outstanding balance.
 
 ARI
        has
        no employees and operates the Tel Assaniya Windfarm through a subcontractor.
        The
        Tel Assaniya Windfarm is planned to be upgraded from the current total capacity
        of 6MW, to seven wind turbines with a capacity of 2.3MW each. We expect this
        upgrade to be completed between April and June 2008. Until such upgrade is
        completed, Gunther will receive a minimum of a 10% preferred return on its
        $3,000,000 investment, which amounts to $75,000 each quarter, in anticipation
        of
        the payment of future dividends. Payments have been made for the quarterly
        periods ending June 30, 2007 and September 30, 2007. After the upgrade is
        completed, Gunther will receive a minimum of a 12.5% preferred annual
        return.
 
 **Purchase
        and Strategic Relationship Agreement**
 
 We
        have
        also engaged in ongoing negotiations with Senergy Ltd, an Israeli firm through
        which DCI plans to engage in solar energy projects across Israel, Spain,
        and
        Greece through various partnerships entered into by Senergy Solar Systems.
        In
        January 2007, the Company entered into a Purchase and Strategic Relationship
        Agreement with Senergy, Ltd. (“Senergy”), an Israeli limited liability company
        (the “Senergy Agreement”). Pursuant to the agreement, the Company, through a
        new, to-be-formed subsidiary, is to make investments in three installments
        totaling $500,000 in Senergy. In return for the investment, the Company receives
        promissory notes totaling $500,000 and a 60% equity interest in Senergy.
        The
        Promissory notes incur interest at the rate of 6% and are due 18 months after
        the date of the note. The Company made the first required installment of
        $100,000. The Company has requested that the terms of the Senergy Agreement
        be
        renegotiatied and Synergy has agreed to such renegotiation. If we are able
        to
        successfully conclude our negotiations, we will be in charge of managing
        fund-raising activities at Senergy and establishing strategic partnerships
        for
        Senergy. Senergy operates in the areas of solar heating and cooling and
        solar-based energy generation. Until negotiations are finalized, the two
        current
        owners of Senergy have personally guaranteed the loan of $100,000.
 
 **231
        Norman Avenue**
 
 The
        Company remains involved in the renovation and conversion of buildings to
        commercial condominiums. Our development at 231 Norman Avenue, in Brooklyn,
        New
        York is the underlying asset comprising the collateral on the loan discussed
        below. Construction is being completed and inspections are currently being
        conducted. Approvals needed for the commercial condominium plan offering
        have
        been obtained and 68 commercial condos are currently on the market for sale.
        The
        Company is actively involved in managing the construction, financing, and
        sales
        of the 231 Norman Avenue project.
  3
  The
        Company lent $1.37 million dollars to 231 Norman Ave, LLC (“Norman LLC”) in part
        pursuant to an agreement which provided the Company the option of supplanting
        the 100% membership interest holder in Norman LLC. The Company exercised
        this
        option as of November 2006 and now owns 100% interest in Norman LLC. As a
        result
        of the Company’s acquisition of Norman LLC, the Company controls 30% of the
        membership interests of 231 Norman Avenue Property Development, LLC (“231
        NAPD”).
 
 In
        November 2006, the Company purchased an option to acquire an additional 20%
        interest in 231 NAPD for $100,000. The option price was required to be paid
        by
        December 31, 2006. The option, which if exercised prior to March 30, 2007,
        gives
        the Company the right to purchase the 20% interest in exchange for 18 million
        shares of the Company’s common stock and a promissory note in the amount of
        $1,400,000. The promissory note would bear interest at the rate of 8% and
        is due
        in November 2011. The payment of the option price has been extended to June
        30,
        2007 and the exercise of the option has been extended to July 31, 2007. The
        Company did not exercise the option prior to its expiration on July 31,
        2007.
 
 231
        NAPD
        is a New York limited liability company engaged in owning, developing and
        operating income producing real property. 231 NAPD owns fee simple title
        to the
        real property located at 231 Norman Avenue, Brooklyn, New York. In March
        2005,
        231 NAPD consummated a $10 million refinancing and construction loan with
        Washington Mutual with respect to the property at 231 Norman Avenue and received
        capital contributions from investors of $1.75 million. The project at 231
        Norman
        Avenue, including the conversion of the existing building to condominiums,
        has
        been completed. 231 NAPD is now in the process of obtaining a Temporary
        Certificate of Occupancy.
 
 The
        Company and Jonathan Ilan Ofir, one of its directors and chairman of the
        board,
        guaranteed to North Fork Bank the obligations of 231 Norman Avenue Property
        Development, LLC, a New York limited liability company in which the Company
        owns
        a 30% interest through its wholly-owned subsidiary 231 Norman Avenue, LLC.
        On
        September 5, 2007, 231 NAPD entered into a Consolidated Mortgage Extension
        and
        Security Agreement (the “Agreement”) with North Fork Bank pursuant to which 231
        NAPD borrowed the principal sum of $2,426,497.29 from said bank and consolidated
        a previous loan of $11,411,002.71, for an aggregate consolidated principal
        loan
        amount of $13,837,500 (the “North Fork Loan”).
 
 On
        September 5, 2007, and simultaneous with the execution of the Agreement,
        231
        NAPD issued a Restated Promissory Note to North Fork Bank in the aggregate
        principal amount of $13,837,500 (the “Note”). Pursuant to the Note, principal
        plus all accrued and unpaid interest thereon shall be paid on March 5, 2009.
        Interest accrues on the principal amount at a daily rate of interest equal
        to
        7.25% to be computed on 360-day basis, and is to be paid on a monthly basis.
        Under specified conditions, 231 NAPD may, at its option, extend the loan
        for an
        additional 6 months in which case the rate of interest shall be 2% above
        the one
        year Treasury Index as of the three days prior to the Maturity Date. Upon
        providing 10 days prior written notice, 231 NAPD has the right to prepay
        the
        North Form Bank Loan, in multiples of $25,000 or more, at any time, without
        penalty. The obligations to North Fork Bank are secured by a lien on the
        property owned by 231 NAPD.
 
 In
        connection with the consolidation of the loan with North Fork, the Company,
        Jonathan Ilan Ofir, one of the Company’s directors and chairman of the board,
        and several other parties (specifically, Amir Yerushalmi, Vision Real Estates
        Group, LLC and YIZ Oxford Capital, LLC; collectively, the “Guarantors”) executed
        a Guaranty in favor of North Fork Bank (the “Guaranty”). In accordance with the
        Guaranty, the Guarantors guaranteed full performance of 231 NAPD’s obligations
        to North Fork Bank. In the event 231 NAPD defaults under the terms and
        provisions of the Agreement, upon written demand, the Guarantors, jointly
        and
        severally, shall pay to North Fork Bank all amounts remaining unpaid under
        the
        Agreement. As added security for the North Fork Loan, and in accordance with
        the
        Guaranty, all property of the Guarantors held by North Fork Bank shall be
        subject to a lien as security for the liabilities of the Guarantors. In the
        event the Guarantors fail to make payment to North Fork Bank when due, any
        such
        payment shall bear interest at the rate of 24% per annum.
  4
  **Financial
        Condition and Results of Operations**
  **Comparison
        of the results of operations: three and nine months ended September 30, 2007
        to
        three and nine months ended September 30, 2006** .
 
 Our
        total
        income for the three months ended September 30, 2007 was $6,342, compared
        with total income of $45,554 for the three months ended September 30, 2007.
        Income for the quarter ended September 30, 2007 consisted of interest income
        from notes receivable from related parties.
 
 Our
        total
        income for the nine months ended September 30, 2007 was $19,425, compared
        with total income of $135,179 for the nine months ended September 30, 2006.
        Our income for the nine months ended September 30, 2007 primarily consisted
        of
        interest income from notes receivable from related parties.
 
 Our
        general and administrative expenses increased to $121,980 for the three months
        ended September 30, 2007, from $71,996 for the three months ended September
        30,
        2006. Interest expense increased to $61,832 for the quarter ended September
        30,
        2007, from $42,921 for the quarter ended September 30, 2006.
 
 Professional
        fees increased from $14,173 for the quarter ended September 30, 2006, to
        $71,491
        for the quarter ended September 30, 2007. Consulting fees were $4,851 and
        $96,107 for the three months and nine months ended September 30,
        2007.
 
 Total
        loss from operations during the quarter ended September 30, 2007 was $256,766.
        The loss is attributed mainly to the decrease in interest income due to the
        cancellation of loans made to 231 NAPD and the increase in legal fees incurred
        in connection with the Gunther and ARI transactions.
 
 **Liquidity
        and Capital Resources**
 
 Our
        cash
        as of September 30, 2007 was $10,123. We will not be able to meet our cash
        requirements over the next twelve months.
 
 Over
        the
        next twelve months, we will need additional financing to meet our current
        expenses, expand our business, carry out our business plan and reduce our
        debt. We
        may
        have to borrow money from shareholders or issue debt or equity or enter into
        a
        strategic arrangement with a third party. There can be no assurance that
        additional capital will be available to us. There
        is
        no assurance that we will be able to obtain additional financing in sufficient
        amounts or on acceptable terms when needed, and our inability to obtain
        sufficient financing will adversely affect our operating results and
        prospects.
 
 Notes
        Receivable
 
 In
        exchange for the cancellation of $1,370,000 aggregate principal amount of
        note
        obligations owed to us, we have acquired an aggregate of 30% of the outstanding
        membership interests in 231 NAPD. We previously reported that 231 NAPD had
        received the necessary approval to convert the commercial use building at
        231
        Norman Avenue, Brooklyn, New York, into 68 loft units to be sold as
        condominiums. We have completed the conversion and have applied for a Temporary
        Certificate of Occupancy. As soon as a Temporary Certificate of Occupancy
        is
        obtained, 231 NAPD will begin to close on the sale of units, approximately
        22 of
        which are under contract as of the date of this discussion.
 
 As
        of
        September 30, 2007, our notes payable consisted of the following:
 
 The
        Company has a promissory note payable to Hypothecators Mortgage Company
        (“Hypothecators”) totaling $400,000. The promissory note accrues interest at the
        rate of 15% per annum and was due June 15, 2006. The note was extended to
        October 31, 2006. The Company entered into an arrangement with Hypothecators
        whereby the Company would make monthly payments of $50,000 of principal and
        interest through October 2007. The Company made payments pursuant to the
        agreement in February and March 2007. We are negotiating with Hypothecators
        to
        extend the due date and/or modify the terms of the note.
  5
  In
        addition, on November 1, 2006, four parties acquired the debentures in the
        principal amount of $250,000 and $236,500, with interest accrued to that
        date,
        (the “Debentures”) previously held by Cornell Capital Partners LP. Concurrently
        with such acquisitions the Company and such individuals entered into a Debenture
        Modification Agreement wherein the parties modified certain terms of the
        Debentures. Specifically, the parties agreed that the Debentures will no
        longer
        be secured by a lien on any of the Company’s assets, that the due date of the
        Debentures shall be June 4, 2007, and that the interest rate on the Debentures
        shall be eight percent (8%) per annum until the due date, and paid at the
        due
        date, increasing to fourteen (14%) per annum until such time as the Debentures
        are paid in full. At September 30, 2007, there was $600,000 outstanding on
        the
        Debentures. The agreement was amended to extend the due date to December
        31,
        2007.
 
 In
        addition, in October 2006, the Company initiated a convertible note offering
        whereby the Company would issue up to $1,300,000 of convertible notes. The
        notes
        incur interest at the rate of 10% per annum, payable quarterly, and are due
        November 25, 2007. The notes can be converted at anytime at the option of
        the
        note holder at a conversion price of $.05 per share, plus an adjustment based
        upon the profitability of 231NAPD (at December 31, 2006 the exercise price
        would
        have been $.05). The Company can force conversion of the notes anytime the
        shares are registered and the average computed market price is greater than
        250%
        of the conversion price. The Company measured for a beneficial conversion
        feature on the date of issuance and on December 31, 2006 and determined there
        to
        be no beneficial conversion feature on those dates. Since the conversion
        price
        can vary over time based on the profitability of Norman Property LLC, the
        Company is required to determine whether a beneficial conversion feature
        exists
        for each reporting period the notes are outstanding. At September 30, 2007,
        there was $465,000 in convertible notes outstanding. The Company did not
        make
        the quarterly payments of December 31, 2006 and of March 31, 2007 of interest
        timely, causing a default on the notes. However, such interest payments were
        made during January and May, 2007, respectively. None of the note holders
        has
        notified the Company of their intention to exert any of their rights regarding
        this default. Interest payments for June and September 2007 were made in
        a
        timely manner. Accordingly, the Company is current on its payments.
 
 As
        of
        November 16, 2007, the Company had a balance payable to our Chairman, Jonathan
        Ilan Ofir, in the original principal amount of $976,962.72. Such loan was
        assigned to the purchaser of Mr. Ofir’s shares as described below.
 
 **Impact
        of Inflation**
 
 Inflation
        has not had a material effect on our results of operation.
  **Item
        3. Controls and Procedures.**
 
 **Evaluation
        of Disclosure Controls and Procedures**
  Our
        disclosure controls and procedures are designed to ensure that information
        required to be disclosed in reports that we file or submit under the Securities
        Exchange Act of 1934 is recorded, processed, summarized and reported within
        the
        time periods specified in the rules and forms of the United States Securities
        and Exchange Commission. Our principal financial officer has reviewed the
        effectiveness of our “disclosure controls and procedures” (as defined in the
        Securities Exchange Act of 1934 Rules 13a-14(c) and 15d-14(c)) as of the
        end of
        the period covered by this report and have concluded that the disclosure
        controls and procedures are effective to ensure that material information
        relating to the Company is recorded, processed, summarized, and reported
        in a
        timely manner. There were no significant changes in our internal controls
        or in
        other factors that could significantly affect these controls subsequent to
        the
        last day they were evaluated by our principal financial officer.
 
 **Changes
        in Internal Controls**
 
 There
        have been no changes in the Company’s internal control over financial reporting
        during the last quarterly period covered by this report that have materially
        affected, or are reasonably likely to materially affect, the Company’s internal
        control over financial reporting.
  6
  **PART
        II**
 **OTHER
        INFORMATION**
 
 **Item
        1.**  **Legal
        Proceedings.**
 
 There
        are
        no pending legal proceedings to which the Company is a party or in which
        any
        director, officer or affiliate of the Company, any owner of record or
        beneficially of more than 5% of any class of voting securities of the Company,
        or security holder is a party adverse to the Company or has a material interest
        adverse to the Company. The Company’s property is not the subject of any pending
        legal proceedings.
 
 **Item
        2.**  **Unregistered
        Sales of Equity Securities and Use of Proceeds.**
 
 There
        have not been any sales of unregistered equity securities during the quarter
        ended September 30, 2007.
 
 On
        October 29, 2007, the Company issued 1,000,000 shares of common stock to
        one of
        the Company’s directors in consideration for past services such director has
        rendered to the Company. The
        shares were issued pursuant to Section 4(2) of the Securities Act of 1933.
 
 **Item
        3.**  **Defaults
        Upon Senior Securities.**
 
 As
        discussed above, the Company issued a promissory note payable to Hypothecators
        in the principal amount of $400,000. The promissory note accrues interest
        at the
        rate of 15% per annum and was due June 15, 2006. The term of the note was
        subsequently extended to October 31, 2006. The Company entered into an
        arrangement with Hypothecators whereby the Company would make monthly payments
        of $50,000 of principal and interest though October 2007. The Company made
        payments pursuant to the agreement in February and March 2007, but has not
        made
        any payments thereafter. We are negotiating with Hypothecators to extend
        the due
        date and/or modify the terms of the note.
 
 **Item
        4.**  **Submission
        of Matters to a Vote of Security Holders.**
 
 None.
 
 **Item
        5.**  **Other
        Information.**
 
 On
        November 14, 2007, Jonathan Ilan Ofir, the Company’s Chairman and a director,
        Jonathan Rigbi, the Company’s Chief Financial Officer entered into a Purchase
        Agreement, with TSSS, Inc., a Delaware corporation (“TSSS”). Pursuant to the
        Purchase Agreement, Mr. Ofir sold all 30,952,997 shares of the Company’s common
        stock owned by him to TSSS and assigned to TSSS an aggregate principal amount
        of
        $976,962.72 plus accrued interest of $19,868.17 relating to a series of loans
        Mr. Ofir made to the Company. In addition, Mr. Rigbi sold all 6,135,000 shares
        of the Company’s common stock to TSSS. In consideration for the sale of the
        shares of common stock, TSSS paid cash in the amount of $0.07 per share,
        amounting in the aggregate to $2,596,159.80. Pursuant to the Purchase Agreement,
        Mr. Ofir resigned from his position as Chairman and director of the Company.
        In
        addition, pursuant to the Purchase Agreement and in connection with the
        assignment of the loans, TSSS issued Mr. Ofir a promissory note in the amount
        of
        $846,830.89, representing the aggregate principal loan amount plus accrued
        interest, less $150,000. In accordance with the promissory note, interest
        accrues at a rate of one percent per month. Principal and interest are due
        and
        payable on or before May 14, 2008. In the event TSSS fails to make payments
        when
        due, interest shall accrued at a rate of two percent per month. TSSS has
        the
        right to prepay all or a portion of the note without penalty or premium.
        The
        note is secured by the personal guarantee of a board member of TSSS.
        Simultaneously with the execution of the Purchase Agreement and promissory
        note,
        Mr. Ofir and TSSS entered into an Assignment and Indemnification Agreement
        whereby Mr. Ofir assigned and TSSS accepted the loans and agreed to indemnify
        Mr. Ofir against any and all claims and damages arising in connection with
        the
        loans. The Company was a signatory to the Assignment and Indemnification
        Agreement.
  7
  For
        all
        the terms and conditions of the Purchase Agreement, Promissory Note, Personal
        Guaranty and Assignment and Indemnification Agreement, reference is hereby
        made
        to such agreements and note annexed hereto as Exhibits 10.16, 10.17, 10.18
        and
        10.19, respectively. All statements made herein concerning the foregoing
        are
        qualified in their entirety by reference to said exhibits.
 
 As
        disclosed in the Company’s Current Report on Form 8-K filed with the SEC on June
        28, 2007, the Company appointed David Rothstein as Interim Chief Executive
        Officer on June 21, 2007, for
        a
        period of up to two months .
        As of
        September 15, 2007, Mr. Rothstein was no longer Interim Chief Executive Officer.
        As of the date of this Report, the Company has not appointed a Chief Executive
        Officer.
 
 **Item
        6.**  **Exhibits.**
  The
        following exhibits are filed as part of this report:
 Exhibit
                  No.
              
              Description
                  of Exhibit10.16
              
              Purchase
                  Agreement by and between TSSS, Inc., Jonathan Ilan Ofir and Jonathan
                  Rigbi
                  dated November 14, 2007.10.17
              
              Promissory
                  Note by TSSS, Inc. to Jonathan Ilan Ofir dated November 16,
                  2007.10.18
              
              Personal
                  Guaranty of Ofer Arbib to Jonathan Ilan Ofir dated November 16,
                  2007.10.19
              
              Assignment
                  and Indemnification Agreement between TSSS, Inc. and Jonathan Ilan
                  Ofir
                  dated November 16, 2007.31.1
              
              Certification
                  of Chief Financial Officer pursuant to Rule 13a-14(a) under the
                  Securities
                  Exchange Act of 1934.32.1
              
              Certification
                  of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
                  Act of 2002 (18 U.S.C. 1350).
 
 8
  **SIGNATURES**
 
 In
        accordance with the requirements of the Securities Exchange Act of 1934,
        the
        Registrant has caused this report to be signed on its behalf by the undersigned,
        thereunto duly authorized.
 
 
 Dated:
                  November 19, 2007
              
              By:
              /s/
                  Jonathan RigbiJonathan
                  Rigbi
                Chief
                  Financial Officer
                (Principal
                  Financial and Accounting Officer)
  9