SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C.  20549





FORM
10-Q





QUARTERLY
REPORT UNDER SECTION 13 OR 15(d)


OF THE
SECURITIES EXCHANGE ACT OF 1934





For
      The Quarter Ended March 31,
      2008
            Commission
      File Number 001-13855





ILX RESORTS
INCORPORATED


(Exact
name of registrant as specified in its charter)





ARIZONA
            
            86-0564171(State
      or other jurisdiction of
            
            (IRS
      Employer Identification Number)incorporation
      or organization)





2111 East Highland Avenue,
Suite 200, Phoenix, Arizona 85016


(Address
of principal executive offices)





Registrant's
telephone number, including area code 602-957-2777


_____________________________________________





Former
name, former address, and former fiscal year, if changed since last
report.





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.





Yes 
      x
            No 
      o





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.





Large
      accelerated filer  o
            Accelerated
      filer  oNon-accelerated
      filer  o
            Smaller
      reporting company  x





Indicate
      by check mark whether the registrant is a shell company.
            Yes  o
            No  x





Indicate
the number of shares outstanding of each of the Registrant’s classes of stock,
as of the latest practicable date.





Class
            
            Outstanding at March
      31, 2008Common
      Stock, without par value
            
            3,657,763
      shares

















Item
      1.
            FINANCIAL
      STATEMENTS





ILX
RESORTS INCORPORATED AND SUBSIDIARIES


CONDENSED
CONSOLIDATED BALANCE SHEETS


(Unaudited)




December
      31,
              
              
              March
      31,2007
              
              
              2008ASSETSCash
      and cash equivalents, including restricted cash of $101,113 and $101,923,
      respectively
              
              $
              3,332,922
              
              
              $
              3,661,781Notes
      receivable, net of allowance for uncollectible notesof
      $3,801,902 and $3,972,505, respectively
              
              
              35,369,404
              
              
              
              34,921,565Resort
      property held for Vacation Ownership Interest sales
              
              
              18,655,976
              
              
              
              21,757,261Resort
      property under development
              
              
              4,659,865
              
              
              
              1,579,201Land
      held for sale
              
              
              585,511
              
              
              
              585,511Property
      and equipment, net
              
              
              20,003,338
              
              
              
              19,941,576Other
      assets
              
              
              2,611,469
              
              
              
              3,047,328TOTAL
      ASSETS
              
              $
              85,218,485
              
              
              $
              85,494,223LIABILITIES
      AND SHAREHOLDERS' EQUITYLIABILITIES:Accounts
      payable
              
              $
              1,409,993
              
              
              $
              1,038,936Accrued
      expenses and other liabilities
              
              
              3,784,582
              
              
              
              4,365,647Income
      tax payable
              
              
              44,232
              
              
              
              11,816Notes
      payable
              
              
              37,353,072
              
              
              
              38,739,517Note
      payable affiliate
              
              
              600,000
              
              
              
              -Deferred
      income taxes
              
              
              3,830,318
              
              
              
              3,408,421TOTAL
      LIABILITIES
              
              
              47,022,197
              
              
              
              47,564,337MINORITY
      INTERESTS
              
              
              2,032,716
              
              
              
              2,019,643COMMITMENTS
      AND CONTINGENCIESSHAREHOLDERS'
      EQUITYPreferred
      stock, $10 par value; 10,000,000 shares authorized;117,722
      shares issued and outstanding; liquidation preference
      of  $1,177,220
              
              
              746,665
              
              
              
              746,665Common
      stock, no par value; 30,000,000 shares authorized;5,477,257
      and 5,583,259 shares issued and outstanding
              
              
              29,018,839
              
              
              
              29,336,215Treasury
      stock, at cost, 1,925,496 shares
              
              
              (9,973,257
              )
              
              
              (9,973,257
              )Additional
      paid-in capital
              
              
              59,435
              
              
              
              59,435Deferred
      compensation
              
              
              (265,513
              )
              
              
              (236,635
              )Retained
      earnings
              
              
              16,577,403
              
              
              
              15,977,820TOTAL
      SHAREHOLDERS' EQUITY
              
              
              36,163,572
              
              
              
              35,910,243TOTAL
      LIABILITIES AND SHAREHOLDERS' EQUITY
              
              $
              85,218,485
              
              
              $
              85,494,223
   See notes
to condensed consolidated financial statements.




2





ILX
RESORTS INCORPORATED AND SUBSIDIARIES


CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS


(Unaudited)




Three
      months ended March 31,2007
              
              
              2008REVENUES:Sales
      of Vacation Ownership Interests
              
              $
              6,146,233
              
              
              $
              5,273,647Estimated
      uncollectible revenue
              
              
              (268,551
              )
              
              
              (231,486
              )Resort
      operating revenue
              
              
              4,406,287
              
              
              
              4,735,885Interest
      and finance income
              
              
              883,992
              
              
              
              645,431Total
      revenues
              
              
              11,167,961
              
              
              
              10,423,477COST
      OF SALES AND OPERATING EXPENSES:Cost
      of Vacation Ownership Interests sold
              
              
              845,061
              
              
              
              677,115Cost
      of resort operations
              
              
              4,148,820
              
              
              
              4,323,041Sales
      and marketing
              
              
              4,592,437
              
              
              
              3,854,746General
      and administrative
              
              
              1,672,391
              
              
              
              1,679,915Depreciation
      and amortization
              
              
              363,370
              
              
              
              324,383Total
      cost of sales and operating expenses
              
              
              11,622,079
              
              
              
              10,859,200Timeshare
      and resort operating loss
              
              
              (454,118
              )
              
              
              (435,723
              )Income
      from land and other, net (including Related Party)
              
              
              35,249
              
              
              
              33,730Total
      operating loss
              
              
              (418,869
              )
              
              
              (401,993
              )Interest
      expense
              
              
              (669,730
              )
              
              
              (665,824
              )Loss
      before income taxes and minority interest
              
              
              (1,088,599
              )
              
              
              (1,067,817
              )Income
      tax benefit
              
              
              435,400
              
              
              
              421,897Loss
      before minority interest
              
              
              (653,199
              )
              
              
              (645,920
              )Minority
      interest in loss of consolidated subsidiary
              
              
              -
              
              
              
              13,073NET
      LOSS
              
              $
              (653,199
              )
              
              $
              (632,847
              )NET
      LOSS PER SHARETotal
      Basic loss per share
              
              $
              (0.19
              )
              
              $
              (0.18
              )Total
      Diluted loss per share
              
              $
              (0.19
              )
              
              $
              (0.18
              )DIVIDENDS
      PER SHARE
              
              $
              0.125
              
              
              $
              -











3





ILX
RESORTS INCORPORATED AND SUBSIDIARIES


CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS


(Unaudited)





Three
      months ended March 31,2007
            
            
            2008CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
            
            $
            (653,199
            )
            
            $
            (632,847
            )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Gain
      on sale of property and equipment
            
            
            (9,742
            )
            
            
            -Gain
      of sale of investment in common stock
            
            
            (29,327
            )
            
            
            -Minority
      interest in net loss
            
            
            -
            
            
            
            (13,073
            )Income
      tax benefit
            
            
            (435,400
            )
            
            
            (421,897
            )Estimated
      uncollectible revenue
            
            
            268,551
            
            
            
            231,486Depreciation
      and amortization
            
            
            363,370
            
            
            
            324,383Amortization
      of deferred compensation
            
            
            63,353
            
            
            
            46,254Change
      in assets and liabilities:Decrease
      in notes receivable, net
            
            
            837,139
            
            
            
            216,353Decrease
      (increase) in resort property held for Vacation OwnershipInterest
      sales
            
            
            532,337
            
            
            
            (3,101,285
            )(Increase)
      decrease in resort property under development
            
            
            (1,155,624
            )
            
            
            3,080,664Increase
      in other assets
            
            
            (95,248
            )
            
            
            (494,943
            )Increase
      (decrease) in accounts payable
            
            
            206,636
            
            
            
            (371,057
            )Increase
      in accrued and other liabilities
            
            
            461,559
            
            
            
            581,065Decrease
      in income taxes payable
            
            
            (410,267
            )
            
            
            (32,416
            )Net
      cash used in operating activities
            
            
            (55,862
            )
            
            
            (587,313
            )CASH
      FLOWS FROM INVESTING ACTIVITIES:Purchases
      of property and equipment
            
            
            (641,591
            )
            
            
            (203,537
            )Proceeds
      from sale of investment in common stock
            
            
            29,327
            
            
            
            -Proceeds
      from sale of property and equipment
            
            
            10,028
            
            
            
            -Assumption
      of First Piggy LLC membership interests
            
            
            -
            
            
            
            33,264Net
      cash used in investing activities
            
            
            (602,236
            )
            
            
            (170,273
            )CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from notes payable
            
            
            2,396,407
            
            
            
            3,763,078Principal
      payments on notes payable
            
            
            (3,045,348
            )
            
            
            (2,376,633
            )Principal
      payment on note payable to affiliate
            
            
            -
            
            
            
            (300,000
            )Acquisition
      of treasury stock
            
            
            (357,090
            )
            
            
            -Common
      stock dividend
            
            
            (285,142
            )
            
            
            -Net
      cash (used in) provided by financing activities
            
            
            (1,291,173
            )
            
            
            1,086,445(DECREASE)
      INCREASE IN CASH AND CASH EQUIVALENTS
            
            
            (1,949,271
            )
            
            
            328,859CASH
      AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
            
            
            5,583,721
            
            
            
            3,332,922CASH
      AND CASH EQUIVALENTS AT END OF PERIOD
            
            $
            3,634,450
            
            
            $
            3,661,781SUPPLEMENTAL
      DISCLOSURE OF NONCASH INVESTING
      AND FINANCING ACTIVITIES:Value
      of dividend shares issued under DRIP plan
            
            $
            220,244
            
            
            $
            -Deferred
      compensation resulting from unvested common stock issuance
            
            
            271,416
            
            
            
            -Common
      stock issued to repay portion of note payable to affiliate
            
            
            -
            
            
            
            300,000





4





ILX
RESORTS INCORPORATED AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)







Note
1. Summary of Significant Accounting Policies





Principles
of Consolidation and Business Activities





The
condensed consolidated financial statements include the accounts of ILX Resorts
Incorporated, and its wholly owned subsidiaries (“ILX” or the
“Company”).  All significant intercompany transactions and balances
have been eliminated in consolidation.





The accompanying condensed consolidated
balance sheet as of December 31, 2007, which has been derived from audited
financial statements, and the unaudited condensed consolidated financial
statements have been prepared in accordance with accounting principles generally
accepted in the United States of America for interim financial information and
the instructions to Form 10-Q and Rule 10-01 of Regulation
S-X.  Accordingly, they do not include all of the information and
notes required by accounting principles generally accepted in the United States
of America for complete financial statements.  In the opinion of
management, all adjustments and reclassifications considered necessary for a
fair and comparable presentation have been included and are of a normal
recurring nature.  Operating results for the three-month period ended
March 31, 2008 are not necessarily indicative of the results that may be
expected for the year ending December 31, 2008.  The accompanying
financial statements should be read in conjunction with the Company’s most
recent audited financial statements.





The
Company’s significant business activities include developing, operating,
marketing and financing ownership interests (“Vacation Ownership Interests”) in
resort properties located in Arizona, Colorado, Indiana, Nevada and
Mexico.





Revenue
Recognition





Revenue
from sales of Vacation Ownership Interests is recognized in accordance with
Statement of Financial Accounting Standards No. 152, Accounting for Real Estate
Time-Sharing Transactions (“SFAS 152”).  No sales are recognized until
such time as a minimum of 10% of the purchase price and any incentives given at
the time of sale has been received in cash, the statutory rescission period has
expired, the buyer is committed to continued payments of the remaining purchase
price and the Company has been released of all future obligations for the
Vacation Ownership Interest.  Resort operating revenue represents
daily room rentals (inclusive of homeowner’s dues) and revenues from food and
other resort services.  Such revenues are recorded as the rooms are
rented or the services are performed.





Condensed
Consolidated Statements of Cash Flows




Cash
equivalents are liquid investments with an original maturity of three months or
less.  The following summarizes interest paid (excluding capitalized
interest), income taxes paid and interest capitalized.




Three
      Months Ended March 31,2007
              
              
              2008Interest
      paid
              
              $
              669,730
              
              
              $
              669,901Income
      taxes paid
              
              
              410,267
              
              
              
              32,416Interest
      capitalized
              
              
              272,285
              
              
              
              270,785









5





ILX
RESORTS INCORPORATED AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)





Stock
Based Compensation





The
Company records stock based compensation in accordance with the provisions of
SFAS No. 123R. SFAS No. 123R addresses the accounting for share-based payments
to employees, including grants of employee stock options. Under the standard,
the Company is no longer able to account for share-based compensation
transactions using the intrinsic method in accordance with APB Opinion No. 25.
Instead, the Company is required to account for such transactions using a
fair-value method and recognize the expense in the condensed consolidated
statement of operations. The Company had no unvested options at March 31,
2008.





Reclassification





The financial statements for the prior
period have been reclassified to be consistent with the current period financial
statement presentation.  The reclassification had no effect on net
income.





Note 2. Basic and Diluted Net Loss
Per Share








Three
      Months EndedMarch
      31,2007
              
              
              2008Net
      loss
              
              $
              (653,199
              )
              
              $
              (632,847
              )Less:
      Series A preferred stock dividends
              
              
              (11,697
              )
              
              
              (11,697
              )Basic
      and Diluted Net Loss Available to Common Shareholders
              
              $
              (664,896
              )
              
              $
              (644,544
              )Basic
      Weighted-Average Common Shares Outstanding
              
              
              3,491,358
              
              
              
              3,618,807Diluted
      Weighted-Average Common Shares Outstanding
              
              
              3,491,358
              
              
              
              3,618,807Basic
      Net Loss Per Common Share
              
              $
              (0.19
              )
              
              $
              (0.18
              )Diluted
      Net Loss Per Common Share
              
              $
              (0.19
              )
              
              $
              (0.18
              )




Stock
options to purchase 25,000 shares of common stock at a price of $9.90 per share
were outstanding at March 31, 2008 and 2007, but were not included in the
computation of diluted net income per share because their effect would be
anti-dilutive.  These options expire in 2009.





Note
3. Shareholders’ Equity





During the three months ended March 31,
2008, the Company issued 6,000 shares of common stock, valued at $17,376 to
employees under the Stock Bonus Plan.  These shares have voting rights
and therefore are included in shares outstanding.  The 6,000 shares
are contingent upon the recipients being employed by the Company on January 15,
2011.  The $17,376 deferred expense is being amortized pro-rata over
the vesting period and the unrecognized portion is included in deferred
compensation on the condensed consolidated balance sheet.  The Company
also issued 100,002 restricted common shares valued at the fair value of
$300,000 to six former members of First Piggy LLC as partial repayment of the
$600,000 note payable to affiliates.





In
December 2002, the Company announced an annual cash dividend of $0.40 per common
share to be paid in equal quarterly installments, payable on the tenth day of
the calendar month following the end of each calendar quarter, to common
shareholders of record as of the last day of each calendar quarter in
2003.  The Company continued to pay the dividend each year and for
2007 the dividend was established at $0.50 per common share to be paid in equal
quarterly installments of $0.125.  In December 2007, the dividend was
discontinued and no payment was made for the fourth quarter 2007.  In
March 2003, the Company adopted the ILX Resorts Incorporated Dividend
Reinvestment Plan (“DRIP”).  The DRIP was amended and restated in
March 2006.  Under the terms of the DRIP, shareholders could elect to
reinvest dividends in shares of the Company’s common stock, with no brokerage or
other fees to the shareholder.








6





ILX
RESORTS INCORPORATED AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)





Note
4.  Share Based Compensation





Employee
Stock Options





The Company has Stock Option Plans
pursuant to which options (which term as used herein includes both incentive
stock options and non-statutory stock options) could have been granted through
2005 to key employees, including officers, whether or not they are directors,
and non-employee directors and consultants, who are determined by the Board of
Directors to have contributed in the past, or who may be expected to contribute
materially in the future, to the success of the Company.  The exercise
price of the options granted pursuant to the Plans could be not less than the
fair market value of the shares on the date of grant.  All outstanding
stock options require the holder to have been a director or employee of the
Company for at least one year before exercising the option.  Incentive
stock options are exercisable over a five-year period from date of grant if the
optionee was a ten-percent or more shareholder immediately prior to the granting
of the option and over a ten-year period if the optionee was not a ten-percent
shareholder.  No further grants may be made under the
Plans.





Stock
Bonus Plan





The Company’s Stock Bonus Plan was
created to advance the interests of the Company and its shareholders, by
encouraging and enabling selected officers, directors, consultants and key
employees upon whose judgment, initiative and effort the Company is largely
dependent for the successful conduct of its business to acquire and retain a
proprietary interest in the Company by ownership of its stock.





A summary of the non-vested stock under
the Stock Bonus Plan at March 31, 2008 follows:




Non-Vested
      Shares
              
              
              Weighted
      Average Grant Date Fair ValueNon-vested
      at December 31, 2007
              
              
              93,000
              
              
              $
              7.83Stock
      Granted
              
              
              6,000
              
              
              
              2.90Stock
      Vested
              
              
              (26,000
              )
              
              
              7.70Stock
      Forfeited
              
              
              -
              
              
              
              -Non-vested
      at March 31, 2008
              
              
              73,000
              
              
              $
              7.48


Unamortized deferred compensation of
$236,635 will be amortized over the weighted average remaining term of 1.56
years.  The value of the non-vested stock under the Stock Bonus Plan
at March 31, 2008 is $372,300.





Note
5. Related Party Transactions





During
the three months ended March 31, 2008, the Company’s wholly owned subsidiary,
Genesis Investment Group, Inc. (“Genesis”), recorded the sale of 33 Vacation
Ownership Interests to Premiere Vacation Club homeowners’ association, an
Arizona nonprofit corporation (“PVC”).  PVC purchased the intervals at
$2,415 per interval, the same price at which it has historically acquired
intervals in arms-length negotiations with unaffiliated third
parties.  PVC is owned by the holders of its vacation ownership
interests, including the Company.  A gain of $30,295 was recorded on
the sale.  At March 31, 2008, deeds of trust for 655 of the Vacation
Ownership Interests secure outstanding indebtedness from PVC to Genesis of
$1,504,860 which is included in notes receivable.








7





ILX
RESORTS INCORPORATED AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)





The
Company, together with James Bruno Enterprises LLC (Bruno), formed ILX-Bruno LLC
(“ILX-Bruno”) in August 2005 to purchase and develop three parcels approximating
22 acres of land in Sedona, Arizona from the Forest Service of the Department of
Agriculture and an unrelated party (approximately one acre).  The
Company entered into an Operating Agreement with Bruno, as a member of
ILX-Bruno, in which the Company was named as the manager of
ILX-Bruno.  The Company held an 85.0% interest in ILX-Bruno as of
March 31, 2008.  ILX-Bruno is included in the Company’s condensed
consolidated financial statements as of March 31, 2008 with Bruno’s capital
contributions net of operating losses included as Minority Interests on the
accompanying condensed consolidated balance sheets.





At
December 31, 2007, a note payable to former First Piggy LLC members in the
principal amount of $600,000 (bearing interest at 8.0%) was outstanding,
together with interest payable in the amount of $4,077.  The note
provided for principal payments of $300,000 in each of 2008 and
2009.  In February 2008, $300,000 of the note payable was satisfied
through the issuance of 100,002 shares of the Company’s common stock, and the
remaining $300,000 principal plus accrued interest was paid in
cash.





Note
6. Subsequent Events





In April 2008, Sedona Vacation Club
Incorporated homeowners’ association (“SVC”) and PVC entered into promissory
notes of $350,000 and $900,000, respectively, to finance renovations and the
purchase of certain equipment.  ILX Resorts Incorporated has
guaranteed the promissory notes for both SVC and PVC and has entered into a
Guarantee Fee Agreement with SVC and PVC to receive a guarantee fee of 1% of the
promissory note amount.





Note
7. Commitments and Contingencies





Legal
Proceedings





In
October 2005, The Greens of Las Vegas, Inc. (“GOLV”) filed suit against the
Company, VCA-Nevada (“VCA-NV”), Greens Worldwide Incorporated (“GWWI”) and all
of the directors of GWWI from 2003 to the present.  GOLV alleged that
the Company interfered with prospective advantages between GOLV and third
parties, interfered with contracts between GOLV and VCA-NV, fraud, unjust
enrichment and civil conspiracy.  All Defendants answered the
Complaint on March 16, 2006 and asserted various counterclaims.  In
February 2008, the Court granted the Company’s Motion to Dismiss the Complaint
and in April 2008 reaffirmed its decision and awarded that GOLV pay the
Company’s attorneys’ fees in the amount of $626,000.  The
counterclaims of the Company against the Plaintiffs remain.  In March
2008, GOLV appealed the dismissal of its claims, which appeal the Company has
been advised is untimely.  A court ordered settlement conference is
scheduled in June 2008.  The Company intends to continue to vigorously
defend the case and pursue its counterclaims and believes the Plaintiffs’
allegations of the Complaint are without merit.





Other
litigation has arisen in the normal course of the Company’s business, none of
which is deemed to be material.








8








MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL


CONDITION
AND RESULTS OF OPERATIONS








Item
      2.
            Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations





The following discussion of the
Company’s financial condition and results of operations includes certain
forward-looking statements.  When used in this Form 10-Q, the words
“estimate,” “projection,” “intend,” “anticipates,” “expects,” “may,” “should”
and similar terms are intended to identify forward-looking statements that
relate to the Company’s future performance.  Such statements are
subject to substantial risks and uncertainties that could cause actual results
to differ materially from those projected, including, without limitation, the
risks and uncertainties set forth below.  Readers are cautioned not to
place undue reliance on the forward-looking statements set forth
below.  The Company undertakes no obligation to publicly update or
revise any of the forward-looking statements contained herein.





Overview





ILX Resorts Incorporated (“ILX” or the
“Company”) is one of the leading developers, marketers and operators of
timeshare resorts in the western United States and Mexico.  The
Company’s principal operations consist of (i) acquiring, developing and
operating timeshare resorts marketed by the Company as vacation ownership
resorts, (ii) marketing and selling vacation ownership interests in the
timeshare resorts, which typically have entitled the buyers thereof to ownership
of a fully-furnished unit for a one-week period on either an annual or an
alternate year (i.e., bienniel) basis (“Vacation Ownership Interests”), and
(iii) providing purchase money financing to the buyers of Vacation Ownership
Interests at its resorts.  In addition, the Company receives revenues
from the rental of unused or unsold inventory of units at its vacation ownership
resorts, and from the sale of food, beverages and other services at such
resorts.  The Company’s current portfolio of resorts consists of eight
resorts in Arizona, one in Indiana, one in Colorado, one in San Carlos, Mexico,
land in Puerto Penãsco (Rocky Point), Mexico and land in Sedona, Arizona
(collectively, the “ILX Resorts”).  One of the resorts in Arizona is
not at this time registered with the Arizona Department of Real Estate nor is
being marketed for sale as Vacation Ownership Interests, and is operated under a
long-term lease arrangement.  The Company also owns 2,173 Vacation
Ownership Interests in a resort in Las Vegas, Nevada, 2,127 of which have been
annexed into Premiere Vacation Club, 193 Vacation Ownership Interests in a
resort in Pinetop, Arizona, 191 of which have been annexed into Premiere
Vacation Club and 176 Vacation Ownership Interests in a resort in Phoenix,
Arizona, all of which have been annexed into Premiere Vacation
Club.





Significant
Accounting Policies





Principles
of Consolidation and Business Activities





The
condensed consolidated financial statements include the accounts of ILX Resorts
Incorporated, and its wholly owned subsidiaries (“ILX” or the
“Company”).  All significant intercompany transactions and balances
have been eliminated in consolidation.





The accompanying condensed consolidated
balance sheet as of December 31, 2007, which has been derived from audited
financial statements, and the unaudited condensed consolidated financial
statements have been prepared in accordance with accounting principles generally
accepted in the United States of America for interim financial information and
the instructions to Form 10-Q and Rule 10-01 of Registration
S-X.  Accordingly, they do not include all of the information and
notes required by accounting principles generally accepted in the United States
of America for complete financial statements.  In the opinion of
management, all adjustments and reclassifications considered necessary for a
fair and comparable presentation have been included and are of a normal
recurring nature.  Operating results for the three-month period ended
March 31, 2008 are not necessarily indicative of the results that may be
expected for the year ending December 31, 2008.  The accompanying
financial statements should be read in conjunction with the Company’s most
recent audited financial statements.








9





MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL


CONDITION
AND RESULTS OF OPERATIONS


(CONTINUED)








The
Company’s significant business activities include developing, operating,
marketing and financing ownership interests (“Vacation Ownership Interests”) in
resort properties located in Arizona, Colorado, Indiana and Mexico.





Revenue
Recognition





Revenue
from sales of Vacation Ownership Interests is recognized in accordance with
Statement of Financial Accounting Standards No. 152, Accounting for Real Estate
Time-Sharing Transactions (“SFAS 152”).  No sales are recognized until
such time as a minimum of 10% of the purchase price and any incentives given at
the time of sale has been received in cash, the statutory rescission period has
expired, the buyer is committed to continued payments of the remaining purchase
price and the Company has been released of all future obligations for the
Vacation Ownership Interest.  Resort operating revenue represents
daily room rentals (inclusive of homeowner’s dues) and revenues from food and
other resort services.  Such revenues are recorded as the rooms are
rented or the services are performed.





Recent
Accounting Pronouncements




In
September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS
157). SFAS 157 establishes a framework for measuring fair value in generally
accepted accounting principles, and expands disclosures about fair value
measurements. SFAS 157 is effective for the Company as of January 1, 2008. In
February 2008, the FASB issued FASB Staff Position No. 157-2 (FSP 157-2); which
extended the effective date for certain nonfinancial assets and nonfinancial
liabilities to fiscal years beginning after November 15, 2008. The adoption of
the portions of SFAS 157 that were not postponed by FSP 157-2 did not have a
material impact on our consolidated financial statements. Adoption of the
postponed portions of SFAS 157 is not anticipated to cause a material change in
financial position or results of operations.




In
February 2007, the FASB issued Statement of Financial Accounting Standards No.
159, The Fair Value Option for Financial Assets and Financial Liabilities (“SFAS
No. 159”), which allows an irrevocable election to measure certain financial
assets and financial liabilities at fair value on an instrument-by-instrument
basis, with unrealized gains and losses recognized currently in earnings. Under
SFAS No. 159, the fair value option may only be elected at the time of initial
recognition of a financial asset or financial liability or upon the occurrence
of certain specified events. Additionally, SFAS No. 159 provides that
application of the fair value option must be based on the fair value of an
entire financial asset or financial liability and not selected risks inherent in
those assets or liabilities. SFAS No. 159 requires that assets and liabilities
which are measured at fair value pursuant to the fair value option be reported
in the financial statements in a manner that separates those fair values from
the carrying amounts of similar assets and liabilities which are measured using
another measurement attribute. SFAS No. 159 also provides expanded disclosure
requirements regarding the effects of electing the fair value option on the
financial statements. SFAS No. 159 is effective prospectively for fiscal years
beginning after November 15, 2007, with early adoption permitted for fiscal
years in which interim financial statements have not been issued, provided that
all of the provisions of SFAS No. 157 are early adopted as well.  The
adoption of this standard did not have a material effect on the Company’s
financial position or results of operations.





In
December 2007, the FASB issued Statement of Financial Accounting Standards No.
141(R) Business Combinations (SFAS 141(R))
and Statement of Financial Accounting Standards No. 160, Noncontrolling Interests in
Consolidated Financial Statements – an amendment of ARB No. 51(SFAS
160).  SFAS 141(R) requires an acquirer to measure the identifiable
assets acquired, the liabilities assumed and any non-controlling interest in the
acquiree at their fair values on the acquisition date, with goodwill being the
excess value over the net identifiable assets acquired.  SFAS 160
seeks to improve the relevance, comparability, and transparency of the financial
information that a reporting entity provides in its consolidated financial
statements by establishing accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary.  SFAS 141(R) and SFAS 160 are effective for fiscal years
beginning on or after December 15, 2008.  Earlier adoption is
prohibited.  The Company is currently evaluating the impact the
adoption of these standards will have on the Company’s financial position or
results of operations.





10





MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL


CONDITION
AND RESULTS OF OPERATIONS


(CONTINUED)








Results
of Operations





The
following table sets forth certain operating information for the
Company:





Three
      Months EndedMarch
      31,2007
              
              
              2008As
      a percentage of total revenues:Sales
      of Vacation Ownership Interests
              
              
              55.0
              %
              
              
              50.6
              %Estimated
      uncollectible revenue
              
              
              (2.4
              %)
              
              
              (2.2
              %)Resort
      operating revenue
              
              
              39.5
              %
              
              
              45.4
              %Interest
      and finance income
              
              
              7.9
              %
              
              
              6.2
              %Total
      revenues
              
              
              100.0
              %
              
              
              100.0
              %As
      a percentage of sales of Vacation Ownership Interests(1):Cost
      of Vacation Ownership Interests sold
              
              
              14.4
              %
              
              
              13.4
              %Sales
      and marketing
              
              
              78.1
              %
              
              
              76.5
              %Contribution
      margin percentage from sale of VacationOwnership
      Interests (2)
              
              
              7.5
              %
              
              
              10.1
              %As
      a percentage of resort operating revenue:Cost
      of resort operations
              
              
              94.2
              %
              
              
              91.3
              %As
      a percentage of total revenues(1):General
      and administrative
              
              
              15.0
              %
              
              
              16.1
              %Depreciation
      and amortization
              
              
              3.3
              %
              
              
              3.1
              %Total
      operating loss
              
              
              (3.8
              %)
              
              
              (3.9
              %)Selected
      operating data:Vacation
      Ownership Interests sold (3)
      (4)
              
              
              261
              
              
              
              216Average
      sales price per Vacation Ownership Interestsold (excluding
      revenues from Upgrades) (4)
              
              $
              18,017
              
              
              $
              18,014Average
      sales price per Vacation Ownership Interestsold (including
      revenues from Upgrades) (4)
              
              $
              22,609
              
              
              $
              23,881





(1)Sales
of Vacation Ownership Interests and total revenues includes the reduction for
estimated uncollectible revenue.


(2)
Defined as: the sum of Vacation Ownership Interest sales less the cost of
Vacation Ownership Interests sold less sales and marketing expenses less
estimated uncollectible revenue divided by sales of Vacation Ownership Interests
less estimated uncollectible revenue.


(3)Reflects all Vacation Club Ownership Interests on an annual
basis.


(4)Consists of an aggregate of 383 and 348 biennial and annual Vacation
Ownership Interests for the three months ended March 31, 2007 and 2008,
respectively.  Excludes the number of conversions and
upgrades.





11





MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL


CONDITION
AND RESULTS OF OPERATIONS


(CONTINUED)





Comparison
of the Three Months Ended March 31, 2007 to the Three Months Ended March 31,
2008





Sales of
Vacation Ownership Interests decreased 14.2% or $835,521 to $5,042,161 for the
three months ended March 31, 2008, from $5,877,682 for the same period in
2007.  The decrease reflects reduced sales from the Rancho Mañana and
Sedona sales offices due to the closure of the Rancho Mañana sales office in
June 2007 and decreased tours in Sedona, offset by increased sales at the Tucson
sales office due to greater tours in 2008.





The
average sales price per Vacation Ownership Interest sold (excluding revenues
from Upgrades) was consistent at $18,014 and $18,017 for the three months ended
March 31, 2008 and 2007, respectively.  The number of Vacation
Ownership Interests sold decreased 17.2% from 261 in the three months ended
March 31, 2007 to 216 for the same period in 2008 primarily due to the closure
of the Rancho Mañana sales office discussed above and decreased tours at the
Sedona sales office.  The three months ended March 31, 2008 included
265 biennial Vacation Ownership Interests (counted as 132.5 annual Vacation
Ownership Interests) compared to 245 biennial Vacation Ownership Interests
(counted as 122.5 annual Vacation Ownership Interests) in the same period in
2007.





Upgrade
revenue, included in Vacation Ownership Interest sales, increased 5.7% to
$1,264,419 for the three months ended March 31, 2008 from $1,196,125 for the
same period in 2007.  The increase in 2008 reflects increased
marketing efforts to existing owners in Sedona and Tucson offset by the closure
of the Rancho Mañana sales office as discussed above.  Upgrades often
do not involve the sale of additional Vacation Ownership Interests (merely their
exchange) and, therefore, such Upgrades increase the average sales price per
Vacation Ownership Interest sold.  The average sales price per
Vacation Ownership Interest sold (including upgrades) increased 5.6% or $1,272
to $23,881 for the three months ended March 31, 2008 from $22,609 in
2007.  This increase is due to greater upgrade revenue relative to new
sales in 2008.





Resort
operating revenue increased 7.5% to $4,735,885 for the three months ended March
31, 2008, from $4,406,287 for the same period in 2007.  The increase
for the three months ended March 31, 2008 reflects revenue from the operation of
the Sea of Cortez Premiere Vacation Club (which was previously operated by a
third party and the net effect of revenue less expenses charged to revenue)
beginning in July 2007, as well as increased revenue from vacation interval
owners.  Cost of resort operations as a percentage of resort operating
revenue decreased from 94.2% to 91.3% for the first quarter ended March 31, 2008
reflecting the increase in revenue from vacation interval owners.





Interest
and finance income decreased 27.0% to $645,431 for the three months ended March
31, 2008 from $883,992 for the same period in 2007, reflecting decreased
Customer Note balances, a reduction in notes sold due to decreased sales and a
greater portion of Customer Notes being zero-interest one year
maturities.





Cost of
Vacation Ownership Interests sold as a percentage of Vacation Ownership Interest
sales decreased from 14.4% for the three months ended March 31, 2007 to 13.4%
for the three months ended March 31, 2008, due to the June 2007 determination of
the ultimate cost of inventory in San Carlos, Mexico, as a result of the
termination of the existing business agreement on terms favorable to the
Company.





Sales and
marketing as a percentage of sales of Vacation Ownership Interests decreased to
76.5% for the three months ended March 31, 2008 from 78.1% for the same period
in 2007, reflecting closure of the unprofitable Rancho Mañana sales office in
June 2007.





General
and administrative expenses increased to 16.1% of total revenue for the first
quarter ended March 31, 2008, from 15.0% for the same period in
2007.  While actual expenses were comparable at $1,679,915 and
$1,672,391 for the three months ended March 31, 2008 and 2007, respectively,
they increased as a percentage of revenue due to the reduction in sales of
Vacation Ownership Interests discussed above.  General and
administrative expense reductions implemented in late 2007 and early 2008 were
offset by increased legal expenses related to the GOLV lawsuit as well as
redeployment of certain labor, previously utilized for construction activities
and capitalized, to other activities.








12





MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL


CONDITION
AND RESULTS OF OPERATIONS


(CONTINUED)








Income
from land and other, net was comparable at $33,730 and $35,249 for the three
months ended March 31, 2008 and 2007, respectively.





Interest
expense was comparable at $665,824 and $669,730 for the three months ended March
31, 2008 and 2007, respectively reflecting reductions in rate on variable rate
borrowings, net of increased interest bearing obligations.





Liquidity
and Capital Resources





Sources
of Cash





The
Company generates cash primarily from the sale of Vacation Ownership Interests
(including Upgrades), from the financing of Customer Notes from such sales and
from resort operations.  For the three months ended March 31, 2008 and
2007, cash used in operations was $587,313 and $55,862,
respectively.  The increase in cash used in operations reflects a
smaller decrease in notes receivable due to reduced customer prepayments, an
increase in other assets due to the timing of maintenance fee payments to third
party owned resorts, and a decrease in accounts payable.  These
increases are offset by a net decrease in resort property under development and
resort property held for Vacation Ownership Interest sales due to greater
additions in 2007 for the expansion of VCA South Bend, a smaller amount of cash
paid for income taxes in 2008 and an increase in accrued liabilities due to
timing differences between years in accrued compensation, offset by amounts
related to the homeowners’ associations.





For
regular federal income tax purposes, the Company reports substantially all of
its non-factored financed Vacation Ownership Interest sales under the
installment method.  Under the installment method, the Company
recognizes income on sales of Vacation Ownership Interests only when cash is
received by the Company in the form of a down payment, as an installment
payment, or from proceeds from the sale of the Customer Note.  The
deferral of income tax liability conserves cash resources on a current
basis.  Interest may be imposed, however, on the amount of tax
attributable to the installment payments for the period beginning on the date of
sale and ending on the date the related tax is paid.  If the Company
is otherwise not subject to tax in a particular year, no interest is imposed
since the interest is based on the amount of tax paid in that
year.  The condensed consolidated financial statements do not contain
an accrual for any interest expense that would be paid on the deferred taxes
related to the installment method, as the interest expense is not
estimable.





At
December 31, 2007, the Company’s subsidiary, Genesis, had federal NOL
carryforwards of approximately $205,000, which are limited as to usage because
they arise from built in losses of an acquired company.  In addition,
such losses can only be utilized through the earnings of Genesis and are limited
to a maximum of $189,000 per year.  To the extent the entire $189,000
is not utilized in a given year, the difference may be carried forward to future
years.  Any unused Genesis NOLs will expire in 2008.





In
addition, Section 382 of the Internal Revenue Code imposes additional
limitations on the utilization of NOLs by a corporation following various types
of ownership changes, which result in more than a 50% change in ownership of a
corporation within a three-year period.  Such changes may result from
new common stock issuances by the Company or changes occurring as a result of
filings with the Securities and Exchange Commission of Schedules 13D and 13G by
holders of more than 5% of the common stock, whether involving the
acquisition or disposition of common stock.  If such a subsequent
change occurs, the limitations of Section 382 would apply and may limit or
deny the future utilization of the NOL by the Company, which could result in the
Company paying additional federal and state taxes.








13





MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL


CONDITION
AND RESULTS OF OPERATIONS


(CONTINUED)








Uses
of Cash





Investing
activities typically reflect a net use of cash because of capital
additions.  Net cash used in investing activities was $170,273 and
$602,236 for the three months ended March 31, 2008 and 2007,
respectively.  The decrease in net cash used in investing activities
in 2008 is due to reduced ILX-Bruno capital expenditures for projects in
Sedona.





Net cash
used in financing activities in the three months ended March 31, 2007 was
$1,291,173 as compared to net cash provided by financing activities of
$1,086,445 in the three months ended March 31, 2008.  The increase in
cash provided by financing activities is due to greater borrowings on notes
payable to finance construction projects in 2008, lower principal payments on
notes payable in 2008, due to lower customer payments on the hypothecation line,
the payment of a dividend and purchase of treasury shares in 2007, offset by the
repayment in 2008 of a note payable to affiliates.





The
Company requires funds to finance the acquisitions of property for future resort
development and to further develop the existing resorts, as well as to make
capital improvements and support current operations.





Customer
defaults have a significant impact on cash available to the Company from
financing Customer Notes receivable in that notes which are more than 60 to 90
days past due are not eligible as collateral.  As a result, the
Company in effect must repay borrowings against such notes or buy back such
notes if they were sold with recourse.





Credit
Facilities and Capital





At March
31, 2008, the Company had an agreement with a financial institution for a
commitment of $30 million, under which the Company may sell certain of its
Customer Notes. The agreement provides for sales on a recourse basis with a
purchase rate of prime plus 2.75%.  Customer Notes may be sold at
discounts or premiums to the principal amount in order to yield the purchase
rate, with the premium held back by the financial institution as additional
collateral.  At March 31, 2008, $14.4 million of such commitment was
available to the Company.





The
Company also has a financing commitment aggregating $20 million whereby the
Company may borrow against notes receivable pledged as
collateral.  These borrowings bear interest at a rate of prime plus
1.5%.  The $20 million commitment has a borrowing period which expires
in 2009 and the maturity is in 2013.  At March 31, 2008, approximately
$7.3 million was available under this commitment.





At March
31, 2007 and 2008, the Company had approximately $11.8 million and $9.2 million,
respectively, in outstanding notes receivable sold on a recourse
basis.  Portions of the notes receivable are secured by customer deeds
of trust on Los Abrigados Resort & Spa, VCA–South Bend and
VCA–Tucson.





In
January 2008, the Company amended an existing note payable due March 1, 2008 to
extend the maturity date to March 1, 2010.  All other terms remain
unchanged.





In
February 2008, the Company amended an existing construction note payable to
provide an additional $1.9 million in financing, change the interest rate to
10.0% per year and extend the maturity date to February 2013.





In March
2008, the Company amended its existing commitment pursuant to which the Company
may hypothecate Customer Notes that are pledged to the lender as
collateral.  The amendment extends the borrowing period through
December 2009, extends the maturity date to 2013 and decreases the maximum
borrowing amount to $20.0 million.








14





MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL


CONDITION
AND RESULTS OF OPERATIONS


(CONTINUED)








In the
future, the Company may negotiate additional credit facilities, issue corporate
debt, issue equity securities, or any combination of the above.  Any
debt incurred or issued by the Company may be secured or unsecured, may bear
interest at fixed or variable rates of interest, and may be subject to such
terms as management deems prudent.  While the Company believes it
maintains excellent relationships with its lenders and will seek renewal or
replacement of existing lines upon their maturity, there is no assurance that
the Company will be able to secure additional corporate debt or equity at or
beyond current levels or that the Company will be able to maintain its current
level of debt.  The Company may negotiate with additional lenders to
supplement its existing credit facilities.





The
Company believes available borrowing capacity, together with cash generated from
operations, will be sufficient to meet the Company’s liquidity, operating and
capital requirements for at least the next twelve months.





Contractual
Cash Obligations and Commercial Commitments





The
following table presents the Company’s contractual cash obligations and
commercial commitments as of March 31, 2008.  The Company also sells
consumer notes with recourse.  The Company has no other significant
contractual obligations or commercial commitments either on or off balance sheet
as of this date.




Payments
      Due by PeriodContractual
      Cash Obligations
              
              Total
              
              
              <
      1 Year
              
              
              1-3
      Years
              
              
              4-5
      Years
              
              
              >
      5 YearsLong-term
      Debt
              
              $
              38,388,000
              
              
              $
              10,901,000
              
              
              $
              8,917,000
              
              
              $
              16,331,000
              
              
              $
              2,239,000Capital
      Lease Obligations
              
              
              352,000
              
              
              
              73,000
              
              
              
              166,000
              
              
              
              113,000
              
              
              
              -Operating
      Leases
              
              
              16,004,000
              
              
              
              1,918,000
              
              
              
              3,119,000
              
              
              
              2,189,000
              
              
              
              8,778,000Agreement
      to purchase VOI's
              
              
              44,000
              
              
              
              44,000
              
              
              
              -
              
              
              
              -
              
              
              
              -Total
              
              $
              54,788,000
              
              
              $
              12,936,000
              
              
              $
              12,202,000
              
              
              $
              18,633,000
              
              
              $
              11,017,000


Excluded
from the contractual cash obligations table is the amount of $1,154,000 under an
agreement to purchase Vacation Ownership Interests (“VOI’s”) because effective
April 1, 2008 the party to the agreement to purchase VOI’s has agreed to cancel
the obligation in exchange for the VOI’s.





Seasonality





The
Company’s revenues are moderately seasonal with the volume of ILX owners, hotel
guests and Vacation Ownership Interest exchange participants typically greatest
in the second and third fiscal quarters.  Also impacting revenues are
inclement weather, forest fires, gasoline prices and other unforeseen natural
disasters.  As the Company expands into new markets and geographic
locations it may experience increased or additional seasonality dynamics which
may cause the Company’s operating results to fluctuate.





Inflation





Inflation
and changing prices have not had a material impact on the Company’s revenues,
operating income and net income during any of the Company’s three most recent
fiscal years or the three months ended March 31, 2008.  However, to
the extent inflationary trends affect interest rates, a portion of the Company’s
debt service costs may be affected as well as the rates the Company charges on
its Customer Notes.








15





MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL


CONDITION
AND RESULTS OF OPERATIONS


(CONTINUED)







Item3.
            Quantitative
      and Qualitative Disclosures about Market
Risk





The
Company currently derives a portion of income from the spread between the
interest rates charged to customers and the interest rates at which it borrows
against customer notes or at which it sells customer notes.  The
Company’s indebtedness bears interest at variable rates while the retained
customer notes bear interest at fixed rates.  As a result, increases
in interest rates could cause interest expense to exceed interest income on the
Company’s portfolio of retained customer notes.  The Company does not
currently engage in interest rate hedging transactions.  Therefore,
any change in the prime interest rate could have a material effect on results of
operations, liquidity and financial position.  If there were a
one-percentage point change in the prevailing prime rate at March 31, 2008, then
based on the $21.0 million balance of variable rate debt at March 31, 2008,
interest expense would increase or decrease by approximately $210,000 (before
income taxes) per annum.





Item
      4T.
            Controls
      and Procedures





(a)  Evaluation
of Disclosure Controls and Procedures





The
Company has established disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange
Act”)) to ensure that material information relating to the Company is made known
to the officers who certify the Company’s financial reports and to other members
of senior management and the Board of Directors. These disclosure controls and
procedures are designed to ensure that information required to be disclosed in
the reports that are filed or submitted under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's (“SEC”) rules and forms. Under the
supervision and with the participation of management, including the principal
executive officer and principal financial officer an evaluation of the
effectiveness of the design and operation of our disclosure controls and
procedures as of March 31, 2008 was completed based on criteria established
in Internal Control—Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (“COSO”).  Based on this evaluation, the principal
executive officer and principal financial officer concluded that the Company’s
disclosure controls and procedures are functioning effectively.





(b)  Changes
in Internal Control over Financial Reporting





There was
no change in the Company’s internal control over financial reporting during the
Company’s most recently completed fiscal quarter that has materially affected,
or is reasonably likely to materially affect, the Company’s internal control
over financial reporting.








16





MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL


CONDITION
AND RESULTS OF OPERATIONS


(CONTINUED)








Part
II





Item
      1.
            Legal
      Proceedings





In
October 2005, The Greens of Las Vegas, Inc. (“GOLV”) filed suit against the
Company, VCA-Nevada (“VCA-NV”), Greens Worldwide Incorporated (“GWWI”) and all
of the directors of GWWI from 2003 to the present.  GOLV alleged that
the Company interfered with prospective advantages between GOLV and third
parties, interfered with contracts between GOLV and VCA-NV, fraud, unjust
enrichment and civil conspiracy.  All Defendants answered the
Complaint on March 16, 2006 and asserted various counterclaims.  In
February 2008, the Court granted the Company’s Motion to Dismiss the Complaint
and in April 2008 reaffirmed its decision and awarded that GOLV pay the
Company’s attorneys’ fees in the amount of $626,000.  The
counterclaims of the Company against the Plaintiffs remain.  In March
2008, GOLV appealed the dismissal of its claims, which appeal the Company has
been advised is untimely.  A court ordered settlement conference is
scheduled in June 2008.  The Company intends to continue to vigorously
defend the case and pursue its counterclaims and believes the Plaintiffs’
allegations of the Complaint are without merit.





Other
litigation has arisen in the normal course of the Company’s business, none of
which is deemed to be material.





Item
      1A.
            Risk
      Factors





Not
      applicable




Item
      2.
            Unregistered
      Sales of Equity Securities and Use of
Proceeds








ISSUER
      PURCHASES OF EQUITY SECURITIES(a)
      Total Number of Shares (or Units) purchased
              
              
              (b)
      Average Price Paid per Share (or Unit)
              
              
              (c)
      Total Number of Shares (or Units) Purchased as Part of Publicly Announced
      Plans or Programs
              
              
              (d)
      Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May
      Yet Be Purchased Under the Plans or ProgramsPeriodJanuary
      1, 2008 - January 31, 2008
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -February
      1, 2008 - February 29, 2008
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -March
      1, 2008 - March 31, 2008
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Total
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -









17





MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL


CONDITION
AND RESULTS OF OPERATIONS


(CONTINUED)







Item
      3.
            Defaults
      Upon Senior Securities





None





Item
      4.
            Submission
      of Matters to a Vote of Security
Holders





None





Item
      5.
            Other
      Information





None





Item
      6.
            Exhibits





(i)
            Exhibits





Exhibit
      No.
            Description





31
            CERTIFICATION
      PURSUANT TO 18 U.S.C. § 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE
      SARBANES-OXLEY ACT OF 2002







32
              CERTIFICATION
      PURSUANT TO 18 U.S.C. § 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE
      SARBANES-OXLEY ACT OF 2002







18





SIGNATURES














Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
Registrant has duly caused its quarterly report on Form 10-Q to be signed on its
behalf by the undersigned thereunto duly authorized.











ILX
RESORTS INCORPORATED


(Registrant)











/s/
      Joseph P. MartoriJoseph
      P. MartoriChief
      Executive Officer/s/
      Nancy J. StoneNancy
      J. StoneVice
      Chairman & President/s/
      Margaret M. EardleyMargaret
      M. EardleyExecutive
      Vice President & Chief Financial Officer/s/
      Taryn L. ChmielewskiTaryn
      L. ChmielewskiVice
      President & Corporate
Controller














Date:  As
of May 15, 2008








19