UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                  FORM 10-QSB/A
                                (Amendment No. 1)


(Mark One)

[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
     OF 1934

                           For the quarterly period ended  March 31, 2007
                                                          ----------------------

[_]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

                           For the transition period from _________ to _________

                           Commission file number   000-50675
                                                  ------------------------------

                    EXCELLENCY INVESTMENT REALTY TRUST, INC.
--------------------------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

          Maryland                                       20-8635424
--------------------------------------------------------------------------------
(State or other jurisdiction                   (IRS Employer Identification No.)
of incorporation or organization)

        270 Laurel Street, 1st Floor Office, Hartford, Connecticut 06105
--------------------------------------------------------------------------------
                    (Address of principal executive offices)

                                 (860) 246-7672
--------------------------------------------------------------------------------
                           (Issuer's telephone number)


Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 [ ]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).                                  Yes [ ] No [X]

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of May 21, 2007, the issuer had
                                          --------------------------------------
43,761,537 shares of common stock issued and outstanding.
---------------------------------------------------------

Transitional Small Business Disclosure Format (Check one):  Yes [ ]   No [X]

<PAGE>

<TABLE>
<CAPTION>


                    EXCELLENCY INVESTMENT REALTY TRUST, INC.
                   (FORMERLY KNOWN AS GIFT LIQUIDATORS, INC.)
                               AMENDMENT NO. 1 TO
                         QUARTERLY REPORT ON FORM 10-QSB
                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2007



                                               INDEX
                                               -----

                                                                                        Page No.
                                                                                        --------
<S>                                                                                        <C>
PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

         Condensed Consolidated Balance Sheet as of March 31, 2007 (Unaudited)............. 3

         Condensed Consolidated Statements of Operations for the Three Months
              ended March 31, 2007 and 2006 (Unaudited).................................... 4

         Condensed Consolidated Statements of Cash Flows for the Three Months
              ended March 31, 2007 and 2006 (Unaudited).................................... 5

         Condensed Consolidated Statement of Changes in Stockholders' Deficit
              for the Three Months ended March 31, 2007.................................... 6

         Notes to Condensed Consolidated Financial Statements.............................. 7

Item 2.  Management's Discussion and Analysis or Plan of Operation......................... 25

Item 3.  Controls and Procedures........................................................... 37


PART II - OTHER INFORMATION

Item 1.  Legal Proceedings................................................................. 39

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds....................... 39

Item 3.  Defaults Upon Senior Securities................................................... 39

Item 4.  Submission of Matters to a Vote of Security Holders............................... 39

Item 5.  Other Information................................................................. 39

Item 6.  Exhibits.......................................................................... 41


SIGNATURES................................................................................. 43
</TABLE>



                                EXPLANATORY NOTE

     This Amendment No. 1 to the Quarterly Report on Form 10-QSB for the fiscal
quarter ended March 31, 2007 of Excellency Investment Realty Trust, Inc. (as
originally filed on May 21, 2007, the "Form 10-QSB") is being filed in response
to comments from the Staff of the Securities and Exchange Commission. The Form
10-QSB is restated herein in its entirety. The disclosures in this amendment
continue to speak as of the date of the Form 10-QSB, and do not reflect events
occurring after the filing of the Form 10-QSB. Accordingly, this Form 10-QSB/A
should be read in conjunction with our other filings made with the Securities
and Exchange Commission subsequent to the filing of the Form 10-QSB, including
any amendments to those filings. The filing of this Form 10-QSB/A shall not be
deemed an admission that the Form 10-QSB filed included any untrue statement of
material fact or omitted to state a material fact necessary to make a statement
not misleading.


<PAGE>

                          PART 1 - FINANCIAL STATEMENTS

ITEM 1 - FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                        EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
                                  CONDENSED CONSOLIDATED BALANCE SHEET
                                             March 31, 2007
                                               (unaudited)

                                               ASSETS
<S>                                                                                          <C>
Real Estate:
     Land                                                                                    $    811,402
     Buildings and improvements                                                                 5,182,456
                                                                                             ------------
                                                                                                5,993,858
     Less: accumulated depreciation                                                             1,169,269
                                                                                             ------------
                                                                                                4,824,589

Cash and cash equivalents                                                                         797,367
Accounts receivable-tenants, net of allowance for doubtful
     accounts of $62,240                                                                           17,795
Deferred financing costs, net of accumulated amortization of
     of $17,890                                                                                   159,631
Escrow account                                                                                     51,969
Other assets                                                                                        9,864
                                                                                             ------------
                                                                                             $  5,861,215
                                                                                             ============

                                      LIABILITIES AND STOCKHOLDERS' DEFICIT

Liabilities:
     Mortgage notes payable                                                                  $  8,097,089
     Promissory notes payable-related party                                                     2,578,581
     Security deposits                                                                             96,464
     Accounts payable and accrued expenses                                                        138,954
     Registration rights liability                                                              1,620,000
                                                                                             ------------
                                                                                               12,531,088
                                                                                             ------------
Commitments and contingencies

Stockholders' Deficit:

   Series A Convertible Preferred Stock, par value $0.01, 10,000 shares authorized, 10,000
     issued and outstanding.  Aggregate liquidation preference of $9,100 ($0.91 per share)            100
   Series B Preferred Stock, par value $0.01, 20,000
     shares authorized, 0 shares issued and outstanding                                                 -
   Series C Convertible Preferred Stock, par value $0.01,
     0 shares authorized, 0 shares issued and outstanding                                               -
   Common stock, par value $0.01, 200,000,000 shares authorized, 43,761,537 issued and
     outstanding                                                                                  437,615
   Treasury stock, at cost- 2,469 shares                                                          (34,168)
   Additional paid-in capital                                                                   1,833,939
   Accumulated deficit                                                                         (8,907,359)
                                                                                             ------------
                                                                                               (6,669,873)
                                                                                             ------------
                                                                                             $  5,861,215
                                                                                             ============
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                       3
<PAGE>

<TABLE>
<CAPTION>

                 EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006
                                        (unaudited)


                                                                       2007                2006
                                                                       ----                ----
<S>                                                               <C>                 <C>
Rental revenue                                                    $    395,805        $    401,218
                                                                  ------------        ------------
Operating expenses:
  Property operating costs                                             265,833             276,742
  General and administrative                                           171,998             264,344
  Depreciation and amortization                                         38,323              37,851
  Management fee-related party                                               -              16,169
                                                                  ------------        ------------

Total operating expenses                                          $    476,154        $    595,106
                                                                  ------------        ------------
Operating loss                                                         (80,349)           (193,888)
                                                                  ------------        ------------

Non operating expenses and income:
  Interest expense                                                    (159,257)           (129,408)
  Other income                                                          10,168               6,433
  Realized loss from sales of trading securities                      (168,748)                  -
  (Loss)gain on derivative instrument                                        -              30,000
                                                                  ------------        ------------

Net non-operating expenses                                            (317,837)            (92,975)
                                                                  ------------        ------------

  Net loss                                                        $   (398,186)       $   (286,863)
                                                                  ============        ============


Loss per common share - basic and diluted                         $      (0.01)       $      (2.42)
                                                                  ============        ============

Weighted average common shares outstanding basic and diluted        43,658,259             118,537
                                                                  ============        ============
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                       4
<PAGE>

<TABLE>
<CAPTION>
                              EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
                                      CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006
                                                   (unaudited)


CASH FLOWS FROM OPERATING ACTIVITIES                                                          2007             2006
                                                                                              ----             ----
<S>                                                                                      <C>               <C>
Net loss                                                                                 $  (398,186)         (286,863)
Adjustments to reconcile net loss to net cash
  provided (used) in operating activities:
  Loss on sale of securities                                                                 168,748                 -
  Depreciation and amortization                                                               38,221            37,851
  Gain on derivative liability                                                                     -           (30,000)
  Provision for doubtful accounts                                                              9,717                 -

Changes in Operating Assets and Liabilities:
  Accounts receivable-tenants                                                                (13,555)            2,830
  Escrow                                                                                      42,193            44,307
  Other assets                                                                                48,580           153,469
  Security deposits                                                                          (11,782)            9,606
  Accounts payable and accrued expenses                                                       19,397           101,743
                                                                                         -----------       -----------
   Net cash (used in) provided by operating activities                                       (96,667)           32,943
                                                                                         -----------       -----------
CASH FLOWS FROM INVESTING ACTIVITIES
  Net purchases of trading securities                                                       (117,134)                -
                                                                                         -----------       -----------

  Net cash used in investing activities                                                     (117,134)                -
                                                                                         -----------       -----------

CASH FLOWS FROM FINANCING ACTIVITIES

  Repayments of loans to officer/director                                                    (31,425)         (325,000)
  Proceeds of loans from officer/director                                                          -            10,892
  Repayment of mortgage notes payable                                                        (27,900)          (17,623)
                                                                                         -----------       -----------
   Net Cash used in Financing Activities                                                     (59,325)         (331,731)
                                                                                         -----------       -----------
Decrease in Cash and Cash Equivalents                                                       (273,126)         (298,788)
Cash- Beginning of Period                                                                  1,070,493         2,905,529
                                                                                         -----------       -----------
Cash-End of Period                                                                       $   797,367       $ 2,606,741
                                                                                         ===========       ===========

Cash paid during the period during the period for interest                               $   159,257       $    77,061
                                                                                         ===========       ===========
Non-Cash Transactions


Contributions of capital for waived liquidated damages related to derivative liability   $         -       $   744,000
                                                                                         ===========       ===========
Conversion of preferred stock into common stock 1,430                                    $     1,460       $         -
                                                                                         ===========       ===========
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                       5
<PAGE>

<TABLE>
<CAPTION>
                                         EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
                                    CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
                                                               (unaudited)


                                                                                                                       Additional
                                   Preferred Stock-Series A    Preferred Stock-Series C          Common Stock           Paid-in
                                     Shares        Amount        Shares         Amount        Shares        Amount      Capital
                                     ------        ------        ------         ------        ------        ------      -------
<S>                                    <C>      <C>            <C>            <C>           <C>          <C>           <C>
Balance at December 31, 2006           11,000   $       110             -              -   43,618,537   $   436,185   $ 1,835,359
                                  ===========   ===========   ===========    ===========   ==========   ===========   ===========
Cumulative-effect adjustment
of adopting FASB Staff Position
No. EITF 00-19-2                            -             -             -              -            -             -             -
                                  -----------   -----------   -----------    -----------  -----------   -----------   -----------
Balance as of January 1, 2007          11,000           110             -              -   43,618,537       436,185     1,835,359

Conversion of preferred stock          (1,000)          (10)                                  143,000         1,430        (1,420)
Net loss                                    -             -             -              -            -             -             -
                                  -----------   -----------   -----------    -----------  -----------   -----------   -----------
Balance at March 31, 2007              10,000   $       100   $         -    $         -   43,761,537   $   437,615   $ 1,833,939
                                  ===========   ===========   ===========    ===========  ===========   ===========   ===========

<CAPTION>

                                  Accumulated     Treasury Stock
                                    Deficit       Shares at Cost        Total
                                    -------       --------------        -----

<S>                               <C>              <C>               <C>
Balance at December 31, 2006       (8,130,173)         (34,168)       (5,892,687)
                                  ===========      ===========       ===========
Cumulative-effect adjustment
of adopting FASB Staff Position
No. EITF 00-19-2                     (379,000)               -          (379,000)
                                  -----------      -----------       -----------
Balance as of January 1, 2007      (8,509,173)         (34,168)        (6,271,687)

Conversion of preferred stock               -                -                 -
Net loss                             (398,186)               -          (398,186)
                                  -----------      -----------       -----------
Balance at March 31, 2007         $(8,907,359)     $   (34,168)      $(6,669,873)
                                  ===========      ===========       ===========
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                       6
<PAGE>

            EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


NOTE 1 - NATURE OF OPERATIONS, ORGANIZATION AND FINANCIAL STATEMENT PRESENTATION

Company Background
------------------

Excellency Investment Realty Trust, Inc. (f/k/a Gift Liquidators, Inc.) and its
predecessor companies were originally incorporated in 1963 as Dorsett
Educational Systems, Inc. ("Dorsett"). From 1963 through the mid-1980's, Dorsett
was in the business of developing and marketing educational material. During
that same period, the stock of Dorsett was publicly traded.

In 1990, Dorsett acquired, in a stock for stock exchange, a privately owned
business that developed, marketed and distributed a diverse line of gift and
novelty products, and changed its name to Laid Back Enterprises, Inc. ("Laid
Back"). From that date, until December 2002, Laid Back continued its
development, marketing and distribution of gift products, seasonal retailing and
closeout liquidation of gift products.

On December 20, 2002, Laid Back's shareholders voted to split-off its gift
inventory liquidation business from its gift design and merchandising business.
Pursuant to a Split-Off Agreement, dated December 20, 2002 (the "Split-Off
Agreement"), Laid Back distributed its gift design and merchandising business to
Max Colclasure and Ronald Hurt in exchange for a substantial portion of the
shares of Laid Back owned by Mr. Colclasure and Mr. Hurt. The shareholders also
voted to approve a change of name from Laid Back to Gift Liquidators, Inc.

Prior to the split-off, Mr. Colclasure and Mr. Hurt owned 64.72% and 6.42% of
the stock of Laid Back, respectively. Minority shareholders owned the remaining
outstanding stock. Subsequently, Mr. Colclasure and Mr. Hurt acquired all of the
remaining outstanding stock of the gift design and merchandising business,
thereafter known as Laid Back, and Mr. Colclasure acquired 25.78% of the gift
inventory liquidation business now known as Gift Liquidators, Inc. (hereinafter,
the "Company"), with the remaining shareholders owning 74.22% of the Company.

Pursuant to the Split-Off Agreement, on December 20, 2002, all of the assets,
liabilities and operations were transferred to Laid Back, except for gift
liquidation inventory valued at $400,019, which was retained by the Company. In
addition, all employees of the Company became employees of Laid Back. Since, the
Company had no employees, it entered into an Administrative Services Agreement
with Laid Back, dated December 20, 2002 (the "Administrative Services
Agreement"), to share administrative functions and personnel. The administrative
services, for which the Company reimbursed Laid Back, included sales, marketing,
accounting and customer service. In addition, the Company entered into a Tax
Sharing Agreement with Laid Back, dated December 20, 2002 (the "Tax Sharing
Agreement"), pursuant to which the Company shared certain tax responsibilities
with Laid Back.

During the third quarter of 2005, the Company's management determined that it
would no longer pursue its interests in the gift liquidation business.

As of September 28, 2005 (the "Closing Date"), the Company entered into a
Preferred Stock Purchase Agreement with David Mladen, pursuant to which Mr.
Mladen purchased 11,000 shares of the Company's Series A Convertible Preferred
Stock, $0.01 par value per share ("Series A Preferred Stock"), for an aggregate
purchase price of $10,000 (the "Preferred Stock Purchase Transaction"). As of
the Closing Date, each share of the Company's Series A Preferred Stock was
convertible at any time, at the holder's option, into 5 shares of the Company's
common stock, $0.01 par value per share ("Common Stock"), subject to adjustment
for stock dividends, stock splits, reclassifications, and similar events.

                                       7
<PAGE>

            EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


NOTE 1 - NATURE OF OPERATIONS, ORGANIZATION AND FINANCIAL STATEMENT PRESENTATION
(Continued)

In addition, as of the Closing Date, two of the Company's former stockholders,
including Mr. Colclasure, a former officer and director of the Company, sold an
aggregate of 33,761 shares of the Company's Common Stock to Mr. Mladen, which
amount represented 28.6% of the Company's issued and outstanding Common Stock,
for an aggregate purchase price of $325,000 (the "Common Stock Purchase
Transaction").

Further, as of the Closing Date, the Company's existing officers and directors
resigned, and Mr. Mladen was appointed as the Company's sole officer and
director.

As a result of the Preferred Stock Purchase Transaction and the Common Stock
Purchase Transaction (jointly, the "Purchase Transactions"), as of the Closing
Date, Mr. Mladen owned and/or controlled approximately 51% of the Company's
voting power. By virtue of (i) the percentage of the Company's Common Stock Mr.
Mladen acquired, (ii) the number of shares of Common Stock Mr. Mladen would
receive upon conversion of the shares of Preferred Stock he purchased, (iii) the
resignation of all of the Company's officers and directors, and (iv) the
appointment of Mr. Mladen as the Company's sole officer and director, there was
deemed to have been a "change in control" of the Company as of the Closing Date.

As of the Closing Date, the Company:

     o    terminated its Administrative Services Agreement with Laid Back;

     o    terminated its Tax Sharing Agreement with Laid Back; and

     o    entered into an Asset Sale Agreement with Laid Back (the "Asset Sale
          Agreement").

Pursuant to the Asset Sale Agreement, effective as of the Closing Date, the
Company sold all of its non-cash assets, including certain inventory, to Laid
Back, in exchange for the cancellation of the Company's indebtedness to Laid
Back in the aggregate amount of $50,485. As a result of the above transactions,
the Company became a "shell company", as defined by Securities Act Rule 405 and
Exchange Act Rule 12b-2 as a company other than an asset-backed issuer, with (a)
no or nominal operations, and (b) either (i) no or nominal assets; (ii) assets
consisting solely of cash and cash equivalents; or (iii) assets consisting of
any amount of cash and cash equivalents and other nominal assets.

Reverse Stock Spilt
-------------------

As of September 29, 2005, the Company's board of directors approved a 15-1
reverse stock spilt of the Company's Common Stock, in which every fifteen shares
of the Company's Common Stock would be combined into one share of the Company's
Common Stock. The Company was authorized to either (i) round any fractional
shares resulting from such reverse spilt to the nearest whole share, or (ii)
purchase such fractional shares from the applicable shareholders at their fair
market value. Immediately prior to the spilt there were approximately 118,048
common shares issued and outstanding.

                                       8
<PAGE>

            EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


NOTE 1 - NATURE OF OPERATIONS, ORGANIZATION AND FINANCIAL STATEMENT PRESENTATION
(Continued)

Merger
------

Eternal Enterprise, Inc. ("Eternal") was incorporated in the State of
Connecticut on June 18, 1997. Eternal is in the business of acquiring,
developing, holding for investment, operating and selling residential real
estate properties in the United States. Eternal owns the following residential
apartment buildings (collectively, the "Properties"):

     o    154-160A Collins Street, Hartford, CT;
     o    21 Evergreen Avenue, Hartford, CT;
     o    243 & 255 Laurel Street, Hartford, CT;
     o    252 Laurel Street, Hartford CT;
     o    270 Laurel Street, Hartford, CT;
     o    360 Laurel Street, Hartford, CT;
     o    117-145 S. Marshall Street, Hartford, CT; and
     o    56 Webster Street, Hartford, CT.

Prior to the Reverse Merger, described below, Mr. Mladen, the Company's majority
stockholder and sole officer and director, was also the majority stockholder and
the sole officer and director of Eternal. The other stockholders of Eternal were
(i) Mr. Mladen's daughter, (ii) Mr. Mladen's son-in-law, (iii) Mr. Mladen's son,
and (iv) Mr. Mladen's daughter-in-law (collectively, with Mr. Mladen, the
"Pre-Acquisition Eternal Stockholders"). Mr. Mladen entered into the Stock
Purchase Transactions described above, with the specific intention of taking
control of the Company, and, subsequently, causing the Company to acquire
Eternal.

In October 2005, the Company formed eight limited partnerships as wholly-owned
Delaware subsidiaries of the Company (the "Limited Partnerships"), as follows:

     o    Excellency Investment Realty Trust I, L.P.;
     o    Excellency Investment Realty Trust II, L.P.;
     o    Excellency Investment Realty Trust III, L.P.;
     o    Excellency Investment Realty Trust IV, L.P.;
     o    Excellency Investment Realty Trust V, L.P.;
     o    Excellency Investment Realty Trust VI, L.P.;
     o    Excellency Investment Realty Trust VII, L.P.; and
     o    Excellency Investment Realty Trust VIII, L.P.

On November 4, 2005, the Pre-Acquisition Eternal Stockholders exchanged, in the
aggregate, 100% of the issued and outstanding shares of Common Stock of Eternal
for (i) limited partnership interests representing 20% of the total partnership
interests in each of the Limited Partnerships, and (ii) unsecured promissory
notes payable to the Pre-Acquisition Eternal Stockholders in the aggregate
principal amount of $2,610,006 (the "LP Notes"), pursuant to Contribution
Agreements between the Pre-Acquisition Eternal Stockholders and the Limited
Partnerships (the "Reverse Merger"). As a result, Eternal is now 100% owned, in
the aggregate, by the Limited Partnerships. In consideration of the Company's
ownership of 80% of the total partnership interests of each of the Limited
Partnerships that now own 100% of Eternal, the Company agreed to assume the LP
Notes.

                                       9
<PAGE>

            EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


NOTE 1 - NATURE OF OPERATIONS, ORGANIZATION AND FINANCIAL STATEMENT PRESENTATION
(Continued)

The partnership interests of the Limited Partnerships were exchanged for shares
of common stock of Eternal based upon the ratio by which the value of each
Property bears to the aggregate value of all of the Properties.

Pursuant to the Partnership Agreements of the Limited Partnerships (the
"Partnership Agreements"), among other things, the Company (i) is the general
partner of each of the Limited Partnerships, and (ii) has the right to compel
the limited partners (i.e., the Pre-Acquisition Eternal Stockholders) to
exchange 100% of their limited partnership interests for shares of Common Stock
of the Company. In the event the Company, as general partner of the Limited
Partnerships, compels the limited partners to exchange their limited partnership
interests for shares of Common Stock of the Company, certain family members of
Mr. Mladen, the Company's majority stockholder and sole officer and director,
would become shareholders of the Company.

Because (i) the Pre-Acquisition Eternal Stockholders obtained a majority of the
shares of common stock of the combined entity after the combination, (ii) the
Pre-Acquisition Eternal Stockholders obtained the ability to elect and appoint a
voting majority of the governing board of the combined entity, and (iii)
Eternal's officer and director replaced the Company's officers and directors of
the combined entity, the transaction was treated as a reverse merger with
Eternal as the accounting acquirer of the Company. The accompanying consolidated
financial statements of the Company reflect the historical results of operations
of Eternal, and the consolidated results of operations subsequent to the
acquisition date of November 4, 2005. Eternal, as the accounting acquirer of the
"shell company", did not record goodwill or any other intangible asset as a
result of this Reverse Merger.

As of December 29, 2005, the Company entered into a Purchase and Sale Agreement
with Goran Mladen, the Company's majority stockholder and sole officer and
director's son (the "Purchase Agreement"), pursuant to which the Company
purchased all of the limited partnership interests of the Limited Partnerships
owned by Goran Mladen, for an aggregate purchase price of $479,096. As a result,
the Company now owns approximately 81% of the partnership interests of each of
the Limited Partnerships.

As of March 31, 2007, an aggregate of $2,578,581 was due under the LP Notes.

Reincorporation by Merger in Maryland
-------------------------------------

On May 10, 2006, the Company formed a new wholly-owned subsidiary, Excellency
Investment Realty Trust, Inc., in the State of Maryland (the "Maryland
Subsidiary"). The Articles of Incorporation of the Maryland Subsidiary
authorized 25,000,000 shares of capital stock, of which 24,000,000 shares were
authorized as common stock, $0.01 par value per share, and 1,000,000 were
authorized as preferred stock, $0.01 par value per share.

On July 17, 2006, the Maryland Subsidiary filed Articles of Amendment and
Restatement to its Articles of Incorporation, to, among other things: (a)
increase its number of authorized shares of capital stock to 201,000,000, of
which 200,000,000 shares are authorized as common stock and 1,000,000 as
preferred stock; and (b) increase the number of shares of common stock into
which each share of Series A convertible preferred stock is convertible to one
hundred forty-three (143).

                                       10
<PAGE>

            EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


NOTE 1 - NATURE OF OPERATIONS, ORGANIZATION AND FINANCIAL STATEMENT PRESENTATION
(Continued)

On September 20, 2006, the Company reincorporated in the State of Maryland by
virtue of its merger with and into the Maryland Subsidiary (the "Reincorporation
by Merger"). The Reincorporation by Merger was consummated pursuant to an
Agreement and Plan of Merger by and between the Company and the Maryland
Subsidiary, dated July 19, 2006.

As a result of the Reincorporation by Merger, among other things:

     o    The surviving company and successor filer is known as Excellency
          Investment Realty Trust, Inc.;

     o    Each share of the Company's issued and outstanding common stock and
          preferred stock was converted into one share of the Maryland
          Subsidiary's common stock and preferred stock, respectively;

     o    The title to all of the Company's property automatically vested in the
          Maryland Subsidiary;

     o    The Maryland Subsidiary assumed all of the Company's liabilities;

     o    Corporate actions of the surviving entity are now governed by the
          Maryland Corporations and Associations Law and by the Maryland
          Subsidiary's Articles of Amendment and Restatement of Articles of
          Incorporation and Bylaws;

     o    David Mladen, the Company's sole officer and director, continued to
          serve as the sole officer and director of the surviving entity;

     o    The trading symbol for the surviving entity's common stock, which is
          quoted on the over-the-counter bulletin board of the National
          Association of Securities Dealers, was changed to "EIVR"; and

     o    The total number of shares of stock which the surviving entity is
          authorized to issue has increased to 201,000,000 shares, of which
          200,000,000 shares are common stock, $0.01 par value per share and
          1,000,000 are preferred stock, par value $0.01.

While the Reincorporation by Merger resulted in changes to the Company's name
and state of incorporation, as well as the other changes listed above, it did
not result in any material changes to its business, management, assets,
liabilities or net worth.


NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation
---------------------------

The accompanying unaudited condensed consolidated financial statements include
the accounts of Excellency Investment Realty Trust, Inc., its controlled
subsidiaries comprised of certain Limited Partnerships (see Note 1), and Eternal
Enterprise, Inc. (wholly owned in the aggregate by the Limited Partnerships)
(hereinafter collectively referred to as the "Company"). As noted above, the
historical financial statements as presented reflect the operations of Eternal
as a result of the Reverse Merger. The Company records minority interest for the
non-owned portions of consolidated subsidiaries, however, these subsidiaries
have not generated any income to warrant the recording of such minority
interests through March 31, 2007. All significant inter-company transactions and
accounts have been eliminated in these condensed consolidated financial
statements.

                                       11
<PAGE>

            EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIE
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Interim Financial Statements
----------------------------

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America and the rules and regulations of the Securities and
Exchange Commission (the "SEC") for interim financial reporting. Certain
information and footnote disclosures normally included in the Company's annual
financial statements have been condensed or omitted. In the Company's opinion,
the unaudited interim financial statements and accompanying notes reflect all
adjustments consisting of normal and recurring adjustments that are necessary
for a fair presentation of its financial position and operating results for the
interim periods ended March 31, 2007 and 2006. The results of operations for
such periods are not necessarily indicative of the results that may be expected
for the full year or any future period.

These unaudited condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and related notes
included in the Company's Annual Report on Form 10-KSB for the year ended
December 31, 2006, as amended.

Financial Statement Presentation
--------------------------------

Because the Company is engaged in the rental and sale of real estate, the
operating cycle may extend beyond one year. Accordingly, following the usual
practice of the real estate industry, the accompanying condensed consolidated
balance sheet is unclassified.

Going Concern
-------------

The Company has suffered recurring losses from operations. During the three
months ended March 31, 2007, the Company had a net loss of $398,186; negative
cash flow from operations of $96,667 and has a net stockholders' deficit of
$6,669,873, all of which raise substantial doubt about the Company's ability to
continue as a going concern. Management plans to raise capital through a
combination of debt and equity financings and to manage cash flows carefully.
However, the Company has no assurance that sufficient cash flow will be
generated in the future to meet its operating requirements. As a result of the
above, the accompanying condensed consolidated financial statements have been
prepared assuming that the Company will continue as a going concern. The
condensed consolidated financial statements do not include any adjustments that
might result from the outcome of this uncertainty.

Use of Estimates
----------------

The preparation of the Company's condensed consolidated financial statements in
conformity with accounting principles generally accepted in the United States of
America requires management to make estimates, judgments and assumptions that
affect the reported amounts of assets and liabilities, disclosure of contingent
assets and liabilities at the date of the consolidated financial statements and
the reported amount of revenues and expenses during the reporting period. Actual
results may differ from these estimates under different assumptions or
conditions.

                                       12
<PAGE>

            EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Real Estate
-----------

Real estate is stated at cost. The Company's real estate has been pledged as
security for various mortgage notes payable.

Depreciation
------------

Buildings are depreciated using the straight line method over an estimated
useful life of 40 years. Building improvements are depreciated using the
straight line method over their estimated service lives, as determined by
management, generally between 5 and 15 years. Depreciation expense for the three
months ended March 31, 2007 and 2006 was $34,643 and $34,273, respectively.

If impairment indicators are present, we compare the expected future
undiscounted cash flows for the long-lived asset against the carrying amount of
that asset. If the sum of the estimated undiscounted cash flows is less than the
carrying amount of the asset, an impairment loss would be recorded for the
difference between the estimated fair value and the carrying amount of the
asset.

The Company has not identified any impairment indicators and consequently has
not recognized any impairment losses.

Cash and Cash Equivalents
-------------------------

All highly liquid investments with an original maturities of three months or
less are considered to be cash equivalents. The Company maintains its cash
accounts with various financial institutions located in Hartford, Connecticut.

Cash balances are insured by the Federal Deposit Insurance Corporation up to
$100,000. As of March 31, 2007, the uninsured portion of cash balances held at
such financial institutions was $695,503.

Accounts Receivable - Tenants
-----------------------------

Tenant receivables are reported net of an allowance for doubtful accounts.
Management's estimate of the allowance is based on historical collection
experience and a review of the current status of specific tenant accounts
receivable. The Company fully reserves for moved-out balances. After a six month
period, the Company charges-off the moved out balances for the previous six
months against accounts receivable.

                                       13
<PAGE>

            EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Investments in Trading Securities
---------------------------------

The Company accounts for its investments in trading securities in accordance
with Statement of Financial Accounting Standards No. 115, "Accounting for
Certain Investments in Debt and Equity Securities." Management determines the
appropriate classification of its investments in marketable securities at the
time of purchase. Securities that are bought and held principally for the
purpose of selling them in the near term are classified as trading securities.
Debt securities for which the Company does not have the intent or ability to
hold to maturity and equity securities not classified as trading securities are
classified as available-for-sale. The cost of investments sold is determined on
the specific identification or the first-in, first-out method. Trading
securities are reported at fair value with unrealized gains and losses
recognized in earnings (see Note 5), and available-for-sale securities are also
reported at fair value but unrealized gains and losses are shown in the caption
"unrealized gains (losses) on shares available-for-sale" included in
stockholders' equity. Management determines fair value of its investments based
on quoted market prices at each balance sheet date. At March 31, 2007, there
were no investments classified as trading securities.

Fair Value of Financial Instruments
-----------------------------------

The carrying value of the Company's financial instruments, including cash and
cash equivalents, accounts receivable, investments in trading securities,
accounts payable and accrued expenses March 31, 2007, approximate their fair
value because of their relatively short maturities.

The carrying value of long-term debt consisting of notes payable - related party
and mortgage notes payable approximates their fair values based upon current
rates at which the Company could borrow funds with similar remaining maturities.

Concentrations of Credit Risk
-----------------------------

The Company's real estate is located in the same geographic area of Hartford,
CT. If this area experiences significant changes in its economy, this may have
an adverse effect on the Company's operations.

Derivative Financial Instruments
---------------------------------

Effective in the first quarter of 2007 the Company adopted FASB Staff Position
No. EITF 00-19-2 "Accounting for Registration Payment Arrangements" issued on
December 21, 2006 ("FSP 00-19-2"). FSP 00-19-2 specifies that the contingent
obligation to make future payments or otherwise transfer consideration under a
registration payment, whether issued as a separate agreement or included as a
provision of a financial instrument or other agreement, should be separately
recognized and measured in accordance with FASB Statement No. 5, "Accounting for
Contingencies". FSP 00-19-2 further clarifies that a financial instrument, such
as a warrant, subject to a registration payment arrangement should be accounted
for in accordance with other applicable generally accepted accounting principles
without regard to the contingent obligation to transfer consideration pursuant
to the registration payment arrangement. For registration payment arrangements
and financial instruments subject to those arrangements that were entered into
prior to the issuance of EITF 00-19-2, this guidance is effective for financial
statements issued for fiscal years beginning after December 15, 2006 and interim
periods within those fiscal years.

                                       14
<PAGE>

            EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Deferred Financing Costs
------------------------

Deferred financing costs include fees and costs to obtain the Company's
mortgages and other notes payable. These costs are amortized over the terms of
the respective loans. Amortization expense for the three months ended March 31,
2007 and 2006 was $3,578 and $3,578, respectively.

Revenue Recognition
-------------------

Leases entered into between tenants and the Company for the rental of apartment
units are generally year to year and are renewable upon consent of both parties
on an annual or monthly basis. The Company also offers shorter term leases.
Rental income is earned on a straight-line basis over the terms of the lease.
Advance receipts of rental income are deferred and classified as liabilities.

Loss Per Common Share
---------------------

Loss per common share (basic and diluted) is calculated based on the weighted
average number of common shares outstanding during the period. The common stock
equivalents for the Company's preferred stock and treasury shares were not
included in the computation of diluted loss per share because to do so would
have been anti-dilutive.

For the three months ended March 31, 2007 and 2006, respectively, 1,571,570 and
55,000 of common stock equivalents were not included in the calculation of
diluted loss per share as their effect would be anti-dilutive.

Income Taxes
------------

The Company accounts for income taxes following the asset and liability method
in accordance with SFAS No. 109, "Accounting for Income Taxes." Under such
method, deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. The Company's income tax returns are prepared on the cash basis of
accounting. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years that the asset is
expected to be recovered or the liability settled. The types of deferred tax
assets are book versus tax depreciation and net operating losses.

In assessing the need for a valuation allowance, the Company estimates future
taxable income, considering the feasibility of ongoing tax planning strategies
and the realizability of tax loss carryforwards. Valuation allowances related to
deferred tax assets can be impacted by changes to tax laws, changes to statutory
tax rates and future taxable income levels. In the event the Company was to
determine that it would not be able to realize all or a portion of its deferred
tax assets in the future, it would increase the recorded valuation allowance
through a charge to income in the period in which the determination is made.
Conversely, if the Company were to determine that it would be able to realize
its deferred tax assets in the future in excess of the net carrying amount, it
would decrease the recorded valuation allowance through an increase to income in
the period in which that determination is made.

                                       15
<PAGE>

            EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Adoption of New Accounting Policies
-----------------------------------

Effective January 1, 2007, the Company adopted Financial Accounting Standards
Board Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" ("FIN
48") -- an interpretation of FASB Statement No. 109, "Accounting for Income
Taxes." The Interpretation addresses the determination of whether tax benefits
claimed or expected to be claimed on a tax return should be recorded in the
financial statements. Under FIN 48, the Company may recognize the tax benefit
from an uncertain tax position only if it is more likely than not that the tax
position will be sustained on examination by the taxing authorities, based on
the technical merits of the position. The tax benefits recognized in the
financial statements from such a position should be measured based on the
largest benefit that has a greater than fifty percent likelihood of being
realized upon ultimate settlement. FIN 48 also provides guidance on
de-recognition, classification, interest and penalties on income taxes,
accounting in interim periods and requires increased disclosures. At the date of
adoption, and as of March 31, 2007, the Company does not have a liability for
unrecognized tax benefits.

The Company files income tax returns in the U.S. federal jurisdiction and the
state of Connecticut. The Company is subject to U.S. federal or state income tax
examinations by tax authorities for years after 2002. During the periods open to
examination, the Company has net operating loss and tax credit carry forwards
for U.S. federal and state tax purposes that have attributes from closed
periods. Since these net operating losses and tax credit carry forwards may be
utilized in future periods, they remain subject to examination. The Company's
policy is to record interest and penalties on uncertain tax provisions as income
tax expense. As of March 31, 2007, The Company has no accrued interest or
penalties related to uncertain tax positions. The Company believes that it has
not taken any uncertain tax positions that would impact its condensed
consolidated financial statements as of March 31, 2007. Also as of the date of
adoption, and as of March 31, 2007, the Company does not have a liability for
unrecognized tax benefits.

Effective in the first quarter of 2007 the Company adopted FASB Staff Position
No EITF 00-19-2 "Accounting for Registration Payment Arrangements" issued on
December 21, 2006 ("FSP 00-19-2"). FSP 00-19-2 specifies that the contingent
obligation to make future payments or otherwise transfer consideration under a
registration payment, whether issued as a separate agreement or included as a
provision of a financial instrument or other agreement, should be separately
recognized and measured in accordance with FASB Statement No. 5, "Accounting for
Contingencies. For registration payment arrangements and financial instruments
subject to those arrangements that were entered into prior to the issuance of
EITF 00-19-2, this guidance is effective for financial statements issued for
fiscal years beginning after December 15, 2006 and interim periods within those
fiscal years.

The Company has recorded the effect of applying FSP 00-19-2 to its derivative
liability using the cumulative-effect transition method, which resulted in an
increase in registration rights liability of $379,000, and with an offsetting
cumulative-effect entry to accumulated deficit (see Note 7). The cumulative
adjustment was not recorded in the condensed consolidated statement of
operations and prior periods were not adjusted.

                                       16
<PAGE>

            EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent Accounting Pronouncements and Interpretations
----------------------------------------------------

FASB Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value
Measurements, issued in September 2006, establishes a formal framework for
measuring fair value under GAAP. It defines and codifies the many definitions of
fair value included among various other authoritative literature, clarifies and,
in some instances, expands on the guidance for implementing fair value
measurements, and increases the level of disclosure required for fair value
measurements. Although SFAS No. 157 applies to and amends the provisions of
existing FASB and AICPA pronouncements, it does not, of itself, require any new
fair value measurements, nor does it establish valuation standards. SFAS No. 157
applies to all other accounting pronouncements requiring or permitting fair
value measurements, except for; SFAS No. 123 (R), share-based payment and
related pronouncements, the practicability exceptions to fair value
determinations allowed by various other authoritative pronouncements, and AICPA
Statements of Position 97-2 and 98-9 that deal with software revenue
recognition. This statement is effective for financial statements issued for
fiscal years beginning after November 15, 2007, and interim periods within those
fiscal years. The Company is evaluating the impact of SFAS 157 on its
consolidated financial statements.

In February 2007, the FASB Issued SFAS No. 159, "Establishing the Fair Value
Option for Financial Assets and Liabilities ("SFAS No. 159"). SFAS No. 159 was
to permit all entities to choose to elect, at specified election dates, to
measure eligible financial instruments at fair value. An entity shall report
unrealized gains and losses on items for which the fair value option has been
elected in earnings at each subsequent reporting date, and recognize upfront
costs and fees related to those items in earnings as incurred and not deferred.
SFAS No. 159 applies to fiscal years beginning after November 15, 2007, with
early adoption permitted for an entity that has also elected to apply the
provisions of SFAS No. 157, "Fair Value Measurements." An entity is prohibited
from retrospectively applying SFAS No. 159, unless it chooses early adoption.
SFAS No. 159 also applies to eligible items existing at November 15, 2007 (or
early adoption date). The Company is evaluating the impact of the adoption of
SFAS No. 159 will have on the Company's consolidated financial statements.


NOTE 3 - NOTES PAYABLE

Promissory Notes Payable - Related Party
----------------------------------------

As of November 4, 2005 (the "Loan Date"), the Pre-Acquisition Eternal
Stockholders of Eternal Enterprise, Inc., which are comprised of David Mladen,
the Company's majority shareholder and sole officer and director, and Mr.
Mladen's son, daughter-in-law, daughter, and son-in-law, exchanged, in the
aggregate, 100% of the issued and outstanding shares of common stock of Eternal,
for (i) limited partnership interests representing 20% of the total partnership
interests in each of the Limited Partnerships, and (ii) unsecured promissory
notes payable to the Pre-Acquisition Eternal Stockholders in the aggregate
principal amount of $2,610,006 (the "LP Notes"), pursuant to Contribution
Agreements between the Pre-Acquisition Eternal Stockholders and the Limited
Partnerships. In consideration for the Company's ownership of 80% of the total
partnership interests of each of the Limited Partnerships, the Company agreed to
assume the LP Notes.

                                       17
<PAGE>

            EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


NOTE 3 - NOTES PAYABLE (Continued)

The interest rate on the LP Notes is 7% per annum. The entire balance of
principal and interest of the LP Notes is due and payable on November 4, 2010.
The LP Notes may be prepaid without penalty. All payments shall be applied first
toward the payment of interest and the balance towards the reduction of
principal.

For the three months ended March 31, 2007, the Company paid Mr. Mladen a total
of $33,925 of interest, and $56,516 principal due under his portion of the LP
Notes. As a result, an aggregate of $2,578,581 was due under the LP Notes as of
such date.

Equity Line
-----------

On August 29, 2006, the Company entered into an Investment Agreement with
Dutchess Private Equities Fund, L.P. (the "Investor"), pursuant to which the
Investor committed to purchase up to $25,000,000 of the Company's common stock
over the course of thirty six (36) months. The amount that the Company shall be
entitled to request from each purchase ("Puts") shall be equal to, at the
Company's election, either (i) $250,000, or (ii) 200% of the average daily
volume (U.S. market only) of the common stock for the 10 trading days prior to
the applicable put notice date, multiplied by the average of the 3 daily closing
bid prices immediately preceding the put date. The put date shall be the date
that the Investor receives a put notice of a draw down by the Company. The
purchase price shall be set at 93% of the lowest closing Best Bid price of the
common stock during the pricing period. The pricing period shall be the 5
consecutive trading days immediately after the put notice date. There are put
restrictions applied on days between the put date and the closing date with
respect to that particular Put. During this time, the Company shall not be
entitled to deliver another put notice. Further, the Company shall reserve the
right to withdraw that portion of the Put that is below 90% of the lowest
closing bid prices for the 10-trading day period immediately preceding each put
notice.

The Investment Agreement with Dutchess terminates either (a) when Dutchess has
purchased an aggregate of Twenty-Five Million dollars ($25,000,000) in shares of
Common Stock of the Company pursuant to the Investment Agreement, or (b)
thirty-six months after the effective date of the Investment Agreement.

Dutchess is not obligated to purchase any shares of the Common Stock, unless
each of the following conditions are satisfied at the time of purchase:

        o    a registration statement shall have been declared effective and
shall remain effective and available for the resale of all the shares of Common
Stock to be purchased by Dutchess;

        o    the Common Stock shall be listed, and shall not have been suspended
from trading for a period of two (2) consecutive trading days, and the Company
shall not have been notified of any pending or threatened proceeding or other
action to suspend the trading of its Common Stock;

        o    the Company must have complied with its obligations and must not
otherwise be in breach of or in default under the Investment Agreement, or other
related transaction documents;

        o    no injunction shall have been issued and remain in force, or action
commenced by a governmental authority, which has not been stayed or abandoned,
prohibiting the purchase or the issuance of the shares of the Company's Common
Stock to be purchased; and

        o    the issuance of the shares of Common Stock of the Company will not
violate any shareholder approval requirements of the principal market or
exchange on which the Common Stock is traded.

As of March 31, 2007, the Company has not delivered any Puts to Dutchess
pursuant to the Investment Agreement, and has no intention to do so in the
foreseeable future.

In connection with the Investment Agreement, the Company paid the Investor a due
diligence fee of $15,000.

Mortgage Notes Payable
----------------------

On December 27, 2005, the Company borrowed an aggregate of $8,224,000 from
Astoria Federal Mortgage Corp. ("Astoria"), in connection with the refinancing
of the Properties, evidenced by eight notes payable (the "Mortgage Notes"). The
initial interest rate on the Mortgage Notes, of 5.625%, will remain in effect
for eighty four (84) months. Thereafter, the Mortgage Notes bear interest at a
rate equal to the five (5) year "Fixed Rate Advance" as determined by the
Federal Home Bank of New York, plus two and one half percent (2.5%), rounded to
the nearest one-eighth of one percent (0.125%) and the interest rate will be
adjusted every sixty (60) months. The loans are repayable in monthly
installments of principal and interest (which total $47,343), due on the first
day of each month, commencing February 1, 2006. The principal and interest
payments are based on a 360 month amortization. The Mortgage Notes mature on
January 1, 2018, at which time the entire unpaid principal balance, plus accrued
interest thereon, shall be due.

                                       18
<PAGE>

            EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


NOTE 3 - NOTES PAYABLE (Continued)

The Mortgage Notes are collateralized by each respective Property. David Mladen,
the Company's majority stockholder and sole officer and director, has guaranteed
up to 5% of the outstanding balance of the principal with interest for the life
of the loan. The Company incurred approximately $178,000 of deferred financing
costs related to these loans, which is being amortized over the life of the
mortgage notes payable (twelve years). Amortization expense was $3,578 for the
three months ended March 31, 2007 and 2006.

Future annual maturities of the mortgage notes payable as of March 31, 2007 were
as follows:

           Fiscal Year         Amount
         -------------------------------------

               2007             $   86,082
               2008                120,561
               2009                127,521
               2010                134,881
               2011                142,667
            Thereafter           7,485,377
         -------------------------------------
                                $8,097,089
         =====================================


NOTE 4 - ESCROW ACCOUNT

As of March 31, 2007, the Company maintained an escrow account with Astoria
Federal Mortgage Corp. in the amount of $51,969 for the payment of real estate
taxes.


NOTE 5 - INVESTMENTS IN TRADING SECURITIES

Between July, 2006 and September, 2006, the Company purchased an aggregate of
4,969 shares of its common stock in the open market, through a brokerage account
held in the name of Excellency Investment Realty Trust I, L.P., a limited
partnership which is owned (i) 81% by the Company, and (ii) 19%, collectively,
by David Mladen, the Company's majority shareholder and sole officer and
director, and his son, daughter-in-law, daughter, and son-in-law. For accounting
purposes, these purchases were treated as treasury stock of which 2,500 of the
purchased shares were resold in the open market. The purchase price of these
shares was between $8.16 and $24.44, and the selling price per share was between
$11.66 and $24.26, or an average aggregate sales price of $17.44. The difference
between the purchased price and the sales price of $16,359 was recorded as
additional paid in capital in the accompanying condensed consolidated financial
statements. The Company paid $34,168 or $13.83 share for these 2,469 shares of
stock, and has recorded the acquisition of these shares as treasury stock shares
at cost in the accompanying consolidated financial statements. As of March 31,
2007, 2,469 shares of the Company's common stock are held in the Company's
brokerage account. The Company's plans to hold and not sell the Treasury Stock.

As of March 31, 2007, the Company had no Investments In Trading Securities. For
the three months ended March 31, 2007, the Company recognized a loss on the sale
of trading securities totaling $168,748.

                                       19
<PAGE>

            EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


NOTE 6 - RELATED PARTY TRANSACTIONS

Property Management
-------------------

Until June 30, 2006, the Company's properties were managed by White Knight
Management, LLC ("White Knight"), a related party owned (i) 99% by Goran Mladen,
the son of David Mladen, the Company's majority shareholder and sole officer and
director, and (ii) 0.2% by Gorica Mladen, David Mladen's daughter. The
Properties were managed pursuant to an oral agreement between White Knight and
the Company, according to which White Knight collected the rents for all eight
of the Company's properties and paid the Company's operating expenses. In
consideration for such services, White Knight was entitled to retain a
management fee of approximately 4% of the rent revenues of the Company.
Management fees were $16,169 for the three months ended March 31, 2006.

As of March 31, 2006, White Knight retained amounts of rent in excess of
expenses paid (including management fee) on behalf of the Company totaling
$171,276. The Company has written off such amount due from White Knight as it
has determined such amount is not collectible.

The Company discontinued its arrangement with White Knight effective July 1,
2006, and, currently, all of the Company's properties are managed by the
Company.

Goran Mladen and Gorica Mladen are employees of Eternal Enterprise, Inc., a
company which is owned 100%, in the aggregate, by limited partnerships that are
81% owned by the Company. Gorica Mladen owns 0.2% of such limited partnerships.

Rent-Free Apartments
--------------------

The Company provided rent-free apartments to David Mladen, its majority
shareholder and sole officer and director, and one of Mr. Mladen's family
members. As a result, the Company has recorded compensation expense to Mr.
Mladen for the three months ended March 31, 2007 in the aggregate amount of
$3,000.


NOTE 7 - STOCKHOLDERS' DEFICIT

Liquidated Damages
------------------

In connection with David Mladen's purchase of 11,000 shares of the Company's
Series A Preferred Stock (the "Series A Preferred Stock"), the Company entered
into a Registration Rights Agreement with Mr. Mladen (the "Registration Rights
Agreement"), pursuant to which the Company agreed to prepare and, on or prior to
the sixtieth (60th) day following the date of such purchase, file with the
Securities and Exchange Commission ("SEC") a Resale Registration Statement on
Form SB-2 (the "Resale Registration Statement"), to register all of the shares
of the Company's Common Stock underlying the series A Preferred Stock (the
"Conversion Shares"). Further, pursuant to the Registration Rights Agreement,
the Company is required to use best efforts to (a) have the SEC declare the
Resale Registration Statement effective within ninety (90) days after filing the
Resale Registration Statement with the SEC (or one hundred and twenty (120) days
in the event any comments on the Registration Statement are received from the
SEC), and (b) maintain the effectiveness of the Resale Registration Statement
until all such common shares have been sold or may be sold without volume
restrictions pursuant to Rule 144(k) of the Securities Act of 1933, as amended.

                                       20
<PAGE>

            EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


NOTE 7 - STOCKHOLDERS' DEFICIT (Continued)

If the Company (i) fails to file the Resale Registration Statement, or (ii)
fails to have the Registration Statement declared effective within the required
period, or (iii) if effectiveness is not maintained, the Registration Rights
Agreement requires the Company to make payments to Mr. Mladen in an aggregate
amount equal to two percent (2%) per month of $9,000,000 (assuming the sale of
$9,000,000 of the aggregate fair market value of the Conversion Shares)
("Outstanding Principal Amount"), multiplied by the number of months (prorated
for partial months) until the failure is cured.

As of June 30, 2006, the Resale Registration Statement had not been filed. At
that time, Mr. Mladen agreed to waive $1,174,000 of liquidated damages due to
him, and such amount was accounted for as a contribution of capital as of that
date.

On October 24, 2006, the Resale Registration Statement had still not been filed.
At that time, Mr. Mladen agreed to waive an additional $720,000 in liquidated
damages, for the period between July 1, 2006 and October 31, 2006, in
consideration for 43,500 shares of the Company's Series C Preferred Stock. As
of March 31, 2007, $720,000 of these liquidated damages have been issued as
preferred stock and subsequently converted to common stock (Note 7, Series C
Convertible Preferred Stock).

On November 29, 2006, the Company filed the Resale Registration Statement. On
February 2, 2007, the Resale Registration Statement was withdrawn by the Company
(see Note 8). Mr. Mladen has agreed to waive any additional liquidated damages
which may be due to him through March 31, 2007.

Prior to January 1, 2007, the Company acoounted for liquidated damages in
accordance with View C of EITF 05-4 "Effect of Liquidated Damages Clause on a
Freestanding Financial Instrument Subject to EITF 00-19" ("EITF 05-4").

For the year ended December 31, 2006, the Company recorded a loss on derivative
instrument of $917,000. As of December 31, 2006, the liability amounted to
$1,241,000 and is included on the balance sheet as a derivative liability.

The Company elected to record the effects of applying FSP 00-19-2 using the
cumulative-effect transition method, which resulted in eliminating the Company's
derivative liability at the beginning of the first quarter of fiscal 2007,
creating a registration rights liability estimated at nine months of liquidated
damages at $180,000 per month, with the offsetting cumulative-effect entry to
opening accumulated deficit. The cumulative adjustment was not recorded in the
statements of operations and previous periods were not adjusted. The impact on
previously reported accounts as of December 31, 2006, adjusted effective January
1, 2007, is as follows:

<TABLE>
<CAPTION>
                                                               FSP 00-19-2
                                         December 31,       cumulative-effect        January 1,
                                             2006               adjustment              2007
                                             ----               ----------              ----
<S>                                     <C>                   <C>                   <C>
Derivative liability                    $ 1,241,000           $(1,241,000)          $         -
Registration rights liability           $         -           $ 1,620,000           $ 1,620,000
Accumulated deficit                     $(8,130,173)          $  (379,000)          $(8,509,173)
Total stockholders' equity              $(5,892,687)          $  (379,000)          $(6,271,687)
</TABLE>

The tax effect of the identified adjustments is not significant since the
Company has a full valuation allowance for deferred tax assets.

                                       21
<PAGE>

            EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


NOTE 7 - STOCKHOLDERS' DEFICIT (Continued)

Series A Preferred Stock
------------------------

As of September 28, 2005, the Company filed a Certificate of Designation of
Series A Convertible Preferred Stock (the "Series A Certificate of Designation")
with the Secretary of State of the State of Oklahoma, designating a Series of
11,000 shares of Series A Convertible Preferred Stock, $0.01 par value per share
(the "Series A Preferred Stock"). Pursuant to the Series A Certificate of
Designation, as amended on July 12, 2006, holders of the Company's Series A
Preferred Stock:

     o    shall be entitled to cast one hundred forty three (143) votes per
          share of Series A Preferred Stock upon all matters submitted to a vote
          of the holders of the Company's Common Stock;

     o    shall be entitled to receive dividends when and as declared by the
          Company's Board of Directors; and

     o    shall be entitled to convert each of their shares of Series A
          Preferred Stock into one hundred forty three (143) shares of the
          Company's Common Stock, at any time, and from time to time, for no
          additional consideration.

The shares of Series A Preferred Stock:

     o    shall not be reissued after they are reacquired by the Company by
          reason of repurchase or otherwise, and all such shares shall be
          returned to the status of undesignated shares of the Company's
          Preferred Stock; and

     o    shall be adjusted in the event of stock splits, stock combinations,
          mergers, reorganizations, or other such events.

As of December 31, 2006, all 11,000 shares of the Company's Series A Preferred
Stock were issued and outstanding, and held by David Mladen, the Company's
majority shareholder and sole officer and director. As of March 6, 2007, 1,000
shares of the Company's Series A Preferred Stock were converted into 143,000
shares of the Company's common stock (see Note 10). As a result, Mr. Mladen
beneficially owns 45,109,230 shares, or 99.8%, of the Company's voting stock.

Series B Preferred Stock
------------------------

On March 10, 2006, the Company filed a Certificate of Designation of Series B
Preferred Stock (the "Series B Certificate of Designation") with the Secretary
of State of the State of Oklahoma, designating a series of 20,000 shares of
Preferred Stock of the Company, $0.01 par value (the "Series B Preferred
Stock"). Pursuant to the Series B Certificate of Designation, holders of the
Company's Series B Preferred Stock:

     o    shall be entitled to cast one hundred (100) votes per share of Series
          B Preferred Stock upon all matters submitted to a vote of the
          holdersof the Company's Common Stock;

     o    shall not be entitled to receive dividends when and as declared, out
          of the Company's net profits;

                                       22
<PAGE>

            EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


NOTE 7 - STOCKHOLDERS' DEFICIT (Continued)

     o    shall not be entitled to a liquidation preference in the event of any
          liquidation, dissolution or winding up of the Company; and

     o    shall not be entitled to convert their shares of Series B Preferred
          Stock into shares of the Company's Common Stock.

In addition, the shares of Series B Preferred Stock:

     o    shall not be redeemable by the Company;

     o    shall rank junior to all other series of the Company's Preferred Stock
          as to the distributions of assets, unless the terms of any such series
          shall provide otherwise;

     o    shall be not be reissued after they are reacquired by the Company by
          reason of repurchase or otherwise, and all such reacquired shares
          shall be returned to the status of undesignated shares of the
          Company's Preferred Stock; and

     o    shall be adjusted in the event of stock splits, stock combinations,
          mergers, reorganizations, or other such events.

So long as any shares of Series B Preferred Stock remain issued and outstanding,
the Company shall not, without the consent of the holders of a majority of the
shares of Series B Preferred Stock then outstanding:

     o    amend, alter or repeal any provision of the Company's Certificate of
          Incorporation (including the Certificate of Designation), or Bylaws;

     o    authorize, or increase the authorized amount of any additional class
          or series of stock; or

     o    effect any reclassification of the Series B Preferred Stock.

The Series B Certificate of Designation may be amended by vote of both the
Company's Board of Directors and the holders of a majority of the outstanding
shares of Series B Preferred Stock.

As of March 31, 2007, no shares of the Company's Series B Preferred Stock were
issued or outstanding.

Series C Convertible Preferred Stock
------------------------------------

On October 6, 2006, the Company's Board of Directors approved the
reclassification and designation of 43,500 shares of the Company's authorized
preferred stock, $0.01 par value per share, designated as series C convertible
preferred stock ("Series C Preferred Stock"). On October 11, 2006, the Company
filed Articles Supplementary to the Articles (the "Articles Supplementary") with
the State Department of Assessments and Taxation of Maryland, reclassifying and
designating the Series C Preferred Stock and fixing the rights and preferences
of such series. Pursuant to the Articles Supplementary, the holders of the
Company's Series C Preferred Stock:

                                       23
<PAGE>

            EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


NOTE 7 - STOCKHOLDERS' DEFICIT (Continued)

     o    shall be entitled to cast one thousand (1,000) votes per share of
          Series C Preferred Stock upon all matters submitted to a vote of the
          holders of the Company's Common Stock;

     o    shall be entitled to receive dividends when and as declared by the
          Company's Board of Directors; and

     o    shall be entitled to convert each of their shares of Series C
          Preferred Stock into one thousand (1,000) shares of the Company's
          Common Stock, at any time, and from time to time, for no additional
          consideration.

The shares of Series C Preferred Stock:

     o    shall not be reissued after they are reacquired by the Company by
          reason of repurchase or otherwise, and all such shares shall be
          returned to the status of undesignated shares of the Company's
          Preferred Stock; and

     o    shall be adjusted in the event of stock splits, stock combinations,
          mergers, reorganizations, or other such events.

On October 18, 2006, the Company issued the 43,500 shares of Series C Preferred
Stock (the "Series C Preferred Shares") to David Mladen, the Company's majority
shareholder and sole officer and director. The Series C Preferred Shares were
issued to Mr. Mladen in consideration for his agreement to waive $720,000 of
liquidated damages due to him, for the period of July 1, 2006 through October
31, 2006, by virtue of the Company's failure to satisfy certain of its
registration requirements.

On October 24, 2006, Mr. Mladen converted the Series C Preferred Shares into
43,500,000 shares of the Company's Common Stock.


NOTE 8 - CONTINGENCIES

Periodic Filings
----------------

Under a 2005 rule change, OTC Bulletin Board ("OTCBB") issuers that are cited
for filing delinquency three times in a 24-month period and those removed for
failure to file two times in a 24-month period will be ineligible for quotation
by an NASD member. Following removal under this new rule, an issuer's securities
would again become eligible for quotation on the OTCBB when the issuer has filed
periodic reports for one year in a timely manner.

The Company has been late in two of its periodic filings with the Securities and
Exchange Commission ("SEC") during 2006. Accordingly, the Company may be
ineligible for quotation by an NASD member if it is delinquent one more time in
its periodic filings with the SEC during the applicable 24-month period.

On November 29, 2006, the Company filed a Registration Statement on Form SB-2
(the "Resale Registration Statement") with the Securities and Exchange
Commission (the "Commission") to register (i) 5,000,000 shares of common stock
issuable to Dutchess Private Equities Fund, LP ("Dutchess") in connection with
an Investment Agreement between the Company and Dutchess, and (ii) 1,573,000
shares of common stock issuable upon conversion of shares of the Company's
Series A convertible preferred stock held by David Mladen, the Company's sole
officer, director and majority shareholder. On February 2, 2007, the Company
filed a request to withdraw the Registration Statement with the Commission.

                                       24
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.


     The financial and business analysis below provides information which we
believe is relevant to an assessment and understanding of our financial
condition and results of operations. You should read the following discussion of
our financial condition and results of operations in conjunction with the Notes
to the Financial Statements in Item 1 of this Amendment No. 1 to the Quarterly
Report on Form 10-QSB, and our Annual Report on Form 10-KSB for the year ended
December 31, 2006, as amended (the "Annual Report"). In addition to historical
information, this discussion contains statements that may be deemed to be
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. The words "believes", "estimates", "expects" and "anticipates" and
other similar expressions that are predictions of or indicate future events and
trends and which do not relate solely to historical matters identify
forward-looking statements. Such forward-looking statements are subject to risks
and uncertainties, which could cause actual results, performance, or
achievements of ours to differ materially from anticipated future results,
performance or achievements expressed or implied by such forward-looking
statements. Factors that might cause such differences include, but are not
limited to, the following:


     o    Anticipated capital expenditures for replacements and building
          improvements all reflect our best estimates and are subject to
          uncertainties arising from changing economic conditions (such as the
          cost of labor and construction materials), competition and local
          government regulation;

     o    Sources of capital or labor and materials required for maintenance,
          repair, capital expenditure or development are more expensive than
          anticipated;

     o    Occupancy levels and market rents may be adversely affected by
          national and local economic and market conditions including, without
          limitation, new construction of multifamily housing, slow employment
          growth, availability of low interest mortgages for single-family home
          buyers and the potential for geopolitical instability, all of which
          are beyond our control;

     o    Our inability to derive sufficient revenues from our operations, or
          obtain financing when needed, would have a material adverse effect on
          our company, requiring us to curtail or cease operations; and

     o    Additional factors as discussed in Item 1 of our Annual Report, under
          the heading of "Risk Factors."

     Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. We undertake no obligation
to publicly release any revisions to these forward-looking statements, which may
be made to reflect events or circumstances after the date hereof or to reflect
the occurrence of unanticipated events.

                                       25
<PAGE>

OVERVIEW

     On September 4, 1963, we were incorporated in the State of Oklahoma as
Dorsett Educational Systems, Inc. On December 20, 2002, we changed our name to
Gift Liquidators, Inc. Since that time, and prior to the sale of all of our gift
and novelty inventory in September 2005, our core business involved the
wholesale distribution of a diverse line of gift and novelty products acquired
in closeouts from gift developers and distributors.

     As of September 28, 2005 (the "Closing Date"), we entered into a Preferred
Stock Purchase Agreement with David Mladen (the "Preferred Stock Purchase
Agreement"), pursuant to which Mr. Mladen purchased 11,000 shares of our Series
A Convertible Preferred Stock, $0.01 par value per share ("Series A Preferred
Stock"), for an aggregate purchase price of $10,000 (the "Preferred Stock
Purchase Transaction"). As of the Closing Date, each share of our Series A
Preferred Stock was convertible into 5 shares of our common stock, $0.01 par
value per share ("Common Stock"), subject to adjustment for stock dividends,
stock splits, reclassifications, and similar events.

     In addition, as of the Closing Date, two of our former stockholders, one of
whom was an officer and director of ours, sold an aggregate of 33,761 shares of
our Common Stock to Mr. Mladen, which amount represented 28.6% of our issued and
outstanding Common Stock (the "Common Stock Purchase Transaction," and, together
with the Preferred Stock Purchase Transaction, the "Stock Purchase
Transactions").

     Further, as of the Closing Date, our existing officers and directors
resigned, and Mr. Mladen was appointed as our sole officer and director.

     As a result of the Stock Purchase Transactions, Mr. Mladen controlled
approximately 51.3% of our voting power. By virtue of (i) the percentage of our
Common Stock Mr. Mladen acquired, (ii) the number of shares of Common Stock Mr.
Mladen would receive upon conversion of the shares of our Preferred Stock he
purchased, (c) the resignation of all of our officers and directors, and (d) the
appointment of Mr. Mladen as our sole officer and director, there was deemed to
have been a "change in control" of our company as of the Closing Date.

     At the time of the Preferred Stock Purchase Transaction and the Common
Stock Purchase Transaction, Mr. Mladen was also the majority stockholder and the
sole officer and director of Eternal Enterprise, Inc., a Connecticut Corporation
("Eternal"), which owned the following residential real estate properties
(collectively, the "Properties") in Hartford, Connecticut:

     o    154-160A Collins Street, Hartford, CT;
     o    21 Evergreen Avenue, Hartford, CT;
     o    243 & 255 Laurel Street, Hartford, CT;
     o    252 Laurel Street, Hartford CT;
     o    270 Laurel Street, Hartford, CT;
     o    360 Laurel Street, Hartford, CT;
     o    117-145 S. Marshall Street, Hartford, CT; and
     o    56 Webster Street, Hartford, CT.

     Mr. Mladen entered into the Stock Purchase Transactions with the specific
intention of taking control of our Company, and, subsequently, combining it with
Eternal.

                                       26
<PAGE>

     In connection with the aforementioned transactions, and the corresponding
decision by Mr. Mladen to have our Company exit the gift liquidation business,
effective as of the Closing Date, we:

          o    entered into an Asset Sale Agreement with Laid Back Enterprises,
Inc. ("Laid Back"), a company owned and controlled by two of our former officer
and directors, pursuant to which Laid Back purchased all of our non-cash assets,
including all of our inventory in exchange for the cancellation of our
indebtedness to Laid Back in the aggregate amount of $50,485;

          o    terminated our Administrative Services Agreement with Laid Back,
dated December 20, 2002, pursuant to which we had been receiving certain
personnel, sales, marketing, accounting and other administrative services from
Laid Back; and

          o    terminated our Tax Sharing Agreement with Laid Back, dated
December 20, 2002, pursuant to which we had been sharing certain tax
responsibilities with Laid Back.

     Between October 26, 2005 and October 31, 2005, we formed eight limited
partnerships as wholly-owned Delaware subsidiaries of the Company (the "Limited
Partnerships"). At the time of formation, the Company owned 100% of the
partnership interests of each of the Limited Partnerships.

     As of November 4, 2005, the pre-acquisition stockholders of Eternal, which
consisted of David Mladen and certain of his family members (the
"Pre-Acquisition Eternal Stockholders"), exchanged, in the aggregate, 100% of
the issued and outstanding shares of common stock of Eternal, for (i) limited
partnership interests representing 20% of the total partnership interests of
each of the Limited Partnerships, and (b) promissory notes in the aggregate
principal amount of $2,610,006 (the "LP Notes") (the "Eternal Acquisition"). The
partnership interests of the Limited Partnerships were exchanged for shares of
common stock of Eternal based upon the ratio which the value of each Property
bears to the aggregate value of all of the Properties. As a result of the
Eternal Acquisition, the shares of common stock of Eternal are now 100% owned,
in the aggregate, by the Limited Partnerships.

     In consideration for our ownership of 80% of the total partnership
interests of each of the Limited Partnerships, we agreed to assume the LP Notes.
The interest rate on the LP Notes is 7% per annum. The entire balance of
principal and interest of the LP Notes is due and payable on November 4, 2010.
The LP Notes may be prepaid without penalty. All payments shall be applied first
toward the payment of interest and the balance towards the reduction of
principal.

     Pursuant to the Partnership Agreements of the Limited Partnerships (the
"Partnership Agreements"), among other things, we (i) are the general partner of
each of the Limited Partnerships; and (ii) have the right to compel the limited
partners (i.e., the Pre-Acquisition Eternal Stockholders) to exchange 100% of
their limited partnership interests for shares of common stock of the Company.

     Since, at the effective time of the Eternal Acquisition (and the Preferred
Stock Purchase Transaction and the Common Stock Purchase Transaction,
consummated in anticipation thereof): (i) the Pre-Acquisition Eternal
Stockholders obtained a majority of the shares of common stock of the combined
entity after the combination, (ii) Pre-Acquisition Eternal Stockholders obtained
the ability to elect and appoint a voting majority of the governing board of the
combined entity, and (iii) Eternal's officers and directors replaced ours as
officers and directors of the combined entity, the Eternal Acquisition was
treated as a reverse merger with Eternal as the accounting acquirer for
financial reporting purposes.

     Following the Stock Purchase Transactions and the Eternal Acquisition, the
business of Eternal, which is now 100% owned, in the aggregate, by the Limited
Partnerships, became our primary business.

                                       27
<PAGE>

     We intend to qualify as a real estate investment trust, or REIT, under the
Internal Revenue Code of 1986, as amended. Therefore, in fiscal 2006 our
management determined to change our domicile to the State of Maryland, to take
advantage of Maryland's detailed and comprehensive REIT laws.

     On September 20, 2006, we reincorporated in the State of Maryland by virtue
of our merger with and into Excellency Investment Realty Trust, Inc., our
Maryland subsidiary (the "Maryland Subsidiary"), which had been organized for
that purpose (the "Reincorporation by Merger"). As a result of the
Reincorporation by Merger, among other things:

          o    The surviving company and successor filer is known as Excellency
Investment Realty Trust, Inc.;

          o    Each share of our issued and outstanding common stock and
preferred stock was converted into one share of the Maryland Subsidiary's common
stock and preferred stock, respectively;

          o    The title to all of our property automatically vested in the
Maryland Subsidiary;

          o    The Maryland Subsidiary assumed all of our liabilities;

          o    Corporate actions of the surviving entity are now governed by the
Maryland Corporations and Associations Law and by the Maryland Subsidiary's
Articles of Amendment and Restatement of Articles of Incorporation and Bylaws;

          o    David Mladen, our sole officer and director, continued to serve
as the sole officer and director of the surviving entity;

          o    The trading symbol for the surviving entity's common stock, which
is quoted on the over-the-counter bulletin board of the National Association of
Securities Dealers, was changed to "EIVR"; and

          o    The total number of shares of stock which the surviving entity is
authorized to issue has increased to 201,000,000 shares, of which 200,000,000
shares are common stock, $0.01 par value per share and 1,000,000 are preferred
stock, par value $0.01.

     While the Reincorporation by Merger resulted in changes to our name and
state of incorporation, as well as the other changes listed above, it did not
result in any material changes to our business, management, assets, liabilities
or net worth.

TRENDS AND UNCERTAINTIES

     We are not aware of any material trends or uncertainties, favorable or
unfavorable, other than national economic conditions affecting real estate
generally, that may be reasonably anticipated to have a material impact on
either capital resources or the revenues or income to be derived from the
acquisition and operation of the Properties, other than those identified below.

Increasing Demand For Rental Apartments
---------------------------------------

     Based on certain demographic trends, in particular, the growth of the "Echo
Boomer" generation, we believe we are well-positioned to continue achieving our
objectives. While there is no guarantee that individuals making up this group
will choose renting versus ownership, we believe the increase in this age group
will have a positive demand for the number of rental households. Echo Boomers

                                       28
<PAGE>

are now entering into the age group having the greatest propensity to rent. The
number of individuals between the ages of 18-39 is expected to grow
significantly over the next 20 years.

Strong Demand Due To Interest Rate Environment
----------------------------------------------

     The 40-year historic lows reached on mortgage interest rates in recent
years provided some individuals with the opportunity to purchase homes at
similar costs to renting, particularly when utilizing short-term variable
mortgages. However, with the more recent increases in interest rates, this
attractive alternative may have faded for some and the apartment sector is in a
position to reap the benefits. If a higher interest rate environment continues,
then the number of individuals purchasing homes will typically decline. As
rental apartments directly compete with the single-family home and condominium
sectors of the economy, the demand for new and existing rental apartment
communities may rise when demand for purchasing homes falls. We believe this
will be beneficial for apartment owners as it should translate into greater
demand, higher occupancy rates, fewer concessions needed to attract renters, and
therefore increased profitability of our apartment communities.

Increased Income And Distributions Due To Healthy U.S. Economy
--------------------------------------------------------------

     Generally, healthy employment in a particular market area enables apartment
owners to increase rents charged to tenants. As employment across locations in
which we own apartment buildings continues to improve and stabilize, apartment
owners in these locations should be able to increase rents ahead of expenses
which should increase the revenue we receive from our apartment buildings. As a
result, the amount of cash available for distribution to our stockholders should
increase. However, our actual results of operations and, accordingly, cash
available for distribution, will be affected by a number of factors, including
the revenue we receive from our communities, our operating expenses, our debt
obligations, interest expense, the ability of our residents to meet their
obligations, and unanticipated expenditures. The occupancy rates at our
Properties declined from an average of 96% in fiscal 2005 to an average of 89%
in fiscal 2006.

MORTGAGE NOTES PAYABLE

     As a result of the Eternal Acquisition, we are the owner of eight
Properties, all in the metropolitan Hartford, Connecticut area.

     As of December 27, 2005, we borrowed an aggregate of $8,224,000 from
Astoria Federal Mortgage Corp., in connection with the refinancing of the
Properties, evidenced by eight notes payable (the "Mortgage Notes"). The
Mortgage Notes bear interest at a rate equal to the five (5) year "Fixed Rate
Advance" as determined by the Federal Home Bank of New York, plus 2.500%,
rounded to the nearest one-eighth of one percent (0.125%). The initial interest
rate on the Mortgage Notes, of 5.625%, will remain in effect for 84 months.
Thereafter, the interest rate will be adjusted every sixty (60) months. The
loans are repayable in monthly installments of principal and interest, due on
the first day of each month, commencing February 1, 2006. The principal and
interest payments will be based on a 360 month amortization. The Mortgage Notes
mature on January 1, 2018, at which time the entire unpaid principal balance,
plus accrued interest thereon, shall be payable. The Mortgage Notes are secured
against each respective Property. David Mladen, our majority stockholder, and
sole officer and director, has guaranteed up to 5% of the outstanding balance of
the principal with interest for the life of the loan.

                                       29
<PAGE>

     The following sets forth certain material terms of each of the Notes as of
March 31, 2007:

--------------------------------------------------------------------------------
                                                                      Monthly
                                                Mortgage Note        Principal
                                                   Amount              and
                                                (as of March         Interest
Location of Property                              31, 2007)          Payment
--------------------------------------------------------------------------------
154-160A Collins Street, Hartford, CT            $1,283,877        $    7,506
--------------------------------------------------------------------------------
21 Evergreen Avenue, Hartford, CT                $  693,136        $    4,053
--------------------------------------------------------------------------------
243 & 255 Laurel Street, Hartford, CT            $1,110,593        $    6,493
--------------------------------------------------------------------------------
252 Laurel Street, Hartford CT                   $  574,988        $    3,361
--------------------------------------------------------------------------------
270 Laurel Street, Hartford, CT                  $1,969,137        $   11,502
--------------------------------------------------------------------------------
360 Laurel Street, Hartford, CT                  $  582,864        $    3,408
--------------------------------------------------------------------------------
117-145 S. Marshall Street, Hartford, CT         $1,409,902        $    8,244
--------------------------------------------------------------------------------
56 Webster Street, Hartford, CT                  $  472,592        $    2,764
-------------------------------------------------==========--------==========---
      Total:                                     $8,097,089        $   47,331
-------------------------------------------------==========--------==========---

PROMISSORY NOTES PAYABLE - RELATED PARTY

     As of November 4, 2005 (the "Loan Date"), the Pre-Acquisition Eternal
Stockholders of Eternal Enterprise, Inc., which were comprised of David Mladen,
our majority shareholder and sole officer and director, and Mr. Mladen's son,
daughter-in-law, daughter, and son-in-law, exchanged, in the aggregate, 100% of
the issued and outstanding shares of common stock of Eternal, for (i) limited
partnership interests representing 20% of the total partnership interests in
each of the Limited Partnerships, and (ii) unsecured promissory notes payable to
the Pre-Acquisition Eternal Stockholders in the aggregate principal amount of
$2,610,006 (the "LP Notes"). In consideration for our ownership of 80% of the
total partnership interests of each of the Limited Partnerships, we agreed to
assume the LP Notes.

     The interest rate on the LP Notes is 7% per annum. The entire balance of
principal and interest of the LP Notes is due and payable on November 4, 2010.
The LP Notes may be prepaid without penalty. All payments shall be applied first
toward the payment of interest and the balance towards the reduction of
principal.

     As of March 31, 2007, an aggregate of $2,578,581 of principal and interest
were due under the LP Notes.

EQUITY LINE OF CREDIT

     On August 29, 2006, we entered into an Investment Agreement with Dutchess
Private Equities Fund, L.P. ("Dutchess"), pursuant to which Dutchess committed
to purchase up to $25,000,000 of our Common Stock over the course of thirty six
(36) months. The amount that we will be entitled to request from each purchase
("Puts") shall be equal to, at our election, either (i) $250,000, or (ii) 200%
of the average daily volume (U.S. market only) of the Common Stock for the 10
trading days prior to the applicable put notice date, multiplied by the average
of the 3 daily closing bid prices immediately preceding the put date. The put
date shall be the date that Dutchess receives a put notice of a draw down by us.
The purchase price shall be set at 93% of the lowest closing Best Bid price of
the Common Stock during the pricing period. The pricing period shall be the 5
consecutive trading days immediately after the put notice date. There are put
restrictions applied on days between the put date and the closing date with
respect to that particular Put. During this time, we shall not be entitled to
deliver another put notice. Further, we shall reserve the right to withdraw that
portion of the Put that is below 90% of the lowest closing bid prices for the
10-trading day period immediately preceding each put notice.


     The Investment Agreement with Dutchess terminates either (a) when Dutchess
has purchased an aggregate of Twenty-Five Million dollars ($25,000,000) in
shares of Common Stock of the Company pursuant to the Investment Agreement, or
(b) thirty-six months after the effective date of the Investment Agreement.

     Dutchess is not obligated to purchase any shares of the Common Stock,
unless each of the following conditions are satisfied at the time of purchase:

        o    a registration statement shall have been declared effective and
shall remain effective and available for the resale of all the shares of Common
Stock to be purchased by Dutchess;

        o    the Common Stock shall be listed, and shall not have been suspended
from trading for a period of two (2) consecutive trading days, and the Company
shall not have been notified of any pending or threatened proceeding or other
action to suspend the trading of its Common Stock;

        o    the Company must have complied with its obligations and must not
otherwise be in breach of or in default under the Investment Agreement, or other
related transaction documents;

                                       30
<PAGE>

 o    no injunction shall have been issued and remain in force, or action
commenced by a governmental authority, which has not been stayed or abandoned,
prohibiting the purchase or the issuance of the shares of the Company's Common
Stock to be purchased; and

        o    the issuance of the shares of Common Stock of the Company will not
violate any shareholder approval requirements of the principal market or
exchange on which the Common Stock is traded.

     As of March 31, 2007, the Company has not delivered any Puts to Dutchess
pursuant to the Investment Agreement, and has no intention to do so in the
foreseeable future.


LIQUIDATED DAMAGES

     In connection with David Mladen's purchase of 11,000 shares of our Series A
Preferred Stock (the "Preferred Stock") on September 29, 2005, we entered into a
Registration Rights Agreement with Mr. Mladen (the "Registration Rights
Agreement"), pursuant to which we agreed to prepare, and, on or prior to the
sixtieth (60th) day following the date of such purchase, file with the
Securities and Exchange Commission a Resale Registration Statement on Form SB-2
(the "Resale Registration Statement"), to register all of the shares of our
Common Stock underlying the Preferred Stock (the "Conversion Shares"). Further,
pursuant to the Registration Rights Agreement, we are required to use best
efforts to (a) have the SEC declare the Resale Registration Statement effective
within ninety (90) days after filing the Resale Registration Statement with the
SEC (or one hundred and twenty (120) days if we receive any comments on the
Registration Statement from the SEC), and (b) maintain the effectiveness of the
Resale Registration Statement until all such common shares have been sold or may
be sold without volume restrictions pursuant to Rule 144(k) of the Securities
Act of 1933, as amended.

     If we (i) fail to file the Resale Registration Statement, or (ii) fail to
have the Registration Statement declared effective within required period, or
(iii) if effectiveness is not maintained, the Registration Rights Agreement
requires us to make payments to Mr. Mladen in an aggregate amount equal to two
percent (2%) per month of $9,000,000 (assuming the sale of $9,000,000 of the
aggregate fair market value of the Conversion Shares) ("Outstanding Principal
Amount"), multiplied by the number of months (prorated for partial months) until
the failure is cured.

     Mr. Mladen waived the liquidated damages due to him for the period between
November 28, 2005 through June 30, 2006. We issued Mr. Mladen 43,500 shares of
our Series C Preferred Stock for his agreement to waive additional liquidated
damages due to him for the period between July 1, 2006 and October 31, 2006. The
Resale Registration Statement was filed on November 29, 2006, however, on
February 2, 2007, we requested its withdrawal. Subsequently, Mr. Mladen agreed
to waive additional liquidated damages due to him through March 31, 2007.

     Prior to January 1, 2007, we adopted View C of EITF 05-4, "Effect of
Liquidated Damages Clause on a Freestanding Financial Instrument Subject to EITF
00-19" ("EITF 05-4"). For the year ended December 31, 2006, we recorded a loss
on derivative instrument of $917,000. As of December 31, 2006, the liability
amounted to $1,241,000 and was included on the balance sheet as a derivative
liability. Subsequently, we elected to record the effects of adopting FSP
00-19-2 using the cumulative-effect transition method, which resulted in
eliminating our derivative liability at the beginning of the first quarter of
fiscal 2007, assigned with the offsetting cumulative-effect entry to opening
accumulated deficit. In addition, this created a registration rights liability
estimated at $1,620,000. The cumulative adjustment was not recorded in the
statements of operations and previous periods were not adjusted. The impact on
previously reported accounts as of December 31, 2006, adjusted effective January
1, 2007, is as follows:


<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
                                                                   FSP 00-19-2
                                                                cumulative-effect
                                         December 31, 2006          adjustment        January 1, 2007
------------------------------------------------------------------------------------------------------
<S>                                         <C>                  <C>                     <C>
Derivative liability                        $ 1,241,000          $(1,241,000)            $         -
------------------------------------------------------------------------------------------------------
Registration rights liability               $         -          $ 1,620,000             $ 1,620,000
------------------------------------------------------------------------------------------------------
Accumulated deficit                         $(8,130,173)         $  (379,000)            $(8,509,173)
------------------------------------------------------------------------------------------------------
Total stockholders' equity                  $(5,892,687)         $  (379,000)            $(6,271,687)
------------------------------------------------------------------------------------------------------
</TABLE>


                                       31
<PAGE>

     The tax effect of the identified adjustments is not significant since we
have a full valuation allowance for deferred tax assets.

PROPERTY INFORMATION

     As of March 31, 2007, we owned interests in eight properties. Details on
the properties are as follows:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
                                       Number and
Location                             Type of Units          Rent Range      Vacancies
---------------------------------------------------------------------------------------
<S>                            <C>                         <C>                   <C>
154-160A Collins Street        41 units:                                         8
Hartford, CT                   3 three-bedroom             $750
                               1 one-and a-half-bedroom    $650
                               37 one-bedroom              $600
---------------------------------------------------------------------------------------
21 Evergreen Avenue            24 units:                                         2
Hartford, CT                   18 one-bedroom              $625 - $650
                               6 studios                   $500 - $550
---------------------------------------------------------------------------------------
243 & 255 Laurel Street        34 units:                                         3
Hartford, CT                   4 two-bedroom               $725 - $775
                               30 one-bedroom              $600 - $625
---------------------------------------------------------------------------------------
252 Laurel Street              21 units:                                         1
Hartford, CT                   2 two-bedroom               $750
                               16 one-bedroom              $625
                               3 studios                   $450 - $475
---------------------------------------------------------------------------------------
270 Laurel Street              77 units:                                         5
Hartford, CT                   1 two-bedroom               $825
                               3 one-bedroom               $650
                               73 studios                  $500 - $550
---------------------------------------------------------------------------------------
360 Laurel Street              18 units:                                         5
Hartford, CT                   3 two-bedroom               $650 - $700
                               15 one-bedroom              $600 - $625
---------------------------------------------------------------------------------------
117-145 S. Marshall Street     42 units:                                         9
Hartford, CT                   36 two bedroom              $700 - $725
                               6 one-bedroom               $600 - $625
---------------------------------------------------------------------------------------
56 Webster Street              16 units:                                         1
Hartford, CT                   10 one-bedroom              $500
                               6 studios                   $400
---------------------------------------------------------------------------------------
</TABLE>

RESULTS OF OPERATIONS

COMPARISON OF OPERATIONS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2007 TO THE
THREE-MONTH PERIOD ENDED MARCH 31, 2006


     The following summarizes changes in our operations for the three-month
period ended March 31, 2007 and 2006. Our net loss for the three-month period
ended March 31, 2007, was $398,186. The primary reasons for this loss were an
increase in interest expense, and the realized loss from sales of trading
securities. For the three-month period ended March 31, 2006, we had a net loss
of $286,863.


                                       32
<PAGE>

RENTAL REVENUE

     Revenues decreased $5,413, or approximately 1.3%, to $395,805 from
$401,218, in the three-month period ended March 31, 2007, as compared to the
three-month period ended March 31, 2006. This decrease was primarily related to
lower occupancy rates at our Properties.

PROPERTY OPERATING COSTS

     Property operating costs decreased $10,099, or approximately 3.9%, to
$265,833 from $276,742, in the three-month period ended March 31, 2007, as
compared to the same period in the prior year. The decrease was primarily
related to a decrease in utility costs.

GENERAL AND ADMINISTRATIVE


     General and administrative expense decreased $92,346, or approximately
34.9%, to $171,998 from $264,344, in the three-month period ended March 31,
2007, as compared to the three-month period ended March 31, 2006. The decrease
was due to our write off of uncollectible amounts due from a related party for
the first quarter in fiscal 2006, which amounts did not reoccur in the same
period in fiscal 2007.


DEPRECIATION AND AMORTIZATION

     Depreciation and amortization expense in the three-month period ended March
31, 2007 was $38,323, as compared to $37,851 in the first quarter of fiscal
2006.

MANAGEMENT FEE - RELATED PARTY


     Until June 30, 2006, our Properties were managed by White Knight
Management, LLC ("White Knight"), a related party owned (i) 99% by Goran Mladen,
the son of David Mladen, our majority shareholder and sole officer and director,
and (ii) 1% by Gorica Mladen, David Mladen's daughter. The Properties were
managed pursuant to an oral agreement we had with White Knight, according to
which White Knight collected the rents for all eight of our properties and paid
our operating expenses. In consideration for such services, White Knight was
entitled to retain a management fee of approximately 4% of our rent revenues. We
discontinued our arrangement with White Knight, and, effective July 1, 2006, we
assumed responsibilities for the management of our Properties. As a result,
there were no property management fees for the three-month period ended March
31, 2007, compared to $16,169 of property management fees in the same period in
the prior year.


INTEREST EXPENSE

     Interest expense increased $29,849, or approximately 23.1%, to $159,257
from $129,408, in the first quarter of the current year, as compared to the
three-month period ended March 31, 2006. The reason for this increase was
primarily related to increased interest on the promissory notes under our
mortgage notes payable.

REALIZED LOSS FROM SALES OF TRADING SECURITIES

     In the three-month period ended March 31, 2007, we lost $168,748 from sales
of trading securities. Our investments are comprised of equity securities of
publicly traded companies. We did not have a trading portfolio of equity
securities in the three-month period ended March 31, 2006.

                                       33
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

     We have suffered recurring losses from operations and have a net
stockholders' deficit of $6,669,873. Our cash and cash equivalents balance at
March 31, 2007 was $797,367, which represents a decrease of $273,126 as compared
to our cash and cash equivalents balance of $1,070,493 at December 31, 2006. We
expect that the rental income we receive from tenants of our Properties will be
our primary source of funds going forward. In order to acquire additional
apartment properties, and, if necessary, to fund our operations, we may
determine to take out additional loans from financial institutions or raise
funds from one or a combination of debt offerings and equity offerings.
Management plans to manage cash flows carefully. However, we have no assurance
that sufficient cash flow will be generated in the future to meet our operating
requirements. This raises substantial doubt about our ability to continue as a
going concern.

USES OF CAPITAL

Net Cash Used In Operations
---------------------------


     During the three-month period ended March 31, 2007, $96,667 was used in
operations, compared to $32,943 provided by operations during the three-month
period ended March 31, 2006. The primary reason for this difference, was our
loss on the sale of trading securities in the first quarter of fiscal 2007.


Net Cash Used In Investing Activities
-------------------------------------

     During the first quarter of fiscal 2007, we used $117,134 in investing
activities, related to our purchase of trading securities. We did not purchase
or sell any trading securities in the three-month period ended March 31, 2006.

Net Cash Used In Financing Activities
-------------------------------------

     During the three-month period ended March 31, 2007, we used $59,325 in
financing activities, compared to $331,731 used in financing activities during
the corresponding period in the prior year. The primary reason for this
difference was the repayment of loans to our sole officer and director in the
first quarter of 2006.

CRITICAL ACCOUNTING POLICIES

Use of Estimates
----------------

     The preparation of our consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates, judgments and assumptions that affect the
reported amounts of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and the
reported amount of revenues and expenses during the reporting period. We base
our estimates on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions.

                                       34
<PAGE>

Income Taxes
------------

     Effective January 1, 2007, we adopted Financial Accounting Standards Board
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" ("FIN 48") -
an interpretation of FASB Statement No. 109, Accounting for Income Taxes. The
Interpretation addresses the determination of whether tax benefits claimed or
expected to be claimed on a tax return should be recorded in the financial
statements. Under FIN 48, we may recognize the tax benefit from an uncertain tax
position only if it is more likely than not that the tax position will be
sustained on examination by the taxing authorities, based on the technical
merits of the position. The tax benefits recognized in the financial statements
from such a position should be measured based on the largest benefit that has a
greater than fifty percent likelihood of being realized upon ultimate
settlement. FIN 48 also provides guidance on de-recognition, classification,
interest and penalties on income taxes, accounting in interim periods and
requires increased disclosures. At the date of adoption, and as of March 31,
2007, we did not have a liability for unrecognized tax benefits.

Derivative Liabilities
----------------------

     Effective in the first quarter of 2007, we adopted FASB Staff Position No.
EITF 00-19-2 "Accounting for Registration Payment Arrangements" issued on
December 21, 2006 ("FSP 00-19-2"). FSP 00-19-2 specifies that the contingent
obligation to make future payments or otherwise transfer consideration under a
registration payment arrangement, whether issued as a separate agreement or
included as a provision of a financial instrument or other agreement, should be
separately recognized and measured in accordance with FASB Statement No. 5,
"Accounting for Contingencies". FSP 00-19-2 further clarifies that a financial
instrument, such as convertible preferred stock, subject to a registration
payment arrangement should be accounted for in accordance with other applicable
generally accepted accounting principles without regard to the contingent
obligation to transfer consideration pursuant to the registration payment
arrangement. For registration payment arrangements and financial instruments
subject to those arrangements and financial instruments subject to those
arrangements that were entered into prior to the issuance of EITF 00-19-2, this
guidance is effective for financial statements issued for fiscal years beginning
after December 15, 2006 and interim periods within those fiscal years.

ADOPTION OF NEW ACCOUNTING POLICIES

     See Note 2 to our condensed unaudited consolidated financial statements in
Part 1, Item 1 to this Quarterly Report on Form 10-QSB for adoption of new
accounting policies.

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

         Our contractual obligations, as of March 31, 2007, were as follows:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
                                           Payments Due By Period
------------------------------------------------------------------------------------------------------------
                                                  Less than                                      More than
Contractual obligations              Total          1 year        1-3 years       3-5 years       5 years
------------------------------------------------------------------------------------------------------------
<S>                              <C>             <C>            <C>             <C>             <C>
   Mortgage Notes Payable        $ 8,097,089     $    86,082    $   248,082     $   277,548     $ 7,485,377
------------------------------------------------------------------------------------------------------------
    Promissory Notes             $ 2,578,581              --             --     $ 2,578,581              --
     Payable - Related Party
------------------------------------------------------------------------------------------------------------
Total                            $10,675,670     $    86,082    $   248,082     $ 2,856,129     $ 7,485,377
------------------------------------------------------------------------------------------------------------
</TABLE>

                                       35
<PAGE>

RECENT ACCOUNTING PRONOUNCEMENTS AND INTERPRETATIONS

     In February 2007, the FASB Issued SFAS No. 159, "Establishing the Fair
Value Option for Financial Assets and Liabilities ("SFAS No. 159"). SFAS No. 159
was to permit all entities to choose to elect, at specified election dates, to
measure eligible financial instruments at fair value. An entity shall report
unrealized gains and losses on items for which the fair value option has been
elected in earnings at each subsequent reporting date, and recognize upfront
costs and fees related to those items in earnings as incurred and not deferred.
SFAS No. 159 applies to fiscal years beginning after November 15, 2007, with
early adoption permitted for an entity that has also elected to apply the
provisions of SFAS No. 157, "Fair Value Measurements." An entity is prohibited
from retrospectively applying SFAS No. 159, unless it chooses early adoption.
SFAS No. 159 also applies to eligible items existing at November 15, 2007 (or
early adoption date). We are evaluating the impact the adoption of SFAS No. 159
will have on our consolidated financial statements.

     FASB Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value
Measurements, issued in September 2006, establishes a formal framework for
measuring fair value under GAAP. It defines and codifies the many definitions of
fair value included among various other authoritative literature, clarifies and,
in some instances, expands on the guidance for implementing fair value
measurements, and increases the level of disclosure required for fair value
measurements. Although SFAS No. 157 applies to and amends the provisions of
existing FASB and AICPA pronouncements, it does not, of itself, require any new
fair value measurements, nor does it establish valuation standards. SFAS No. 157
applies to all other accounting pronouncements requiring or permitting fair
value measurements, except for; SFAS No. 123 (R), share-based payment and
related pronouncements, the practicability exceptions to fair value
determinations allowed by various other authoritative pronouncements, and AICPA
Statements of Position 97-2 and 98-9 that deal with software revenue
recognition. This statement is effective for financial statements issued for
fiscal years beginning after November 15, 2007, and interim periods within those
fiscal years. We are evaluating the impact of SFAS 157 on our consolidated
financial statements.

OFF BALANCE SHEET ARRANGEMENTS

     We have no off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that are material to investors.


                                       36
<PAGE>

ITEM 3.  CONTROLS AND PROCEDURES

     The term "disclosure controls and procedures" is defined in Rules 13a-15(e)
and 15d-15(e) of the Securities Exchange Act of 1934, or the Exchange Act. This
term refers to the controls and procedures of a company that are designed to
ensure that information required to be disclosed by a company in the reports
that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified by the Securities and
Exchange Commission. The Sarbanes-Oxley Act also requires documentation of
internal control procedures, remediation as needed, and periodic testing of the
controls. These requirements are expected to apply to smaller public companies
such as ours, beginning in 2007.

     David Mladen, our principal executive officer and principal financial
officer, evaluated the effectiveness of our disclosure controls and procedures
as of the end of the period covered by this report. Based upon that evaluation,
Mr. Mladen discovered a lack of effectiveness in our disclosure controls and
procedures over financial reporting.

     Previously, our management established a remediation plan to address the
material weaknesses identified in our disclosure controls and procedures. These
remediation efforts were designed to address the material weaknesses identified
by management and to improve and strengthen our overall control environment. Our
remediation plan is to:

          o    Establish procedures to improve its review of related party
transactions and processing of non-accounting documentation;

          o    Keep its books and records and bank accounts separate from
related parties;

          o    Hire certain staff members including a Chief Financial Officer,
or person performing similar functions, to help develop and implement controls
to ensure timely and accurate completion of accounting and reporting tasks;

          o    Document and improve controls over routine and systematic
transactions;

          o    Aggressively seek candidates for independent directorships; and

          o    Develop controls related to the initiation and processing of
non-routine and non-systematic transactions including those resulting from the
adoption and implementation of new accounting pronouncements.

     In an attempt to remediate the material weaknesses management identified in
our disclosure controls and procedures, to date we have:

          o    terminated our relationship with White Knight Management, LLC, a
related party which, prior to July 1, 2006, managed our Properties;

          o    begun to put processes in place to keep our books and records and
bank accounts separate from related parties;

          o    spoken with several candidates for our Chief Financial Officer
position;

          o    increased the number of hours our Bookkeeper works for our
Company;

                                       37
<PAGE>

          o    spoken with several candidates regarding serving as independent
directors on our board of directors; and

          o    worked with our outside corporate counsel and our outside
accountants in an attempt to improve documentation of transactions.

     Our management does not expect that disclosure controls or internal
controls over financial reporting will prevent all errors, even as the
aforementioned remediation measures are implemented and further improved to
address all deficiencies. The design of any system of controls is based in part
upon certain assumptions about the likelihood of future events, and there can be
no assurance that any design will succeed in achieving its stated goals under
all potential future conditions.

     Except as previously indicated, there were no changes to our internal
control over financial reporting during our last fiscal quarter that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.


                                       38
<PAGE>

                           PART II - OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS.

     During the three-month period ended March 31, 2007, and subsequent period
through the date hereof, we were not a party to any pending legal proceedings.
To the knowledge of management, no federal, state or local governmental agency
is presently contemplating any proceeding against us. No director, executive
officer or affiliate of ours, or owner of record of more than 5% of our common
stock is a party adverse to us, or has a material interest adverse to us in any
legal proceeding.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

SALES OF UNREGISTERED SECURITIES

     In the three-month period ended March 31, 2007, and subsequent period
through the date hereof, we issued the following unregistered securities:

     On March 6, 2007, David Mladen, our majority shareholder and sole officer
and director, converted 1,000 shares of the Series A Preferred Stock he
purchased from us for approximately $909 on September 29, 2005, into 143,000
shares of our Common Stock, for no additional consideration. We believe that
this transaction is exempt from registration under the Securities Act of 1933,
as amended, pursuant to Section 4(2), or Regulation D promulgated thereunder, as
a transaction by an issuer not involving a public offering.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

     During the three-month period ended March 31, 2007, and subsequent period
through the date hereof, we did not default upon any senior securities.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     No matters were submitted to a vote of our security holders during the
three-month period ended March 31, 2007, or subsequent period through the date
hereof, except that:

ITEM 5. OTHER INFORMATION.

WITHDRAWAL OF REGISTRATION STATEMENT

     On November 29, 2006, we filed a Registration Statement on Form SB-2 (the
"Resale Registration Statement") with the Securities and Exchange Commission
(the "Commission") to register (i) 5,000,000 shares of common stock issuable to
Dutchess Private Equities Fund, LP ("Dutchess") in connection with an Investment
Agreement between our Company and Dutchess, and (ii) 1,573,000 shares of common
stock issuable upon conversion of shares of our Series A convertible preferred
stock held by David Mladen, our majority shareholder and sole officer and
director. On February 2, 2007, we filed a request to withdraw the Registration
Statement with the Commission.

                                       39
<PAGE>

CONVERSION OF SERIES A PREFERRED STOCK

     On March 6, 2007, David Mladen, our sole officer and director, and a
majority stockholder of ours, converted 1,000 shares of the Series A Preferred
Stock he originally purchased from us on September 29, 2005, into 143,000 shares
of our Common Stock, for no additional consideration.

WAIVER OF LIQUIDATED DAMAGES

     In connection with David Mladen's purchase of 11,000 shares of our Series A
Preferred Stock (the "Series A Preferred Stock") as of September 29, 2005, we
entered into a Registration Rights Agreement with Mr. Mladen (the "Registration
Rights Agreement"), pursuant to which we agreed to prepare and, on or prior to
the sixtieth (60th) day following the date of such purchase, file with the
Securities and Exchange Commission ("SEC") the Resale Registration Statement, to
register all of the shares of our Common Stock underlying the Series A Preferred
Stock (the "Conversion Shares"). Further, pursuant to the Registration Rights
Agreement, we are required to use best efforts to (a) have the SEC declare the
Resale Registration Statement effective within ninety (90) days after filing the
Resale Registration Statement with the SEC (or one hundred and twenty (120) days
in the event any comments on the Registration Statement are received from the
SEC), and (b) maintain the effectiveness of the Resale Registration Statement
until all such common shares have been sold or may be sold without volume
restrictions pursuant to Rule 144(k) of the Securities Act of 1933, as amended.

     If we (i) fail to file the Resale Registration Statement, or (ii) fail to
have the Registration Statement declared effective within the required period,
or (iii) if effectiveness is not maintained, the Registration Rights Agreement
requires us to make payments to Mr. Mladen in an aggregate amount equal to two
percent (2%) per month of $9,000,000 (assuming the sale of $9,000,000 of the
aggregate fair market value of the Conversion Shares) ("Outstanding Principal
Amount"), multiplied by the number of months (prorated for partial months) until
the failure is cured.

     As of June 30, 2006, the Resale Registration Statement had not been filed.
At that time, Mr. Mladen agreed to waive $1,174,000 of liquidated damages due to
him, and such amount was accounted for as a contribution of capital as of that
date.

     On October 24, 2006, the Resale Registration Statement had still not been
filed. At that time, Mr. Mladen agreed to waive an additional $720,000 in
liquidated damages, for the period between July 1, 2006 and October 31, 2006, in
consideration for 43,500 shares of our Series C Preferred Stock.

     On March 21, 2007, Mr. Mladen agreed to waive any additional liquidated
damages which are due to him for the period ending on March 31, 2007.

     Prior to January 1, 2007, we adopted View C of EITF 05-4, "Effect of
Liquidated Damages Clause on a Freestanding Financial Instrument Subject to EITF
00-19" ("EITF 05-4"). For the year ended December 31, 2006, we recorded a loss
on derivative instrument of $917,000. As of December 31, 2006, the liability
amounted to $1,241,000 and was included on the balance sheet as a derivative
liability. Subsequently, we elected to record the effects of applying FSP
00-19-2 using the cumulative-effect transition method, which resulted in
eliminating our derivative liability at the beginning of the first quarter of
fiscal 2007, assigned with the offsetting cumulative-effect entry to opening
accumulated deficit. In addition, this created a registration rights liability
estimated at $1,620,000 for the period between April 1, 2007 and December 31,
2007.

                                       40
<PAGE>

ITEM 6. EXHIBITS.

Exhibit No.                    Description of Exhibit
-----------                    ----------------------

     2.1     Agreement and Plan of Merger between Gift Liquidators, Inc. and
             Excellency Investment Realty Trust, Inc., dated July 19, 2006
             (filed as Exhibit 2.1 to our Quarterly Report on Form 10-QSB for
             the quarter ended June 30, 2006, filed on August 21, 2006, and
             incorporated herein by reference)**

     3.1     Articles of Amendment and Restatement of Articles of
             Incorporation of Excellency Investment Realty Trust, Inc. (filed
             as Exhibit 3.1 to our Quarterly Report on Form 10 QSB for the
             quarter ended June 30, 2006, filed on August 21, 2006, and
             incorporated herein by reference)**

     3.2     Bylaws of Excellency Investment Realty Trust, Inc. (filed as
             Exhibit 3.2 to our Quarterly Report on Form 10-QSB for the
             quarter ended June 30, 2006, filed on August 21, 2006, and
             incorporated herein by reference)**

     3.3     Certificate of Ownership and Merger of Gift Liquidators, Inc.
             with and into Excellency Investment Realty Trust, Inc., filed
             with the Secretary of State of the State of Oklahoma on
             September 18, 2006 (filed as Exhibit 3.3 to our Current Report
             on Form 8-K, filed September 25, 2006 and incorporated herein by
             reference)**

     3.4     Articles of Merger of Gift Liquidators, Inc. with and into
             Excellency Investment Realty Trust, Inc., filed with the
             Maryland State Department of Assessments and Taxation on
             September 20, 2006 (filed as Exhibit 3.4 to our Current Report
             on Form 8-K, filed September 25, 2006 and incorporated herein by
             reference)**

     4.1     Amended and Restated Certificate of Designation of Series A
             Preferred Stock of Gift Liquidators, Inc. (filed as Exhibit 4.1
             to our Current Report on Form 8-K, dated July 18, 2006 and
             incorporated herein by reference)**

     4.2     Certificate of Designation of Series B Preferred Stock of Gift
             Liquidators, Inc. (filed as Exhibit 4.2 to our Annual Report on
             Form 10-KSB for the fiscal year ended December 31, 2006, filed
             on June 8, 2006, and incorporated herein by reference)**

     4.3     Articles Supplementary to the Articles of Amendment and
             Restatement of Articles of Incorporation of Excellency
             Investment Realty Trust, Inc., filed October 11, 2006 (filed as
             Exhibit 4.1 to our Current Report on Form 8-K filed on October
             11, 2006, and incorporated herein by reference)**

    10.1     Preferred Stock Purchase Agreement, between Gift Liquidators,
             Inc. and David Mladen, dated September 29, 2005 (filed as
             Exhibit 10.1 to our Current Report on Form 8-K, dated September
             29, 2005 and incorporated herein by reference)**

    10.2     Registration Rights Agreement, between Gift Liquidators, Inc.
             and David Mladen, dated September 29, 2005 (filed as Exhibit
             10.2 to our Current Report on Form 8-K, dated September 29, 2005
             and incorporated herein by reference)**


                                       41
<PAGE>

Exhibit No.                    Description of Exhibit
-----------                    ----------------------

    10.3     Asset Sale Agreement, between Gift Liquidators, Inc. and Laid
             Back Enterprises Inc., dated September 29, 2005 (filed as
             Exhibit 10.3 to our Current Report on Form 8-K, dated September
             29, 2005 and incorporated herein by reference)**

    10.4     Form of Contribution Agreement (filed as Exhibit 10.1 to our
             amended Current Report on Form 8-K/A, dated November 4, 2005 and
             incorporated by reference) **

    10.5     Form of Limited Partnership Agreement (filed as Exhibit 10.2 to
             our amended Current Report on Form 8-K/A, dated November 4, 2005
             and incorporated herein by reference)**

    10.6     Investment Agreement, dated as of August 29, 2006, by and
             between Gift Liquidators, Inc. and Dutchess Private Equities
             Fund, L.P. (filed as Exhibit 10.1 to our Current Report on Form
             8-K, filed August 31, 2006 and incorporated herein by
             reference)**

    10.7     Registration Rights Agreement, dated as of August 29, 2006, by
             and between Gift Liquidators, Inc. and Dutchess Private Equities
             Fund, L.P. (filed as Exhibit 10.2 to our Current Report on Form
             8-K, filed August 31, 2006 and incorporated herein by
             reference)**

    31.1     Certification pursuant to Section 13a-14(a)*

    32.1     Certification pursuant to Section 1350*

________________________
* Filed herewith.
** Incorporated by reference as indicated.


                                       42
<PAGE>

                                   SIGNATURES



     In accordance with the requirements of the Exchange Act, the registrant
caused this Amendment No. 1 to the Quarterly Report on Form 10-QSB to be signed
on its behalf by the undersigned, thereunto duly authorized.

                                     EXCELLENCY INVESTMENT REALTY TRUST, INC.


Date:  August 20, 2007                  By: /s/ David Mladen
     -------------------                --------------------------------------
                                            David Mladen
                                            Chief Executive Officer and Director
                                            (Principal Executive, Financial and
                                            Accounting Officer and Authorized
                                            Signatory)





                                       43
<PAGE>

                                  EXHIBIT INDEX
                                  -------------

Exhibit No.                    Description of Exhibit
-----------                    ----------------------

     2.1     Agreement and Plan of Merger between Gift Liquidators, Inc. and
             Excellency Investment Realty Trust, Inc., dated July 19, 2006
             (filed as Exhibit 2.1 to our Quarterly Report on Form 10-QSB for
             the quarter ended June 30, 2006, filed on August 21, 2006, and
             incorporated herein by reference)**

     3.1     Articles of Amendment and Restatement of Articles of
             Incorporation of Excellency Investment Realty Trust, Inc. (filed
             as Exhibit 3.1 to our Quarterly Report on Form 10 QSB for the
             quarter ended June 30, 2006, filed on August 21, 2006, and
             incorporated herein by reference)**

     3.2     Bylaws of Excellency Investment Realty Trust, Inc. (filed as
             Exhibit 3.2 to our Quarterly Report on Form 10-QSB for the
             quarter ended June 30, 2006, filed on August 21, 2006, and
             incorporated herein by reference)**

     3.3     Certificate of Ownership and Merger of Gift Liquidators, Inc.
             with and into Excellency Investment Realty Trust, Inc., filed
             with the Secretary of State of the State of Oklahoma on
             September 18, 2006 (filed as Exhibit 3.3 to our Current Report
             on Form 8-K, filed September 25, 2006 and incorporated herein by
             reference)**

     3.4     Articles of Merger of Gift Liquidators, Inc. with and into
             Excellency Investment Realty Trust, Inc., filed with the
             Maryland State Department of Assessments and Taxation on
             September 20, 2006 (filed as Exhibit 3.4 to our Current Report
             on Form 8-K, filed September 25, 2006 and incorporated herein by
             reference)**

     4.1     Amended and Restated Certificate of Designation of Series A
             Preferred Stock of Gift Liquidators, Inc. (filed as Exhibit 4.1
             to our Current Report on Form 8-K, dated July 18, 2006 and
             incorporated herein by reference)**

     4.2     Certificate of Designation of Series B Preferred Stock of Gift
             Liquidators, Inc. (filed as Exhibit 4.2 to our Annual Report on
             Form 10-KSB for the fiscal year ended December 31, 2006, filed
             on June 8, 2006, and incorporated herein by reference)**

     4.3     Articles Supplementary to the Articles of Amendment and
             Restatement of Articles of Incorporation of Excellency
             Investment Realty Trust, Inc., filed October 11, 2006 (filed as
             Exhibit 4.1 to our Current Report on Form 8-K filed on October
             11, 2006, and incorporated herein by reference)**

    10.1     Preferred Stock Purchase Agreement, between Gift Liquidators,
             Inc. and David Mladen, dated September 29, 2005 (filed as
             Exhibit 10.1 to our Current Report on Form 8-K, dated September
             29, 2005 and incorporated herein by reference)**

    10.2     Registration Rights Agreement, between Gift Liquidators, Inc.
             and David Mladen, dated September 29, 2005 (filed as Exhibit
             10.2 to our Current Report on Form 8-K, dated September 29, 2005
             and incorporated herein by reference)**

                                       44
<PAGE>

Exhibit No.                    Description of Exhibit
-----------                    ----------------------

    10.3     Asset Sale Agreement, between Gift Liquidators, Inc. and Laid
             Back Enterprises Inc., dated September 29, 2005 (filed as
             Exhibit 10.3 to our Current Report on Form 8-K, dated September
             29, 2005 and incorporated herein by reference)**

    10.4     Form of Contribution Agreement (filed as Exhibit 10.1 to our
             amended Current Report on Form 8-K/A, dated November 4, 2005 and
             incorporated by reference)**

    10.5     Form of Limited Partnership Agreement (filed as Exhibit 10.2 to
             our amended Current Report on Form 8-K/A, dated November 4, 2005
             and incorporated herein by reference)**

    10.6     Investment Agreement, dated as of August 29, 2006, by and
             between Gift Liquidators, Inc. and Dutchess Private Equities
             Fund, L.P. (filed as Exhibit 10.1 to our Current Report on Form
             8-K, filed August 31, 2006 and incorporated herein by
             reference)**

    10.7     Registration Rights Agreement, dated as of August 29, 2006, by
             and between Gift Liquidators, Inc. and Dutchess Private Equities
             Fund, L.P. (filed as Exhibit 10.2 to our Current Report on Form
             8-K, filed August 31, 2006 and incorporated herein by
             reference)**

    31.1     Certification pursuant to Section 13a-14(a)*

    32.1     Certification pursuant to Section 1350*

 __________________
* Filed herewith.
** Incorporated by reference as indicated.


                                       45