UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   ----------

                                    FORM 10-Q


(Mark One)

        |X|     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended: June 30, 2008
                                                --------------------------------

                                       OR

        |_|     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934

                For the transition period from _______________ to ______________

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


                    EXCELLENCY INVESTMENT REALTY TRUST, INC.
--------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)


             Maryland                                      20-8635424
-----------------------------------          -----------------------------------
  (State or Other Jurisdiction of                      (I.R.S. Employer
   Incorporation or Organization)                     Identification No.)


     245 Park Avenue, 39th Floor
             New York, NY                                     10167
--------------------------------------------------------------------------------
(Address of Principal Executive Offices)                    (Zip Code)


                                 (212) 792-4040
--------------------------------------------------------------------------------
              (Registrant's Telephone Number, Including Area Code)



--------------------------------------------------------------------------------
         (Former Name, Former Address and Former Fiscal Year, if Changed
                               Since Last Report)


         Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
                                                                  Yes |X| No |_|

<PAGE>

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

         As of August 14, 2008, the issuer had 43,761,537 shares of Common Stock
issued and outstanding.

         Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a small reporting
company:

            Large accelerated filer |_|       Accelerated filer |_|

            Non-accelerated filer |_|         Smaller reporting company |X|


<PAGE>

<TABLE>
<CAPTION>
                                   QUARTERLY REPORT ON FORM 10-Q
                   OF EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
                                FOR THE PERIOD ENDED JUNE 30, 2008


                                         TABLE OF CONTENTS

                                                                                                PAGE
                                                                                                ----

<S>  <C>                                                                                         <C>
PART I     -  FINANCIAL INFORMATION

Item 1.       Financial Statements..........................................................      1
                  Consolidated Balance Sheets as of June 30, 2008 (Unaudited) and
                     December 31, 2007......................................................      1
                  Consolidated Statements of Operations for the Three and Six Months
                     Ended June 30, 2008 and 2007 (Unaudited)...............................      2
                  Consolidated Statements of Cash Flows for the Six Months Ended June,
                     2008 and 2007 (Unaudited)..............................................      3
                  Consolidated Statement of Changes in Stockholders' Deficit for the Six
                     Months Ended June 30, 2008 (Unaudited).................................      4
                  Notes to Consolidated Financial Statements (Unaudited)....................      5
Item 2.       Management's Discussion and Analysis of Financial Condition and Results
               of Operations................................................................     13
Item 3        Quantitative and Qualitative Disclosures About Market Risk....................     28
Item 4T.      Controls and Procedures.......................................................     28

PART II    -  OTHER INFORMATION

Item 1.       Legal Proceedings.............................................................     29
Item 1A.      Risk Factors..................................................................     29
Item 2.       Unregistered Sales of Equity Securities and Use of Proceeds...................     29
Item 3.       Defaults Upon Senior Securities...............................................     29
Item 4.       Submission of Matters to a Vote of Security Holders...........................     29
Item 5.       Other Information.............................................................     29
Item 6.       Exhibits......................................................................     30

Signatures..................................................................................     31
</TABLE>


<PAGE>


                         PART I - FINANCIAL INFORMATION

ITEM 1.     FINANCIAL STATEMENTS.

<TABLE>
<CAPTION>
                                  EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
                                          (FORMERLY KNOWN AS GIFT LIQUIDATORS, INC.)
                                                 CONSOLIDATED BALANCE SHEETS
                                                     As of June 30, 2008
                                                    and December 31, 2007

                                  ASSETS
                                                                                       June 30, 2008     December 31, 2007

                                                                                        (Unaudited)

<S>                                                                                     <C>                 <C>
Real Estate
  Land                                                                                  $    811,402        $    811,402
  Building and improvements                                                                5,227,119           5,227,119
                                                                                        ------------        ------------
                                                                                           6,038,521           6,038,521
Less: accumulated depreciation                                                             1,387,657           1,318,167
                                                                                        ------------        ------------
                                                                                           4,650,864           4,720,354


Cash and cash equivalents                                                                     55,202             241,551
Accounts receivable-tenants, net of allowance of $147,639 and
  $81,733 as of June 30, 2008 and December 31, 2007, respectively                             33,243              39,317
Deferred financing costs, net of accumulated amortization of
  $46,514 and $28,624 as of June 30, 2008 and December 31, 2007,
  respectively                                                                               141,741             148,897
Escrow account                                                                                97,760              84,109
Other assets                                                                                       -              11,136
                                                                                        ------------        ------------
     Total Assets                                                                       $  4,978,810        $  5,245,364
                                                                                        ============        ============

                             LIABILITIES AND STOCKHOLDERS' DEFICIT


Mortgage notes payable                                                                 $   7,951,572        $  8,011,007
Promissory notes payable-related parties                                                   2,310,546           2,292,871
Security deposits                                                                            117,067             135,151
Accounts payable and accrued expenses                                                        266,943             356,249
Contingent Liability                                                                       4,071,921           4,071,921
                                                                                        ------------        ------------
     Total Liabilities                                                                    14,718,049          14,867,199
                                                                                        ------------        ------------


STOCKHOLDERS' DEFICIT:

Preferred stock, $0.001 par value, 1,000,000 shares authorized; 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                 100
Series B Preferred Stock, par value $0.01, 20,000 shares authorized, 0 shares
  issued and outstanding                                                                           -                   -
Common stock, par value $0.01, 200,000,000 shares authorized, 43,761,537
 issued and outstanding as of June 30, 2008 and December 31, 2007,
 respectively                                                                                437,615             437,615
Treasury stock, at cost- 34,168 shares                                                       (34,168)            (34,168)
Additional paid-in capital                                                                 2,069,687           2,063,821
Accumulated  deficit                                                                     (12,212,473)        (12,089,203)
                                                                                        ------------        ------------
     Total Stockholders' Deficit                                                          (9,739,239)         (9,621,835)
                                                                                        ------------        ------------
     Total Liabilities And Stockholders' Deficit                                        $  4,978,810        $  5,245,364
                                                                                        ============        ============


                                 See accompanying notes to consolidated financial statements

</TABLE>

                                        1
<PAGE>

<TABLE>
<CAPTION>
                                        EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
                                               (FORMERLY KNOWN AS GIFT LIQUIDATORS, INC.)
                                                  CONSOLIDATED STATEMENTS OF OPERATIONS
                                        FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2008 AND 2007
                                                               (Unaudited)

                                                       Three Months         Three Months         Six Months         Six Months
                                                      Ended June 30,       Ended June 30,      Ended June 30,     Ended June 30,
                                                           2008                 2007               2008               2007
                                                           ----                 ----               ----               ----
                                                       (Unaudited)          (Unaudited)         (Unaudited)        (Unaudited)
<S>                                                    <C>                  <C>                 <C>                <C>
Rental revenue                                         $    403,718         $    392,795        $    923,511       $    785,600

Operating expenses:
  Property operating costs                                  213,207              256,034             495,497            518,867
  General and administrative                                 66,198              265,970             172,230            437,968
  Depreciation and amortization                              38,323               38,323              76,646             76,646
                                                       ------------         ------------        ------------       ------------
     Total operating expenses                               317,728              560,327             744,373          1,033,481

Operating income (loss)                                      85,990             (167,532)            179,138           (247,881)

Non-operating expenses and income:
  Interest expense                                         (150,210)            (158,859)           (302,852)          (318,116)
  Other income                                                  137               12,532                 444             22,700
  Realized loss froms sales of trading securities                 -                    -                   -           (168,748)
  (Loss) on derivative instrument                                 -             (180,000)                  -           (180,000)
                                                       ------------         ------------        ------------       ------------
     Total non-operating expenses                          (150,073)            (326,327)           (302,408)          (644,164)
                                                       ------------         ------------        ------------       ------------

  Net (loss)                                                (64,083)            (493,859)           (123,270)          (892,045)
                                                       ============         ============        ============       ============

Loss per share -- basic and diluted                    $      (0.00)        $      (0.01)       $      (0.00)      $      (0.02)
                                                       ============         ============        ============       ============

Weighted average common shares outstanding basic
and diluted                                              43,761,537           55,959,339          43,761,537         49,842,780
                                                       ============         ============        ============       ============


                                 See accompanying notes to consolidated financial statements

</TABLE>

                                        2
<PAGE>

<TABLE>
<CAPTION>
                                  EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
                                          (FORMERLY KNOWN AS GIFT LIQUIDATORS, INC.)
                                            CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                  FOR THE SIX MONTHS PERIODS
                                                 ENDED JUNE 30, 2008 AND 2007
                                                         (Unaudited)
                                                                                             Six Months          Six Months
                                                                                               Ended                Ended
                                                                                           June 30, 2008        June 30, 2007
                                                                                            (Unaudited)          (Unaudited)
                                                                                            -----------          -----------
<S>                                                                                         <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES

Net loss                                                                                    $  (123,270)         $  (892,045)

Adjustments to reconcile net loss to net cash used in operating activities:
  Loss on derivative                                                                                  -              180,000
  Compensation Expense                                                                            3,000                    -
  Loss on sale of trading securities                                                                                 168,748
  Depreciation & Amortization                                                                    76,646               76,646

Changes in Operating Assets and Liabilities:
  Accounts receivable-tenants                                                                     6,074              (22,004)
  Other assets                                                                                   (2,514)              46,708
  Accounts payable and accrued expenses                                                        (107,390)             227,594
  Notes payable due to accrued interest                                                          78,085                    -

                                                                                            -----------          -----------
     NET CASH (USED IN) OPERATING ACTIVITIES                                                    (69,369)            (214,353)
                                                                                            -----------          -----------


CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of trading securities                                                                        -             (117,134)

                                                                                            -----------          -----------
     NET CASH USED IN INVESTING ACTIVITIES                                                            -             (117,134)
                                                                                            -----------          -----------

CASH FLOWS FROM FINANCING ACTIVITIES

Contributions from Shareholders                                                                   2,866                    -
Borrowings on related parties note                                                              155,798                    -
Principal payments on related parties notes                                                    (216,209)             (62,339)
Repayment of mortgage notes payable                                                             (59,435)             (56,192)

                                                                                            -----------          -----------
     NET CASH USED IN FINANCING ACTIVITIES                                                     (116,980)            (118,531)
                                                                                            -----------          -----------

DECREASE IN CASH                                                                               (186,349)            (450,018)
CASH- BEGINNING OF YEAR                                                                         241,551            1,070,493

                                                                                            -----------          -----------
CASH-END OF YEAR                                                                            $    55,202          $   620,475
                                                                                            ===========          ===========

Cash paid during the period for interest                                                    $   291,660          $   291,926
                                                                                            ===========          ===========
Cash paid during the period for taxes                                                                 -                    -


NON-CASH TRANSACTIONS
  Conversion of preferred stock into common stock                                                     -                1,460


                                 See accompanying notes to consolidated financial statements
</TABLE>

                                        3
<PAGE>

<TABLE>
<CAPTION>
                                     EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
                                            (FORMERLY KNOWN AS GIFT LIQUIDATORS, INC.)
                                    CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
                                       FOR THE PERIODS OF DECEMBER 31, 2006 TO JUNE 30, 2008
                                                              (Unaudited)


                        Preferred Stock -               Common Stock         Additional   Accumulated     Treasury         Total
                           Series A                                           Paid-in       Deficit         Stock
                                                                              Capital                    Shares at
                                                                                                            Cost
                       Shares        Amount         Shares       Amount
<S>                       <C>     <C>             <C>         <C>           <C>           <C>           <C>            <C>
Balance as of
December 31, 2006         11,000  $        110    43,618,537  $    436,185  $  1,835,359  $ (8,130,173)      (34,168)    (5,892,687)

FIN 46 Consolidation           -             -             -             -       229,882             -             -        229,882
Conversion of
preferred stock           (1,000)          (10)      143,000         1,430        (1,420)            -             -              -
Issuance of common
stock                          -             -    30,000,000       300,000             -             -      (300,000)             -
Rescission of
common stock issued            -             -   (30,000,000)     (300,000)            -             -       300,000              -
Net loss                       -             -             -             -             -    (3,959,030)            -     (3,959,030)
                    ------------  ------------  ------------  ------------  ------------  ------------  ------------   ------------
Balance as of
December 31, 2007         10,000  $        100    43,761,537  $    437,615  $  2,063,821  $(12,089,203) $   (34,168)   $ (9,621,835)

Compensation
expense                        -             -             -             -         3,000             -             -          3,000
Capital
distributions                  -             -             -             -         2,866             -             -          2,866
Net loss                       -             -             -             -             -      (123,270)            -       (123,270)
                    ------------  ------------  ------------  ------------  ------------  ------------  ------------   ------------
Balance as of
June 30, 2008             10,000  $        100    43,761,537  $    437,615  $  2,069,687  $(12,212,473) $    (34,168)  $ (9,739,239)
                    ============  ============  ============  ============  ============  ============  ============   ============



                                 See accompanying notes to consolidated financial statements
</TABLE>

                                        4
<PAGE>

            EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
                   (FORMERLY KNOWN AS GIFT LIQUIDATORS, INC.)
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2008 AND 2007


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

Unaudited Consolidated Financial Statements
-------------------------------------------

The June, 2008 consolidated financial statements presented herein are unaudited,
and in the opinion of management, include all adjustments (consisting only of
normal recurring accruals) necessary for a fair presentation of financial
position, results of operations and cash flows. Such financial statements do not
include all of the information and footnote disclosures normally included in
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America. This quarterly report on Form 10-Q
should be read in conjunction with Annual Report on Form 10-KSB for Excellency
Investment Realty Trust, Inc. ("Excellency" and "the Company") for the year
ended December 31, 2007. The December 31, 2007 consolidated balance sheet is
derived from the audited balance sheet included therein.

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.

                                        5
<PAGE>

            EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
                   (FORMERLY KNOWN AS GIFT LIQUIDATORS, INC.)
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2008 AND 2007


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.

FIN 46R, which amended FIN 46, "Consolidation of Variable Interest Entities," an
interpretation of Accounting Research Bulletin No. 51, "Consolidated Financial
Statements," requires an existing unconsolidated variable interest entity to be
consolidated by its primary beneficiary if the entity does not effectively
disperse risk among all parties involved or if other parties do not have
significant capital to finance activities without subordinated financial support
from the primary beneficiary. White Knight Management, LLC is now considered a
VIE and the Company its primary beneficiary both as of June 30, 2008 and
December 31, 2007. The Company has determined that restatement and evaluation of
the consolidation of White Knight Management was not necessary as of June 30,
2007 due to immateriality.

NOTE 2 - BASIS OF PRESENTATION AND CHANGES IN OR NEW ACCOUNTING POLICIES

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

The accompanying 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
June 30, 2008. All significant inter-company transactions and accounts have been
eliminated in the consolidated financial statements.

                                        6
<PAGE>

            EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
                   (FORMERLY KNOWN AS GIFT LIQUIDATORS, INC.)
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2008 AND 2007


NOTE 2 - BASIS OF PRESENTATION AND CHANGES IN OR NEW ACCOUNTING POLICIES
(Continued)

The accompanying consolidated financial statements include accounts of White
Knight Management, LLC. in which the Company has a controlling financial
interest with the exception of comparative June 30, 2007 information as
management has determined the effect to be immaterial. The usual condition for a
controlling financial interest is ownership of a majority of the voting
interests of an entity. However, a controlling financial interest may also exist
in entities, such a special purpose entity ("SPE"), through arrangements that do
not involve voting interest. The Company has determined that White Knight
Management, LLC is a VIE and that the Company is the primary beneficiary as of
June 30, 2008 and June 30, 2007.

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

The Company has suffered recurring losses from operations. During the six months
ended June 30, 2008, the Company had a net loss of ($123,270), net cash used in
operations of $69,370 and has a net accumulated deficit of $12,212,473 as of
June 30, 2008, all of which raise substantial doubt about the Company's ability
to continue as a going concern. Management does plan to raise capital through
any combination of debt and equity financing. 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 consolidated
financial statements have been prepared assuming that the Company will continue
as a going concern. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

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. As of June 30, 2008, and December 31, 2007,
the Company has recorded an allowance for doubtful accounts of $147,639 and
$81,733, respectively.

Contingent Liabilities
----------------------

The Company has previously accounted for registration rights agreements as a
separate freestanding instrument and accounted for liquidated damages provision
as a derivative liability in accordance with SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities," Emerging Issue Task Force
("EITF") 00-19, "Accounting for Derivative Financial Instruments Indexed to and
Potentially Settled in a Company's Own Stock," and EITF 05-04, "The Effect of a
Liquidating Damages Clause in a Free Standing Financial Instrument Subject to
EITF 00-19." Accordingly the liability was recorded at estimated fair value
based on an estimate of the probability and costs of cash penalties being
incurred and is revalued at each balance sheet date with changes in value
recorded as other non-operating income or expenses.

As of January 1, 2007, the Company adopted EITF 00-19-2 which called for
registration rights agreement penalties to be assessed pursuant to FASB
Statement Number 5. After determining loss was probable, the Company, with the
assistance of a valuation expert, assessed the probability of an effective
registration statement and determined that based upon a probability analysis the
contingent liability was $4,071,921 as of December 31, 2007. The Company had not
anticipated an effective registration by June 30, 2008, and therefore the amount
is unchanged at June 30, 2008.

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

Net loss per common share is based on the weighted average number of shares of
common stock outstanding during the applicable period. Basic loss per share is
computed by dividing loss available to common stockholders by 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 would have diluted
earnings per share that had a basic earnings per share of $0.00.

For the six month period ended June 30, 2008 and 2007, common stock equivalents
of 1,573,000 and 1,573,000, respectively, were not included in the calculation
of diluted loss per share as their effect would further dilute earnings per
share that had a basic earnings per share of $0.00.

                                        7
<PAGE>

            EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
                   (FORMERLY KNOWN AS GIFT LIQUIDATORS, INC.)
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2008 AND 2007


NOTE 2 - BASIS OF PRESENTATION AND CHANGES IN OR NEW ACCOUNTING POLICIES
(continued)

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

In September 2006, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard ("SFAS") No. 157, "Fair Value
Measurement," which provides enhanced guidance for using fair value to measure
assets and liabilities. SFAS No. 157 provides a common definition of fair value
and establishes a framework to make the measurement of fair value in generally
accepted accounting principles more consistent and comparable. SFAS No. 157 also
requires expanded disclosures to provide information about the extent to which
fair value is used to measure assets and liabilities, the methods and
assumptions used to measure fair value, and the effect of fair value measure on
earnings. SFAS No. 157 is effective for financial statements issued in fiscal
years beginning after November 15, 2007, and to interim periods within those
fiscal years. The Company is currently in the process of evaluating the effect,
if any, the adoption of SFAS No. 157 will have on its consolidated results of
operations, financial position, or cash flows.

In December 2006, the FASB issue Staff Position ("FSP")EITF-00-19-2, "Accounting
for Registration Payment Arrangement." This FSP 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." The guidance was effective for fiscal years
beginning December 15, 2006. We have adopted this pronouncement and reflected
the change in our previously classified derivative accordingly.

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities-including an amendment of FASB
Statement No. 115." FAS 159 became effective for the Company on January 1, 2008.
This standard permits companies to choose to measure many financial instruments
and certain other items at fair value and report unrealized gains and losses in
earnings. Such accounting is optional and is generally to be applied instrument
by instrument. The Company does not anticipate that election, if any, of this
fair-value option will have a material effect on the consolidated results of
operations, financial position or cash flows.

In December 2007, the FASB issued SFAS No. 141R, "Business Combinations, and
SFAS No.160, "Non-Controlling Interest in Consolidated Financial Statements."
SFAS No.141R requires an acquirer to measure the identifiable assets acquired,
the liabilities assumed, and any non-controlling interest in the acquire at
their fair values on the acquisition date, with goodwill being the excess value
over the net identifiable assets acquired. SFAS No. 160 clarifies that a
non-controlling interest in a subsidiary should be reported as equity in the
consolidated financial statements. The calculation of earnings per share will
continue to be based on income amounts attributable to the parent. SFAS No.141R
and SFAS No.160 are effective for financial statements issued for fiscal years
beginning after December 15, 2008. Early adoption is prohibited. We have not yet
determined the effect on our consolidated financial statements, if any, upon
adoption of SFAS No.141R or SFAS No.160. The implementation of the above
pronouncements is not expected to have a material effect on the Company's
consolidated financial statements or disclosures.

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 consolidated balance
sheet is unclassified.

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

The preparation of the Company's consolidated financial statements in conformity
with generally accepted accounting principles in the United States of America
requires management to make estimates 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. Management
makes these estimates using the best information available at the time the
estimates are made; however actual results could differ materially from those
estimates.

                                        8
<PAGE>

            EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
                   (FORMERLY KNOWN AS GIFT LIQUIDATORS, INC.)
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2008 AND 2007


NOTE 3 - NOTES PAYABLE

Promissory Notes Payable - Related Parties
------------------------------------------

On November 4, 2005 (the "Loan Date"), the Pre-Acquisition Eternal Stockholders
of Eternal Enterprise, Inc., which were comprised of David Mladen, the Company's
majority shareholder and the then 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.

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 June 30, 2008, and December 31,2007, the LP Notes payable were $2,310,546
and 2,292,871, respectively.

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 Note 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.

The Mortgage Notes are collateralized by each respective Property. David Mladen,
the Company's majority stockholder and an 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 $7,156 and
$7,156 for the six months ended June 30, 2008 and 2007, respectively.

The following sets forth the amounts outstanding on each of the Notes as of June
30, 2008, and the initial required monthly principal and interest payments:

                                                              Initial Monthly
                                               Mortgage        Principal and
   Location of Property                       Note Amount     Interest Payment
  ---------------------------------------     -----------     ----------------
  270 Laurel Street, Hartford, CT             $ 1,933,748       $    11,513
  117-145 S. Marshal Street, Hartford, CT       1,384,564             8,243
  154-160A Collins Street, Hartford, CT         1,260,804             7,506
  243 &255 Laurel Street, Hartford, CT          1,090,634             6,496
  21 Evergreen Avenue, Hartford, CT               680,679             4,052
  360 Laurel Street, Hartford, CT                 572,389             3,407
  252 Laurel Street, Hartford CT                  564,655             3,363
  56 Webster Street, Hartford, CT                 464,100             2,763
  ---------------------------------------     -----------       -----------
  Total                                       $ 7,951,572       $    47,343
                                              ===========       ===========

                                        9
<PAGE>

            EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
                   (FORMERLY KNOWN AS GIFT LIQUIDATORS, INC.)
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2008 AND 2007


NOTE 3 - NOTES PAYABLE (Continued)

In connection with the refinance described above, the Company defeased its
existing mortgage with Credit Suisse First Boston Mortgage Capital, LLC. The
Company incurred approximately $654,000 in costs associated with the defeasance.
Additionally, the Company wrote-off the remaining deferred financing costs
related to the mortgage totaling approximately $110,000. The remaining funds
have been used to purchase all of the limited partnership interests of our
subsidiary Limited Partnerships owned by Goran Mladen, the son of the Company's
sole officer and director and majority stockholder, and for working capital
purposes.

Principal payment maturities on the mortgage outstanding at June 30, 2008 are:


          Fiscal Year           Amount
          -----------         ----------
                 2008         $   91,053
                 2009            127,521
                 2010            134,881
                 2011            142,667
                 2012            150,903
           Thereafter          7,304,547
          -----------         ----------
                Total         $7,951,572
                              ==========

NOTE 4 - INVESTMENTS IN TRADING SECURITIES

The Company's investments are comprised of equity securities of publicly traded
companies. During the 6 months ended June 30. 2007, the Company sold its
investments for a realized loss of $168,748. As of June 30, 2008, the Company no
longer held any investments.

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 consolidated financial
statements. The Company paid $34,168 or $13.83 per 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 June
30, 2008, 2,469 shares of the Company's common stock are held in the Company's
brokerage account. The Company plans to hold and not sell the Treasury Stock.

NOTE 5 - 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) 99.8% 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. For the
six months ended June 30, 2007, the Company did not incur any management fees.
The Company did not incur any management fees in the six months ended June 30,
2008.

In 2006, White Knight retained amounts of rent in excess of expenses paid
(including management fees) on behalf of the Company totaling $171,767. The
Company has written off such amounts due from White Knight as it has determined
the amounts are not collectible. As of December 31, 2007, White Knight did not
hold any rents.

                                       10
<PAGE>

            EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
                   (FORMERLY KNOWN AS GIFT LIQUIDATORS, INC.)
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2008 AND 2007


NOTE 5 - RELATED PARTY TRANSACTIONS (Continued)

As of December 31, 2007, the Company has consolidated its financial statements
with White Knight Management, LLC. In accordance with the Financial Accounting
Standards Board ("FASB") Interpretation No. 46R, "Consolidation of Variable
Interest Entities" ("FIN 46R"), an Interpretation of Accounting Research
Bulletin No. 51, a VIE is to be consolidated by a company if that company is
subject to a majority of the risk of loss for the VIE or is entitled to receive
a majority of the VIE's residual returns. Due to immateriality, given that White
Knight is a small development stage company, the Company did not consolidate
White Knight at June 30, 2007.

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 a rent-free apartment to David Mladen, its majority
shareholder and an officer and director. As a result, the Company has recorded
compensation expense to David Mladen in the aggregate amount of $3,000, for the
six months ended June 30, 2008, which was the fair value of apartment rental.

NOTE 6 - 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.

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 December 31, 2006, $720,000 of these liquidated damages have been issued
as preferred stock and subsequently converted to common stock.

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.

                                       11
<PAGE>

            EXCELLENCY INVESTMENT REALTY TRUST, INC. AND SUBSIDIARIES
                   (FORMERLY KNOWN AS GIFT LIQUIDATORS, INC.)
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2008 AND 2007


NOTE 6 - STOCKHOLDERS' DEFICIT (Continued)

On February 2, 2007, the Company filed a request to withdraw the Registration
Statement with the Commission. Mr. Mladen had agreed to waive the liquidated
damages which were due to him through June 30, 2007, but as a result of the
withdrawal of the Registration Statement the contingent liability increased to
$4,071,921 as of December 31, 2007.

The Company had 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"). Accordingly, the Company classified as liability instruments, the fair
value of registration rights agreements when such agreements (i) require it to
file, and cause to be declared effective under the Securities Act, a
registration statement with the SEC within contractually fixed time periods, and
(ii) provide for the payment of liquidating damages in the event of its failure
to comply with such agreement.

Previously under View C of EITF 05-4, (i) registration rights with these
characteristics were accounted for as derivative financial instruments at fair
value and (ii) contracts that are (a) indexed to and potentially settled in an
issuer's own stock and (b) permit gross physical or net share settlement with no
net cash settlement alternative were classified as equity instruments.

The Company has adopted EITF 00-19-2 and as a result no longer classifies these
registration rights as a derivative instrument. Due to the probable loss, the
Company, with the help of a valuation specialist, determined the likely
settlement to be $4,071,921 at December 31, 2007. The analysis assumed an
effective registration would not be achieved by June 30, 2008, and as a result
the contingent liability remains unchanged.

NOTE 8 - CONTINGENCY

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.

In 2008 the Company has been late in two of its periodic filings with the
Securities and Exchange Commission ("SEC"). 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.

                                       12
<PAGE>

ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS.

         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 Quarterly Report on Form 10-Q, and
our Annual Report on Form 10-KSB for the year ended December 31, 2007 (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; and

               o    Our inability to derive sufficient revenues from our
                    operations, or obtain financing when needed, would have a
                    material adverse affect 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.

                                       13
<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.

         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. Further, 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").

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

         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.

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

                                       14
<PAGE>

         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.

         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, who was 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.

                                       15
<PAGE>

         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.

         We are engaged in the business of acquiring, developing, holding for
investment, operating and selling apartment properties in metropolitan areas on
the east coast of the United States. We intend to qualify as a real estate
investment trust, or REIT, under the Internal Revenue Code of 1986, as amended.

         Through our subsidiaries, we own eight residential real estate
Properties, consisting of an aggregate of 273 apartment units, and comprising a
total of approximately 221,839 square feet, all of which are leased to
residential tenants. Each of the Properties is located in the metropolitan
Hartford area of Connecticut.

         We operate in the real estate industry segment. We do not have any
foreign operations, and our business is not seasonal. See the Consolidated
Financial Statements attached hereto and incorporated by reference herein for
financial information relating to our industry segment.

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 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.

Consolidation with White Knight Management, LLC

         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

                                       16
<PAGE>

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.

         Property management Fees were $31,019 for the year ended December 31,
2006. As of December 31, 2006, White Knight had retained amounts of rent in
excess of expenses paid on our behalf totaling $171,767. We wrote off such
amounts due from White Knight, as we determined the amounts were not
collectible.

         Effective July 1, 2006, we discontinued our arrangement with White
Knight and assumed all responsibilities for the management of our Properties.
Therefore, there were no property management fees for the fiscal year ended
December 31, 2007.

         As of December 31, 2007, we have consolidated our financial statements
with White Knight. In accordance with the Financial Accounting Standards Board
("FASB") Interpretation No. 46R, "Consolidation of Variable Interest Entities"
("FIN 46R"), an interpretation of Accounting Research Bulletin No. 51, a
variable-interest entity ("VIE") is to be consolidated by a company if that
company is subject to a majority of the risk of loss for the VIE or is entitled
to receive a majority of the VIE's residual returns. Due to immateriality, White
Knight was not consolidated at June 30, 2007.

Mortgage Notes Payable to Astoria Federal Mortgage Corp.

         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.

                                       17
<PAGE>

         The following sets forth certain material terms of each of the Notes as
of June 30, 2008:

  -----------------------------------------------------------------------------
                                              Mortgage Note         Monthly
                                                 Amount            Principal
                                             (as of June 30,          and
                                                  2008)             Interest
  Location of Property                                              Payment
  -----------------------------------------------------------------------------
  154-160A Collins Street, Hartford, CT            $ 1,260,804         $  7,506
  -----------------------------------------------------------------------------
  21 Evergreen Avenue, Hartford, CT                $   680,679         $  4,052
  -----------------------------------------------------------------------------
  243 & 255 Laurel Street, Hartford, CT            $ 1,090,634         $  6,496
  -----------------------------------------------------------------------------
  252 Laurel Street, Hartford CT                   $   564,655         $  3,363
  -----------------------------------------------------------------------------
  270 Laurel Street, Hartford, CT                  $ 1,933,748         $ 11,513
  -----------------------------------------------------------------------------
  360 Laurel Street, Hartford, CT                  $   572,389         $  3,407
  -----------------------------------------------------------------------------
  117-145 S. Marshall Street, Hartford, CT         $ 1,384,564         $  8,243
  -----------------------------------------------------------------------------
  56 Webster Street, Hartford, CT                  $   464,100         $  2,763
  ------------------------------------------==================--===============
             Total:                                $ 7,951,572         $ 47,343
  ------------------------------------------==================--===============


         We used the amounts borrowed from Astoria Federal Mortgage Corp. to
repay the aggregate amount of $5,263,472 of principal and interest we owed under
previous mortgages with Credit Suisse First Boston Mortgage Capital, LLC. In
connection with such refinancing, we incurred approximately $654,083 in
pre-payment penalties in fiscal 2005. The remaining funds have been used to
purchase all of the limited partnership interests of our subsidiary Limited
Partnerships owned by Goran Mladen, the son of our majority stockholder and sole
officer and director, and for general working capital purposes.

Repayment of 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 June 30, 2008, the total amount due under the LP Notes was
$2,310,546.

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. Further, pursuant to the

                                       18
<PAGE>

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), multiplied by the number
of months (prorated for partial months) until the failure is cured.

         We were not able to file the Resale Registration Statement on or prior
to the required filing date and, as a result, began incurring liquidated damages
equal to $180,000 per month (the "Liquidated Damages").

         As of June 30, 2006, we had still failed to file the Resale
Registration Statement. At that time, Mr. Mladen agreed to waive approximately
$1,174,000 of Liquidated Damages due to him pursuant to the Registration Rights
Agreement. Such amount was accounted for in our financial statements as a
contribution of capital.

         On October 18, 2006, we issued 43,500 shares of our Series C
convertible preferred stock to Mr. Mladen, in consideration for his agreement to
waive an additional $720,000 of 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 filed a request to withdraw the Registration
Statement with the Commission. Mr. Mladen had agreed to waive the liquidated
damages which were due to him through March 31, 2007, but as a result of the
withdrawal of the Registration Statement the contingent liability increased to
$4,071,921 as of December 31, 2007.

         We had 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").
Accordingly, we classified as liability instruments the fair value of
registration rights agreements when such agreements (i) require it to file, and
cause to be declared effective under the Securities Act, a registration
statement with the SEC within contractually fixed time periods, and (ii) provide
for the payment of liquidating damages in the event of its failure to comply
with such agreements.

         Previously, under View C of EITF 05-4, (i) registration rights with
these characteristics are accounted for as derivative financial instruments at
fair value and (ii) contracts that are (a) indexed to and potentially settled in
an issuer's own stock and (b) permit gross physical or net share settlement with
no net cash settlement alternative are classified as equity instruments.

         We have adopted EITF 00-19-2 and as a result no longer classify these
registration rights as a derivative instrument. With the help of a valuation
specialist, we determined the likely settlement to be $4,071,921 as of December
31, 2007. The analysis assumed an effective registration would not be achieved
by June 30, 2008 and as a result the contingent liability remains unchanged.

                                       19
<PAGE>

Investment Agreement with Dutchess Private Equities

         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. As
of the date hereof, we have not requested any Puts under the Investment
Agreement.

         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.

         To date, 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.

                                       20
<PAGE>

Results of Operations

         As of June 30, 2008 and 2007 we owned interests in eight Properties.
Details on the Properties are as follows:

--------------------------------------------------------------------------------
                                                  Occupancy         Occupancy
                                                  Rate as of        Rate as of
Location                    Number of Units     June 30, 2008     June 30, 2007
--------------------------------------------------------------------------------
154-160A Collins Street      41 units                 96%               95%
Hartford, CT
--------------------------------------------------------------------------------
21 Evergreen Avenue          24 units                 96%               98%
Hartford, CT
--------------------------------------------------------------------------------
243 & 255 Laurel Street      34 units                 93%               97%
Hartford, CT
--------------------------------------------------------------------------------
252 Laurel Street            18 units                 98%               95%
Hartford, CT
--------------------------------------------------------------------------------
270 Laurel Street            77 units                 95%               98%
Hartford, CT
--------------------------------------------------------------------------------
360 Laurel Street            18 units                 86%               85%
Hartford, CT
--------------------------------------------------------------------------------
117-145 S. Marshall Street   42 units                 92%               96%
Hartford, CT
--------------------------------------------------------------------------------
56 Webster Street            16 units                 95%               95%
Hartford, CT
-------------------------------------------------------------------------------

Comparison Of Operations For The Three Months Ended June 30, 2008 To The Three
Months Ended June 30, 2007

         The following summarizes changes in our operations for the three-month
periods ended June 30, 2008 and 2007. We had a net loss of $64,083 for the
three-month period ended June 30, 2008, compared to a net loss of $493,859 for
the three-month period ended June 30, 2007. One of the main reasons for this
reduction was a decrease in our general and administrative expenses of $199,771.
In addition, in the three-month period ended June 30, 2007, we incurred a loss
on derivative instrument of $180,000. We did not have a similar loss in the
comparable period of fiscal 2008.

Rental Revenue

         Revenues increased $10,923, to $403,718 from $392,795, or approximately
2.8%, in the three-month period ended June 30, 2008, compared to the same period
in the prior year. This increase was primarily related to a combination of
higher occupancy rates and higher rents at our Properties.

Property Operating Costs

         Property operating costs decreased $42,828, to $213,206 from $256,034,
or approximately 16.7%, in the second quarter of 2008 as compared to the second
quarter of 2007. The increase was primarily related to decreases in our utility
costs.

                                       21
<PAGE>

General and Administrative

         General and administrative expense decreased $199,771, to $66,199 in
the three-month period ended June 30, 2008, from $265,970 in the three-month
period ended June 30, 2007, or approximately 75.1%. The amount decreased
primarily due to a decrease in professional fees we incurred in the second
quarter of fiscal 2007, as compared to the second quarter of the prior year.

Depreciation And Amortization

         Depreciation and amortization expense in the three-month period ended
June 30, 2008 remained steady at $38,323, as compared to the second quarter of
fiscal 2007.

Interest Expense

         Interest expense decreased $8,649, to $150,210 from $158,859, or
approximately 5.4%, in the three-month period ended June 30, 2008, as compared
to the second quarter of fiscal 2007. The reason for this decrease was primarily
related to decreased interest on outstanding promissory notes.

Loss on Derivative Instrument

         In the three-month period ended June 30, 2007, we had a loss on
derivative instrument of $180,000, resulting from our failure to satisfy certain
registration requirements, as further described in the "Liquidated Damages"
section above. We did not have a similar loss in the comparable period of fiscal
2008.

Comparison Of Operations For The Six Months Ended June 30, 2008 To The Six
Months Ended June 30, 2007

         The following summarizes changes in our operations for the six-month
periods ended June 30, 2008 and 2007. We had a net loss of $123,270 for the
six-month period ended June 30, 2008, compared to a net loss of $892,045 for the
six-month period ended June 30, 2007. One of the main reasons for this reduction
in our net loss was an increase in our rental revenue of $137,911. In addition,
general and administrative expenses decreased by of $265,738 compared to the
comparable period in the prior year. Further, in the six-month period ended June
30, 2007, we incurred a loss on derivative instrument of $180,000 and a realized
loss on sales of trading securities of $168,748. We did not have a similar
losses in the comparable period of fiscal 2008.

Rental Revenue

         Revenues increased $137,911, to $923,511 from $785,600, or
approximately 17.6%, in the six-month period ended June 30, 2008, compared to
the same period in the prior year. This increase was primarily related to a
combination of higher occupancy rates and higher rents at our Properties.

Property Operating Costs

         Property operating costs decreased $23,370, to $495,497 from $518,867,
or approximately 4.5%, in the first half of 2008 as compared to the first half
of 2007. The increase was primarily related to decreases in our utility costs.

                                       22
<PAGE>

General and Administrative

         General and administrative expense decreased $265,738, to $172,230 in
the six-month period ended June 30, 2008, from $437,968 in the six-month period
ended June 30, 2007, or approximately 60.7%. The amount decreased primarily due
to a decrease in professional fees we incurred in the first half of fiscal 2008,
as compared to the comparable period of the prior year.

Depreciation And Amortization

         Depreciation and amortization expense in the six-month period ended
June 30, 2008 remained steady at $76,646, as compared to the same period in
fiscal 2007.

Interest Expense

         Interest expense decreased $15,264, to $302,852 from $318,116, or
approximately 4.8%, in the six-month period ended June 30, 2008, as compared to
the six-month period ended June 30, 2007. The reason for this decrease was
primarily related to decreased interest on outstanding promissory notes.

Loss on Derivative Instrument

         In the six-month period ended June 30, 2007, we had a loss on
derivative instrument of $180,000, resulting from our failure to satisfy certain
registration requirements, as further described in the "Liquidated Damages"
section above. We did not have a similar loss in the comparable period of fiscal
2008.

Realized Loss from Sales of Trading Securities

         In the six-month period ended June 30, 2007, we had a realized loss on
sales of trading securities of $168,748. During fiscal 2007, we discontinued our
practice of trading equity securities of publicly traded companies. Therefore we
did not have a similar loss in the comparable period of fiscal 2008.

Liquidity and Capital Resources

         As of June 30, 2008, our cash and cash equivalents were $55,202. This
represents a decrease of $186,349 from the beginning of our fiscal year. All
cash and cash equivalents are held in money market or checking accounts.

         We have suffered recurring losses from operations. As of June 30, 2008,
we had a net stockholders' deficit of $9,739,239.

         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.

                                       23
<PAGE>

Uses of Capital

Net Cash From Operations
------------------------

         During the six months ended June 30, 2008, $69,370 was used in
operations, compared to $214,353 used in operations during the first half of
fiscal 2007. The main reasons for this change were a $768,772 reduction in our
net loss for the six-month period ended June 30, 2008, as compared to the same
period in the previous year, partially offset by a reduction of $334,981 in our
accounts payable and accrued expenses for the period, combined with our loss on
sale of trading securities of $168,748 in the first half of fiscal 2007, which
was not repeated in the first half of fiscal 2008.

Net Cash From Investing Activities
----------------------------------

         During the six-month period ended June 30, 2008, no cash was provided
by or used in investing activities, compared to $117,134 used in investing
activities during the first quarter of 2007. The reason for this change, was our
discontinuance of our practice of trading equity securities of publicly traded
companies prior to fiscal 2008.

Net Cash From Financing Activities
----------------------------------

         During the first half of fiscal 2008, we used $116,979 in financing
activities, compared to $118,531 used in financing activities during the
six-month period ended June 30, 2007. The amounts remained relatively steady
since we paid out approximately the same amounts on outstanding promissory
notes.

Critical Accounting Policies

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

         The consolidated financial statements found in Part I, Item 1 of this
report include the accounts of Excellency Investment Realty Trust, Inc. and its
controlled subsidiaries comprised of certain Limited Partnerships, and Eternal
Enterprise, Inc. The historical financial statements as presented, reflect the
operations of Eternal as a result of the Reverse Merger. We record 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 June 30, 2008. All significant inter-company
transactions and accounts have been eliminated in the consolidated financial
statements.

         The consolidated financial statements found in Part I, Item 1 of this
report include accounts of White Knight Management, LLC, in which we have a
controlling financial interest, with the exception of comparative June 30, 2007
information as management has determined the effect to be immaterial. The usual
condition for a controlling financial interest is ownership of a majority of the
voting interests of an entity. However, a controlling financial interest may
also exist in entities, such a special purpose entity ("SPE"), through
arrangements that do not involve voting interest. We have determined that White
Knight Management, LLC is a VIE and that we are the primary beneficiary as of
June 30, 2008 and December 31, 2007.

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

         We have suffered recurring losses from operations. During the six month
period ended June 30, 2008, we had a net loss of $123,270, net cash used in
operations of $214,353, and a net accumulated deficit of $12,212,473, all of

                                       24
<PAGE>

which raise substantial doubt about our ability to continue as a going concern.
Management plans to raise capital through any combination of debt and equity
financing. However, we have no assurance that sufficient cash flow will be
generated in the future to meet its operating requirements. As a result of the
above, the consolidated financial statements found in Part I, Item 1 of this
report have been prepared assuming that we will continue as a going concern. The
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

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. We fully reserve for moved-out balances. After a six month
period, we charge-off the moved out balances for the previous six months against
accounts receivable. As of June 30, 2008 and December 31, 2007 we had recorded
an allowance for doubtful accounts of $147,639 and $81,733, respectively.

Contingent Liabilities
----------------------

         We have previously accounted for the registration rights agreements as
a separate freestanding instrument and accounted for the liquidated damages
provision as a derivative liability in accordance with SFAS No. 133, "Accounting
for Derivative Instruments and Hedging Activities," Emerging Issue Task Force
("EITF") 00-19, "Accounting for Derivative Financial Instruments Indexed to and
Potentially Settled in a Company's Own Stock," and EITF 05-04, "The Effect of a
Liquidating Damages Clause in a Free Standing Financial Instrument Subject to
EITF 00-19." Accordingly the liability was recorded at estimated fair value
based on an estimate of the probability and costs of cash penalties being
incurred and is revalued at each balance sheet date with changes in value
recorded as other non-operating income or expenses.

         As of January 1, 2007, we adopted EITF 00-19-2 which called for
registration rights agreement penalties to be assessed pursuant to FASB
statement number 5. After determining loss was probable we, with the assistance
of a valuation expert, assessed the probability of an effective registration
statements and determined that based upon a probability analysis the contingent
liability was $4,071,921 as of December 31, 2007. We had not anticipated an
effective registration by June 30, 2008 and therefore the amount is unchanged at
June 30, 2008.

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

         Net loss per common share is based on the weighted average number of
shares of common stock outstanding during the applicable period. Basic loss per
share is computing by diving loss available to common stockholders by the
weighted average number of common shares outstanding during the period. The
common stock equivalents for our 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 six-month period ended June 30, 2008 and 2007, common stock
equivalents of 1,573,000 and 1,573,000 respectively, were not included in the
calculation of diluted loss per share as their effect would be anti-dilutive.

                                       25
<PAGE>

Contractual Obligations and Commercial Commitments

         Our contractual obligations, as of June 30, 2008, were as follows:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
                             Payments Due By Period
-------------------------------------------------------------------------------------------------------------
                                                 Less than                                        More than
Contractual obligations         Total             1 year        2-3 years        4-5 years         5 years
-------------------------------------------------------------------------------------------------------------
<S>                          <C>                <C>            <C>              <C>              <C>
  Mortgages                  $ 7,951,572        $    61,127    $   262,402      $   293,570      $ 7,334,473
-------------------------------------------------------------------------------------------------------------
  Promissory Notes           $ 2,310,546                 --    $ 2,310,546               --               --
-------------------------------------------------------------------------------------------------------------
Total                        $10,262,118        $    61,127    $ 2,572,948      $    293,570     $ 7,334,473
------------------------------------------------------------------------------------------ ------------------
</TABLE>

Recent Accounting Pronouncements and Interpretations

         In September 2006, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standard ("SFAS") No. 157, "Fair Value
Measurement," which provides enhanced guidance for using fair value to measure
assets and liabilities. SFAS No. 157 provides a common definition of fair value
and establishes a framework to make the measurement of fair value in generally
accepted accounting principles more consistent and comparable. SFAS No. 157 also
requires expanded disclosures to provide information about the extent to which
fair value is used to measure assets and liabilities, the methods and
assumptions used to measure fair value, and the effect of fair value measure on
earnings. SFAS No. 157 is effective for financial statements issued in fiscal
years beginning after November 15, 2007 and to interim periods within those
fiscal years. We are currently in the process of evaluating the effect, if any,
the adoption of SFAS No. 157 will have on our consolidated results of
operations, financial position, or cash flows.

         In December 2006, the FASB issue Staff Position ("FSP") EITF-00-19-2,
"Accounting for Registration Payment Arrangement." This FSP specifies that the
contingent obligation to make future payments or otherwise transfer
consideration under a registration payment arrangement, whether issue 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." The guidance was effective for
fiscal years beginning December 15, 2006. We have adopted this pronouncement and
reflected the change in our previously classified derivative accordingly.

         In February 2007, the FASB issued SFAS No. 159, The Fair Value Option
for Financial Assets and Financial Liabilities-including an amendment of FASB
Statement No. 115 ("FAS 159"). FAS 159 became effective for us on January 1,
2008. This standard permits companies to choose to measure many financial
instruments and certain other items at fair value and report unrealized gains
and losses in earnings. Such accounting is optional and is generally to be
applied instrument by instrument. We do not anticipate that election, if any, of
this fair-value option will have a material effect on the consolidation results
or operations or financial position.

         In December 2007, the FASB issued SFAS No. 141(R), Business
Combinations, and SFAS No.160, non-controlling Interest in Consolidation
Financial Statements. SFAS No.141(R) requires an acquirer to measure the
identifiable assets acquired, the liabilities assumed, and any non-controlling
interest in the acquire at their fair values on the acquisition date, with
goodwill being the excess value over the net identifiable assets acquired. SFAS
No. 160 clarifies that a non-controlling interest in a subsidiary should be
report as equity in the consolidated financial statement. The calculation of
earnings per share will continue to be based on income amounts attributable to
the parent. SFAS No.141(R) and SFAS No.160 are effective for financial
statements issued for fiscal years beginning after December 15, 2008. Early
adoption is prohibited. We have not yet determined the effect on our
consolidated financial statements, if any, upon adoption of SFAS No.141(R) or
SFAS No.160.

                                       26
<PAGE>

         The implementation of the above pronouncements is not expected to have
a material effect on our consolidated financial statements or disclosures.

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.

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<PAGE>

ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         We are a smaller reporting company as defined by Rule 12b-2 of the
Securities Exchange Act of 1934 and are not required to provide the information
under this item.

Item 4T.    CONTROLS AND PROCEDURES.

         We have not yet been able to implement disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities
Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that
information required to be disclosed in our Exchange Act reports are recorded,
processed, summarized, and reported within the time periods specified in rules
and forms of the Securities and Exchange Commission, and that such information
is accumulated and communicated to our management, including our Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure.

         As of October 8, 2007, we hired Daniel Norensberg as our Chief
Financial Officer. One of his main responsibilities was to help us analyze our
disclosure controls and procedures and recommend and implement improvements to
ensure the integrity of our financial information and systems and compliance
with all applicable securities laws, including, reporting requirements under the
Exchange Act. We believe that between October 8, 2007 and February 29, 2008, Mr.
Norensberg did not adequately serve as our Chief Financial Officer. In addition,
despite numerous attempts to contact Mr. Norensberg, we have not heard from him
since approximately March 1, 2008. This has caused us material hardship in
connection with, among other things, (a) our ability to prepare and timely file
our SEC periodic reports, and (b) our ability to timely evaluate and report on
the effectiveness of our disclosure controls and procedures in accordance with
Section 404 of the Sarbanes Oxley Act of 2002. We replaced Mr. Norensberg with
Carlos D. Carrillo as our Chief Financial Officer, as of March 24, 2008.
However, Mr. Carrillo has limited experience with SEC disclosure principles and
practices.

         During the process of preparing the Annual Report, our Chief Executive
Officer and Chief Financial Officer concluded that the our disclosure controls
and procedures were not effective as of either December 31, 2007, or May 29,
2008, the date our Annual Report on Form 10-KSB was filed. In addition, our
principal executive officer and principal financial officer cannot report that
that our disclosure controls and procedures are effective as of the end of the
period covered by this report.

         Our management has performed additional accounting and financial
analyses and other post-closing procedures including detailed validation work
with regard to all the balance sheet account balances, additional analysis on
income statement amounts and managerial review of all significant account
balances and disclosures in this report, to ensure that these reports, and the
financial statements forming a part thereof, are in accordance with accounting
principles generally accepted in the United States of America. Accordingly,
management believes that the financial statements included in this Quarterly
Report fairly present, in all material respects, our financial condition,
results of operations, and cash flows for the periods presented.

         In our Annual Report on Form 10-KSB, we included management's
assessment that we had a number of material or significant deficiencies in our
internal controls. We have not yet been able to implement changes to address
these deficiencies.

         There have been no changes in our internal controls that have
materially affected, or are reasonably likely to materially affect, our internal
controls over financial reporting during the period covered by this report.

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<PAGE>

                           PART II - OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS.

         During the three-month period ended June 30, 2008, 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 1A.    RISK FACTORS.

         We are a smaller reporting company as defined by Rule 12b-2 of the
Securities Exchange Act of 1934 and are not required to provide the information
under this item.

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

         In the three-month period ended June 30, 2008, and subsequent period
through the date hereof, we did not issue any unregistered securities.

ITEM 3.     DEFAULTS UPON SENIOR SECURITIES.

         During the three-month period ended June 30, 2008, 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 June 30, 2008, or subsequent period through the date
hereof, except that:

ITEM 5.     OTHER INFORMATION.

         There was no information we were required to disclose in a report on
Form 8-K during the three-month period ended June 30, 2008, or subsequent period
through the date hereof, that we did not report.

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<PAGE>

ITEM 6.     EXHIBITS.

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

  31.1      Certification of principal executive officer pursuant to Section
            13a-14(a) -- filed herewith

  31.2      Certification of principal financial and accounting officer pursuant
            to Section 13a-14(a) -- filed herewith

  32.1      Certification of principal executive officer pursuant to Section
            1350 -- filed herewith

  32.2      Certification of principal financial and accounting officer pursuant
            to Section 1350 -- filed herewith



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<PAGE>

                                   SIGNATURES



         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.



                                    EXCELLENCY INVESTMENT REALTY TRUST, INC.


Dated: August 14, 2008              By:   /s/ David Mladen
                                          --------------------------------------
                                          David Mladen
                                          President and Chief Executive Officer
                                          (principal executive officer)



Dated: August 14, 2008              By:   /s/ Carlos D. Carrillo
                                          --------------------------------------
                                          Carlos D. Carrillo
                                          Chief Financial Officer
                                          (principal financial and accounting
                                          officer)



                                       31