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

                                   FORM 10-QSB


(Mark One)

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

                                  For the quarterly period ended  March 31, 2006
                                                                  --------------


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

                           For the transition period from _________ to _________

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


                             GIFT LIQUIDATORS, INC.
--------------------------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

            Oklahoma                                    73-0731559
--------------------------------------------------------------------------------
(State of or other jurisdiction of       (I.R.S. Employer Identification Number)
  incorporation or organization)

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

                                 (860) 246-7672
--------------------------------------------------------------------------------
                           (Issuer's Telephone Number)


--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)


Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.     Yes [X]     No [_]

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


State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of June 23, 2006, the issuer had
118,537 shares of common stock issued and outstanding.

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

                                      -1-
<PAGE>

                             GIFT LIQUIDATORS, INC.

                         QUARTERLY REPORT ON FORM 10-QSB
                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2006

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

Item.1   Financial Statements...................................................................... 3

         Condensed consolidated balance sheet as of March 31, 2006 (unaudited)..................... 3

         Condensed consolidated statements of operations for the three months ended
                March 31, 2006 and 2005 (unaudited)................................................ 4

         Condensed consolidated statements of cash flows for the three months ended
                March 31, 2006 and 2005 (unaudited)................................................ 5

         Notes to the condensed consolidated financial statements.................................. 6

Item 2.  Management's Discussion and Analysis or Plan of Operation................................ 15

Item 3.  Controls and Procedures.................................................................. 23


PART II.   OTHER INFORMATION

Item 1.  Legal Proceedings........................................................................ 24

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.............................. 24

Item 3.  Defaults Upon Senior Securities.......................................................... 24

Item 4.  Submission of Matters to a Vote of Security Holders...................................... 24

Item 5.  Other Information........................................................................ 24

Item 6.  Exhibits................................................................................. 25


SIGNATURES........................................................................................ 26
</TABLE>

                                      -2-
<PAGE>

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements.

                     GIFT LIQUIDATORS, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
                                 MARCH 31, 2006

<TABLE>
<CAPTION>
                                     ASSETS
<S>                                                                                  <C>
Real Estate:
Land                                                                                 $    811,402
Buildings and improvements                                                              5,154,110
                                                                                     ------------
                                                                                        5,965,512
Less: accumulated depreciation and amortization                                         1,031,326
                                                                                     ------------
                                                                                        4,934,186

Cash and cash equivalents                                                               2,606,741
Accounts receivable-tenants, net of allowance for doubtful accounts of $10,000             38,055
Deferred financing costs, net of accumulated amortization of $3,578                       173,944
Escrow                                                                                     55,383
Other assets                                                                               35,624
                                                                                     ------------
                                                                                     $  7,843,933
                                                                                     ============

                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Liabilities:

Mortgage notes payable                                                               $  8,206,377
Promissory notes payable-related party                                                  2,610,006
Security deposits                                                                          91,410
Accrued expenses                                                                          280,745
Due to officer/director                                                                   128,100
Derivative liability                                                                    1,804,000
                                                                                     ------------
                                                                                       13,120,638
Commitments and contingencies

Stockholders' Deficiency:

Convertible Preferred stock, par value $0.01, 1,000,000 shares authorized,
11,000 issued and outstanding. Aggregate liquidation preference of $10,010
($0.91 per share)                                                                             110
Common stock, par value $0.01, 24,000,000 shares authorized,
118,537 issued and outstanding                                                              1,185
Additional paid-in capital                                                                744,000
Deficit                                                                                (6,022,000)
                                                                                     ------------
                                                                                       (5,276,705)
                                                                                     ------------
                                                                                     $  7,843,933
                                                                                     ============
</TABLE>

         The accompanying notes are an integral part of these condensed
                       consolidated financial statements.

                                      -3-
<PAGE>

                     GIFT LIQUIDATORS, INC. AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
               FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005

<TABLE>
<CAPTION>
                                                                 2006              2005
                                                             -----------        -----------
<S>                                                          <C>                <C>
Rental revenue                                               $   401,218        $   417,414

Operating expenses:
   Property operating costs                                      276,742            259,596
   General and administrative expenses                           264,344            124,505
   Depreciation and amortization                                  37,851             39,457
   Management fee-related party                                   16,169             16,697
                                                             -----------        -----------
 Total operating expenses                                        595,106            440,255
                                                             -----------        -----------

Operating loss                                                  (193,888)           (22,841)

Non operating income (expense):
   Interest expense                                             (129,408)           (83,900)
   Other income                                                    6,433                 --
   Gain on derivative liability                                   30,000                 --
                                                             -----------        -----------
Total non operating income (expense)                             (92,975)           (83,900)
                                                             -----------        -----------

Net loss                                                     $  (286,863)       $  (106,741)
                                                             ===========        ===========
Loss per share - basic and diluted                           $     (2.42)       $     (0.90)
                                                             ===========        ===========
Weighted average common shares outstanding- basic
and diluted                                                      118,537            118,537
                                                             ===========        ===========
</TABLE>

         The accompanying notes are an integral part of these condensed
                       consolidated financial statements.

                                      -4-
<PAGE>

                     GIFT LIQUIDATORS, INC. AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
               FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005

<TABLE>
<CAPTION>
                                                                 2006               2005
                                                             -----------        -----------
<S>                                                          <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                                     $  (286,863)       $  (106,741)
Adjustments to reconcile net loss to net cash
    provided  by operating activities:
     Depreciation and amortization                                37,851             39,457
     Gain on derivative liability                                (30,000)                --
     Write-off of related party receivable                       171,276            124,505

Changes in operating assets and liabilities:
   Accounts receivable - tenants                                   2,830             45,634
   Escrow                                                         44,307              5,912
   Due to/from related party                                    (171,276)          (124,505)
   Other assets                                                  153,469            (67,531)
   Accrued expenses                                              101,743            117,817
   Security deposits                                               9,606                 --
                                                             -----------        -----------
          Net cash provided by operating activities               32,943             34,548
                                                             -----------        -----------

CASH FLOWS FROM FINANCING ACTIVITIES
   Proceeds from officer/director                                 10,982                 --
   Repayments to officer/director                               (325,000)                --
   Repayment of mortgage notes payable                           (17,623)           (17,408)
                                                             -----------        -----------
          Net cash used in financing activities                 (331,731)           (17,408)
                                                             -----------        -----------
(Decrease) increase in cash and cash equivalents                (298,788)            17,140
Cash and cash equivalents - beginning of period                2,905,529             25,681
                                                             -----------        -----------
Cash and cash equivalents - end of period                    $ 2,606,741        $    42,821
                                                             ===========        ===========

Cash paid during the period for interest                     $    77,061        $    83,800
                                                             ===========        ===========
Non-cash transactions

Contributions of capital for waived liquidated damages       $   744,000        $        --
                                                             ===========        ===========
</TABLE>

         The accompanying notes are an integral part of these condensed
                       consolidated financial statements.

                                      -5-
<PAGE>

                     GIFT LIQUIDATORS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


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

Company Background

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 the Dorsett was
publicly traded.

In 1990 the 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 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 owned all of the
outstanding stock of the gift design and merchandising business, thereafter
known as Laid Back, and Mr. Colclasure owned 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.

Recent Developments

As of September 29, 2005 (the "Closing Date"), the Company entered into a
Preferred Stock Purchase Agreement with Mr. 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"). Each
share of the Company's Series A Preferred Stock is 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.

                                      -6-
<PAGE>

                     GIFT LIQUIDATORS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


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

In addition, as of the Closing Date, two of the Company's former stockholders,
including Mr. Colclasure, a former officer and director of the Company, sold an
aggregate of 33,761 shares of the Company's Common Stock to Mr. Mladen, which
amount represented 28.6% of the Company's issued and outstanding Common Stock
(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, Mr. Mladen owns and/or controls 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.

Merger

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

         o    154-60A 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    117-141 S. Marshall Street, Hartford, CT; and
         o    56 Webster Street, Hartford, CT.

                                      -7-
<PAGE>

                     GIFT LIQUIDATORS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


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

Prior to the Reverse Merger, described below, Mr. Mladen, the Company's majority
stockholder and sole officer and director, was also the majority stockholder and
the sole officer and director of Eternal. The other stockholders of Eternal were
(i) Mr. Mladen's daughter, (ii) Mr. Mladen's son-in-law, (iii) Mr. Mladen's son,
and (iv) Mr. Mladen's daughter-in-law (collectively, with Mr. Mladen, the
"Pre-Acquisition Eternal Stockholders").

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

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

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

In consideration of the Company's ownership of 80% of the total partnership
interests of each of the Limited Partnerships that now own 100% of Eternal, the
Company agreed to assume the LP Notes.

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

Pursuant to the Partnership Agreements of the Limited Partnerships (the
"Partnership Agreements"), among other things, the Company:

         o    is the general partner of each of the Limited Partnerships; and

         o    has the right to compel the limited partners (i.e., the
              Pre-Acquisition Eternal Stockholders) to exchange 100% of their
              limited partnership interests for shares of Common Stock of the
              Company.

                                      -8-
<PAGE>

                     GIFT LIQUIDATORS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


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

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

The common stock of Eternal has been retroactively restated to reflect the
recapitalization and merger transactions discussed above.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include
the accounts of Gift Liquidators, 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) (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. All significant inter-company transactions and accounts have been
eliminated in the consolidated financial statements.

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America and the rules and regulations of the Securities and
Exchange Commission (the "SEC") for interim financial reporting. Certain
information and footnote disclosures normally included in the Company's annual
financial statements have been condensed or omitted. In the Company's opinion,
the unaudited interim financial statements and accompanying notes reflect all
adjustments consisting of normal and recurring adjustments that are necessary
for a fair presentation of its financial position and operating results for the
interim periods ended March 31, 2006 and 2005. The results of operations for
such periods are not necessarily indicative of the results that may be expected
for the full year or any future period.

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

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

                                      -9-
<PAGE>

                     GIFT LIQUIDATORS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued)

These unaudited condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and related notes
included in the Company's Annual Report on Form 10-KSB for the year ended
December 31, 2005. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with accounting
principles generally accepted in the United States have been condensed or
omitted pursuant to such rules and regulations.

Real Estate

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

Depreciation

Buildings are depreciated using the straight line method over an estimated
useful life of 40 years. Building improvements are depreciated using the
straight line method over their estimated service lives, as determined by
management, generally between 5 and 15 years. Depreciation and amortization
expense for the three months ended March 31, 2006 and 2005 was $34,273 and
$33,686, respectively.

Derivative Liabilities

The Company accounts for the registration rights agreements as a separate
freestanding instrument and accounts for the liquidated damages provision as a
derivative liability in accordance with SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." Accordingly, the liability is 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 in other non operating income (expense).

Deferred Financing Costs

Deferred financing costs include fees and costs to obtain the Company's
mortgages and other notes payable. These costs are amortized over the term of
the respective loans. Amortization expense for the three months ended March 31,
2006 and 2005 was $3,578 and $5,771, respectively.

Revenue Recognition

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

                                      -10-
<PAGE>

                     GIFT LIQUIDATORS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Loss Per Share

Loss per share is calculated based on the weighted average number of common
shares outstanding during the period. The Company's preferred stock was not
included in the computation of diluted loss per share because to do so would
have been antidilutive.


Income Taxes

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

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

As of March 31, 2006, the Company has concluded that it is more likely than not
that the Company will not realize any deferred tax assets.

Recent Accounting Pronouncements and Interpretations

In December 2004, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 123 (revised 2004), "Share-Based Payment". SFAS 123 requires companies to
recognize in the statement of operations the grant-date fair value of stock
options and other equity-based compensation. That cost will be recognized over
the period during which an employee is required to provide service in exchange
for the award, usually the vesting period. Subsequent changes in fair value
during the requisite service period, measured at each reporting date, will be
recognized as compensation cost over that period. SFAS 123 is effective in the
first period beginning after June 15, 2005. The Company adopted SFAS 123 in
2006. The adoption of SFAS 123 did not have an impact on the Company's financial
position and results of operations.

In December 2005, the FASB issued SFAS No. 155, "Accounting for Certain Hybrid
Financial Instruments - an amendment to FASB Statements No. 133 and 140" and in
May 2005, the FASB issued SFAS No. 154 "Accounting and Error Corrections - a
replacement of APB Opinion No. 20 and FASB Statement No. 3." The Company is not
significantly impacted by these statements and does not expect their
implementation to have a material impact on the Company's consolidated financial
statements.


                                      -11-
<PAGE>

                     GIFT LIQUIDATORS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


NOTE 3 - FINANCINGS

Promissory Notes Payable - Related Party

As of November 4, 2005 (the "Loan Date"), the Pre-Acquisition Eternal
Stockholders exchanged, in the aggregate, 100% of the issued and outstanding
shares of common stock of Eternal, for (i) limited partnership interests
representing 20% of the total partnership interests in each of the Limited
Partnerships, and (ii) 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.

NOTE 4 - RESTRICTED CASH

As of March 31, 2006, the Company maintained an escrow account with Astoria in
the amount of $55,383 for the payment of real estate taxes and property
insurance.

NOTE 5 - RELATED PARTY TRANSACTIONS

Property Management Fees

The Properties are managed by White Knight Management, LLC, ("White Knight"), a
related party owned and controlled by David Mladen, the Company's majority
stockholder and sole officer and director. Pursuant to an oral agreement between
the parties, White Knight collects rent on behalf of the Company and pays the
Company's operating expenses. As of March 31, 2006, White Knight owed the
Company $171,276. However, the Company has written off such amounts from White
Knight as the Company has determined the amounts are not collectible.

Management fees were $16,049 and $16,697 for the three months ended March 31,
2006 and 2005, respectively. The Properties are managed pursuant to an oral
agreement which provides for management fees of approximately 4% of revenues.

Due to Officer/Director

At various times in 2003, 2004, and 2005, David Mladen, the Company's majority
stockholder and sole officer and director, made loans to Eternal Enterprise,
Inc., in the aggregate amount of approximately $400,000 with an interest rate of
6% per annum (the "Mladen Notes") due on or before May 10, 2010. In February
2006, the Company paid $325,000 to Mr. Mladen as partial repayment of the Mladen
Notes, including accrued interest.

                                      -12-
<PAGE>

                     GIFT LIQUIDATORS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


NOTE 6 - STOCKHOLDERS' DEFICIENCY

Liquidated Damages

In connection with David Mladen's purchase of 11,000 shares of the Company's
Series A Preferred Stock (the "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 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 the date hereof, the
Resale Registration Statements has not been filed. As of March 31, 2006, Mr.
Mladen has agreed to waive approximately $744,000 of Liquidated Damages due to
him, and such amount has been reflected as a contribution of capital as of that
date.

The Company accounts for the Registration Rights Agreement as a separate
freestanding instrument and accounts for the liquidated damages provision as a
derivative liability in accordance with to SFAS 133. Accordingly, the liability
is 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 non-operating income (expense). As of
March 31, 2006, the liability amounted to $1,804,000, and is included on the
balance sheet as a derivative liability.

Series B Preferred Stock

On March 10, 2006, the Company's board of directors approved the designation of
a series of 20,000 shares of Preferred Stock of the Company, $0.01 par value per
share. On March 13, 2006, the Company filed a Certificate of Designation of
Series B Preferred Stock (the "Series B Certificate of Designation") with the
Secretary of State of the State of Oklahoma. Pursuant to the Series B
Certificate of Designation, holders of the Company's Series B Preferred Stock:

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

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

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

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

                                      -13-
<PAGE>

                     GIFT LIQUIDATORS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


NOTE 6 - STOCKHOLDERS' DEFICIENCY (Continued)

In addition, the shares of Series B Preferred Stock:

         o    shall not be redeemable by the Company;

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

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

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

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

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

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

         o    effect any reclassification of the Series B Preferred Stock.

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

As of June 23, 2006, no shares of the Company's Series B Preferred Stock were
issued or outstanding.

NOTE 7- COMMITMENTS AND OTHER MATTERS

Periodic Filings

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

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

                                      -14-
<PAGE>

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

         The financial and business analysis below provides information which we
believe is relevant to an assessment and understanding of our financial
condition and results of operations. You should read the following discussion of
our financial condition and results of operations in conjunction with the Notes
to the Financial Statements in Item 1 of this Quarterly Report on Form 10-QSB,
and our Annual Report on Form 10-KSB for the year ended December 31, 2005 (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    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.

Overview

         On August 18, 1968, we were incorporated in the State of Oklahoma as
Dorsett Educational Systems, Inc. On December 20, 2002, we changed our name to
Gift Liquidators, Inc. Since that time, and prior to the sale of all of our gift
and novelty inventory in September 2005, our core business involved the
wholesale distribution of a diverse line of gift and novelty products acquired
in closeouts from gift developers and distributors.

                                      -15-
<PAGE>

         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"). Each share of our Series A Preferred Stock is
convertible at any time, at the holder's option, 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").

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

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

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

         o    154-60A 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    117-141 S. Marshall Street, Hartford, CT; and
         o    56 Webster Street, Hartford, CT.

         The other stockholders of Eternal were (a) Mr. Mladen's daughter, (b)
Mr. Mladen's son-in-law, (c) Mr. Mladen's son, and (d) Mr. Mladen's
daughter-in-law (collectively, with Mr. Mladen, the "Pre-Acquisition Eternal
Stockholders").

         Mr. Mladen entered into the Preferred Stock Purchase Transaction and
the Common Stock Purchase Transaction with the specific intention of taking
control of our company, and, subsequently, combining it with Eternal.

                                      -16-
<PAGE>

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

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

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

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

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

         As of November 4, 2005, the Pre-Acquisition 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"), pursuant to Contribution Agreements between the Pre-Acquisition Eternal
Stockholders and the Limited Partnerships (the "Eternal Acquisition"). As a
result, the shares of common stock of Eternal are now 100% owned, in the
aggregate, by the Limited Partnerships.

         In consideration of our ownership of 80% of the total partnership
interests of each of the Limited Partnerships that now own 100% of Eternal, 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.

         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.

         Pursuant to the Partnership Agreements of the Limited Partnerships (the
"Partnership Agreements"), among other things, the Company:

         o    is the general partner of each of the Limited Partnerships; and

         o    has the right to compel the limited partners (i.e., the
              Pre-Acquisition Eternal Stockholders) to exchange 100% of their
              limited partnership interests for shares of common stock of the
              Company.

                                      -17-
<PAGE>

         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.

Related Party Transactions

         Repayment of Shareholder Loans
         ------------------------------

         At various times during 2003, 2004 and 2005, David Mladen, our majority
stockholder and sole officer and director, made loans to Eternal in the
aggregate amount of approximately $400,000, with an interest rate of 6% per
annum (the "Mladen Notes"). On February 22, 2006, the Company paid $325,000 to
Mr. Mladen as partial repayment of the Mladen Notes, including accrued interest.

         Property Management Fees
         ------------------------

         The Properties are managed by White Knight Management, LLC, a party
owned and controlled by David Mladen, the Company's majority stockholder and
sole officer and director. The Properties are managed pursuant to oral
agreements which provide for management fees of approximately 4% of revenues.
Management fees were $16,049 and $16,697 for the three month periods ended March
31, 2006 and 2005, respectively.

         Pursuant to our oral agreement with White Knight, White Knight collects
rent on our behalf and pays our operating expenses. As of March 31, 2006, White
Knight owed us $171,276. However, we have written off such amounts due from
White Knight as we have determined that such amounts are not collectible.

         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.

                                      -18-
<PAGE>

         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 on 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 Properties.

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

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

Liquidity and Capital Resources

         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 pursue one or a combination of alternatives, as follows:

         o    We may determine to take out additional loans to purchase
              interests in additional properties;

         o    We may raise funds from one or a combination of debt offerings
              and equity offerings, and use such funds to purchase interests in
              additional properties; or

         o    We may determine to acquire additional interests in properties as
              sufficient funds are raised from rental income.

         Our cash and cash equivalents balance was $2,606,741 at March 31, 2006.
All cash and cash equivalents are held in money market or checking accounts.

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.

                                      -19-
<PAGE>

         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 initial
interest rate on the Mortgage Notes, of 5.625%, will remain in effect for 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 2.500%, rounded to the nearest one-eighth of one percent (0.125%) and
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.

Liquidated Damages

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

         If we (i) fail to file the Resale Registration Statement, or (ii) fail
to have the Registration Statement declared effective within the required
period, or (iii) if effectiveness is not maintained, the Registration Rights
Agreement requires us to make payments to Mr. Mladen in an aggregate amount
equal to two percent (2%) per month of $9,000,000 (assuming the sale of
$9,000,000 of the aggregate fair market value of the Conversion Shares)
("Outstanding Principal Amount"), multiplied by the number of months (prorated
for partial months) until the failure is cured. As of March 31, 2006, the Resale
Registration Statement had not been filed. As of the date hereof, the Resale
Registration Statements has still not been filed. As of March 31, 2006, Mr.
Mladen has agreed to waive approximately $744,000 of Liquidated Damages due to
him, and such amount has been reflected as a capital contribution as of that
date.

         We account for the Registration Rights Agreement as a separate
freestanding instrument and account for the liquidated damages provision as a
derivative liability subject to SFAS 133. Accordingly, the liability is 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 non-operating income (expense). As of March 31,
2006, the liability amounted to approximately $1,804,000, and is included on the
balance sheet as a derivative liability.

                                      -20-
<PAGE>

Results of Operations

         As of March 31, 2006, we owned interests in eight (8) residential real
estate properties consisting of 273 units. The table below lists the location of
our Properties, the number and type of units in each Property, the range of
rents, and the vacancies of these Properties as of March 31, 2006.

         Details on the properties are as follows:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
                                   Number and          Rent Range         Vacancies
Location                         Type of Units
------------------------------------------------------------------------------------
<S>                            <C>                       <C>                 <C>
154-60A Collins Street          41 units:                                     7
Hartford, CT                    3 three-bedroom           $750
                                1 one-and a-half-bedroom  $650
                                37 one-bedroom            $600
------------------------------------------------------------------------------------
21 Evergreen Avenue             24 units:                                     3
Hartford, CT                    18 one-bedroom            $625 - $650
                                6 studios                 $500 - $550
------------------------------------------------------------------------------------
243 & 255 Laurel Street         34 units:                                     1
Hartford, CT                    4 two-bedroom             $725 - $775
                                30 one-bedroom            $600 - $625
------------------------------------------------------------------------------------
252 Laurel Street               21 units:                                     2
Hartford, CT                    2 two-bedroom             $750
                                16 one-bedroom            $625
                                3 studios                 $450 - $475
------------------------------------------------------------------------------------
270 Laurel Street               77 units:                                     6
Hartford, CT                    1 two-bedroom             $825
                                3 one-bedroom             $650
                                73 studios                $500 - $550
------------------------------------------------------------------------------------
360 Laurel Street               18 units:                                     4
Hartford, CT                    3 two-bedroom             $650 - $700
                                15 one-bedroom            $600 - $625
------------------------------------------------------------------------------------
117-141 S. Marshall Street      42 units:                                     4
Hartford, CT                    36 two bedroom            $700 - $725
                                6 one-bedroom             $600 - $625
------------------------------------------------------------------------------------
56 Webster Street               16 units:                                     1
Hartford, CT                    10 one-bedroom            $500
                                6 studios                 $400
------------------------------------------------------------------------------------
</TABLE>


Comparison of Operations for the Three-Month Period Ended March 31, 2006 to the
Three-Month Period Ended March 31, 2005

         The following summarizes changes in our operations for the three-month
periods ended March 31, 2006 and 2005. Our net loss for the three-month periods
ended March 31, 2006 and 2005, was $286,863 and 106,741, respectively. The
primary reason for this increase in our net loss, was an increase in
professional fees incurred in connection with the Eternal Acquisition and
related regulatory filings.

                                      -21-
<PAGE>

Rental Revenue

         Revenues decreased approximately $16,196, from $417,414 in the
three-month period ended March 31, 2005 to $401,218 in the three-month period
ended March 31, 2006, or approximately 3.9%, as a result of decreased occupancy
rates.

Property Operating Costs

         Property operating costs increased approximately $17,146, from $259,596
in the three-month period ended March 31, 2005 to $276,742 in the three-month
period ended March 31, 2006, or approximately 6.6%. The increase was primarily
related to increased costs for heat and other utilities.

General and Administrative

         General and administrative expense increased approximately $139,839,
from $124,505 in the three-month period ended March 31, 2005 to $264,344 in the
three-month period ended March 31, 2006, or approximately 112.3%. The increase
was due to professional fees incurred in connection with the Eternal Acquisition
and related regulatory filings as well as the write-off of the related party
receivable with White Knight Management, LLC.

Interest Expense

         Interest expense increased approximately $45,808, from $83,900 in the
three-month period ended March 31, 2005 to $129,408 in the three-month period
ended March 31, 2006, or 54.2%. The increase was primarily related to interest
on the promissory notes and the increased borrowings under the mortgage notes
payable.

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.

Critical Accounting Policies

         The discussion included in our Annual Report on Form 10-KSB for the
year ended December 31, 2005, under the subheading "Critical Accounting Policies
and Estimates", is still considered current and applicable.

                                      -22-
<PAGE>

Item 3.  Controls and Procedures.

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

         In connection with the audit of our consolidated financial statements
for the year ended December 31, 2005, our management, including our principal
executive officer and principal financial officer, has evaluated the
effectiveness of disclosure controls and procedures as of the end of the period
covered by this report. Based upon that evaluation, our principal executive
officer and principal financial officer discovered a lack of effectiveness in
our disclosure controls and procedures during the years ended December 31, 2005
and 2004, and for the subsequent period through the date hereof.

         Our management intends to engage in remediation efforts to address the
material weaknesses identified in our disclosure controls and procedures. These
remediation efforts will be designed to address the material weaknesses
identified by management and to improve and strengthen our overall control
environment.

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

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

                                      -23-
<PAGE>

                           PART II - OTHER INFORMATION


Item 1.  Legal Proceedings.

         During the three-month period ended March 31, 2006, and subsequent
period through the date hereof, we were not a party to any pending legal
proceedings. To the knowledge of management, no federal, state or local
governmental agency is presently contemplating any proceeding against us. No
director, executive officer or affiliate of ours, or owner of record of more
than 5% of our common stock is a party adverse to us, or has a material interest
adverse to us in any legal proceeding.

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

         In the three-month period ended March 31, 2006, and subsequent period
through the date hereof, we did not issue any unregistered securities.

Item 3.  Defaults Upon Senior Securities.

         In the three-month period ended March 31, 2006, and subsequent period
through the date hereof, we did not default upon any senior securities.

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

         No matters were submitted to a vote of our security holders during the
three-month period ended March 31, 2006, or subsequent period through the date
hereof.

Item 5.  Other Information.

         None.

                                      -24-
<PAGE>

Item 6.  Exhibits.

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

     4.1         Certificate of Designation of Series A Preferred Stock (1)

     4.2         Certificate of Designation of Series B Preferred Stock (3)

     10.1        Preferred Stock Purchase Agreement, between the Company and
                 David Mladen, dated September 29, 2005 (1)

     10.2        Registration Rights Agreement, between the Company and David
                 Mladen, dated September 29, 2005 (1)

     10.3        Asset Sale Agreement, between the Company and Laid Back
                 Enterprises Inc., dated September 29, 2005 (1)

     10.4        Form of Contribution Agreement (2)

     10.5        Form of Limited Partnership Agreement (2)

     31.1        Certification pursuant to Section 13a-14(a) (4)

     32.1        Certification pursuant to Section 1350 (4)

------------------------------


(1)  Incorporated by reference from our Current Report on Form 8-K, dated
     September 29, 2005
(2)  Incorporated by reference from our amended Current Report on Form 8-K/A,
     dated November 4, 2005
(3)  Incorporated by reference from our Annual Report on Form 10-KSB for the
     year ended December 31, 2005
(4)  Filed herewith

                                      -25-
<PAGE>

                                   SIGNATURES


         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                      GIFT LIQUIDATORS, INC.



Date:  June 23, 2006                  By:  /s/ David Mladen
     ------------------                  --------------------------------------
                                           David Mladen
                                           Chief Executive Officer and Director
                                           (Principal Executive, Financial and
                                           Accounting Officer and Authorized
                                           Signatory)





                                      -26-
<PAGE>

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

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

     4.1         Certificate of Designation of Series A Preferred Stock (1)

     4.2         Certificate of Designation of Series B Preferred Stock (3)

     10.1        Preferred Stock Purchase Agreement, between the Company and
                 David Mladen, dated September 29, 2005 (1)

     10.2        Registration Rights Agreement, between the Company and David
                 Mladen, dated September 29, 2005 (1)

     10.3        Asset Sale Agreement, between the Company and Laid Back
                 Enterprises Inc., dated September 29, 2005 (1)

     10.4        Form of Contribution Agreement (2)

     10.5        Form of Limited Partnership Agreement (2)

     31.1        Certification pursuant to Section 13a-14(a) (4)

     32.1        Certification pursuant to Section 1350 (4)

------------------------------


(1)  Incorporated by reference from our Current Report on Form 8-K, dated
     September 29, 2005
(2)  Incorporated by reference from our amended Current Report on Form 8-K/A,
     dated November 4, 2005
(3)  Incorporated by reference from our Annual Report on Form 10-KSB for the
     year ended December 31, 2005
(4)  Filed herewith


                                      -27-