UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549


_______________




FORM
10-Q


_______________




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




For
the quarterly period ended March 31, 2009




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





MOD
HOSPITALITY, INC.


(Exact
name of registrant as specified in Charter)




NEVADA
              
              000-24723
              
              88-0393257(State
      or other jurisdiction of
                incorporation
      or organization)
              
              (Commission
      File No.)
              
              (IRS
      Employee Identification No.)





11710
Old Georgetown Road, Suite 808


North
Bethesda, MD  20852


(Address
of Principal Executive Offices)




(301)
230-9674


(Issuer
Telephone number)




Check
whether the issuer (1) has filed all reports required to be filed by Section 13
or 15(d) of the Exchange Act during the Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Exchange Act during the preceding 12 months (or for such shorter period
that the issuer was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.


Yes x No o




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).


Yes o No x





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




Large
Accelerated Filer o               
Accelerated Filer o             
  Non-Accelerated Filer o               
 Smaller Reporting Company x




Indicate by check
      mark whether the registrant is a shell company as defined in Rule 12b-2 of
      the Exchange Act.
              Yes o No x




State the
number of shares outstanding of each of the issuer’s classes of common equity,
as of May 20, 2009:  11,054,829 shares of Common
Stock.









MOD
HOSPITALITY, INC.




FORM
10-Q




March
31, 2009




INDEX






PART
I -- FINANCIAL INFORMATION




Item
      1.
            Financial
      Statements
            F-1Item
      2.
            Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
            2Item
      3
            Quantitative
      and Qualitative Disclosures About Market Risk
            6Item
      4T.
            Controls
      and Procedures
            6




PART
II -- OTHER INFORMATION




Item
      1
            Legal
      Proceedings
            7Item
      1A
            Risk
      Factors
            7Item
      2.
            Unregistered
      Sales of Equity Securities and Use of Proceeds
            7Item
      3.
            Defaults
      Upon Senior Securities
            7Item
      4.
            Submission
      of Matters to a Vote of Security Holders
            7Item
      5.
            Other
      Information
            7Item
      6.
            Exhibits
            7SIGNATURE
            
            8











Part
I – Financial Information





Item
1. Financial Statements.


Consolidated
      Balance Sheets
              F-2
      and F-3Consolidated
      Statements of Operations
              F-4Consolidated  Statements
      of Cash Flows
              F-5Notes
      to the Consolidated Financial Statements
              F-6
 
  F-1
  
 MOD HOSPITALITY, INC. F/K/A PSPP HOLDINGS, INC. AND
      SUBSIDIARIESCONSOLIDATED
      BALANCE SHEETSAssetsMarch 31, 2009
                                            
                                            
                                            December 31, 2008Unaudited
                                            
                                            
                                            AuditedCurrent assetsCash
      and cash equivalents
                                            
                                            $
                                            692,346
                                            
                                            
                                            $
                                            728,349Accounts
      receivable
                                            
                                            
                                            139,860
                                            
                                            
                                            
                                            157,791Inventory
                                            
                                            
                                            8,469
                                            
                                            
                                            
                                            -Prepaid
      Expenses
                                            
                                            
                                            103,838
                                            
                                            
                                            
                                            183,223Total
      current assets
                                            
                                            
                                            944,512
                                            
                                            
                                            
                                            1,069,363Property and equipmentFurniture,
      fixtures and equipment, net of depreciation
                                            
                                            
                                            4,467,187
                                            
                                            
                                            
                                            2,742,877Total
      property and equipment
                                            
                                            
                                            4,467,187
                                            
                                            
                                            
                                            2,742,877Other assetsFranchise
      fees, net of amortization
                                            
                                            
                                            144,500
                                            
                                            
                                            
                                            144,500Construction
      in- progress
                                            
                                            
                                            -
                                            
                                            
                                            
                                            1,139,531Investments,
      net
                                            
                                            
                                            58,000
                                            
                                            
                                            
                                            58,000Deposits
                                            
                                            
                                            41,103
                                            
                                            
                                            
                                            41,103Total
      other assets
                                            
                                            
                                            243,603
                                            
                                            
                                            
                                            1,383,134Total
      assets
                                            
                                            $
                                            5,655,302
                                            
                                            
                                            $
                                            5,195,374The
      financial information presented herein has been prepared by management
      without audit by independent certified public accountantsSee
      accompanying notes to consolidated financial statements, which are an
      integral part of the financial statements
  F-2
  
 MOD
      HOSPITALITY, INC. F/K/A PSPP HOLDINGS, INC. AND
    SUBSIDIARIESCONSOLIDATED
      BALANCE SHEETSLiabilities and Stockholders'
      EquityMarch 31, 2009
                                        
                                        
                                        December 31, 2008Unaudited
                                        
                                        
                                        AuditedCurrent
      liabilitiesAccounts
      payable and accrued expenses
                                        
                                        $
                                        1,751,822
                                        
                                        
                                        $
                                        1,423,596Escrow
      reserves
                                        
                                        
                                        204,234
                                        
                                        
                                        
                                        908,605Accrued
      salaries and wages
                                        
                                        
                                        97,200
                                        
                                        
                                        
                                        107,692Management
      fees payable
                                        
                                        
                                        21,589
                                        
                                        
                                        
                                        20,857Taxes
      payable, rooms and other
                                        
                                        
                                        162,894
                                        
                                        
                                        
                                        387,689Due
      to related party
                                        
                                        
                                        650,887
                                        
                                        
                                        
                                        368,565Notes
      payable
                                        
                                        
                                        1,728,544
                                        
                                        
                                        
                                        1,116,699Total
      current liabilities
                                        
                                        
                                        4,617,170
                                        
                                        
                                        
                                        4,333,701Total
      liabilities
                                        
                                        
                                        4,617,170
                                        
                                        
                                        
                                        4,333,701Commitments
      and contingencies
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -Stockholders'
      EquityPreferred
      stock, $.001 par value, 10,000,000 shares authorized1,000,000
      shares outstanding
                                        
                                        
                                        10,000
                                        
                                        
                                        
                                        10,000Common
      stock, $.001 par value, 175,000,000 shares authorized10,804,829
      shares outstanding as of March 31, 2009 and 6,941,168
    sharesoutstanding
      as of December 31, 2008
                                        
                                        
                                        10,805
                                        
                                        
                                        
                                        6,941Additional
      paid-in capital
                                        
                                        
                                        4,634,837
                                        
                                        
                                        
                                        3,529,837Accumulated
      deficit
                                        
                                        
                                        (3,617,510
                                        )
                                        
                                        
                                        (2,685,106
                                        )Total
      stockholders' equity
                                        
                                        
                                        1,038,132
                                        
                                        
                                        
                                        861,672Total
      liabilities and stockholders' equity
                                        
                                        $
                                        5,655,302
                                        
                                        
                                        $
                                        5,195,374The
      financial information presented herein has been prepared by management
      without audit by independent certified public accountantsSee
      accompanying notes to consolidated financial statements, which are an
      integral part of the financial statements
  F-3
 
 MOD
      HOSPITALITY, INC. F/K/A PSPP HOLDINGS, INC. AND
    SUBSIDIARIESCONSOLIDATED
      STATEMENTS OF OPERATIONSFor
      the three
                                                        
                                                        
                                                        For
      the threemonths
      ended
                                                        
                                                        
                                                        months
      endedMarch
      31, 2009
                                                        
                                                        
                                                        March
      31, 2008Unaudited
                                                        
                                                        
                                                        UnauditedRevenueRooms
                                                        
                                                        $
                                                        1,943,636
                                                        
                                                        
                                                        $
                                                        2,934,200Food
      and beverage
                                                        
                                                        
                                                        65,710
                                                        
                                                        
                                                        
                                                        37,251Other
      income
                                                        
                                                        
                                                        198,372
                                                        
                                                        
                                                        
                                                        231,243Total
      operating revenue
                                                        
                                                        
                                                        2,207,718
                                                        
                                                        
                                                        
                                                        3,202,694Operating expensesRooms
                                                        
                                                        
                                                        681,599
                                                        
                                                        
                                                        
                                                        680,243Food
      and beverage
                                                        
                                                        
                                                        76,713
                                                        
                                                        
                                                        
                                                        14,211Rent
                                                        
                                                        
                                                        1,035,988
                                                        
                                                        
                                                        
                                                        1,238,983Management
      and franchise fees
                                                        
                                                        
                                                        126,194
                                                        
                                                        
                                                        
                                                        305,145General
      and administrative
                                                        
                                                        
                                                        755,000
                                                        
                                                        
                                                        
                                                        264,199Depreciation
      and amortization
                                                        
                                                        
                                                        286,549
                                                        
                                                        
                                                        
                                                        186,046Other
      expenses
                                                        
                                                        
                                                        140,748
                                                        
                                                        
                                                        
                                                        706,366Total
      operating expenses
                                                        
                                                        
                                                        3,102,792
                                                        
                                                        
                                                        
                                                        3,395,193Loss
      from operations
                                                        
                                                        
                                                        (895,074
                                                        )
                                                        
                                                        
                                                        (192,499
                                                        )Other income (expenses)Interest
      income
                                                        
                                                        
                                                        226
                                                        
                                                        
                                                        
                                                        662Interest
      expense
                                                        
                                                        
                                                        (37,556
                                                        )
                                                        
                                                        
                                                        (4,774
                                                        )Total
      other income (expenses)
                                                        
                                                        
                                                        (37,330
                                                        )
                                                        
                                                        
                                                        (4,112
                                                        )Income
      before provision for income taxes
                                                        
                                                        
                                                        (932,404
                                                        )
                                                        
                                                        
                                                        (196,611
                                                        )Provision
      for income taxes
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        -Net
      loss
                                                        
                                                        $
                                                        (932,404
                                                        )
                                                        
                                                        $
                                                        (196,611
                                                        )Net loss per common shareBasic
                                                        
                                                        $
                                                        (0.11
                                                        )
                                                        
                                                        $
                                                        (3.54
                                                        )Diluted
                                                        
                                                        $
                                                        (0.11
                                                        )
                                                        
                                                        $
                                                        (3.54
                                                        )Weighted average of common shares
      outstandingBasic
      - split adjusted
                                                        
                                                        
                                                        8,228,726
                                                        
                                                        
                                                        
                                                        55,499Diluted
      - split adjusted
                                                        
                                                        
                                                        8,228,726
                                                        
                                                        
                                                        
                                                        55,499Dividends
      declared per common share
                                                        
                                                        $
                                                        -
                                                        
                                                        
                                                        $
                                                        -The
      financial information presented herein has been prepared by management
      without audit by independent certified public accountantsSee
      accompanying notes to consolidated financial statements, which are an
      integral part of the financial statements
  F-4
 
 MOD
      HOSPITALITY, INC. F/K/A PSPP HOLDINGS, INC. AND
    SUBSIDIARIESCONSOLIDATED
      STATEMENTS OF CASH FLOWSFor
      the three
                            
                            
                            For
      the threemonths
      ended
                            
                            
                            months
      endedMarch
      31, 2009
                            
                            
                            March
      31, 2008Cash flows from operating
      activities:
                            
                            Unaudited
                            
                            
                            UnauditedNet
      loss
                            
                            $
                            (932,404
                            )
                            
                            $
                            (196,611
                            )Adjustments
      to reconcile net loss from operations tonet cash used in operating activities:Stock
      issued for services
                            
                            
                            3,864Depreciation
      and amortization
                            
                            
                            286,549
                            
                            
                            
                            186,046(Increase)
      decrease in:Prepaid
      expenses
                            
                            
                            79,384
                            
                            
                            
                            (30,618
                            )Accounts
      receivable
                            
                            
                            17,931
                            
                            
                            
                            115,383Inventory
                            
                            
                            (8,469
                            )
                            
                            
                            -Deposits
                            
                            
                            -
                            
                            
                            
                            (22,941
                            )Increase
      (decrease) in:Accounts
      payable and accrued expenses
                            
                            
                            328,226
                            
                            
                            
                            391,332Escrow
      reserves
                            
                            
                            (704,371
                            )
                            
                            
                            123,230Accrued
      Salaries
                            
                            
                            (10,492
                            )
                            
                            
                            5,930Management
      Fees
                            
                            
                            732
                            
                            
                            
                            5,873Taxes
      payable, rooms and other
                            
                            
                            (224,795
                            )
                            
                            
                            (47,206
                            )Net
      cash provided by (used in) operating activities
                            
                            
                            (1,163,844
                            )
                            
                            
                            530,417Cash
      flows from investing activities:Purchase
      of furniture, fixtures and equipment
                            
                            
                            (871,328
                            )
                            
                            
                            -Net
      cash (used in) investing activities
                            
                            
                            (871,328
                            )
                            
                            
                            -Cash
      flows from financing activities:Proceeds
      from capital contribution
                            
                            
                            1,105,000
                            
                            
                            
                            -Proceeds
      from notes payable
                            
                            
                            611,845
                            
                            
                            
                            -Due
      to related party, net
                            
                            
                            282,324
                            
                            
                            
                            (263,645
                            )Net
      cash provided by (used in) financing activities
                            
                            
                            1,999,169
                            
                            
                            
                            (263,645
                            )Net
      increase (decrease) in cash and cash equivalents
                            
                            
                            (36,003
                            )
                            
                            
                            266,772Cash
      and cash equivalents , beginning of year
                            
                            
                            728,349
                            
                            
                            
                            806,806Cash
      and cash equivalents, end of year
                            
                            $
                            692,346
                            
                            
                            $
                            1,073,578Supplemental
      disclosure of cash flow information:Interest
      paid
                            
                            $
                            -
                            
                            
                            $
                            -Taxes
      paid
                            
                            $
                            -
                            
                            
                            $
                            -The
      financial information presented herein has been prepared by management
      without audit by independent certified public accountantsSee
      accompanying notes to consolidated financial statements, which are an
      integral part of the financial statements
  F-5
  MOD
HOSPITALITY, INC.
 f/k/a
PSPP HOLDINGS, INC. AND SUBSIDIARIES
 Notes to
Consolidated Interim Financial Statements
 March 31,
2009
 
 NOTE 1 –
SUMMARY OF SIGNIFICANT
ACCOUTING POLICIES AND BASIS OF PRESENTATION
 
 Nature of
Business
 
 Mod
Hospitality, Inc. f/k/a PSPP Holdings, Inc. (“the Company”) was incorporated in
the State of Delaware in 1993. In 1997, the Company changed its Corporate
Charter to the State of Nevada.  As of March 31, 2009, the Company
maintained its Corporate Charter in the State of Nevada.
 
 On
September 22, 2008, the Company changed its name to Mod Hospitality,
Inc.
  On
February 12, 2008, East Coast Realty Ventures, LLC (ECRV, LLC) purchased from
Airport Road Associates One, LLC ("Airport LLC"), the then controlling
shareholder of the issuer, 900,000 shares of Preferred Stock and 25,865,000
shares of Common Stock in a privately negotiated transaction. ECRV, LLC paid
$153,750 for the Preferred and Common Stock.
 
 As of
February 12, 2008, ECRV, LLC may be deemed to have sole voting power over
132,873,855 shares of Common Stock (which includes the 107,008,855 votes from
the Series A Shares) and dispositive power over 81,553,282 shares of Common
Stock (which includes shares of Common Stock issuable upon the conversion of the
Series A Shares). Airport LLC may be deemed to have shared voting and
dispositive power over no shares of Common Stock.
 
 As of
February 12, 2008, Frederic Richardson may be deemed to have sole voting and
dispositive power over no shares of Common Stock and may be deemed to have
shared voting power over 132,873,855 shares of Common Stock (which includes the
107,008,855 votes from the Series A Shares held by Airport LLC) and shared
dispositive power over 81,553,282 shares of Common Stock (which includes shares
of Common Stock issuable upon the conversion of the Series A Shares held by
Airport LLC).
 
 On March
26, 2008, ECV Holdings, Inc. (“ECV”) is a corporation formed under the laws of
Delaware. On April 4, 2008, ECV entered into a stock for membership interest
agreement with East Coast Realty Ventures, LLC (“ ECRV ”) which owned all of the
issued and outstanding capital (the “ Membership Interest ”) of ECRV Hanover
LeaseCo, LLC (the “ Hanover ”), ECRV Clinton LeaseCo, LLC (the “ Clinton ”), and
ECRV FM LeaseCo, LLC (the “ Absecon ”). Hanover, Clinton, and Absecon are
limited liability companies organized under the law of the State of Delaware. As
a result of the stock for membership interest transaction, ECV acquired 100% of
the membership interest in Hanover, Clinton and Absecon by issuing Frederic
Richardson 100,000 shares of its common stock.
 
 Effective
May 8, 2008, ECV entered into a share exchange agreement with Frederic
Richardson, and FLNU, a non-reporting small public company listed on the Pink
Sheets Grey Market, whereby, Frederic Richardson transferred to FLNU 100% of the
issued and outstanding common stock of ECV, in exchange for 28,000,000 shares of
common stock of FLNU, which represents 80% of FLNU’s outstanding common stock.
As a result of the share exchange transaction, Hanover, Clinton and Absecon
became the wholly owned subsidiaries of FLNU.
  F-6
  On
October 21, 2008 (“the Closing Date”), the Company acquired all of the issued
and outstanding common stock of ECV Holdings, Inc., (“ECV”) a Delaware
corporation, in accordance with the Share Exchange Agreement.  On the
Closing Date, pursuant to the terms of the Securities Exchange Transaction, the
Company acquired all of the outstanding common stock of ECV from Flora
Nutrients, Inc. (“FLNU”). In exchange, the Company issued FLNU 50,000,000 common
stock, or approximately 99.912% of the Company’s common stock
outstanding.
 
 The
Company conducts its business operations through ECRV Hanover LeaseCo, LLC
(“Hanover”), ECRV Clinton LeaseCo, LLC (“Clinton”), and ECRV FM LeaseCo, LCC
(“Absecon”).
 
 Hanover was organized as a limited liability company under the
laws of the State of Delaware on June 16, 2006. Clinton was organized as a
limited liability company under the laws of the State of Delaware on March 08,
2007. Absecon was organized as a limited liability company under the laws of the
State of Delaware on May 10, 2007.
 
 Basis of
Presentation
 
 The
accompanying consolidated interim unaudited financial statements of the Company
as of March 31, 2009, and the three months ended March 31, 2009 and 2008 have
been prepared in accordance with accounting principles generally accepted for
interim unaudited financial statement presentation and in accordance with the
instructions to Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by accounting principles generally accepted
in the United States for complete financial statement presentation. In the
opinion of management, all adjustments for a fair statement of the results of
operations and financial position for the interim period presented have been
included.
 
 All such
adjustments are of a normal recurring nature. This interim financial information
should be read in conjunction with the audited consolidated financial statements
and notes thereto included in the Company’s Form 10-K as of December 31,
2008.
 
 The
summary of significant accounting policies is presented to assist in the
understanding of the financial statements. The financial statements and notes
are the representation of management. These policies conform to accounting
principles generally accepted in the United States of America and have been
consistently applied.
 
 Use of
Estimates
 
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and the reported revenues and expenses during the
reporting periods. Because of the use of estimates inherent in the financial
reporting process, actual results may differ significantly from those
estimates.
 
 Cash and cash
Equivalents
 
 The
Company maintains cash balances in non-interest bearing accounts that currently
do exceed federally insured limits. For the purpose of the statements of cash
flows, all highly liquid investments with a maturity of three months or less are
considered to be cash equivalents. There were no cash equivalents as of March
31, 2009 and December 31, 2008. Historically, the Company has not incurred any
losses due the accounts that exceed federally insured limits.
 
 Fair Value of Financial
Instruments
 
 The
Company measures their financial assets and liabilities in accordance with
accounting principles generally accepted in the United States. For certain of
the Company’s financial instruments, including cash, accounts payable and
accrued expenses, the carrying amounts approximate fair value due to their short
maturities.
  F-7
  FASB Interpretation No.
(FIN) 46, “Consolidation of Variable Interest Entities”
 
 As of
March 31, 2009 and December 31, 2008, the Company considered the provisions of
FASB Interpretation No. (FIN) 46, “Consolidation of Variable Interest Entities”
specifically as it relates to the entities controlled by the majority
shareholder of the Company. As of March 31, 2009 and December 31, 2008, the
accompanying financial statements only include the accounts of the
Company.
 
 Net Loss per Share
Calculation
  In
February 1997, the FASB issued SFAS No. 128, “Earnings per Share.” Basic net
loss per common share ("EPS") is computed by dividing income available to common
stockholders by the weighted-average number of common shares outstanding for the
period.   Diluted earnings per shares is computed by dividing net
income by the weighted average shares outstanding, assuming all dilutive
potential common shares were issued.
 
 Revenue and Expense
Recognition
 
 The
Company recognizes income from the management of the properties in accordance
with the accrual basis of accounting, that is, when the services and products
are provided for hotel guests and there is no uncertainty as to cash
collections; i.e. upon receipt of cash/check payment or credit card from the
hotel guests. The Company recognizes expenses related to the management of the
properties in accordance with the accrual basis of accounting, that is, when the
expense is incurred.
 
 Advertising, Sales and
Marketing Expenses
 
 The
Company incurs sales and marketing expenses in conjunction with the production
of promotional materials, and related travel costs. In accordance with the
AICPA’s Statement of Position No. 93-7 “Reporting on Advertising Costs”, the
Companies expense advertising and marketing costs as incurred or as the
advertising takes place.
 
 Income
Taxes
 
 Income
taxes are provided for using the liability method of accounting in accordance
with SFAS No. 109 "Accounting for Income Taxes," and clarified by FIN 48,
"Accounting for Uncertainty in Income Taxes an interpretation of FASB Statement
No. 109." A deferred tax asset or liability is recorded for all temporary
differences between financial and tax reporting. Temporary differences are the
differences between the reported amounts of assets and liabilities and their tax
basis. Deferred tax assets are reduced by a valuation allowance when, in the
opinion of management, it is more likely than not that some portion or all of
the deferred tax assets will not be realized. Deferred tax assets and
liabilities are adjusted for the effect of changes in tax laws and rates on the
date of enactment.
 
 Investments
  The
Company accounts for investments, where the Company holds from 20% up to 50%, in
the common stock, or membership interest, of an entity, using the equity method.
The investment is initially recorded at cost and the carrying amount is adjusted
to recognize the Company’s proportionate share of the earnings or losses of the
investee after the date of acquisition. The amount of the adjustment is included
in the determination of net income or loss of the Company in the period of the
adjustment. Any dividends received from the investee reduce the carrying value
of the investment.
 
 As of
March 31, 2009, Dream Apartments TV continued to pursue its planned operations,
therefore, current management made the decision to reflect the $58,000 as the
fair value of this investment.
  F-8
  Accounting
Pronouncements
 
 In March
2008, the FASB issued Statement of Financial Accounting Standards ("SFAS")
No. 161, Disclosures
about Derivative Instruments and Hedging Activities(SFAS 161).
SFAS 161 amends and expands the disclosure requirements of SFAS 133, Accounting for Derivative
Instruments and Hedging Activities.It requires qualitative disclosures
about objectives and strategies for using derivatives, quantitative disclosures
about fair value amounts of gains and losses on derivative instruments, and
disclosures about credit-risk-related contingent features in derivative
agreements. This statement is effective for financial statements issued for
fiscal years beginning after November 15, 2008.
  In
December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations(SFAS 141R). SFAS 141R significantly changes the accounting for
business combinations in a number of areas including the treatment of contingent
consideration, pre-acquisition contingencies, transaction costs, in-process
research and development, and restructuring costs. In addition, under
SFAS 141R, changes in an acquired entity's deferred tax assets and
uncertain tax positions after the measurement period will impact income tax
expense. SFAS 141R is effective for fiscal years beginning after
December 15, 2008.
  The
Emerging Issues Task Force (EITF) reached consensuses on EITF Issue
No. 06-04, Accounting for Deferred Compensation and Postretirement Benefit
Aspects of Endorsement Split-Dollar Life Insurance Arrangements (EITF 06-04) and
EITF Issue No. 06-10, Accounting for Deferred Compensation and
Postretirement Benefit Aspects of Collateral Assignment Split-Dollar Life
Insurance Arrangements (EITF 06-10), which require that a company recognize
a liability for the postretirement benefits associated with endorsement and
collateral assignment split-dollar life insurance arrangements. The Company does
not expect that the provisions of this pronouncement to have an impact on its
consolidated financial statements.
  In
September 2006, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 157 (“FAS 157”), Fair Value Measurements,
which defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles (“GAAP”), and expands disclosures about
fair value measurements. FAS 157 applies under other accounting pronouncements
that require or permit fair value measurements. Prior to FAS 157, there were
different definitions of fair value and limited guidance for applying those
definitions in GAAP. Moreover, that guidance was dispersed among the many
accounting pronouncements that require fair value measurements. Differences in
that guidance created inconsistencies that added to the complexity in applying
GAAP. The changes to current practice resulting from the application of FAS 157
relate to the definition of fair value, the methods used to measure fair value,
and the expanded disclosures about fair value measurements. FAS 157 is effective
for financial statements issued for fiscal years beginning after November 15,
2007, and interim periods within those fiscal years. The Company does not expect
the adoption of FAS 157 to have an effect on its financial
statements.
  In June
2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation
No. 48, Accounting for
Uncertainty in Income Taxes - an Interpretation of FASB Statement No. 109(FIN 48). FIN 48 prescribes a comprehensive model of how a
company should recognize, measure, present, and disclose in its financial
statements uncertain tax positions that the company has taken or expects to take
on a tax return.  The Company expects to comply with the provisions of
FIN 48.  As of December 31, 2008, the Company did not have any uncertain tax positions that the Company has taken or expects to
take on a tax return.  ECV Holdings, Inc. and its subsidiaries
(Clinton, Hanover and Absecon) expect to file their first federal and state tax
returns for the year ended December 31, 2008. Clinton, Hanover and Absecon are
single-member limited liability companies that are disregarded entities for
federal tax purposes.
  F-9
  NOTE
2                      FURNITURE, FIXTURES AND
EQUIPMENT
 
 Furniture
and fixtures are recorded at cost.  Depreciation is computed using the
straight-line method; i.e., original cost divided by the estimated useful lives
of the related assets, which is 5 years.  When assets are retired or
otherwise disposed of, the cost and related accumulated depreciation are removed
from the accounting records, and any resulting gain or loss is reflected in the
Statement of Operations for the period.  The cost of maintenance and
repairs are charged to income as incurred.  Renewals and betterments are
capitalized and depreciated over their estimated useful lives.
 
 For the
three months ended March 31, 2009 and 2008, the depreciation expense was
$286,549 and $186,046, respectively.
 
 NOTE
3                      MANAGEMENT
AGREEMENTS
 
 Hanover
leases the Holiday Inn Express flag for a hotel located in Hanover,
Maryland.  Absecon leases the Marriott’s Fairfield Inn flag for a
hotel located in Absecon, New Jersey.  The Clinton is a private hotel
located in South Beach, Miami, Florida with no franchise or licensing
agreements.
 
 Under
each management agreement, PPHG received a 3.5% management fee based on gross
income, and an incentive fee based on gross operating profit. In addition, under
Absecon’s agreement, additional fees for managing property improvements (the
PIP) equal to a fixed incentive fee of 10% to 15% of these costs.
 
 In
September 2008, Company terminated PPHG’s management agreement for the Clinton
Hotel in South Beach, Miami, Florida.  In February 2009, the Company
terminated PPHG’s management agreement for the Holiday Inn Express in Hanover,
Maryland.  The Company retained the management services of
Mid-Atlantic Realty Group for both of these hotel properties under the same
terms as PPHG’s. Mid-Atlantic Realty Group is an entity controlled by the
Company’s majority shareholder and CEO, Mr. Richardson.
 
 NOTE
4                      PROPERTY IMPROVEMENT
PLAN
 
 A
Property Improvement Plan (PIP) for the property located in Absecon, New
Jersey in the amount of $1,105,000 was reserved at the closing of the
transaction in 2007 and is owned by Absecon.  The funds were being
held by the lender to cover the deferred maintenance obligations required by the
Marriott Corporation to maintain the Fairfield flag.
 
 The total
amount of the PIP as of March 31, 2009 increased from the initial $1,105,000 to
$1,609,768.  The amounts needed to fund the PIP over the amount
escrowed of $504,768 at closing in 2007 were funded by the property
owner.  See note 7.
 
 As of
March 31, 2009, the management company for Absecon had yet to have a cost
segregation study performed on the PIP.
 
 As of
March 31, 2009, management of the Company has estimated the depreciation expense
for the three months ended March 31, 2009 to be $80,448 subject to further
adjustments pending the final cost allocations to leasehold improvements and
furniture, fixtures and equipment.
 
 NOTE
5                      FRANCHISE
FEES
 
 As of
March 31, 2009, Hanover paid $64,500 in franchise fees for the use of the
Holiday Inn Express Flag, and Absecon paid $80,000 in franchise fees for the use
of Marriott’s Fairfield Inn flag.  Clinton did not incur any franchise
fees when it was acquired in 2007. As of March 31, 2009, management of the
Company has determined that the franchise fees have an indefinite useful
life.  Therefore, pursuant to SFAS no. 142, the franchise fees are not
being subject to amortization rather they are subject to an impairment test by
management.  Management has conducted an impairment test and has
determined that as of March 31, 2009, the franchise fees are not subject to any
impairment adjustment; therefore, the carrying value of the franchise fees at
their original cost of $144,500.
  F-10
  NOTE
6                      BASE RENT AND ADDITIONAL
RENT
 
 There
exists a triple net master lease between each of the Company’s subsidiaries, the
master lessee and the tenant in common investors who own the buildings, in
accordance with the master lease agreements.  The master leases have a
term of 15 years, but shall terminate upon the sale of the properties by the
investors.
 
 The
tenants in common investors acquired the property subject to the master lease
and became parties to the master lease.  Except for certain reserves
and escrows that are required under the terms of the loan, the master lessee is
responsible for all costs of operating, managing, leasing, and maintaining the
property during the term, excluding the payment of all capital expenses, which
have been defined in the master lease.
 
 The
accompanying consolidated financial statements reflect the base rent expense to
comply with the provisions of SFAS no. 13 paragraph 15.  The base rent
payments are not being made on straight-line basis over the life of the leases;
however, the base rent expense is being recognized on a straight-line basis over
the life of the leases.
 
 For the
period ended March 31, 2009 and the year ended December 31, 2008, the rent
payable included in the current liabilities is $729,630 and $460,404 ,
respectively.
 
 Base Rent:
Hanover
 
 Hanover
pays base rent in equal monthly installments derived from the following annual
yields on net cash equity investment:
 
 Year
              
              Annual Yield
              
              Year
              
              Annual YieldYear
      1
              
              8.00%
              
              Year
      6
              
              10.50%Year
      2
              
              8.50%
              
              year
      7
              
              10.50%Year
      3
              
              9.00%
              
              Year
      8
              
              10.50%Year
      4
              
              9.25%
              
              Year
      9
              
              10.50%Year
      5
              
              10.50%
              
              Year
      10 - 15
              
              10.50%
 
 Base rent
is paid, monthly, in arrears as follows:
 
 Year
              
              Total Base
              
              Year
              
              Total BaseYear
      1
              
              $    
            756,000
              
              Year
      6
              
              $            992,250Year
      2
              
              803,250
              
              Year
      7
              
              992,250Year
      3
              
              850,500
              
              Year
      8
              
              992,250Year
      4
              
              874,125
              
              Year
      9
              
              992,250Year
      5
              
              992,250
              
              Year
      10 - 15
              
              992,250
 
 Additional
rent due under the lease is a combination of the principal, interest, reserves,
tax, and insurance escrows due under the loan.  Any funds remaining in
any of the reserves or escrows are the property of Hanover.
 
 For the
three months ended March 31, 2009 and 2008 the base rent expense was $230,934
and $230,934, respectively.
  F-11
  Base Rent:
Clinton
 
 Clinton
pays the base rent in equal monthly installments derived from the following
annual yields on net cash equity investment:
 
 Year
              
              Annual Yield
              
              Year
              
              Annual YieldYear
      1
              
              8.00%
              
              Year
      6
              
              9.00%Year
      2
              
              8.25%
              
              Year
      7
              
              9.00%Year
      3
              
              8.50%
              
              Year
      8
              
              9.00%Year
      4
              
              8.75%
              
              Year
      9
              
              9.00%Year
      5
              
              9.00%
              
              Year
      10 - 15
              
              9.00%
 
 Base rent
is paid, monthly, in arrears as follows:
 
 Year
              
              Total Base
              
              Year
              
              Total BaseYear
      1
              
              $          405,157
              
              Year
      6
              
              $       540,209Year
      2
              
              438,020
              
              Year
      7
              
              540,209Year
      3
              
              450,625
              
              Year
      8
              
              540,209Year
      4
              
              463,229
              
              Year
      9
              
              540,209Year
      5
              
              534,807
              
              Year
      10 - 15
              
              540,209
 
 Additional
rent due under the lease is a combination of the principal, interest, reserves,
tax, and insurance escrows due under the loan.  Any funds remaining in
any of the reserves or escrows are the property of Clinton.
 
 For the
three months ended March 31, 2009 and 2008 the base rent expense was $128,232
and $128,232, respectively.
 
 Base Rent:
Absecon
 
 Rental
payments shall be equivalent to a cumulative and compounding annualized return
of 10% on the $2,150,000 purchase price plus $150,000, at risk, interest rate
reserve required by Prudential ($230,000).
 
 The
additional rent payments are equal to the mortgage, principle plus interest and
the tax, insurance, and reserves, less the furniture, fixtures & equipment
(“FF&E”) reserve.  The FF&E reserve is paid by Absecon as part
of the additional rent payment, but the control of the reserve belongs to
Absecon.  The reserve will be used exclusively to pay for the direct
FF&E needs of the hotel operation as determined by the Company and Park
Place Hospitality Group.  Excess funds, over and above the current
needs of the Base Rent Escrow Account and the FF&E escrow reserve are deemed
“excess” and distributed periodically to the investor and Absecon as follows:
75% to investor as a rent extension payment and 25% to Absecon for services.
This distribution sharing is subject to investor receiving full repayment of all
invested funds and any accrued base rent through either refinancing or the
excess distributable cash flow.
 
 For the
three months ended March 31, 2009 and 2008, the base rent expense was $57,500
and $57,500, respectively.
  F-12
  NOTE
7                      LOANS
PAYABLE
 
 As of
March 31, 2009 and December 31, 2008, the Company had notes
payable with principal balances of $1,728,544 and $1,116,699,
respectively.
 
 These
notes payable are demand notes payable with an interest rate of 10%. As of March
31, 2009 $1,485,070 of the notes payable are advances from the property owner at
Absecon to cover the additional funds necessary to fulfill the $504,768 in the
PIP and for operating cash flows.  All of these funds were used for
the Absecon property.  The other notes payable with a principal
balance of $243,474 were acquired in the revere merger in October
2008.
 
 For the
three months ended March 31, 2009 and 2008, the interest expense was $37,556 and
$4,774, respectively.
 
 As of
March 31, 2009, these amounts are being accrued; no payments of interest and/or
principal have been made.
 
 NOTE
8                      DUE TO RELATED
PARTY
 
 As of
March 31, 2009 and December 31, 2008 the Company owed East Coast Realty
Ventures, LLC, the former managing member of Hanover, Clinton and Absecon, an
entity controlled by Frederic Richardson, the Company’s Chairman and CEO,
$650,887 and $368,565, respectively under a demand note with no formal repayment
requirements.
 
 NOTE
9                      COMMON AND PREFERRED
STOCK
 
 As of
March 31, 2009, the Company has 175,000,000 shares of common stock authorized
and 10,804,829 issued and outstanding.
 
 During
the three months ended March 31, 2009, the Company issued 3,863,661 shares of
its common stock at its par value of $.001.  The amount of $3,864 is
being reflected as general and administrative expenses.
 
 During
the year ended December 31, 2008, 6,876,469 shares of common stock were issued
at par value of $.001 for a total of $6,876 to certain individuals and entities
for past consideration. The amount of $6,876 is included in general and
administrative expenses.
 
 As of
March 31, 2009, the Company has 10,000,000 shares of preferred stock authorized
and 1,000,000 issued and outstanding.
 
 NOTE
10                      
REVERSE SPLIT AND
SYMBOL CHANGE
 
 On April
29, 2008, the Company increased our authorized common stock from 80,000,000
shares to 175,000,000 shares by filing a Certificate of Change pursuant to NRS
78.209.
 
 Effective
June 21, 2008, in order to meet a requirement of the Stock Purchase Agreement,
as amended, between Airport Road Associates One, LLC (“Airport, LLC”) and East
Coast Realty Ventures, LLC (“ECRV, LLC”), as previously reported on Form 8-K
filed March 20, 2008, the Board of Directors of the Company has declared a 100
to 1 round lot reverse split of the Company’s Common Stock. In accordance with
the reverse split, each shareholder will receive one (1) share of Common Stock
for each one hundred (100) shares currently held.  No fractional
shares shall be issued; all fractional shares shall be rounded up to the next
whole share.  Any shareholder that should own less than one hundred
(100) shares after completion of the reverse split shall be issued a sufficient
number of additional shares so that each such shareholder shall own a minimum of
one hundred (100) shares.  The reverse split was effective as of the
opening of trading on June 2, 2008. Additionally, also effective June 2, 2008,
the Company’s trading symbol was changed to “PSPN” in conjunction with the
reverse split of the Company’s common stock.
 
 On August
11, 2008, the Company changed its name to Cynosure Holdings, Inc. by filing a
Certificate of Amendment to Articles of Incorporation.
 
 On August
11, 2008, the members of our Board of Directors were increased to six (6), and
Mark T. Johnson and Marc D. Manoff, Esq. were appointed to the Board of
Directors pursuant to the increase.
  F-13
  On August
21, 2008, the Company changed its name to Hybid Hospitality, Inc. by filing a
Certificate of Amendment to the Articles of Incorporation.
 
 On August
27, 2008, the Company changed its name to Mod Hospitality, Inc. by filing a
Certificate of Amendment to the Articles of Incorporation.
 
 Effective
September 22, 2008, the Company completed a 1 for 10 reserve split of its common
stock and changed its name to Mod Hospitality, Inc. with a new symbol
“MODY.”
 
 NOTE
11                      INCOME TAXES AND CHANGE IN
CONTROL
 
 The
Company has approximately $1,260,286 in gross deferred tax assets as of March
31, 2009, resulting from net operating loss carry forwards.  A
valuation allowance has been recorded to fully offset these deferred tax assets
because the future realization of the related income tax benefits is uncertain.
Accordingly, the net provision for income taxes is zero as of March 31,
2009.
 
 As of
March 31, 2009, the Company has federal net operating loss carry forwards of
approximately $3,150,716 available to offset future taxable income through 2029
subject to the annual limitations imposed by Section 382 under the Internal
Revenue Code due to the change in control.  In February 2008, there
was a change in control of the Company wherein Section 382 will apply to the net
operating loss carryforward starting with the year ended December 31,
2008.
 
 As of
March 31, 2009, the difference between the tax provision at the statutory
federal income tax rate and the tax provision attributable to loss before income
taxes is as follows (in percentages):
  Statutory
      federal income tax rate
                          -34%State
      taxes - net of federal benefits
                          -5%Valuation
      allowance
                          39%Income
      tax rate – net
                          0%
 
 For the
three months ended March 31, 2009, the valuation allowance adjustment was
$372,962.
 
 NOTE
12                      REVERSE
MERGER
 
 On
October 21, 2008, we underwent a reverse merger with ECV Holdings, Inc. (“ECV”),
a Delaware corporation, pursuant to a share exchange agreement (the “Share
Exchange Agreement”) with ECV and Flora Nutrients, Inc., a Nevada corporation
and the sole shareholder of ECV (“FLNU”). The closing of the transaction took
place on October 21, 2008 (the “Share Exchange Transaction”) and resulted in the
acquisition of ECV. Pursuant to the terms of the Share Exchange Agreement, we
acquired all of the outstanding common stock of ECV by issuing FLNU an aggregate
of 50,000,000 shares representing 99.912% of our common stock outstanding. Since
FLNU, the sole shareholder of ECV, will own 99.912% of the shares of our
outstanding common stock upon the completion of the Share Exchange Transaction,
ECV is the legal acquiree but the accounting acquirer in the reverse merger.
Upon the completion of the Share Exchange Transaction, ECV (accounting acquirer,
legal acquiree) will succeed to the business that we previously carried on, and
will become the registrant. As a result, the historical financial statements
presented going forward will be those of ECV (accounting acquirer, legal
acquiree).
  The Share
Exchange Agreement contains customary terms and conditions for a transaction of
this type, including representations, warranties and covenants, as well as
provisions describing the consideration for the Acquisition, the process of
exchanging the consideration and the effect of the acquisition.
 
 As
described above, on October 21, 2008, we acquired all of the issued and
outstanding common stock of ECV, a Delaware corporation, in accordance with the
Share Exchange Agreement. The closing of the transaction took place on
October 21, 2008 (the “Closing Date”).  On the Closing Date, pursuant
to the terms of the Securities Exchange Transaction, we acquired all of the
outstanding common stock of ECV from FLNU. In exchange, we issued FLNU
50,000,000 shares, or approximately 99.912% of our common stock
outstanding. Since FLNU will own 99.912% of the shares of our outstanding
common stock upon the completion of the Share Exchange Transaction, ECV is the
legal acquiree but the accounting acquirer in the reverse merger. Upon the
completion of the Share Exchange Transaction, ECV (accounting acquirer, legal
acquiree) will succeed to the business that we previously carried on, and will
become the registrant. As a result, the historical financial statements
presented going forward will be those of ECV (accounting acquirer, legal
acquiree).
  F-14
  ECV is a
corporation formed on March 26, 2008 under the laws of Delaware. On April 4,
2008, ECV entered into a stock for membership interest agreement with East Coast
Realty Ventures, LLC (“ECRV”) which owned all of the issued and outstanding
capital (the “Membership Interest”) of ECRV Hanover LeaseCo, LLC (the
“Hanover”), ECRV Clinton LeaseCo, LLC (the “Clinton”), and ECRV FM LeaseCo, LCC
(the “Absecon”). Hanover, Clinton, and Absecon are limited liability companies
organized under the law of the State of Delaware. As a result of the stock for
membership interest transaction, ECV acquired 100% of the membership interest in
Hanover, Clinton and Absecon by issuing Frederic Richardson 100,000 shares of
its common stock.
 
 Effective
May 8, 2008, ECV entered into a share exchange agreement with Frederic
Richardson, and FLNU, a non-reporting small public company listed on the Pink
Sheets Grey Market, whereby, Frederic Richardson transferred to FLNU 100% of the
issued and outstanding common stock of ECV, in exchange for 28,000,000 shares of
common stock of FLNU, which represents 80% of FLNU’s outstanding common stock.
As a result of the share exchange transaction, Hanover, Clinton and Absecon
became the wholly owned subsidiaries of FLNU.
 
 NOTE
13                      
COMMITEMENTS AND
CONTINGENCIES
 
 Legal
Proceedings
 
 Beachview
Restaurants, LLC as Plaintiff vs. ECRV Clinton Leaseco, LLC as Defendant, in the
Circuit Court in and for Miami-Dade County, Florida Case NO. 07 29326 CA 22
which involves a dispute concerning a former lessee which had been evicted for
non-payment of rent in 2007, claiming breach of lease and fraudulent inducement.
It is unlikely that there will be an unfavorable outcome in this matter inasmuch
as the Plaintiff has yet to state a cause of action regarding any breach of
lease or inducement to sign the lease. There are sound defenses. The amount in
controversy has been stated as merely in excess of $15,000.
 
 Miami-Dade
County, as Plaintiff vs. Clinton as Defendant, in the Circuit Court in and for
Miami-Dade County, Florida, Case No. 07-32742 CA 22 which involves a dispute
over a previously undisclosed water and sewer fee imposed by Miami-Dade County,
Florida claiming non-payment of the bill. It is unlikely that there will be an
unfavorable outcome in this matter in that it appears that the suit was filed
beyond the applicable statute of limitations. The amount in controversy is
claimed to be slightly in excess of $42,000.
 
 Rafael
Barrera vs. Clinton Hotel Investors, LLC and East Coast Realty Ventures, LLC,
Miami-Dade County Circuit Court Case No. 08-67650 CA 24. Plaintiff, Barrera
filed an eight (8) count Complaint; counts II, IV and VI apply exclusively to
Clinton Hotel and counts I, III, V, VII, and VIII apply exclusively to East
Coast Realty Ventures, LLC. Count II is for an alleged breach of the employment
contract between Plaintiff and Clinton Hotel resulting from an alleged failure
to pay four (4) months of base salary beginning on the date of Plaintiff’s
termination. Count IV requests an accounting of vacation and bonus payments for
the period beginning August 10, 2001 and ending on August 16, 2007. Count IV is
for unjust enrichment based on an alleged failure to properly compensate
Plaintiff. Clinton Hotel filed a Motion to Dismiss the Complaint which remains
pending and is set for hearing on April 3, 2009. Plaintiff claims damages
against Clinton Hotel in the approximate amount of $115,000, all of which is
being denied by Clinton Hotel and which Clinton Hotel intends to vigorously
defend.
 
 As of
March 31, 2009, management of the Company has determined that the amount of
$172,000, which represents the approximate amount of the above lawsuits do not
warrant an expense to be recorded in accompanying unaudited consolidated
financial statements as of March  31, 2009.
 
 In 2005,
the Company retained the legal services of Weed & Co, LLP.  On
December 3, 2007, Weed & Co, LLP filed a complaint in Superior Court of the
State of California in dispute over payment of legal fees against the Company
and other defendants.  On March 11, 2008, the other defendants entered
into a settlement agreement where Weed & Co, LLP was to be paid
$87,500.  Weed & Co., LP has the right to re-file the complaint
should the other defendants not satisfy this agreement.  There is
no liability reflected in the accompanying consolidated financial statements for
this uncertainty.
 
 NOTE
14                      
SUBSEQUENT
EVENTS
 
 On May 5,
2009, the Company issued 250,000 shares of its common stock at par value of
$.001. These issuances of common stock increase the outstanding shares of common
stock to 11,054,829.
  F-15




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




The
information contained in Item 2 contains 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. Actual results may
materially differ from those projected in the forward-looking statements as a
result of certain risks and uncertainties set forth in this report. Although
management believes that the assumptions made and expectations reflected in the
forward-looking statements are reasonable, there is no assurance that the
underlying assumptions will, in fact, prove to be correct or that actual results
will not be different from expectations expressed in this report.




Forward-Looking Statements




We make
forward-looking statements in Management’s Discussion and Analysis of Financial
Condition and Results of Operations and elsewhere in this report based on the
beliefs and assumptions of our management and on information currently available
to us. Forward-looking statements include information about our possible or
assumed future results of operations which follow under the headings “Business
and Overview,” “Liquidity and Capital Resources,” and other statements
throughout this report preceded by, followed by or that include the words
“believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates” or similar
expressions.




Forward-looking
statements are subject to a number of risks and uncertainties that could cause
actual results to differ materially from those expressed in these
forward-looking statements, including the risks and uncertainties described
below and other factors we describe from time to time in our periodic filings
with the U.S. Securities and Exchange Commission (the “SEC”). We therefore
caution you not to rely unduly on any forward-looking statements. The
forward-looking statements in this report speak only as of the date of this
report, and we undertake no obligation to update or revise any forward-looking
statement, whether as a result of new information, future developments or
otherwise.





Company
Overview





We were
originally organized in the State of Delaware in February 1993 under the name
PLR, Inc. Our business operations are primarily conducted through our three (3)
indirect subsidiaries, ECRV Hanover LeaseCo, LLC (“Hanover”), ECRV Clinton
LeaseCo, LLC (“Clinton”), and ECRV FM LeaseCo, LLC (“Absecon”), limited
liabilities companies incorporated under the laws of the State of
Delaware.




In
November 1997, PLR, Inc. changed its name to Integrated Carbonics Corp. and
moved its domicile to the State of Nevada. On July 23, 1999, Integrated
Carbonics Corp. changed its name to Urbana.ca, Inc. (“URBA”). On April 11, 2003,
URBA changed its name to PSPP Holdings, Inc. On August 11, 2008, PSPP Holdings,
Inc. changed its name to Cynosure Holdings, Inc. by filing a Certificate of
Amendment to Articles of Incorporation with the State of Nevada.  Effective
September 22, 2008, PSPP Holdings, Inc. changed its company name to Mod
Hospitality, Inc. (hereinafter referred to as “Mod Hospitality,” “we,” “us” or
the “Company”).




On March
26, 2008, ECV Holdings, Inc. (“ECV’) was formed under the laws of Delaware. On
April 4, 2008, ECV entered into a stock for membership interest agreement with
East Coast Realty Ventures, LLC (“ECRV”) which owned all of the membership
interest of Hanover, Clinton, and Absecon. As a result of the stock for
membership interest transaction, ECV acquired 100% of the membership interest in
Hanover, Clinton and Absecon by issuing Frederic Richardson, the sole member of
ECRV, 100,000 shares of its common stock.




Effective
May 8, 2008, ECV entered into a share exchange agreement with Frederic
Richardson and FLNU, a non-reporting small public company listed on the Pink
Sheets Grey Market, whereby, Frederic Richardson transferred to FLNU 100% of the
issued and outstanding common stock of ECV, in exchange for 28,000,000 shares of
common stock of FLNU, which represents 80% of FLNU’s outstanding common stock.
As a result of the share exchange transaction, Hanover, Clinton and Absecon
became the wholly-owned subsidiaries of FLNU.




On
October 21, 2008 (the “Closing Date”), we entered into a share exchange
agreement (the “Share Exchange Agreement”) with ECV and FLNU. On the Closing
Date of the share exchange transaction, we issued FLNU 50,000,000 common stock,
or approximately 99.12% of our common stock outstanding, in exchange for all of
the outstanding common stock of ECV from FLNU.





We are
committed to finding unique and profitable hotel operations throughout the
world. We exploit the changing real estate market with new financing structures
and finds quality assets to which we can bring superior cost management and
revenue generation skills. We currently own the operation of a boutique hotel in
the Art Deco District of Miami, South Beach, Florida and branded hotel
operations in the North East.





Hanover,
Clinton and Absecon do not have ownership of the hotel buildings’
financing nor responsibility for capital items, real estate taxes, or
building insurance, but they perform management of these items, which give the
real estate investors a low-maintenance real estate investment.


2


Under
separate management agreements, Hanover, Clinton and Absecon engaged the
services of Park Place Hospitality, Inc (“PPHG”) with its base of operations
located in Charlotte, North Carolina, to run the operations of the hotels. In
September 2008, we terminated PPHG’s management arrangement for the Clinton
Hotel in South Beach, Miami, Florida, and in February 2009, we terminated PPHG’s
management agreement for the Holiday Inn Express in Hanover, Maryland. We have
retained the management services of Mid-Atlantic Realty Group, an entity
controlled by Frederic Richardson, our Chairman and CEO, for both these hotels
under the same terms as with PPHG, with formal agreements pending to be
executed.





Plan of
Operations





In this
slower demand environment, we are working aggressively to enhance property-level
house profit margins by reviewing room amenities and adjusting room rates. We
continue to implement new technology, develop new sales promotions, and improve
our properties to increase property-level revenue, rather than simply
discounting room rates.





Our plan
of operation includes for the next twelve months fee generation from management
agreements on three hotels.  The operations will include selling equity
participation on future hotel acquisitions. We plan to raise additional capital
through a formal registration of equity contributions from its principal
shareholder. Currently there are no planned acquisitions.  We do not
plan to sell any of its assets or operations at this time.





We
believe that despite recent economic downturns the market for hotel lodging is
stable in the markets in which we maintain the operations of the hotels. 
The American Hotel & Lodging Association stated that 2007 was the best year
ever for the U.S. lodging industry. Spurred on by the weak U.S. dollar that
has induced foreign travelers to the United States and consumers within the
United States to travel within its borders.  Additionally, peak
construction of new hotels in markets where we maintain properties such as Miami
have slowed significantly since the fourth quarter of 2007 which has led to a
potential supply and demand imbalance.  However, areas such as Baltimore
have shown decreases in demand as they are not "trendy" vacation areas and
occupancy rates are projected to decline in 2009.  However, average daily
room rates have increased and are projected to do so through 2009.  Gaming
revenues have increased in areas such as Atlantic City and lodging in such
places has not been affected by the current economic instability.





Results of
Operations





The following table sets forth the key
components of our result of operations for the periods indicated, in U.S.
Dollars.





For
      the quarter endedMarch
      31, 2009
                    
                    
                    March
      31, 2008Revenue
                    
                    $
                    2,207,718
                    
                    
                    $
                    3,202,694Operating
      expenses
                    
                    
                    3,102,792
                    
                    
                    
                    3,395,193Loss
      from operations
                    
                    
                    (895,074
                    )
                    
                    
                    (192,499
                    )Other
      income (expenses)
                    
                    
                    (37,330
                    )
                    
                    
                    (4,112
                    )Income
      before provision for income taxes
                    
                    
                    (932,404
                    )
                    
                    
                    (196,611
                    )Provision
      for income taxes
                    
                    
                    -
                    
                    
                    
                    -Net
      loss
                    
                    $
                    (932,404
                    )
                    
                    $
                    (196,611
                    )




Comparison
of Quarters Ended March 31, 2009 and 2008





General:We have
conducted operations through March 31, 2009. This includes the operations from
three hotels: Hanover, Clinton, and Absecon.




Revenue:
Net revenue decreased by $994,976 or 31%, from $3,202,694 in the quarter ended
March 31, 2008 to $2,207,718 in the quarter ended March 31,
2009.  Revenues are comprised of the revenues from rooms, food and
beverage, rental, telephone, movies, and suite shop, generated as a result of
the operations of the three hotels. Our revenue decreased because of the global
financial crisis that began in December 2008, which affected business and
personal travel, and the travel patterns of both domestic and international
travel. We reduced our room rates significantly to attract guests.




Operating
Expenses:
Operating expenses, arising from rooms, food and beverage, rent, management and
franchise fees, general and administrative, and depreciation, were $3,395,193 in
the quarter ended March 31, 2008, compared to $3,102,792 in the quarter ended
March 31, 2009. This represents a decrease of $292,401, or 8.6%. This
decrease was primarily due to a decrease in the rental expense that we
experienced in 2008.


3


Other Income
(Expenses). Our other income (expenses) consists of interest income,
interest expense, gain on sale of assets. We had total other expenses of $37,330
for the quarter ended March 31, 2009 as compared to $4,112 for the quarter ended
March 31, 2008, an increase of $33,218. The decrease in total other
expenses was primarily due to an increase in the interest expense from the notes
we assumed in the amount of $243,000 in connection with the reverse merger
completed in October 2008 by and among Mod Hospitality, Absecon, Hanover and
Clinton, and a construction loan, with a principal amount of $1,485,000 incurred
by Absecon for the renovations of the hotel, which were not covered by the PIP
reserve.




Net Loss:Our net loss was $196,611 in the quarter ended March 31, 2008 and
$932,404 in the quarter ended March 31, 2009.  The increase in net
loss of $735,793, or 350%, was primarily the result of the significant decrease
in revenues.





Capital
Liquidity and Resources





As of
March 31, 2009 and 2008, we had total assets equal to $5,655,302 and $5,195,374,
respectively. As of March 31, 2009, we had cash and cash equivalents of
$692,346. The following table provides the key information about our net cash
flow for all financial statement periods presented in this Form
10-Q:




For
      the quarter endedMarch
      31, 2009
                  
                  
                  March
      31, 2008Net
      cash provided by/used in operating activities
                  
                  $
                  (1,163,844)
                  
                  
                  $
                  530,417Net
      cash used in investing activities
                  
                  
                  (871,328
                  )
                  
                  
                  -Net
      cash provided by financing activities
                  
                  
                  1,999,169
                  
                  
                  
                  (263,645)Net
      increase (decrease) in cash and cash equivalents
                  
                  
                  (36,003
                  )
                  
                  
                  266,772Cash
      and cash equivalents, end of year
                  
                  $
                  692,346
                  
                  
                  $
                  1,073,578





Comparison
of Quarters Ended March 31, 2009 and 2008





Net Cash Provided
By/Used In Operating Activities. Our net cash used by operating
activities totaled $(1,163,844) for the quarter ended March 31, 2009 as compared
to the net cash provided by operating activities of $530,417 for the quarter
ended March 31, 2008. The increase in cash used by operating activities was
primarily due to the decrease in the escrow reserves from the extensive
renovations of Absecon required by the franchisor.





Net Cash Used In
Investing Activities.  Net cash used in investing activities was
$871,328 for the quarter ended March 31, 2009 and $0 for the quarter ended March
31, 2008. The reason for the decrease in net cash was paying for the
construction in progress for the Property Improvement Plan mandated by the
franchisor.





Net Cash Provided
By Financing Activities. Net cash provided by financing activities
totaled $1,999,169 for the quarter ended March 31, 2009 as compared to net cash
used by financing activities of $(263,645) for the quarter ended March 31, 2008.
The reason for increase in cash provided by financing activities was due to an
increase of capital contributions, notes payable, and, related party
debt.





Cash.  As of March 31, 2009,
we had cash of $692,346, as compared to $1,073,578as of March 31, 2008. This
decrease was primarily due to the decrease in our revenues and cost arising from
the renovations of Absecon.





Critical
Accounting Policy





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and the reported revenues and expenses during the
reporting periods. Because of the use of estimates inherent in the financial
reporting process, actual results may differ significantly from those
estimates. We consider our critical accounting policies to be those that
require the most significant judgments and estimates in the preparation of
financial statements, including the following:





Basis of
Presentation




The
accompanying consolidated interim unaudited financial statements as of March 31,
2009, and the three months ended March 31, 2009 and 2008 have been prepared in
accordance with accounting principles generally accepted for interim unaudited
financial statement presentation and in accordance with the instructions to
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by accounting principles generally accepted in the United
States for complete financial statement presentation. In the opinion of
management, all adjustments for a fair statement of the results of operations
and financial position for the interim period presented have been
included.




4


All such
adjustments are of a normal recurring nature. This interim financial information
should be read in conjunction with the audited consolidated financial statements
and notes thereto included in our Form 10-K as of December 31,
2008.




The
summary of significant accounting policies is presented to assist in the
understanding of the financial statements. The financial statements and notes
are the representation of management. These policies conform to accounting
principles generally accepted in the United States of America and have been
consistently applied.




Revenue and
Expense Recognition: We recognize
income from the management of the properties in accordance with the accrual
basis of accounting, that is, when the services and products are provided for
hotel guests and there is no uncertainty as to cash collections; i.e. upon
receipt of cash/check payment or credit card from the hotel guests. We recognize
expenses related to the management of the properties in accordance with the
accrual basis of accounting, that is, when the expense is incurred.





Advertising,
Sales and Marketing Expense:We incur sales and marketing expenses in
conjunction with the production of promotional materials, and related travel
costs. In accordance with the AICPA’s Statement of Position No. 93-7 “Reporting
on Advertising Costs”, companies   expense advertising and
marketing costs as incurred or as the advertising takes place.





Income Taxes:Income taxes are provided for using the liability method of accounting in
accordance with SFAS No. 109 "Accounting for Income Taxes," and clarified by FIN
48, "Accounting for Uncertainty in Income Taxes an interpretation of FASB
Statement No. 109." A deferred tax asset or liability is recorded for all
temporary differences between financial and tax reporting. Temporary differences
are the differences between the reported amounts of assets and liabilities and
their tax basis. Deferred tax assets are reduced by a valuation allowance when,
in the opinion of management, it is more likely than not that some portion or
all of the deferred tax assets will not be realized. Deferred tax assets and
liabilities are adjusted for the effect of changes in tax laws and rates on the
date of enactment.




Investment:We account for
investments, where we hold from 20% up to 50%, in the common stock, or
membership interest, of an entity, using the equity method. The investment is
initially recorded at cost and the carrying amount is adjusted to recognize our
proportionate share of the earnings or losses of the investee after the date of
acquisition. The amount of the adjustment is included in the determination of
our net income or loss in the period of the adjustment. Any dividends received
from the investee reduce the carrying value of the
investment.




As of
March 31, 2009, Dream Apartments TV continued to pursue its planned operations,
therefore, current management made the decision to reflect the $58,000 as the
fair value of this investment.




Recent Accounting
Pronouncements





In March
2008, the FASB issued Statement of Financial Accounting Standards ("SFAS")
No. 161, Disclosures about Derivative Instruments and
Hedging Activities(SFAS 161). SFAS 161 amends and expands the
disclosure requirements of SFAS 133, Accounting for Derivative
Instruments and Hedging Activities.It requires qualitative disclosures
about objectives and strategies for using derivatives, quantitative disclosures
about fair value amounts of gains and losses on derivative instruments, and
disclosures about credit-risk-related contingent features in derivative
agreements. This statement is effective for financial statements issued for
fiscal years beginning after November 15, 2008.




In
December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations(SFAS 141R). SFAS 141R significantly changes the accounting for
business combinations in a number of areas including the treatment of contingent
consideration, pre-acquisition contingencies, transaction costs, in-process
research and development, and restructuring costs. In addition, under
SFAS 141R, changes in an acquired entity's deferred tax assets and
uncertain tax positions after the measurement period will impact income tax
expense. SFAS 141R is effective for fiscal years beginning after
December 15, 2008.




The
Emerging Issues Task Force (EITF) reached consensuses on EITF Issue
No. 06-04, Accounting for Deferred Compensation and Postretirement Benefit
Aspects of Endorsement Split-Dollar Life Insurance Arrangements (EITF 06-04) and
EITF Issue No. 06-10, Accounting for Deferred Compensation and
Postretirement Benefit Aspects of Collateral Assignment Split-Dollar Life
Insurance Arrangements (EITF 06-10), which require that a company recognize
a liability for the postretirement benefits associated with endorsement and
collateral assignment split-dollar life insurance arrangements. The Company does
not expect that the provisions of this pronouncement to have an impact on its
consolidated financial statements.




5


In
September 2006, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 157 (“FAS 157”), Fair Value Measurements,
which defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles (“GAAP”), and expands disclosures about
fair value measurements. FAS 157 applies under other accounting pronouncements
that require or permit fair value measurements. Prior to FAS 157, there were
different definitions of fair value and limited guidance for applying those
definitions in GAAP. Moreover, that guidance was dispersed among the many
accounting pronouncements that require fair value measurements. Differences in
that guidance created inconsistencies that added to the complexity in applying
GAAP. The changes to current practice resulting from the application of FAS 157
relate to the definition of fair value, the methods used to measure fair value,
and the expanded disclosures about fair value measurements. FAS 157 is effective
for financial statements issued for fiscal years beginning after November 15,
2007, and interim periods within those fiscal years. The Company does not
expect the adoption of FAS 157 to have an effect on its financial
statements.




In June
2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation
No. 48, Accounting for
Uncertainty in Income Taxes - an Interpretation of FASB Statement No. 109(FIN 48). FIN 48 prescribes a comprehensive model of how a
company should recognize, measure, present, and disclose in its financial
statements uncertain tax positions that the company has taken or expects to take
on a tax return.  The Company expects to comply with the provisions of
FIN 48.  As of December 31, 2008, the Company did not have any
uncertain tax positions that the Company has taken or expects to take on a tax
return.  ECV Holdings, Inc. and its subsidiaries (Clinton, Hanover and
Absecon) expect to file their first federal and state tax returns for the year
ended December 31, 2008. Clinton, Hanover and Absecon are single-member limited
liability companies that are disregarded entities for federal tax
purposes.




Off Balance Sheet
Transactions




We do not
have any off-balance sheet arrangements, financings, or other relationships with
unconsolidated entities or other persons, also known as “special purpose
entities” (SPEs).





Item
3.  Quantitative and Qualitative Disclosures About Market Risk




Not
applicable because we are a smaller reporting company.




Item
4T.  Controls and Procedures




Management's
report on internal control over financial reporting





Our
Management is responsible for establishing and maintaining adequate internal
control over financial reporting under the supervision of the President and
Chief Executive Officer and the Chief Financial Officer. Internal control over
financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles.





Management
evaluated the design and operation of our internal control over financial
reporting as of March 31, 2009, based on the framework and criteria
established in Internal
Control – Integrated Frameworkissued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO), and has concluded that such
internal control over financial reporting is effective. There are no material
weaknesses that have been identified by management.





An
evaluation was performed, under the supervision of, and with the participation
of, our management, including our Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of the Company’s
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-(e) to
the Securities and Exchange Act of 1934). Based on that evaluation, our
management, including our Chief Executive Officer and Chief Financial Officer,
concluded that our disclosure controls and procedures were adequate and
effective, as of March 31, 2009, to ensure that information required to be
disclosed by us in the reports that it files or submits under the Securities
Exchange Act of 1934, is recorded, processed, summarized, and reported within
the time periods specified in the Commission’s rules and forms, and that such
information is accumulated and communicated to management, including our Chief
Executive Officer and Chief Financial Officer, as appropriate, to allow timely
decisions regarding required disclosure.





We do not
expect that our disclosure controls and procedures or internal control over
financial reporting will prevent all errors and all fraud. A control system, no
matter how well conceived and operated, can provide only reasonable assurance
that the objectives of the system are met and cannot detect all deviations.
Because of the inherent limitations in all control systems, no evaluation of
control can provide absolute assurance that all control issues and instances of
fraud or deviations, if any, within the Company have been detected.





This
report does not include an attestation report of our registered public
accounting firm regarding internal control over financial reporting.
Management's report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the Securities and Exchange
Commission that permit the company to provide only management's report in this
report.


6


Changes
in internal control over financial reporting





There
were no significant changes in our internal controls over financial reporting
that occurred subsequent to our evaluation of our internal control over
financial reporting for the three months ended March 31, 2009 that has
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.





PART
II - OTHER INFORMATION




Item
1.      Legal Proceedings.




There
have been no material developments in this quarter in regard to any litigation
pending or threatened by or against us or any of our subsidiaries as detailed in
Form 10-K filed on April 15, 2009.




Item
1A.   Risk Factors





Not
applicable because we are a smaller reporting company.




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




On May 5,
2009, we issued 250,000 shares of our common stock to Richard Weed in settlement
of prior litigationat $0.001 per share in
reliance upon the exemption provided by Section 4(2) of the Securities Act of
1933, as amended.




Item
3.      Defaults Upon Senior Securities.




None.




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




None.





Item
5.     Other Information.




None




Item
6.      Exhibits.




31.1           Rule
13a-14(a)/ 15d-14(a) Certification of Chief Executive Officer and Chief
Financial Officer


32.1           Section
1350 Certification of Chief Executive Officer and Chief Financial
Officer


7


SIGNATURES




Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.





Dated:
May 20, 2009





Mod Hospitality, Inc.By:
            /s/  Frederic
      RichardsonName:
      Frederic Richardson
              Title:
      Chief Executive Officer
              Principal
      Executive Officer





By:
            /s/  Sarah
      JacksonName:
      Sarah Jackson , CPA
              Title:
      Chief Financial Officer
              Principal
      Financial Officer









8