The following discussion and analysis or plan of operation should be read in conjunction with the condensed consolidated financial statements and related notes thereto included elsewhere in this report. This discussion contains forward-looking statements. Please see the "Caution Regarding Forward-Looking Information; Risk Factors" above and "Risk Factors" below for a discussion of the uncertainties, risks and assumptions associated with these statements.

Overview

Green Builders, Inc., (the "Company"), is a Texas corporation formerly known as Wilson Holdings, Inc, a Nevada corporation. Effective April 4, 2008, Wilson Holdings, Inc, a Nevada corporation, completed its reincorporation to the State of Texas pursuant to the Plan of Conversion as ratified by the shareholders at the 2008 annual meeting of shareholders held on April 3, 2008. As part of the reincorporation, a new Certificate of Formation was adopted and Wilson Holdings, Inc.'s corporate name was changed to Green Builders, Inc., and the Certificate of Formation will now govern the rights of holders of the Company's common stock. The Company has been using the name "Green Builders" in its regular business operations since June 2007 and will continue to do so. Effective April 8, 2008, the Company's common stock began trading under the symbol "GBH" on the American Stock Exchange.

Historically our business plan was focused on the acquisition of undeveloped land that we believe, based on our understanding of population growth patterns and infrastructure development, is strategically located. This portion of our business focus has required, and is expected to continue to require, the majority of our financial resources. The Company is actively pursing placing its land positions into joint ventures to limit that amount of capital required for these assets. We have funded these acquisitions primarily with bank debt and cash from capital raises. In tandem with our land acquisition efforts and based upon our strategic market analysis, we also prepare land for homebuilding. We commenced homebuilding activities in June 2007. We believe that as the central Texas economy expands, the strategic land purchases, land development activities and homebuilding activities will enable us to capitalize on the new growth centers we expect will be created.

A primary focus of our business has been the sale of developed lots to homebuilders, including national homebuilders. Due to deteriorating conditions in the market for homes and in the homebuilding industry both nationally and to a lesser extent locally, during the second quarter of 2007 and continuing through August 2008, demand for finished lots by national homebuilders is and we expect will continue to be significantly reduced. As a result, orders placed for some of our finished lots were cancelled. We elected to retain some of our lots for use in our new homebuilding business (described below). We believe retaining some of our lots for use in homebuilding activities will allow us to generate homebuilding revenue to replace revenue from the loss of sales of these finished lots. We will continue to pursue lot sales contracts with both national and regional builders.

In June 2007 we purchased Green Builders, Inc. and commenced our homebuilding operations under that name. We are in the process of developing the Green Builders brand. Our strategy is to build homes that are environmentally responsible, resource efficient and consistent with local style. Our home designs will be selected and prepared for each of our markets based on local community tastes and the preferences of homebuyers. Substantially all of our construction work will be performed by subcontractors who will be retained for specific subdivisions pursuant to contracts entered in 2007 and 2008. We intend to build homes on the majority of the lots we currently have under development and sell those finished homes. In order to expand the business and increase home closings in future years, we have entered into a purchase lot contract that would allow us to purchase finished lots beginning in fiscal year 2009.
Furthermore, we are currently negotiating with other developers to enter into agreements that would give us the option to purchase additional finished lots in the future.

Although central Texas has been less affected than other areas, national real estate trends have an impact on home buyers and lenders and we believe that sales of new homes in our market will continue to decline in fiscal year 2008. We believe this slowdown is attributable to a decline in consumer confidence, the inability of some buyers to sell their current homes and the direct and indirect impact of the well-publicized turmoil in the mortgage and credit markets. Due to current market conditions, we believe that we will see a reduction in revenue from home and lot sales in fiscal 2008. We are considering selling tracts of commercial and residential land in order to raise additional cash.

We are actively pursing entering into joint venture arrangements with other land developers and builders in order to preserve cash in case the slowdown continues to impact our business for a long time.

Results of Operations

                                                         Three Months Ended June 30
                                                                                       Change
                                             2008          2007         Change            %
                                                               (in thousands)
Revenues
Homebuilding and related services
revenues                                   $   2,754     $     320     $   2,434      %      761
Land revenues                                    709         1,064          (355 )           (33 )
Gross Profit
Homebuilding and related services gross
profit                                           214           114           100              88
Land gross profit                                164          (937 )       1,101             118
Costs & Expenses
Operating expenses                             1,602         1,831          (229 )           (13 )
Operating Income (Loss)                       (1,224 )      (2,654 )       1,430              54
Net Income (Loss)                          $  (2,023 )   $  (3,316 )   $   1,293      %       39




                                                         Nine Months Ended June 30
                                                                                       Change
                                             2008          2007         Change           %
                                                               (in thousands)
Revenues
Homebuilding and related services
revenues                                   $   3,239     $   2,150     $   1,089     %       51
Land revenues                                  2,475         2,471             4              0
Gross Profit
Homebuilding and related services gross
profit                                           293           601          (308 )          (51 )
Land gross profit                                998          (779 )       1,778            228
Costs & Expenses
Operating expenses                             4,989         4,262           727             17
Operating Income (Loss)                       (3,698 )      (4,440 )         742             17
Net Income (Loss)                          $  (6,026 )   $ (11,437 )   $   5,412     %       47

Homebuilding and Related Services

Background - Homebuilding and related services revenue consists of revenue from home sales and from providing services to our homebuilder customers. Prior to fiscal year 2008, all home sales were generated by our homebuilder customers utilizing our homebuilder services. We ceased providing services to homebuilder customers in August 2007 and any future revenues from home sales will be from the sale of homes we build through our Green Builders brand. We consolidate our homebuilder customers into our operating results based on accounting requirements according to FIN 46(R) and refer to these homebuilder customers as Variable Interest Entities, or VIEs.

Revenues - During the three months ended June 30, 2008, we had revenues from homebuilding of $2.8 million. For the three months ended June 30, 2007, all of the homebuilding revenues were generated by one VIE consolidated into our operating results. The increase in revenues was primarily due to our transition into homebuilding and away from providing services to homebuilder customers.

Gross Profit- Gross Profit on homebuilding and related services increased by $100,000 for the three months ended June 30, 2008, compared to the same period in 2007 due to the increase in sales during the period. Gross margins decreased compared to last year primarily due to higher sales incentives offered to homebuyers.

In June 2007 we acquired Green Builders and have commenced our homebuilding activities. We plan to sell homes in the Austin, Texas area for prices ranging from $180,000 to $600,000. For the three months ended June 30, 2008 we were actively building in three communities and had a total of 27 sales and 12 closings. We have 12 completed speculative units, seven speculative units under construction, nine completed models, and 16 units in backlog. Backlog is defined as homes under contract but not yet delivered to our home buyers. Although we feel that the central Texas market is relatively strong, we believe that the turmoil in the mortgage market combined with national publicity of a potential recession has caused a lack of urgency for buyers. As such, sales and sales revenues were lower than anticipated for the three months ended June 30, 2008 and we expect that they will continue to be slow throughout fiscal year 2008. In accordance with these expected market conditions, our strategy is to build a limited number of speculative units per community and build the majority of our homes after a contract is entered into with a homebuyer.

Land and Land Development

Background - Land sales revenue consists of revenues from the sale of undeveloped land and developed lots. Developing finished lots from raw land takes approximately one to three years. In response to the slowdown in the national housing market and the reduction in demand for finished lots, we changed our strategy and have elected to use our developed lots for our own homebuilding operations. We may still sell our lots to national, regional and local homebuilders that may purchase anywhere from five to one hundred or more lots at a time. The delivery of these lots would likely be scheduled over periods of several months or years.

Revenues -Revenue from the sale of land decreased 33% during the three months ended June 30, 2008 compared to the same period in 2007. For the three months ended June 30, 2008, land sale revenues came from the sale of developed finished lots in the Georgetown Village project, located in the City of Georgetown, Texas. The decrease compared to the same period in 2007 was primarily due to the decrease in land sales in the Rutherford West project. In addition revenues declined due to the defaulting of a regional builder for a contract in the Georgetown Village project.

Gross Profit- Gross profit on land and land development increased by $1.1 million for the three months ended June 30, 2008 compared to the same period in 2007 due to previously written off expenses for the Bohl's Tract in 2007.

We are considering selling tracts of undeveloped or developed land in order to increase revenue from the sale of land in 2008 to counteract the anticipated slowdown in revenue from homebuilding activity. We anticipate that sales from developed lots will be slow in fiscal 2008 due to the decreased demand for finished lots from national homebuilders.

General and Administrative Expenses

                                                          Three Months Ended June 30
Breakdown of G&A Expenses                    2008           2007           Change        % Change
Salaries, benefits, payroll taxes and
related emp. exps.                         $ 378,841     $   473,788        (94,947 )          -20 %
Stock compensation expense                    83,272         165,000        (81,728 )          -50 %
Legal, accounting, auditing, and
investor relations                           114,968         222,658       (107,690 )          -48 %
Consultants                                   83,903         189,340       (105,437 )          -56 %
General overhead, including office
expenses, insurance, and travel              241,479         404,500       (163,021 )          -40 %
Amortization of subordinated debt costs
and transaction costs                         62,385          91,808        (29,423 )          -32 %
Total G&A                                  $ 964,848     $ 1,547,094       (582,246 )          -38 %

                                                            Nine Months Ended June 30
Breakdown of G&A Expenses                     2008            2007           Change        % Change
Salaries, benefits, payroll taxes and
related emp. exps.                         $ 1,256,820     $ 1,081,318        175,502             16 %
Stock compensation expense                     758,907         399,909        358,998             90 %
Legal, accounting, auditing, and
investor relations                             471,940         518,399        (46,459 )           -9 %
Consultants                                    224,709         251,913        (27,204 )          -11 %
General overhead, including office
expenses, insurance, and travel                704,670         800,535        (95,865 )          -12 %
Amortization of subordinated debt costs
and transaction costs                          177,759         476,509       (298,750 )          -63 %
Total G&A                                  $ 3,594,805     $ 3,528,583         66,222              2 %

General and administrative expenses are composed primarily of salaries of general and administrative personnel and related employee benefits and taxes. During the three months ended June 30, 2008 and 2007, salaries, benefits, taxes and related employee expenses totaled approximately $379,000 and $474,000, respectively, and represented approximately 40% and 31%, respectively, of total general and administrative expenses for the periods. The decrease for the three months ended is due to an entry for a bonus accrual for $189,000 that was not paid out, offset by an increase in expenses for additional headcount to support the homebuilding business.

Stock compensation expense was approximately $83,000 and $165,000 for the three months ended June 30, 2008 and 2007, respectively. The decrease in stock compensation expense for the three months June 30, 2008 was due to the acceleration of our former CFO's stock option expense recognized in prior quarters.

Legal, accounting, audit and investor relations expense totaled $114,000 and $223,000 for the three months ended June 30, 2008 and 2007, respectively. For the three months ended June 30, 2008, the decrease in legal, accounting, audit, and investor relations expenses was due to the expenses in prior quarter to set up our homebuilding business.

Consultant expenses were approximately $84,000 and $189,000 for the three months ended June 30, 2008 and 2007, respectively. These expenses decreased due to a decrease in consulting services for the development of our homebuilding activities.

General overhead expenses, including rent, office expenses and insurance totaled $242,000 and $405,000 for the three months ended June 30, 2008 and 2007, respectively. The decrease was due to approximately $175,000 write-down of assets relating to the termination of our homebuilder services client recorded in the three months June 30, 2007.

Amortization of subordinated convertible debt issuance costs and transaction costs was approximately $62,000 and $92,000 for the three months ended June 30, 2008 and 2007. This decrease is attributable due to the adoption of FSP 00-10-2.

Selling and Marketing Expenses

                                                             Three Months Ended June 30
                                                 2008          2007         Change        % Change
Salaries and related employee expenses         $  34,565     $  14,963        19,602            131 %
Advertising, public relations, and marketing     465,564       106,015       359,549            339 %
Commisions and closing expenses                  137,326       163,281       (25,955 )          -16 %
Selling and Marketing Expenses                 $ 637,455     $ 284,259       353,196            124 %




                                                               Nine Months Ended June 30
                                                  2008           2007          Change        % Change
Salaries and related employee expenses         $   107,060     $ 101,366          5,694              6 %
Advertising, public relations, and marketing     1,077,137       210,970        866,167            411 %
Model expenditures                                                59,217        (59,217 )         -100 %
Commisions and closing expenses                    209,806       361,484       (151,678 )          -42 %
Selling and Marketing Expenses                 $ 1,394,003     $ 733,037        660,966             90 %

Sales and marketing expenses include selling costs, salaries and related taxes and benefits, marketing activities including websites, brochures, catalogs, signage, and billboards, and market research, all of which benefit our corporate presence and are not included as homebuilding cost of sales. The increase was due to increased marketing expenses to help develop our homebuilding business, increase awareness of our brand through development of our website, advertising, public relations, and community marketing initiatives and to sell our existing inventory.

We expect to see a decline in advertising, public relations, and marketing costs in the next twelve months due to the fact that the major start-up costs of building our brand through the website, through an advertising campaign, and public relations have been completed.

Interest and Other Expense and Income

                                                               Three Months Ended June 30
                                                   2008           2007          Change        % Change
Loss on fair value of derivatives               $        -     $        -              -              0 %
Interest expense - convertible debt                206,258        210,313         (4,055 )           -2 %
Interest discount expense - convertible debt       139,587        321,464       (181,877 )          -57 %
Interest expense - land and development loans      563,511        232,134        331,377            143 %
Interest income and misc income                   (110,788 )     (102,386 )       (8,402 )            8 %
Total interest and other expense and income     $  798,568     $  661,525        137,043             21 %



                                                                  Nine Months Ended June 30
                                                   2008            2007            Change         % Change
Loss on fair value of derivatives               $         -     $ 5,076,957       (5,076,957 )         -100 %
Interest expense - convertible debt                 627,197         628,994           (1,797 )            0 %
Interest discount expense - convertible debt        418,761         777,991         (359,230 )          -46 %
Interest expense - land and development loans     1,551,412         693,671          857,741            124 %
Interest income and misc income                    (269,746 )      (180,379 )        (89,367 )           50 %
Total interest and other expense and income     $ 2,327,624     $ 6,997,234       (4,669,610 )          -67 %

Interest expense for land and development loans increased by approximately $331,000 for the three months ended June 30, 2008 over the same period in 2007. The increase is attributable to our determination to expense, rather than to capitalize, interest related to property temporarily not under development. In addition, discount expense for the convertible debt decreased due to the adoption of FSP 00-10-2.

Financial Condition and Capital Resources

Liquidity

On June 30, 2008 we had approximately $4.9 million in cash and cash equivalents. We completed a public offering of our common stock in May 2007, resulting in net proceeds to us of approximately $14 million.

On June 29, 2007, Wilson Family Communities entered into a $55 million revolving credit facility (the "Credit Facility") with a syndicate of banks led by RBC Bank (formerly RBC Centura Bank), as administrative agent. The credit facility was reduced to $30 million in June 2008. Green Builders has guaranteed the obligations of Wilson Family Communities under the Credit Facility. The Credit Facility allows us to obtain revolving credit loans and provides for the issuance of letters of credit. The amount available at any time under the Credit Facility for revolving credit loans or the issuance of letters of credit is determined by a borrowing base. The borrowing base is calculated as the sum of the values for homes and lots in the subdivision to be developed as agreed by us and the agent. Our obligations under the Credit Facility will be secured by the assets of each subdivision to be developed with the proceeds of loans available under the Credit Facility.

The initial maturity date for the Credit Facility was June 29, 2008. On July 2, 2008, we entered into an agreement to modify the loan documents and extend the maturity date to August 29, 2008. The facility will be reviewed by our syndicate of banks and renewed for successive 12 month periods, so long as the following items have been satisfied: no event of default shall exist, no material adverse effect in our financial condition, operations, business or management shall exist and extension fees in the amount determined by the agent and all costs associated incurred in connection with the proposed extension must be paid. The final borrowing base calculation will be made twelve months prior to the termination of the Credit Facility and no borrowings may be made in excess of such amount. As June 30, 2008, the Credit Facility has loaned approximately $15.8 million and issued a $179,000 letter of credit. We are not currently in compliance with certain of the covenants under the facility as describe in more detail below. Although we are currently negotiating with our banks, this non-compliance may cause the syndicate of banks not to renew this line of credit upon its maturity on August, 29, 2008.

Outstanding borrowings under the Credit Facility bear interest at the prime rate plus 0.25%, with a floor of 5.5%. We are charged a letter of credit fee equal to 1.10% of each letter of credit issued under the Credit Facility. We may elect to prepay the Credit Facility at any time without premium or penalty. Quarterly principal reductions are required during the final 12 months of the term.

The Credit Facility contains customary covenants limiting our ability to take certain actions, including covenants that

· affect how we can develop our properties;

· limit the ability to pay dividends and other restricted payments;

· limit the ability to place liens on its property;

· limit the ability to engage in mergers and acquisitions and dispositions of assets;

· require the Company to maintain a minimum net worth of $20,000,000, including subordinated debt (although the minimum net worth may be $17,000,000 for one quarter);

· prohibit the ratio of debt (excluding convertible debt) to equity (including convertible debt) from exceeding (A) 1.75 to 1.0 prior to September 30, 2007, (B) 1.85 to 1.0 from September 30, 2007 until March 30, 2008 and (C) 2.0 to 1.0 thereafter;

· require the Company to maintain working capital of at least $15,000,000; and

· limit the number of completed speculative homes to 12% of the total borrowing base available for homes.

An event of default will occur under the Credit Facility if certain events occur, including the following:

· a failure to pay principal or interest on any loan under the Credit Facility;

· the inaccuracy of a representation or warranty when made;

· the failure to observe or perform covenants or agreements;

· an event of default beyond any applicable grace period with respect to any other indebtedness;

· the commencement of proceedings under federal, state or foreign bankruptcy, insolvency, receivership or similar laws;

· any loan document, or any lien created thereunder, ceases to be in full force and effect;

· the entry of a judgment greater than $1,000,000 that remains undischarged; or

· a change of control.

If an event of default occurs under the Credit Facility, then the lenders may:
(1) terminate their commitments under the Credit Facility; (2) declare any outstanding indebtedness under the Credit Facility to be immediately due and payable; and (3) foreclose on the collateral securing the obligations.

We are currently out of compliance with the terms of the Borrowing Base Agreement under the Credit Facility due to the total number of completed speculative homes and land and lot inventory that were included in the definition of "eligible property" as of June 30, 2008 and are operating under a wavier which expires August 29, 2008. Per the Borrowing Base Agreement, we may not exceed more than 12% of the total borrowing base available for homes then included in homes defined as "eligible property." "Eligible Property" is defined as homes that meet the requirements of the borrowing base agreement for financing under the Master Line and calculation of borrowing availability. In addition, we are not in compliance with an additional developed lot and land covenant. The loan agreement requires that not more than seventy percent (70%) of our tangible assets be in the form of developed lots and land. We are currently in discussion with our lenders regarding this matter and we expect that our lenders will waive our non-compliance with this covenant until such time as we enter into an extension and amendment of our Credit Facility. If we are unable to comply with any one or more of these financial covenants, and are unable to obtain a waiver for the noncompliance, we could be precluded from incurring additional borrowings and our obligation to repay indebtedness outstanding under the facility, our term loans, and our outstanding note indentures could be accelerated in full. In addition, the banks may elect not to extend the term of the line of credit when it matures on August 29, 2008. We can give no assurance that in such an event, we would have, or be able to obtain, sufficient funds to pay all debt required to repay.

In December 2005 and September 2006, we entered into Securities Purchase Agreements with certain investors for the sale of Convertible Promissory Notes. Pursuant to the cross-default provisions of the Securities Purchase Agreements, a default under our Credit Facility triggers defaults under the Securities Purchase Agreements. In the event that our non-compliance with the . . .