ITEM 2. MANAGEMENT?S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

Three Months Ended March 31, 2009 as compared to Three Months Ended March 31, 2008 Results of Operations

The following table sets forth, for the periods indicated, certain information related to our operations, expressed in dollars and as a percentage of our net sales:

Three Months Ended March 31, 2009:

Net sales

Net sales totaled $1,819,080 for the three months ended March 31, 2009, as compared to $3,034,336 for the same period in 2008, or a decrease of 167%. Home Builders Research reported that new home sales remain down in Las Vegas and the year to date 2009 metro Phoenix housing market continues at a pace belowthat of last year and permit activity is down as well. Our revenue is derived from new construction of residential housing and is directly related to new home sales and permits for new residential construction. The decreased activity of new residential home construction has been pronounced in Las Vegas, Nevada and Phoenix, Arizona has resulted in reduced sales level and gross margin.

Cost of sales

Cost of sales, including all installation expenses, during the three months ended March 31, 2009 was 82.3% of net sales, as compared to 78.5% in 2008. We are anticipating competition to increase and downward pressure on our gross margin during the next year as current and potential competitors seek new revenue streams.

Selling, general and administrative expenses

Selling, general and administrative expenses for the three months ended March 31, 2009 were $653,013 or 35.9% of net sales as compared to $1,019,192 or33.6% of net sales during the same period of the prior year. Selling, general and administrative expenses decreased by $366,179 for the three month period ending March 31, 2009 versus the three month period ending March 31, 2008. Our Chief Executive Officer and Chief Operating Officer, who together own approximately 75% of the outstanding shares of common stock, have salaries of $250,000 per year.

Provision for income taxes

The Company recorded no provision for income taxes for the three months ended March 31, 2009, because of concerns regarding the potential realization of the benefits of the tax loss.