ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION
The following discussion of our financial condition and results of operations should be read in conjunction with, and is qualified in its entirety by, the consolidated financial statements and notes thereto included in, Item 1 in this Quarterly Report on Form 10-Q. This item contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those indicated in such forward-looking statements. Forward-Looking Statements
This Quarterly Report on Form 10-Q and the documents incorporated herein by reference contain forward-looking statements. Such forward-looking statements are based on current expectations, estimates, and projections about our industry, management beliefs, and certain assumptions made by our management. Words such as "anticipates", "expects", "intends", "plans", "believes", "seeks", "estimates", variations of such words, and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict; therefore, actual results may differ materially from those expressed or forecasted in any such forward-looking statements. Unless required by law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. However, readers should carefully review the risk factors set forth herein and in other reports and documents that we file from time to time with the Securities and Exchange Commission, particularly the Annual Reports on Form 10-K and any Current Reports on Form 8-K. Overview and History
HISTORY
We were founded in 2003 as a development partner, providing 100% financing for build-to-suit, small-box retail development projects throughout the United States. Offering 100% financing for our development partners consisted of providing equity or subordinated debt for approximately twenty-five percent of a project's cost and utilizing our senior debt facilities to provide a construction loan for the other seventy-five percent of the project's cost. While we provided the capital for the project, our development partner's responsibility was to obtain a lease, develop, market and sell the project once complete. In exchange for providing all of the capital, we took a controlling interest in the project and received 50% of the profits when the project was sold, with a minimum profit threshold for us in order to protect our downside. In order to facilitate growth, we focused on building our Company's infrastructure, particularly in the areas of deal generation, underwriting, and operations, as well as in finance and accounting. Early on, we implemented a growth strategy of creating a distributed sales force throughout the United States focused on creating relationships with developers and qualifying deals for us to finance. Once deals were generated, it was estimated that they would be developed and sold within seven to ten months. At that point revenues would be generated and capital returned to be recycled into new projects. Beginning in March 2008, with the changing of our management team, we re-assessed our business model and drew the following conclusions: 1) Our development partners had no hard investment in the projects and were not properly incentivized to continue projects when expected profitability fell; 2) Our investment program and marketing efforts did not cater to high quality sponsors with whom we could generate profitable, repeat business; 3) While successful projects proved to be highly profitable, portfolio experience demonstrated that downside risk was larger than originally anticipated; 4) While there are many transactions that worked within our target market, we were unlikely to meet our growth objectives given the limited scope of our addressable market; and 5) Our corporate infrastructure and cost structure was too large for the production levels that we were achieving.
In the second quarter 2008, we began to plan to significantly expand the scope of our business model in order to take advantage of changed market opportunities and more efficiently and profitably deploy capital going forward. This expanded model includes broadening our target property types beyond small-box, single-tenant retail to include office, industrial, multi-family, multi-tenant retail, hospitality and select land transactions. In addition, we have expanded our financial product offerings to focus on preferred equity, mezzanine debt and high yield bridge loans.
Our expanded model focuses on investing in higher-quality, more experienced developers, owners and operators. These target partners typically have equity capital to invest and are able to secure senior debt for their projects, but require additional capital, particularly in today's capital market environment, to bridge the gap between senior debt and their available equity. We seek to fill this gap with preferred equity or mezzanine debt. These structures generally require our partner to provide the senior debt as well as have some equity invested in order to prevent us from being in a first-loss position, which will allow us to invest in larger transactions, with higher quality partners, at lower risk but higher risk-adjusted returns than transactions in which we have previously invested.

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RECENT DEVELOPMENTS
While we had some success in deploying capital under our new approach, our slower than expected disposition of our existing properties has created investment capital constraints that has delayed the full implementation of our growth strategy. In January 2009, we shifted our immediate focus to capital preservation and portfolio management. Under this strategy we have dramatically decreased our operating capital needs and are focusing on the disposition of our current portfolio in a manner that maximizes our shareholder value. As we sell existing properties and recoup invested capital, we will actively pursue new investment opportunities and will then shift our focus back to the growth strategy we identified last year.
Our principal business address is 1440 Blake Street, Suite 310, Denver, CO 80202 We have not been subject to any bankruptcy, receivership or similar proceeding. Results of Operations
The following discussion involves our results of operations for the quarters ending March 31, 2009 and March 31, 2008. Our revenues for the quarter ended March 31, 2009 were $2,218,155 compared to $1,190,405 for the quarter ended March 31, 2008. We sold one project for the quarter ended March 31, 2009 totaling $1,992,151 compared to one project totaling $1,164,000 for the quarter ended March 31, 2008. We will continue to recognize sales revenue as we sell our current properties, all of which are currently classified "available for sale"; however, given current real estate market conditions we can not accurately predict the timing of these sales. Rental income for the quarter ended March 31, 2009 was $98,023 compared to $26,405 for the quarter ended March 31, 2008. This increase is due to additional completed projects that are generating lease income. We had interest income on notes receivable totaling $127,981 for the quarter ended March 31, 2009 compared to $-0- for the quarter ended March 31, 2008. We believe these fees should remain fairly stable throughout 2009. We recognize cost of sales on projects during the period in which they are sold. We had $1,967,022 of cost of sales for the quarter ended March 31, 2009 compared to $1,164,000 for the quarter ended March 31, 2008. Cost of sales going forward will continue to be correlated with the timing of our property sales. Selling, general and administrative costs were $572,559 for the quarter ended March 31, 2009 compared to selling, general and administrative costs of $688,004 for the quarter ended March 31, 2008. Based on our recent cost cutting measures, we anticipate that our selling, general and administrative expense will decrease substantially beginning in the second half of 2009.
During the quarter ended March 31, 2009 we recognized an impairment charge totaling $115,500 compared to an impairment charge of $-0- for the quarter ended March 31, 2008. We believe our balance sheet correctly reflects the current fair value of our projects; however, we will continue to test our properties for impairment on a quarterly basis.
We recognized a full deferred tax allowance as of December 31, 2007 and as such we incurred no income tax benefit for the quarters ended March 31, 2009 or March 31, 2008. We do not anticipate recognizing an income tax benefit or expense for the foreseeable future.
We had a net loss of $839,308 for the quarter ended March 31, 2009 compared to a net loss of $1,014,759 for the quarter ended March 31, 2008. Net loss available to common shareholders, after preferred stock dividends was $839,308 for the quarter ended March 31, 2009 compared to $1,092,097 for the quarter ended March 31, 2008. On June 30, 2008, we converted all convertible preferred stock to common stock so we will not pay a preferred stock dividend going forward.

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Liquidity and Capital Resources
Cash and cash equivalents, were $2,334,651on March 31, 2009 compared to $2,383,740 on March 31, 2008.
Cash used in operating activities was $109,247 for the quarter ended March 31, 2009 compared to cash provided by operating activities of $545,563 for the quarter ended March 31, 2008. This change was primarily the result of fewer projects acquired or under construction during the current period. Cash used in operations has typically been substantial, driven by project funding requirements and we anticipate that it will continue to be significant moving forward.
Cash provided by investing activities was $-0- for the quarter ended March 31, 2009 compared to cash used in investing activities of $8,839 for the quarter ended March 31, 2008. We issue promissory notes to our development partners when we invest earnest money on potential new projects which are retired when we purchase the land into the subsidiary. In the fourth quarter of 2008 we recognized an allowance to fully cover all outstanding promissory notes balance as of December 31, 2008. The balance and allowance remained the same for the quarter ended March 31, 2009.
Cash provided by financing activities was $60,158 for the quarter ended March 31, 2009 compared to cash used in financing activities of $1,940,982 for the quarter ended March 31, 2008. This change was primarily the result of fewer projects being acquired or under construction during the current period. All of our subordinated debt notes with our two major investors, GDBA and BOCO mature before December 31, 2009, including our two $7 million notes that were issued on September 28, 2006 which will mature on September 28, 2009. We are in current discussions with BOCO and GDBA to extend these notes. There is no assurance that these notes will be renewed or extended or that the terms will be acceptable to management.
Based on our cash balance and our availability on our Senior Subordinated Notes as of March 31, 2009, we may not have adequate cash available to meet all of our obligations with regard to operating capital and project equity required over the next nine months. We will need to sell some of our existing projects in order to fund our operations through the end of the year. We continue to work with our existing investors and are seeking additional investors to secure the capital required to fund our operations going forward.
Management continues to assess our capital resources in relation to our ability to fund continued operations on an ongoing basis. As such, management may seek to access the capital markets to raise additional capital through the issuance of additional equity, debt or a combination of both in order to fund our operations and future growth.
As of March 31, 2009, we had $21.25 million in subordinated debt notes that were fully drawn. In addition, we had $10 million in availability on our existing senior credit facility; however, given the deal structure constraints under this facility, it is unlikely that we would be able to utilize any of our availability in the near future.
Recently Issued Accounting Pronouncements We have adopted SFAS No. 141 (R), "Business Combinations" and SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements," in the beginning of our 2009 fiscal year. As of March 31, 2009, there has been no material impact related to the pronouncements on our consolidated financial statements. Further information on these accounting pronouncements is located in our 2008 Form 10K.
On January 1, 2009, the Company adopted the provisions of FSP FAS 157-2, "Effective Date of FASB Statement No. 157," which deferred the effective date of SFAS No. 157 for one year for certain nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis. The adoption of FSP FAS 157-2 did not have a material impact on the Company's consolidated financial statements. On January 1, 2009, the Company adopted the provisions of EITF Issue No. 07-5, "Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity's Own stock" ("EITF No. 07-5"). EITF No. 07-5 provides guidance for determining whether an equity-linked financial instrument (or embedded feature) is indexed to an entity's own stock. EITF No. 07-5 applies to any freestanding financial instrument or embedded feature that has all of the characteristics of a derivative or freestanding instrument that is potentially settled in an entity's own stock. To meet the definition of "indexed to own stock," an instrument's contingent exercise provisions must not be based on (a) an observable market, other than the market for the issuer's stock (if applicable), or (b) an observable index, other than an index calculated or measured solely by reference to the issuer's own operations, and the variables that could affect the settlement amount must be inputs to the fair value of a "fixed-for-fixed" forward or option on equity shares. The adoption of EITF 07-5 did not impact the Company's consolidated financial statements.

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In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities" (SFAS No. 159). SFAS No. 159 permits entities to choose to measure at fair value many financial instruments and certain other items that are not currently required to be measured at fair value. SFAS No. 159 is intended to improve financial reporting by allowing companies to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently and to do so without having to apply complex hedge accounting provisions. SFAS No. 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 does not affect any existing accounting literature that requires certain assets and liabilities to be carried at fair value and does not effect disclosure requirements in other accounting standards. The Company adopted SFAS No. 159 effective for the fiscal year beginning January 1, 2008, and the adoption had no impact on the Company's consolidated financial position and results of operations.
Seasonality
At this point in our business operations our revenues are not impacted by seasonal demands for our products or services. As we penetrate our addressable market and enter new geographical regions, we may experience a degree of seasonality.
Critical Accounting Policies
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Such estimates and assumptions affect the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we evaluate estimates and assumptions based upon historical experience and various other factors and circumstances. We believe our estimates and assumptions are reasonable in the circumstances; however, actual results may differ from these estimates under different future conditions.
We believe that the estimates and assumptions that are most important to the portrayal of our financial condition and results of operations, in that they require subjective or complex judgments, form the basis for the accounting policies deemed to be most critical to us. These relate to bad debts, impairment of intangible assets and long lived assets, contractual adjustments to revenue, and contingencies and litigation. We believe estimates and assumptions related to these critical accounting policies are appropriate under the circumstances; however, should future events or occurrences result in unanticipated consequences, there could be a material impact on our future financial conditions or results of operations.
Our critical accounting policies are estimates and are included in our Annual 10K filed with the SEC on April 15, 2009.