The information contained in this Management's Discussion and Analysis of Financial Condition and Results of Operation contains "forward looking statements." 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 our 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 future results will not be materially different from the expectations expressed in this Annual Report. The following discussion should be read in conjunction with the unaudited Consolidated Financial Statements and related Notes included in Item 1.

RESULTS OF OPERATIONS FOR THE THREE MONTH PERIOD ENDED OCTOBER 31, 2012

Net revenues decreased from $5,658,150 in the three-month period ending October 31, 2011 to $5,613,455 for the three-month period ending October 31, 2012. The increase in revenue is due to changes in the timing of various projects in Desert.

Cost of sales decreased from $4,301,072 in the three-month period ending October 31, 2011 to $4,022,696 for the three-month period ending October 31, 2012. The increase is a result of the revenue decrease described above.

Operating expenses increased from $1,083,783 for the three months ending October 31, 2011 to $1,368,126 for the same period in 2012. This was mainly due to the increase in professional fees.

Net income decreased from $263,229 for the three months ending October 31, 2011 to a net income of $28,787 for the same period in 2012. This is due to higher operating expenses.

RESULTS OF OPERATIONS FOR THE SIX MONTH PERIOD ENDED OCTOBER 31, 2012

Net revenues increased from $10,706,262 in the six-month period ending October 31, 2011 to $12,090,364 for the six-month period ending October 31, 2012. The increase in revenue is due to changes in the timing of various projects in Desert.

Cost of sales increased from $7,853,337 in the six-month period ending October 31, 2011 to $9,065,594 for the six-month period ending October 31, 2012. The increase is a result of the revenue increase described above.

Operating expenses increased from $2,659,693 for the six months ending October 31, 2011 to $2,704,490 for the same period in 2012. This was mainly due to the increase in professional fees.

Net income increased from $170,635 for the six months ending October 31, 2011 to net loss of $88,811 for the same period in 2012. This is due to a non-cash derivative gain of $1,515,219 for the six months ended October 31, 2011 compared to a $317,755 gain for the six months ended October 31, 2012.

LIQUIDITY AND CAPITAL RESOURCES

Cash provided by operations for the six month period ended October 31, 2011 was $234,702 as compared to cash provided by operations of $457,691 for the six months ended October 31, 2012. Cash used in investing activities for the six month period ended October 31, 2011 and October 31, 2012 was $0. Cash provided by financing activities for the period ended October 31, 2011 was $24,839, as compared to $53,272 used in financing activities for the six months ended October 31, 2012.

Our operating activities for the six months ended October 31, 2012, have generated adequate cash to meet our operating needs. As of October 31, 2012, we had cash and cash equivalents totaling $1,156,430, and receivables of $681,150.

As of the date of the filing the Company is attempting to restructure its debt with Boone and some other creditors. If successful there would be a significant decrease in the current portion of debt outstanding, interest rate reductions and extended maturity dates. If unsuccessful, we will continue to be in default on these loans and incur additional interest expense.

EBITDA

EBITDA for the six month period is $576,055. EBITDA is Earnings before interest,
tax, depreciation and amortization:

EBITDA                       31-October-12
Net income (loss)                   (88,811 )
Interest                            708,914
Derivative gain                    (317,755 )
Tax                                  36,939
Depreciation/Amortization           236,768
EBITDA                              576,055