Rogue One (ROAG) 8-K/A Entry into a Material Definitive Agreement

EXHIBIT 99.2

ECRV Hanover Hospitality Leaseco, LLC

ECRV Clinton Leaseco, LLC

ECRV FM Leaseco, LLC

Combined Financial Statements

December 31, 2007 and 2006

ECRV Hanover Hospitality Leaseco, LLC

ECRV Clinton Leaseco, LLC

ECRV FM Leaseco, LLC

Table of Contents

December 31, 2007 and 2006

and

ECRV Hanover Hospitality Leaseco, LLC

for the period June 16, 2006 (date of inception) to December 31, 2007

ECRV Clinton Leaseco, LLC

for the period March 08, 2007 (date of inception) to December 31, 2007

ECRV FM Leaseco, LLC

for the period May 10, 2007 (date of inception) to December 31, 2007

Report of Independent Registered Public Accounting Firm	1
Combined Balance Sheets	2
Combined Statements of Operations	4
Combined Statements of Member’s Equity	5
Combined Statements of Cash Flows	6
Notes to the Combined Financial Statements	7

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Sole Director and Sole Member

ECRV Hanover Hospitality Leaseco, LLC

ECRV Clinton Leaseco, LLC

ECRV FM Leaseco, LLC

We have audited the accompanying combined balance sheets of ECRV Hanover Hospitality Leaseco, LLC, ECRV Clinton Leaseco, LLC, and ECRV FM Leaseco, LLC. (collectively, “the Companies)  (single-member limited liability companies) as of December 31, 2007 and 2006, and the related combined statements of operations, member’s equity, and cash flows for the following periods; ECRV Hanover Hospitality Leaseco, LLC for the period June 16, 2006 (date of inception) to December 31, 2007. ECRV Clinton Leaseco, LLC for the period March 08, 2007 (date of inception) to December 31, 2007. ECRV FM Leaseco, LLC for the period June 10, 2007 (date of inception) to December 31, 2007. These combined financial statements are the responsibility of the Companies management.  Our responsibility is to express an opinion on these combined financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

The Companies have determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companies internal control over financial reporting. Accordingly, we express no such opinion.  

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Companies and the results of its operations and its cash flows for the following periods; ECRV Hanover Hospitality Leaseco, LLC for the period June 16, 2006 (date of inception) to December 31, 2007; ECRV Clinton Leaseco, LLC for the period March 08, 2007 (date of inception) to December 31, 2007; ECRV FM Leaseco, LLC for the period June 10, 2007 (date of inception) to December 31, 2007 in conformity with accounting principles generally accepted in the United States of America.

/s/ Conner & Associates, PC

27 May 2008

Newtown, Pennsylvania

Except for notes #8 and #9, which are dated 5 April 2009

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ECRV Hanover Hospitality Leaseco, LLC

ECRV Clinton Leaseco, LLC

ECRV FM Leaseco, LLC

Combined Balance Sheets

December 31, 2007 and 2006

ASSETS
	2007			2006
Current assets
Cash	$	806,806		$	334,586
Prepaid expenses		141,013			134,506
Accounts receivable		107,821			-
Ledger accounts		179,025			-
Total current assets		1,234,665			469,092
Property and equipment
Furniture, fixtures and equipment		3,727,591			220,625
Less: accumulated depreciation		(233,863	)		(14,708	)
Total fixed assets		3,493,728			205,917
Other assets
Escrow reserves		(54,956	)		17,723
Franchise fees		144,500			64,500
Deposits		17,412			-
Total other assets		106,956			82,223
Total assets	$	4,835,348		$	757,232

See accompanying notes to financial statements, which are an integral part of the financial statements.

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ECRV Hanover Hospitality Leaseco, LLC

ECRV Clinton Leaseco, LLC

ECRV FM Leaseco, LLC

Combined Balance Sheets

December 31, 2007 and 2006

LIABILITIES AND MEMBER'S EQUITY
	2007			2006
Current liabilities
Accounts payable and accrued expenses	$	351,361		$	69,761
Accrued salaries and wages		91,144			32,069
Management fees payable		35,164			10,933
Taxes payable, rooms		69,214			27,879
Taxes payable, other		146,138			10,389
Total current liabilities		693,021			151,031
Long term liabilities
Advances from member		260,000			-
Total liabilities		953,021			151,031
Commitments and contingencies		-			-
Member's equity
Member's equity contribution		4,349,121			404,497
Retained earnings (deficit)		(466,794	)		201,705
Total member's equity		3,882,326			606,201
Total liabilities and member's equity	$	4,835,348		$	757,232

See accompanying notes to financial statements, which are an integral part of the financial statements.

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ECRV Hanover Hospitality Leaseco, LLC

ECRV Clinton Leaseco, LLC

ECRV FM Leaseco, LLC

Combined Statements of Operations

	For the period			For the period
	from			June 16, 2006
	(Inception) to			(Inception) to
	December 31, 2007			December 31, 2006
		(1)
Revenue
Rooms	$	6,918,220		$	1,407,774
Food and beverage		159,782			27,289
Other income		475,044			44,747
Total operating revenue		7,553,046			1,479,810
Operating expenses
Rooms		1,967,157			386,752
Food and beverage		56,188			9,754
Rent		3,288,643			362,856
Management and franchise fees		894,287			224,464
General and administrative		585,532			117,824
Depreciation and amortization		233,863			14,708
Other expenses		1,134,421			163,566
Total operating expenses		8,160,091			1,279,925
Income from operations		(607,045	)		199,886
Other income (expense),
Interest income		5,383			1,819
Interest expense		(66,836	)		-
Total other income (expense)		(61,453	)		1,819
Income before provision for income taxes		(668,498	)		201,705
Provision for income taxes		-			-
Net income (loss)	$	(668,498	)	$	201,705

(1)	ECRV Hanover Hospitality Leaseco, LLC date of inception was June 16, 2006
(1)	ECRV Clinton Leaseco, LLC date of inception was March 08, 2007
(1)	ECRV FM Leaseco, LLC date of inception was May 10, 2007

See accompanying notes to financial statements, which are an integral part of the financial statements.

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ECRV Hanover Hospitality Leaseco, LLC

ECRV Clinton Leaseco, LLC

ECRV FM Leaseco, LLC

Combined Statements of Changes in Member's Equity

							Total
	Member's			Retained			Member's
	Equity			Earnings			Equity
Balance, June 16, 2006 (1)	$	-		$	-		$	-
Member's equity contribution - Hanover		404,497			-			404,497
Net income		-			201,705			201,705
Balance, December 31, 2006		404,497			201,705			606,201
Member's equity contribution - Clinton (2)		1,660,778			-			1,660,778
Member's equity contribution - Absecon (3)		2,280,846			-			2,280,846
Additional equity contribution - Hanover		73,000			-			73,000
Return of equity contribution - Hanover		(70,000	)		-			(70,000	)
Net income (loss)		-			(668,498	)		(668,498	)
Balance, December 31, 2007	$	4,349,121		$	(466,794	)	$	3,882,326

1ECRV Hanover Hospitality Leaseco, LLC date of inception was June 16, 2006 (Hanover)

2ECRV Clinton Leaseco, LLC date of inception was March 08, 2007 (Clinton)

3ECRV FM Leaseco, LLC date of inception was May 10, 2007 (Absecon)

See accompanying notes to financial statements, which are an integral part of the financial statements.

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ECRV Hanover Hospitality Leaseco, LLC

ECRV Clinton Leaseco, LLC

ECRV FM Leaseco, LLC

Combined Statements of Cash Flows

	For the period			For the period
	from			June 16, 2006
	(Inception) to			(Inception) to
	December 31, 2007			December 31, 2006
		(1)
Cash flows from operating activities
Net income (deficit)	$	(668,498	)	$	201,705
Adjustments to reconcile net income to
cash used in operating activities
Depreciation and amortization		219,155			14,708
Changes in operating assets and liabilities:
(Increase) decrease in:
Prepaid expenses		(6,507	)		(134,506	)
Accounts receivable		(107,821	)		-
Ledger accounts		(179,025	)		-
Deposits		(17,412	)		-
Increase (decrease) in:
Accounts payable and accrued expenses		281,600			69,760
Accrued salaries and wages		59,076			32,069
Management fees payable		24,232			10,933
Taxes payable, rooms		41,335			27,879
Taxes payable, other		135,749			10,389
Cash flows (used in) provided by operating activities		(218,117	)		232,936
Cash flows (used in) investing activities
Purchases of furniture and fixtures		(3,434,287	)		(238,348	)
Payment for franchise fees		(80,000	)		(64,500	)
Cash flows (used in) investing activities		(3,514,287	)		(302,848	)
	��
Cash flows provided by financing activities
Member's equity contribution		3,944,624			404,497
Advances from member		260,000			-
Cash flows provided by financing activities		4,204,624			404,497
Net increase in cash		472,220			334,586
Cash, beginning of period		334,586			-
Cash, end of period	$	806,806		$	334,586

See accompanying notes to financial statements, which are an integral part of the financial statements.

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Hanover Hospitality Leaseco, LLC

ECRV Clinton Leaseco, LLC

ECRV FM Leaseco, LLC

Notes to Combined Financial Statements

December 31, 2007 and 2006

Note 1.Organization and Summary of Significant Accounting Policies

Organization

ECRV Hanover Hospitality Leaseco, LLC (“Hanover”) was organized as a limited liability company under the laws of the State of Delaware on June 16, 2006.

ECRV Clinton Leaseco, LLC (“Clinton”) was organized as a limited liability company under the laws of the State of Delaware on March 08, 2007.

ECRV FM Leaseco, LLC (“Absecon”) was organized as a limited liability company under the laws of the State of Delaware on May 10, 2007.

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 with no franchise or licensing agreements.  Under separate management agreements, all of the companies have engaged the services of Park Place Hospitality, Inc. (“PPHG”) to run the operations of the hotels.  PPHG’s base of operations is located in Charlotte, North Carolina.

Under each agreement, PPHG receives 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.

Background and Related Parties

East Cost Realty Ventures, LLC (“ECRV”), is an Internal Revenue Service (“IRS”) Section 1031 Tenant-in-Common Sponsor.  ECRV is the sole limited liability company member of the Company.  ECRV is owned 100% by Frederic Richardson.  Mr. Richardson is the sole director, and President/CEO of the Companies.

In a tenants-in-common investment, multiple qualified property owners come together to purchase a large, institutional–grade property, however, not as limited partners in a partnership, but as individual owners.  Each co-owner willing to assume the inherent risks and expenses associated with real estate investments, including the fluctuations in the real estate market, receives an individual deed at closing for his or her own undivided fractional interest in the entire real estate investment.

Tax-related guidance (ruling guidelines) on tenants in common (TIC) investments is provided for in Revenue Procedure 2002-22 issued by the IRS.  The revenue procedure does not state substantive law; however, it sets forth the conditions under which the IRS will consider a request for a revenue ruling that an undivided fractional interest in rental real property is not an interest in an entity such as a partnership.

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Each 1031 exchange tenants in common property owner has all of the same rights as a single owner and shares the proportionate share of risk, as well as net income or losses, related tax benefits, and growth or loss of market value with other 1031 exchange tenants in common investors.

An exchange into tenants in common property allows a qualified real estate investor to defer capital gains tax in accordance with tenants in common requirements.

ECRV is focused primarily on doing business within the hospitality industry.  When ECRV purchases a hotel, in order for the purchase to remain qualified for 1031 exchange status, the exchange must be like-kind; i.e. of an identical nature to the presently owned property.

For the purchase of a hotel to qualify as a like-kind exchange, the operations must be separated from the real estate.  The building owners then lease the space to the tenant; i.e. the operations, in this particular case the Companies.  The operations pay base rent and additional rent and a master lease agreement are signed by the lessee (the Companies) and each of the individual owners of the building.

New Accounting Pronouncements

In March 2008, the FASB issued FAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities.”  SFAS 161 is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial performance, and cash flows.  SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged.  The Companies do not anticipate a material impact upon adoption.

In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations.”  SFAS No. 141(R) changes the accounting for and reporting of business combination transactions in the following way:  Recognition with certain exceptions, of 100% of the fair values of assets acquired, liabilities assumed, and non controlling interests of acquired businesses; measurement of all acquirer shares issued in consideration for a business combination at fair value on the acquisition date; recognition of contingent consideration arrangements at their acquisition date fair values, with subsequent changes in fair value generally reflected in earnings; recognition of pre-acquisition gain and loss contingencies at their acquisition date fair value; capitalization of in-process research and development (IPR&D) assets acquired at acquisition date fair value; recognition of acquisition-related transaction costs as expense when incurred; recognition of acquisition-related restructuring cost accruals in acquisition accounting only if the criteria in Statement No. 146 are met as of the acquisition date; and recognition of changes in the acquirer’s income tax valuation allowance resulting from the business combination separately from the business combination as adjustments to income tax expense.  SFAS No. 141(R) is effective for the first annual reporting period beginning on or after December 15, 2008 with earlier adoption prohibited.  The adoption of SFAS No. 141(R) will affect valuation of business acquisitions made in 2009 and forward.   

In February 2007, the FASB issued FAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities – Including an Amendment of FASB Statement No. 115” (“FAS 159”).  FAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value.

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This provides entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without being required to apply complex hedge accounting provisions.  FAS 159 is effective for fiscal years beginning after November 15, 2007, and the Companies are currently evaluating the impact that FAS 159 will have on its financial position and results of operations once adopted.

In September 2006, the Securities and Exchange Commission issued Staff Accounting Bulletin 108, “Considering the Effects of Prior Year Misstatements When Quantifying Misstatements in Current Year Financial Statements” (“SAB 108”).  SAB 108 provides interpretive guidance on the consideration of the effects of prior year misstatements in quantifying current year misstatements for the purpose of a materiality assessment and is effective for fiscal years ending after November 15, 2006.  The adoption of SAB 108 had no impact on the Company’s financial statements for the year ended December 31, 2006.

In September 2006, the FASB issued FAS No. 157, “Fair Value Measurements” (“FAS 157”).  FAS 157 defines fair value, establishes a framework for measuring fair value, expands disclosures about fair value measurements and is effective for fiscal years beginning after November 15, 2007.  Management is currently evaluating the impact this statement will have on its consolidated financial statements.

In June 2006, the FASB ratified the consensus of Emerging Issues Task Force Issue No. 06-3, “How Taxes Collected from Customers and Remitted to Governmental Authorities Should be Presented in the Income Statement (That is, Gross versus Net Presentation)” (EITF 06-3).  EITF 06-3 concluded that the presentation of taxes imposed on revenue producing transactions (sales, use, value add, and excise taxes) on either a gross (included in revenues and costs) or a net (excluded from revenues) basis is an accounting policy that should be disclosed.  The Companies have adopted the gross basis for presentation for the year ended December 31, 2007 and 2006, which did not have any impact on our results of operations or financial condition.

FASB Interpretation No. (FIN) 46, “Consolidation of Variable Interest Entities”

As of December 31, 2007 and 2006, the Companies considered the provisions of FASB Interpretation No. (FIN) 46, “Consolidation of Variable Interest Entities” specifically as it relates to the Companies sole managing member, East Coast Realty Ventures, LLC, along with other entities controlled by Mr. Richardson.  As of December 31, 2007 and 2006, the accompanying financial statements only include the accounts of the Companies.

Cash and Cash Equivalents

The Companies consider all highly liquid investments with a maturity of three months or less from the date of purchase that are readily convertible into cash or cash equivalents.  Balances in bank accounts may, from time to time, exceed federally insured limits.  As of December 31, 2007 and 2006 the companies’ maintained cash balances of $ 806,806 and $334,586 respectively.

Use of Estimates

The preparation of combined financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosure. Accordingly, actual results could differ from those estimates.

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Long-Lived Assets

Long-lived assets, primarily furniture and equipment, are reviewed monthly for impairment; i.e. the market value of the asset falls below the carrying value indicating that the carrying value of the asset is highly unlikely to be recovered.  Impairment is necessary when the undiscounted cash flows estimated to be generated by the asset are less than the carrying value of the asset.

Income Taxes

The Companies are single-member limited liability companies and as such are considered  disregarded entities for tax purposes.  All items of income, loss, deductions and credits are reflected on Mr. Richardson’s 2007 and 2006 personal income tax returns.  Since a balance sheet is not required to be presented for income tax purposes, the book to tax adjustments have not been determined.  The accompanying combined financial statements do not reflect any federal nor state income tax payable as of December 31, 2007 and 2006.

Fair Value of Financial Instruments

The Companies measure 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.

Income and Expense Recognition

The Companies 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.  The Companies recognize expenses related to the management of the properties in accordance with the accrual basis of accounting, that is, when the expense is incurred. Park Place Hospitality, Inc. handles all the requisite accounting functions for the Companies.

Advertising, Sales and Marketing Expenses

The Companies 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”, the Companies expense advertising and marketing costs as incurred or as the advertising takes place.

The accompanying combined financial statements reflect sales and marketing expenses for the periods ended December 31, 2007 and for the period June 16, 2006 (inception) to December 31, 2006 of $139,906 and $45,501 respectively.

Note 2.Furniture and Fixtures

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.

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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.

As of December 31, 2007 and 2006, furniture and fixtures consisted of the following:

Hanover

	2007			2006
Furniture and fixtures	$	227,291		$	220,625
Less: accumulated depreciation		(58,833	)		(14,708	)
Total	$	168,458		$	205,917

Clinton

	2007
Furniture and fixtures	$	1,400,300
Less: accumulated depreciation		(280,060	)
Total	$	1,120,240

Absecon

	2007
Furniture and fixtures	$	2,100,000
Less: accumulated depreciation		(35,000	)
Total	$	2,065,000

Note 3.Property Improvement Plan

A Property Improvement Plan (PIP) in the amount of $1.1 million was reserved at the closing of the transaction and is owned by Absecon.  The funds are held by the lender to cover the deferred maintenance obligations required by the Marriott Corporation to maintain the Fairfield flag.

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Listed below is a schedule of what maintenance has been required by Marriott and the estimated cost.

Lobby	$	85,000
Meeting and Board Rooms		20,000
Public Rest Rooms		2,500
Exercise Room		18,000
Pool		17,000
Office		5,000
Employee Dining		2,500
Back of the House		5,000
Corridors/Stairwells		85,000
Guest Rooms and Doors		260,000
Guest Bathrooms		75,000
Wall Vinyl		150,000
Porte		75,000
Building Exterior		50,000
Hardscape and Parking Area		35,000
Arch Façade		120,000
Engineering and Other		100,000
Total	$	1,105,000

All of the work must be completed with six months of purchase.  There is a possibility that the actual costs may exceed the estimated cost.  There is a possibility that the costs could rise to $1.75 million; i.e., $650,000 over the escrowed amount.

Marriott issued a date extension for the property on May 13, 2008. The PIP is scheduled to start September 2008 and will be completed on or before December 31, 2008.

Note 4.Franchise Fees

As of December 31, 2007, 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.

Note 5.Member’s Equity

The member’s equity represents East Coast Realty Ventures, LLC’s (“ECRV”) cash contributed to each of the Companies at inception to fund the operating account plus additional contributions in January 2007 in Hanover less the return of the initial investment in Hanover plus the net income generated for the periods through December 31, 2007 and 2006, respectively.

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Note 6.Base Rent and Additional Rent

There exists a triple net master lease between each of the Companies, 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.

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 Yield
Year 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 Base
Year 1	$	756,000	Year 6	$	992,250
Year 2		803,250	Year 7		992,250
Year 3		850,500	Year 8		992,250
Year 4		874,125	Year 9		992,250
Year 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.

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 Yield
Year 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%

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Base rent is paid, monthly, in arrears as follows:

Year		Total Base	Year		Total Base
Year 1	$	616,000	Year 6	$	693,000
Year 2		635,250	Year 7		693,000
Year 3		654,500	Year 8		693,000
Year 4		673,750	Year 9		693,000
Year 5		693,000	Year 10 - 15		693,000

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 the Companies.

Base Rent: Absecon

Rental payments equivalent to a cumulative and compounding annualized return of 10% on the $2,150,000 limited liability company 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 managing member of the entity that manages Absecon 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.

Note 7.Subsequent Events

Effective April 7, 2008, 100% of the membership interest in all three Companies were exchanged for stock in a newly formed holding company, ECV Holdings, Inc.  The Companies and their legal counsel have structured this agreement to comply with the provisions of Section 351 of the Internal Revenue Code wherein the Companies are treating it as a tax-free reorganization for federal tax purposes.

Effective May 8, 2008, ECV Holdings, Inc. entered into a share exchange agreement with Flora Nutrients, Inc., a non-reporting small public company listed on the Pink Sheets Grey Market under the symbol; FLNU.  Effective with this agreement, ECV Holdings, Inc. is a wholly-owned subsidiary of the small public company which is in the process of changing its name. The three limited liability companies (the Companies) that manage the hotel properties remain wholly-owned subsidiaries of ECV Holdings, Inc.

Effective May 13, 2008, Marriott has issued a date extension for the property located in Absecon, New Jersey. The property improvement plan (PIP) is scheduled to start September 2008 and will be completed on or before December 31, 2008.

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Note 8.Subsequent Events – Reverse Merger (unaudited)

On October 21, 2008, Mod Hospitality, Inc. f/k/a PSPP Holdings, Inc. (“Mod”) acquired all of the issued and outstanding common stock of ECV Holdings, Inc., (“ECV”) a Delaware corporation, in accordance with a share exchange agreement entered into by the parties. Pursuant to the terms of a securities exchange transaction, Mod acquired all of the outstanding common stock of ECV from Flora Nutrients, Inc. In exchange, Mod issued 50,000,000 shares to Flora Nutrients, Inc., or approximately 99.912% of Mod’s common stock outstanding as of October 21, 2008. 

Mod Hospitality, Inc. f/k/a PSPP Holdings, Inc. is a public company with the company’s securities quoted on both Pink Sheets and the OTCBB under the ticker symbol, MODY.

Note 9.Corrections in Previously Issued Financial Statements

The accompanying combined financial statements as of December 31, 2007 and 2006 have been adjusted to 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 (see note no. 6); however, the base rent expense is being recognized on a straight-line basis over the life of the leases.  The base rent expense for the year ended December 31, 2006 decreased by $28,495 and for the year ended December 31, 2007 increased by $163,429.

In February 2009, the management of the Companies discovered that the Holiday Inn Express in Hanover, Maryland managed by Park Place Hospitality Group was accruing $8,321 per month for personal property taxes on the furniture, fixtures and equipment owned by ECRV Hanover Hospitality Leaseco, LLC as opposed to $8,321 per year.  As a result, in accordance with SFAS no. 154, the accompanying combined financial statements as of December 31, 2007 and 2006 have been adjusted to reflect an over accrual of $141,457 for personal property taxes.

The following table reflects the effects of these changes:

	2007			2006
Net income (loss) as
previously reported	$	(604,921	)	$	131,605
Adjustments:
Base rent expense		(163,429	)		28,495
Personal property tax		99,852			41,605
Total adjustments		(63,577	)		70,100
Net income (loss) - restated	$	(668,498	)	$	201,705

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ECRV Hanover Hospitality Leaseco, LLC

ECRV Clinton Leaseco, LLC

ECRV FM Leaseco, LLC

Restated Combined Balance Sheets

December 31, 2007 and 2006

ASSETS
		2007			2007				2006			2006
					As Previously							As Previously
		Restated			Reported				Restated			Reported
Current assets
Cash		$	806,806		$	806,806			$	334,586		$	334,586
Prepaid expenses	B		141,013			134,490		A		134,506			106,012
Accounts receivable			107,821			107,821				-			-
Ledger accounts			179,025			179,025				-			-
Total current assets			1,234,665			1,228,142				469,092			440,598
Fixed Assets
Furniture and fixtures			3,727,591			3,727,591				220,625			220,625
Less: accumulated depreciation			(233,863	)		(233,863	)			(14,708	)		(14,708	)
Total fixed assets			3,493,728			3,493,728				205,917			205,917
Other assets
Escrow reserves			(54,956	)		(54,956	)			17,723			17,723
Franchise fees			144,500			144,500				64,500			64,500
Deposits			17,412			17,412				-			-
Total other assets			106,956			106,956				82,223			82,223
Total assets		$	4,835,349		$	4,828,826			$	757,232		$	728,738
LIABILITIES AND MEMBER'S EQUITY
Current liabilities
Accounts payable and accrued expenses	B		351,361		$	351,361			$	69,761		$	69,761
Accrued salaries and wages			91,144			91,144				32,069			32,069
Management fees payable			35,164			35,164				10,933			10,933
Taxes payable, rooms			69,214			69,214		A		27,879			69,484
Taxes payable, other			146,138			146,138				10,389			10,389
Total current liabilities			693,021			693,021				151,031			192,635
Long term liabilities
Advances from member			260,000			260,000				-			-
Total liabilities			953,021			953,021				151,031			192,635
Commitments and contingencies			-			-				-			-
Member's equity
Member's equity contribution			4,349,121			4,349,121				404,497			404,497
Retained earnings (deficit)	B		(466,794	)		(473,317	)	A		201,705			131,605
Total member's equity			3,882,326			3,875,804				606,201			536,102
Total liabilities and member's equity		$	4,835,349		$	4,828,826			$	757,232		$	728,738

A - adjustments in 2006 for $70,100 increase in the net income

B - adjustments in 2007 for ($63,577) increase in the net loss

The net effect of these adjustments for 2006 and 2007 is $6,523.

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ECRV Hanover Hospitality Leaseco, LLC

ECRV Clinton Leaseco, LLC

ECRV FM Leaseco, LLC

Restated Combined Statements of Operations

		For the period			For the period				For the period		For the period
		from			from				June 16, 2006		June 16, 2006
		(Inception) to			(Inception) to				(Inception) to		(Inception) to
		December 31, 2007			December 31, 2007				December 31, 2006		December 31, 2006
		(1)			(1)
		Restated			As Previously				Restated		As Previously
					Reported						Reported
Revenue
Rooms		$	6,918,220		$	6,918,220			$	1,407,774	$	1,407,774
Food and beverage			159,782			159,782				27,289		27,289
Other income			475,044			475,044				44,747		44,747
Total operating revenue			7,553,046			7,553,046				1,479,810		1,479,810
Operating expenses
Rooms			1,967,157			1,967,157				386,752		386,752
Food and beverage			56,188			56,188				9,754		9,754
Rent	B		3,288,643			3,125,214		A		362,856		391,351
Management and franchise fees			894,287			894,287				224,464		224,464
General and administrative			585,532			585,532				117,824		117,824
Depreciation and amortization			233,863			233,863				14,708		14,708
Other expenses	B		1,134,421			1,234,273		A		163,566		205,171
Total operating expenses			8,160,091			8,096,514				1,279,925		1,350,025
Income (loss) from operations			(607,045	)		(543,468	)			199,886		129,786
Other income (expense),
Interest income			5,383			5,383				1,819		1,819
Interest expense			(66,836	)		(66,836	)			-		-
Total other income (expense)			(61,453	)		(61,453	)			1,819		1,819
Income before provision for income taxes B			(668,498	)		(604,921	)	A		201,705		131,605
Provision for income taxes			-			-				-		-
Net income (loss)		$	(668,498	)	$	(604,921	)		$	201,705	$	131,605

(1) ECRV Hanover Hospitality Leaseco, LLC date of inception was June 16, 2006

(1) ECRV Clinton Leaseco, LLC date of inception was March 08, 2007

(1) ECRV FM Leaseco, LLC date of inception was May 10, 2007

A - adjustments in 2006 for $70,100 increase in the net income

B - adjustments in 2007 for ($63,577) increase in the net loss

The net effect of these adjustments for 2006 and 2007 is $6,523.

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