East Coast Diversified (ECDV) 10-Q 2009 Q2 Quarterly report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________

FORM 10-Q
_________________________

ýQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 31, 2009

OR

¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 0-50356

EAST COAST DIVERSIFIED CORPORATION
(Exact Name Of Registrant As Specified In Its Charter)

Nevada	55-0840109
(State of Incorporation)	(I.R.S. Employer Identification No.)
1475 West Cypress Creek Road, Suite 202, Ft. Lauderdale, FL	33309
(Address of Principal Executive Offices)	(ZIP Code)

 Registrant's Telephone Number, Including Area Code: (732) 803-8000

Securities Registered Pursuant to Section 12(g) of The Act: Common Stock, $0.001

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

On September 15, 2009, the Registrant had 7,260,639 shares of common stock, par value $0.001 outstanding.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨No x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.

Large accelerated filer ¨ Accelerated filer ¨ Non-Accelerated filer ¨ Smaller reporting company x

TABLE OF CONTENTS

Item	Description	Page
PART I - FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS.		3
ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION.		3
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		6
ITEM 4.	CONTROLS AND PROCEDURES.		6
PART II - OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS.		6
ITEM 1A.	RISK FACTORS		6
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		6
ITEM 3.	DEFAULT UPON SENIOR SECURITIES.		6
ITEM 4.	SUBMISSION OF MATERS TO A VOTE OF SECURITY HOLDERS.		6
ITEM 5.	OTHER INFORMATION.		6
ITEM 6.	EXHIBITS.		6

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS Back to Table of Contents

The Registrant's financial statements for the three-month periods ended July 31, 2009 and 2008 are attached to this quarterly report.

Financial Statements

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION Back to Table of Contents

The following discussion contains forward-looking statements. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They use of words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. From time to time, we also may provide forward-looking statements in other materials we release to the public.

Overview

The Company has not generated any revenues from its operations.

General and administrative expenses

During the three-month period ended July 31, 2009 and 2008, the Company had operating expenses of $97,808 and $96,566, respectively. Our operating expenses consist mainly of professional fees, general and administrative expenses.

Operating Loss

Our operating loss during the three-month period ended July 31, 2009 and 2008 was $97,808 and $96,566, respectively.

Liquidity and Capital Resources

While we are dependent upon interim funding provided by management and/or affiliated parties to pay professional fees and expenses, we have no written finance agreement with management and/or affiliated parties to provide any continued funding. However, we may need to raise additional funds through a the issuance of debt or equity securities if additional funds are required to execute our business plan. During the three-month period ended July 31, 2009, we received proceeds of $6,200 through the issuance of convertible notes to management.

On July 31, 2009, we had $12 in current assets and had $2,640,210 in current liabilities. On July 31, 2009, our negative working capital was $2,640,198. We had $523,849 in total assets and $2,726,024 in total liabilities at July 31, 2009.

There are no limitations in the Company's articles of incorporation on the Company's ability to borrow funds or raise funds through the issuance of restricted common stock. The Company's limited resources and lack of having cash-generating business operations may make it difficult to borrow funds or raise capital. The Company's limitations to borrow funds or raise funds through the issuance of restricted capital stock may have a material adverse effect on the Company's financial condition and future prospects, including the ability to execute its business plan. To the extent that debt financing ultimately proves to be available, any borrowing will subject us to various risks traditionally associated with indebtedness, including the risks of interest rate fluctuations and insufficiency of cash flow to pay principal and interest.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Back to Table of Contents

We have not entered into, and do not expect to enter into, financial instruments for trading or hedging purposes.

ITEM 4. CONTROLS AND PROCEDURES Back to Table of Contents

Evaluation of disclosure controls and procedures. As of July 31, 2009, the Company's chief executive officer and chief financial officer conducted an evaluation regarding the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the  Exchange Act. Based upon the evaluation of these controls and procedures, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in internal controls. During the quarterly period covered by this report, no changes occurred in our internal control over financial reporting that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS Back to Table of Contents

The Registrant's officers and directors are not aware of any threatened or pending litigation to which the Registrant is a party or which any of its property is the subject and which would have any material, adverse effect on the Registrant.

ITEM 1A. RISK FACTORS Back to Table of Contents

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1. Description of Business, subheading Risk Factors” in our Annual Report on Form 10-K for the year ended April 30, 2009, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Back to Table of Contents

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES Back to Table of Contents

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Back to Table of Contents

None.

ITEM 5. OTHER INFORMATION Back to Table of Contents

None.

ITEM 6. EXHIBITS Back to Table of Contents

(a) The following documents are filed as exhibits to this report on Form 10-Q or incorporated by reference herein.

Exhibit No.	Description
31	Certification of CEO, CFO pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification of CEO, CFO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.

/s/ Frank Rovito
Frank Rovito
   Chief Executive Officer and Chief Financial Officer
   Dated: September 21, 2009

EAST COAST DIVERSIFIED CORPORATION AND CONSOLIDATED SUBSIDIARIES
(A Development Stage Company) Back to Table of Contents
Consolidated Balance Sheets
July 31, 2009 and April 30, 2009
		July 31, 2009		April 30, 2009 (Audited)
				(Adjusted for 1:100 reverse split)
ASSETS
Current assets:
Cash and equivalents	$	12	$	225
Total current assets		12		225
Leasehold improvements, (net of accumulated amortization of $0)		430,373		430,373
Other assets:
Cost of liquor license		93,464		93,464
Total other assets		93,464		93,464
Total assets	$	523,849	$	524,062
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts and accrued expenses payable	$	1,330,104	$	1,238,626
Current portion, convertible notes payable, officers		717,469		711,269
Current portion, convertible note payable, related party		408,597		408,597
Accrued interest		184,040		170,696
Total current liabilities		2,640,210		2,529,188
Non-current liabilities:
Deferred rent expense		85,814		85,897
Total non-current liabilities		85,814		85,897
Total liabilities		2,726,024		2,615,085
Minority interest in Miami Renaissance Partners, Ltd., a partnership subsidiary		122		122
Stockholders' deficit:
Preferred stock, par value 0.001 par value, 1,000,000 authorized,
none issued and outstanding		-		-
Common stock, $0.001 par value, 74,000,000 shares authorized;
362,939 and 362,939 shares issued and outstanding		363		363
Additional paid-in capital		2,339,298		2,339,298
Accumulated deficit		(4,521,458)		(4,410,306)
Less: stock subscription receivable		(20,500)		(20,500)
Total stockholders' deficit		(2,202,297)		(2,091,145)
Total liabilities and stockholders' deficit	$	523,849	$	524,062
See the summary of significant accounting policies and the accompanying notes to the financial statements.

EAST COAST DIVERSIFIED CORPORATION AND CONSOLIDATED SUBSIDIARIES
(A Development Stage Company) Back to Table of Contents
Consolidated Statements of Operations
For the Periods Ended July 31, 2009 and 2008
and for the Period from inception (April 26, 2006) to July 31, 2009 and April 30, 2009
					Period form		Period form
		Three Months		Three Months	inception		inception
		Ended		Ended	(April 26, 2006)		(April 26, 2006)
		July 31, 2009		July 31, 2008	to April 30, 2009		to July 31, 2009
Revenues	$	-	$	-	-	$	-
Operating expenses:
Consulting fees and services satisfied by
issuance of common stock		-		-	52,500		52,500
Selling, general and administrative		97,808		95,566	1,244,663		1,342,471
Total operating expenses		97,808		95,566	1,297,163		1,394,971
Net loss from operations during development stage		(97,808)		(95,566)	(1,297,163)		(1,394,971)
Other income (expenses):
Interest income		-		-	544		544
Gain on settlement of accrued liabilities		-		-	79,339		79,339
Interest expense		(13,344)		(12,985)	(143,421)		(156,765)
Total other expenses		(13,344)		(12,985)	(63,538)		(76,882)
Net loss before minority interest		(111,152)		(108,551)	(1,360,701)		(1,471,853)
Add: 25% minority interest in net profit of
consolidated affiliate		-		-	(122)		(122)
Net loss after minority interest	$	(111,152)	$	(108,551)	(1,360,823)	$	(1,471,975)
Basic and diluted net loss per weighted-average shares
of common stock outstanding (ajusted for 1:100 reverse split)	$	(1.01)	$	(1.31)	(13.60)	$	(14.61)
Weighted average number of shares of common stock outstanding (ajusted for 1:100 reverse split)		110,447		83,134	100,061		100,682
See the summary of significant accounting policies and the accompanying notes to the financial statements.

EAST COAST DIVERSIFIED CORPORATION AND CONSOLIDATED SUBSIDIARIES
(A Development Stage Company) Back to Table of Contents
Consolidated Statement of Stockholders' Deficit (During Development Stage)
For the period July 31, 2009
and for the Period from inception (April 26, 2006) to July 31, 2009
								Additional		Stock				Total
	Preferred			Common				Paid-in		Subscription		Accumulated		stockholders'
	Shares		Amount	Shares		Amount		Capital		Receivable		Deficit		deficit
Balance April 30, 2004 (adjusted for 1:100 reverse split)	-	$	-	88,489	$	88	$	1,982,573	$	-	$	(2,075,474)	$	(92,813)
Net loss for the year ended April 30, 2005	-		-	-		-		-		-		(60,353)		(60,353)
Balance April 30, 2005 (adjusted for 1:100 reverse split)	-		-	88,489		88	$	1,982,573		-		(2,135,827)		(153,166)
Miami Renaissance Group's share
exchange for Registrant's shares (adjusted for 1:100 reverse split)	167,650		168	46,350		46		20,286		(20,500)		(913,656)		(913,656)
Net loss for the year ended April 30, 2006	-		-	-		-		-		-		(21,643)		(21,643)
Balance April 30, 2006 (adjusted for 1:100 reverse split)	167,650	$	168	134,839	$	134	$	2,002,859	$	(20,500)	$	(3,071,126)	$	(1,088,465)
Common stock issued for cash (adjusted for 1:100 reverse split)	-		-	9,950		10		198,990		-		-		199,000
Common stock issued for services,
including $40,000 capitalized
as leasehold improvements (adjusted for 1:100 reverse split)	-		-	5,500		6		92,494		-		-		92,500
Net loss for the yer ended April 30, 2007	-		-	-		-		-		-		(507,746)		(507,746)
Balance April 30, 2007 (adjusted for 1:100 reverse split)	167,650	$	168	150,289	$	150	$	2,294,343	$	(20,500)	$	(3,578,872)	$	(1,304,711)
Net loss for the yer ended April 30, 2008	-		-	-		-		-		-		(461,691)		(461,691)
Balance April 30, 2008 (adjusted for 1:100 reverse split)	167,650	$	168	150,289	$	150	$	2,294,343	$	(20,500)	$	(4,040,563)	$	(1,766,402)
Preferred shares converted to common stock (adjusted for 1:100 reverse split)	(167,650)		(168)	167,650		168		-		-		-		-
Common stock issued on settlement of
accrued expenses (adjusted for 1:100 reverse split)	-		-	45,000		45		44,955		-		-		45,000
Net loss for the yer ended April 30, 2009	-		-	-		-		-		-		(369,743)		(369,743)
Balance, April 30, 2009 (adjusted for 1:100 reverse split)	-	$	-	362,939	$	363	$	2,339,298	$	(20,500)	$	(4,410,306)	$	(2,091,145)
Net loss for the period ended July 31, 2009	-		-	-		-		-		-		(111,152)		(111,152)
Balance, July 31, 2009 (adjusted for 1:100 reverse split)	-	$	-	362,939	$	363	$	2,339,298	$	(20,500)	$	(4,521,458)	$	(2,202,297)
See the summary of significant accounting policies and the accompanying notes to the financial statements.

EAST COAST DIVERSIFIED CORPORATION AND CONSOLIDATED SUBSIDIARIES
(A Development Stage Company) Back to Table of Contents
Consolidated Statement of Cash Flows
For the Three Months Ended July 31, 2009
and for the Period from inception (April 26, 2006) to July 31, 2009
				Period form		Period form
		Three Months		inception		inception
		ended		(April 26, 2006)		(April 26, 2006)
		July 31, 2009		to April 30, 2009		to July 31, 2009
Net loss	$	(111,152)	$	(1,360,823)	$	(1,471,975)
Cash flows from operating activities:
Adjustments to reconcile net loss to cash used in operating activities:
25% minority interest in net profit of consolidated affiliate		-		122		122
Common stock issued for consulting fees and services		-		52,500		52,500
Common stock issued on settlement of accrued expenses		-		45,000		45,000
Changes in operating assets and liabilities:
Increase in accounts and accrued expenses payable		91,478		755,026		846,504
(decrease) increase in deferred rent expense		(83)		34,268		34,185
Increase in accrued interest		13,344		142,642		155,986
Net cash used in operating activities		(6,413)		(331,265)		(337,678)
Cash flow from investing activities:
Net cash acquired in acquisition of Miami Renaissance Group, Inc.		-		2,451		2,451
Cost paid in acquiring pending liquor license		-		(89,964)		(89,964)
Acquisition of leasehold improvements		-		(80,469)		(80,469)
Net cash provided by investing activities		-		(167,982)		(167,982)
Cash flows from financing activities:
Proceeds from issuance of convertible notes payable, related party		-		80,823		80,823
Proceeds from issuance of convertible notes payable, officers		6,200		217,735		223,935
Common stock issued for cash		-		199,000		199,000
Return of capital contributions to limited partners of 75% owned affiliates		-		(125,000)		(125,000)
Decrease in restricted cash		-		126,914		126,914
Net cash provided by financing activities		6,200		499,472		505,672
Net (decrease) increase in cash		(213)		225		12
Cash at beginning of year		225		-		-
Cash at the end of the period	$	12		225		12
Supplementary disclosure of non-cash transactions:
Cash paid during the year for:
Interest expense	$	-	$	-	$	-
Income taxes	$	-	$	-	$	-
Non-cash operating, investing and financing activities:
Net assets (liabilities) acquired as part of acquisition of
Miami Renaissance Group, Inc. and its
partnership subsidiary, Miami Renaissance Partners, Ltd.
Assets acquired:
Cash	$	-	$	2,451	$	2,451
Restricted cash		-		126,914		126,914
Subscription receivable from Miami Renaissance Group Inc's
shareholders on their stock		-		20,500		20,500
Leasehold improvements		-		309,904		309,904
Legal fees paid for pending liquor license		-		3,500		3,500
		-		463,269		463,269
Liabilities acquired:
Accounts and accrued expenses payable		-		354,556		354,556
Convertible notes payable
Officers		-		479,084		479,084
Related parties		-		327,774		327,774
Accrued interest expense payable		-		18,382		18,382
Deferred rent expense		-		51,629		51,629
Minority interest		-		125,000		125,000
		-		1,356,425		1,356,425
	$	-	$	(893,156)	$	(893,156)
Change in Company's Stockholders' Equity:
Preferred stock issued at par value	$	-		168		168
Common stock issued at par value		-		4,635		4,635
Increase in additional paid-in capital resulting from
difference in value of shares at par exchanged by Company		-		15,697		15,697
Accumulated deficit of MRG at April 25, 2006		-		(913,656)		(913,656)
	$	-	$	(893,156)	$	(893,156)
Restricted stock issued in exchange for architectural services
capitalized as leasehold improvements:
Cost added to leasehold improvements as an asset	$	-	$	40,000	$	40,000
Credited to stockholders' deficit:
Common stock		-		200		200
Additional paid-in capital		-		39,800		39,800
	$	-	$	40,000	$	40,000
See the summary of significant accounting policies and the accompanying notes to the financial statements.

EAST COAST DIVERSIFIED CORPORATION AND CONSOLIDATED SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY) Back to Table of Contents
Notes to the Consolidated Financial Statements

Note 1 - Nature of Business / Organization

Business Description

East Coast Diversified Corporation (the “Company,” also referred to as “East Coast”) was organized on May 24, 1994, under the laws of the State of Florida under the name Plantastic Corp. and changed its name to Viva Golf, USA Corp. in April 1997. The Company acquired 100% of the issued and outstanding shares of common stock of Lifekeepers International, Inc. in exchange for 1,000,000 of its newly issued shares under an Agreement and Plan of Reorganization on October 22, 1998. In connection with this acquisition, the Company changed its name to Lifekeepers International, Inc.

The Company previously held an exclusive licensing agreement to market and distribute golf clubs and related accessories in the continental United States. After the reorganization, the Company changed its business plan to providing mobile non-intrusive medical testing such as ultra-sound screening and blood analysis diagnostic testing.

On May 29, 2003, the Company changed its name to East Coast Diversified Corporation. During the year 2001, the Company discontinued its operations, and remained inoperative until April 26, 2006.

On April 6, 2009 the Company’s Board of Directors unanimously adopted and the consenting stockholders approved a resolution to effect a one-for-hundred (1:100) reverse stock split (the "Reverse Split") of the Common Stock of East Coast Diversified Corporation pursuant to clearance and final approval by FINRA. The resulting share ownership interest including resulting fractional shares for each individual shareholder shall be rounded up to the third whole integer in such a manner that every shareholder shall own at least 100 shares as a result of the Reverse Split.

On June 29, 2009 the Company was notified by NASDAQ that has it had received the necessary documentation to process the Reverse Split (1 for 100) and issue a new symbol (“ECDC”) and that this action would take effect at the open of business June 30, 2009.

Common Stock

On June 29, 2009 ECDV was notified by NASDAQ that it has approved a one-for-hundred reverse common stock split, which became effective on that date. All references to common shares and per-share data for all periods presented in this report have been adjusted to give effect to this reverse split. As no change was made to the par value of the common shares.

Acquisition of Miami Renaissance Group, Inc. subsidiary and its partnership subsidiary, Miami Renaissance Group, Limited

Miami Renaissance Group, Inc. (“MRG”) was incorporated in February 2004 as a Florida corporation. Upon incorporation, 50,000,000 shares of $.001 par value common stock were authorized. On June 4, 2004, MRG issued 18,860,000 shares of stock to its founders in exchange for a stock subscriptions receivable. On March 1, 2005, MRG issued 1,640,000 shares of stock to its founders in exchange for a stock subscriptions receivable. The stock subscriptions receivable are discussed in detail in Note 10.

On April 26, 2006 the Company acquired 100% of the issued and outstanding shares of common stock of Miami Renaissance Group, Inc. (“MRG,”) a development stage company. As a result, effective April 26, 2006, MRG became a wholly-owned subsidiary of the Company. The majority shareholders of MRG exchanged all of their shares in MRG for 46,350 newly issued shares of the Company’s $.001 par value common stock, and 167,650 new issued shares of the Company’s $.001 par value Series A Convertible Preferred Stock. Each share of Series A Preferred Stock is convertible into 100 shares of the Company’s common stock. As a result, MRG became a wholly-owned subsidiary of the Company.

The majority shareholders of MRG, namely the key officers in MRG and its partnership subsidiary (and who will be discussed two paragraphs below), have also become key officers in East Coast since their appointment and replacement of the previous management team in April 25, 2005. In addition, prior to this acquisition, the Company’s publicly traded securities have often been thinly traded in the stock market and can therefore be characterized as a stock subject to penny stock rules. Consequently, the shares exchanged between the Company and MRG were valued based on the par value of the respective shares exchanged, with the difference in aggregate value of $20,286 reflected in additional paid-in capital in a recapitalization in which MRG is identified as the "accounting acquirer.”

MRG was incorporated in Florida in February 2004. MRG has been renting a facility in Miami, Florida to be renovated for the purpose of operating a combined restaurant, nightclub, and parking lot on the premises. MRG began the process of making renovations in 2004, soon after entering into a lease on the premises as described in Note 11. As of April 30, 2008, the renovations on the property were still in progress and the facility had not yet opened to the public. Management expects the completed facility to be open to the public in early 2009.

Pursuant to the terms of a private placement offering described in Note 3, on April 1, 2005, MRG formed a Florida limited partnership, Miami Renaissance Partners, Ltd, ("the Partnership" or "MRP"), in which MRG was the general partner and manager, to raise working capital for the entertainment facility renovation and creation project. MRG was to enter into a sublease agreement with MRP for the completed Florida facility. MRG was to retain a 75% interest in the partnership, with the remainder interest divided amongst limited partners. These financial statements will include the accounts of East Coast, MRG, and MRP, and include the 25% minority interest representing the remainder third party limited partner interests. Since the acquisition took place on April 26, 2006, operations during the development stage were negligible during the year ended April 30, 2006.

Effective April 26, 2006, the Company is considered to be a development stage company.

Note 2 - Summary of Significant Accounting Policies

Principles of consolidation:

These financial statements will include the accounts of East Coast Diversified Corporation, MRG, and MRP and include a 25% minority interest representing the remainder limited partner interest. All significant inter-company balances and transactions have been eliminated in consolidation.

Development Stage Company:

The accompanying financial statements have been prepared in accordance with the Statement of Financial Accounting Standards No. 7 “Accounting and Reporting by Development-Stage Enterprises”. A development state enterprise is one in which planned and principal operations have not commenced or if its operations have commenced, there has been no significant revenue there from. Development-stage companies report cumulative costs from the enterprise’s inception.

Income taxes:

The Company follows SFAS No. 109, "Accounting for Income Taxes." Under the asset and liability method of SFAS No. 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. A valuation allowance has been provided for the Company's net deferred tax asset, due to uncertainty of realization.

Straight-line lease:

For financial statement purposes, rent expense is recorded on a straight-line basis over the lease term. The difference between the rent expense incurred and the amount paid is recorded as deferred rent and is being amortized over the lease term.

Segment information:

The Company will operate in one segment.

Fair value of financial instruments:

Carrying amounts of certain of the Company’s financial instruments, including cash, cash equivalents, restricted cash, short-term investments, accounts receivable, notes receivable, accrued payroll, and other accrued liabilities, approximate fair value due to their short maturities. The fair values of investments are determined using quoted market prices for those securities or similar financial instruments.

Leasehold improvements:

Leasehold improvements are stated at cost and include architect and design fees to renovate and create the entertainment facility. Leasehold improvements will be amortized using the straight-line method (half-year convention) over the shorter of the estimated useful life or lease term. Amortization will commence once the business operations begins.

Florida Liquor License:

On August 24, 2006, the Company acquired a Florida liquor license for a purchase price of $89,000. At April 30, 2009, the cost of the acquired Liquor License, and related legal fees of $4,464 incurred to acquire it, have been capitalized in the Company’s Balance Sheet as an indefinite life intangible asset.

Impairment of long-lived assets:

The Company reviews the carrying value of both its long-lived and other intangible assets annually, and whenever events or changes in circumstances indicate that the historical cost-carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the carrying value of the asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset’s carrying value and fair value. At April 30, 2009, the Company’s evaluation determined that no provision for impairment of either its other intangible assets (the "Liquor License") or its Leasehold Improvements was required at that date.

Use of estimates:

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.

Accounting basis:

The Company uses the accrual basis of accounting for financial statement reporting. Accordingly, expenses are realized when the obligation is incurred. The Company is in the development stage and has not generated any revenues to date.

Loss per Share:

The Company complies with the requirements of the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, "Earning per share" ("SFAS No. 128"). SFAS No. 128 specifies the compilation, presentation and disclosure requirements for earnings per share for entities with publicly held common stock or potentially common stock. Net loss per common share, basic and diluted, is determined by dividing the net loss by the weighted average number of common shares outstanding. As of October 31, 2007, the effect of issuing convertible preferred stock in connection with the Company’s acquisition of MRG on April 26, 2006 has had a negligible dilutive impact on the calculations of earnings per share.

Consideration of Other Comprehensive Income Items:

SFAS No. 130, "Reporting Comprehensive Income," requires companies to present comprehensive income (consisting primarily of net income plus other direct equity changes and credits) and its components as part of the basic financial statements. The Company's consolidated financial statements do not contain any changes in equity that are required to be reported separately in comprehensive income.

Recent Accounting Pronouncements

In May 2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts-an interpretation of FASB Statement No. 60.” Diversity exists in practice in accounting for financial guarantee insurance contracts by insurance enterprises under FASB Statement No. 60, Accounting and Reporting by Insurance Enterprises. This results in inconsistencies in the recognition and measurement of claim liabilities. This Statement requires that an insurance enterprise recognize a claim liability prior to an event of default (insured event) when there is evidence that credit deterioration has occurred in an insured financial obligation. This Statement requires expanded disclosures about financial guarantee insurance contracts. The accounting and disclosure requirements of the Statement will improve the quality of information provided to users of financial statements. The adoption of FASB 163 is not expected to have a material impact on the Company’s financial position.

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles.” The current GAAP hierarchy, as set forth in the American Institute of Certified Public Accountants (AICPA) Statement on Auditing Standards No. 69, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles, has been criticized because (1) it is directed to the auditor rather than the entity, (2) it is complex, and (3) it ranks FASB Statements of Financial Accounting Concepts. The FASB believes that the GAAP hierarchy should be directed to entities because it is the entity (not its auditor) that is responsible for selecting accounting principles for financial statements that are presented in conformity with GAAP. Accordingly, the FASB concluded that the GAAP hierarchy should reside in the accounting literature established by the FASB and is issuing this Statement to achieve that result. This Statement is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. The adoption of FASB 162 is not expected to have a material impact on the Company’s financial position.  

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133.” Constituents have expressed concerns that the existing disclosure requirements in FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities, do not provide adequate information about how derivative and hedging activities affect an entity’s financial position, financial performance, and cash flows. SFAS No. 161 requires enhanced disclosures about an entity’s derivative and hedging activities and thereby improves the transparency of financial reporting. This Statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. This Statement encourages, but does not require, comparative disclosures for earlier periods at initial adoption. The adoption of FASB 161 is not expected to have a material impact on the Company’s financial position.  

In December 2007, the FASB issued SFAS No.160, “Noncontrolling Interests in Consolidated Financial Statements - an amendment of ARB No. 51”.  SFAS No.160 requires that the ownership interests in subsidiaries held by parties other than the parent be clearly identified, labeled, and presented in the consolidated statement of financial position within equity, in the amount of consolidated net income attributable to the parent and to the noncontrolling interest on the face of the consolidated statement of income, and that entities provide sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners.  SFAS No.160 is effective for fiscal years, beginning on or after December 15, 2008 and cannot be applied earlier. 

In December 2007, the FASB issued Statement of Financial Accounting Standards No. 141(revised 2007), “Business Combinations,” (“FASB 141R”). This standard requires that entities recognize the assets acquired, liabilities assumed, contractual contingencies and contingent consideration measured at their fair value at the acquisition date for any business combination consummated after the effective date. It further requires that acquisition-related costs are to be recognized separately from the acquisition and expensed as incurred. FASB 141R is effective for fiscal years beginning after December 15, 2008.

The Company does not anticipate that the adoption of SFAS No. 141R and No. 160 will have an impact on the Company's overall results of operations or financial position, unless the Company makes a business acquisition in which there is a non-controlling interest.

In December 2007, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 110, “Use of a Simplified Method in Developing Expected Term of Share Options” (“SAB 110”). SAB 110 expresses the current view of the staff that it will accept a company’s election to use the simplified method discussed in Staff Accounting Bulletin 107, Share Based Payment , (“SAB 107”), for estimating the expected term of “plain vanilla” share options regardless of whether the company has sufficient information to make more refined estimates. SAB 110 became effective for the Company on January 1, 2008. The adoption of SAB 110 is not expected to have a material impact on the Company’s financial position.

Note 3 – MRG Pre-Merger Private Placement Offering and Related Restricted Cash

On May 13, 2005, MRG made a private placement offering for up to 120 investment units in the Partnership, Miami Renaissance Partners, Ltd, at a subscription price of $25,000 each. Each unit in this non-public offering was to initially represent a 0.002% to 0.007% partnership interest depending on the number of units sold. The offering was made to accredited investors as defined in Rule 501 (a) under the Securities Act of 1933, as amended. The offering was made for a minimum of 30 units, for total proceeds of $750,000, and a maximum of 120 units, for total proceeds of $3,000,000, with the offering to terminate at December 31, 2005 if the minimum units had not been sold. In accordance with the Partnership formation documents, limited partner capital contributions do not bear interest.

Miami Renaissance Partners, Ltd, ("MRP") had received cash contributions from the sale of partnership units to limited partners of $125,000 prior to the MRG merger with East Coast. Accordingly, at April 30, 2006, the Company had recorded $126,914, including interest income earned previously from restricted cash on its balance sheets. Under the terms of the private placement agreement, MRP had not reached the minimum threshold of 30 units sold to access the capital.

During June and July of 2006, MRP returned the $125,000 of cash contributions received from the limited partners.

Note 4 – Income Taxes

The significant components of the Company's deferred tax assets are as follows:

		July 31, 2009		April 30, 2009
Net operating loss carryforward	$	1,537,296	$	1,499,504
Less valuation allowance		(1,537,296)		(1,499,504)
Net deferred tax assets	$	0	$	0

The Company has provided for a valuation allowance against the full amount of the deferred tax asset due to management's uncertainty about its realization. The difference between the federal statutory tax rate of 34% and the effective rate of 0% reflected in the accompanying financial statements is attributable to no tax benefit being recorded for the future utilization of the net operating loss carryforwards.

The Company incurred no federal or state income tax expense for the three months ended July 31, 2009 and 2008, and for period from inception (April 26, 2006) to April 30, 2009, and utilized no tax carryforward losses.

As of July 31, 2009 the Company has available net operating loss carryforwards of $4,521,458 that expire through 2030. The Company has provided a valuation allowance against the full amount of the deferred tax asset due to management’s uncertainty about its realization.

Note 5 – Convertible Notes Payable, Related Party

On August 30, 2005, MRG issued a convertible note payable to Brickell North Investments, Inc. (“Brickell”), in settlement of outstanding sums owed for 2004 and 2005 rent and 2004 real estate taxes in the aggregate amount of approximately $327,774. The note will be adjusted upward for any additional 2005 real estates taxes once that amount has been determined. $110,500 of rent due for the period during the development stage of MRG, (February 25, 2004) to December 31, 2005 was forgiven by Brickell (see Note 7).

The note is convertible to shares of the Company’s common stock at a rate of $.327.

In the event that the Landlord-Holder Brickell did not convert the principal or adjusted principal of the debt to common stock of the Company the note was to be payable in 24 equal monthly installments commencing on June 15, 2006, together with any rent and real estate taxes due on the leased property. In the event of a failure to pay the note or an inability on the part of Brickell to exercise its conversion rights, the principal of the note was to become immediately due and payable together with interest thereon at the rate 6% per annum from the original date of the note. The parties to the convertible note have mutually agreed to extend the time of payment and adjust the date when Brickell may elect to exercise its conversion rights from June 15, 2006 to October 31, 2009. Accordingly, this debt has been presented as a non-current liability at July 31, 2009.

Brickell is a related party, as described in Note 7.

On October 31, 2006, in consideration for cash proceeds of a loan from James Goldstein, the Company issued a $80,823 convertible note payable to him that accrues interest at 12% per annum and was due on October 31, 2007. The loan holder has agreed to extend the maturity date of the obligation to October 31, 2009. The note is convertible into shares of common stock of the Company at a conversion price of $.20.

James Goldstein is a related party, as described in Note 7.

As of July 31, 2009 and April 30, 2009, the Company had recorded $28,730 and $26,306 of accrued interest on the convertible notes payable to related party, respectively. Interest expense on this note was $2,424 and $9,698 for the three months ended July 31, 2009 and 2008, respectively, and $ 28,730 for the period from inception (April 26, 2006) to July 31, 2009.

Note 6 – Convertible Notes Payable to Officers

Convertible notes payable to officers are as follows:

Holder	Terms		July 31, 2009 Balance		April 30, 2009 Balance
Richard Margulies, Former President/CEO and Chairman of the Board of Directors and shareholder	$54,104 note which accrues interest at 6% per annum and was due December 31, 2007. The note is convertible into shares of common stock of the Company at a conversion price of $.50. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.	$	54,104	$	54,104
Richard Margulies, Former President/CEO and Chairman of the Board of Directors and shareholder	$4,140 note which accrues interest at 6% per annum and was due April 25, 2008. The note is convertible into shares of common stock of the Company at a conversion price of $.50. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.		4,140		4,140
Richard Margulies, Former President/CEO and Chairman of the Board of Directors and shareholder	$1,463 note which accrues interest at 6% per annum and is due April 30, 2009. The note is convertible into shares of common stock of the Company at a conversion price of $0.20. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.		1,463		1,463
Richard Margulies, Former President/CEO and Chairman of the Board of Directors and shareholder	$6,500 note which accrues interest at 6% per annum and was due October 31, 2008. The note is convertible into shares of common stock of the Company at a conversion price of $.20. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.		6,500		6,500
Richard Margulies, Former President/CEO and Chairman of the Board of Directors and shareholder	$570 note which accrues interest at 6% per annum and is due October 31, 2009. The note is convertible into shares of common stock of the Company at a conversion price of $.20.		570		570
Richard Margulies, Former President/CEO and Chairman of the Board of Directors and shareholder	$2,170 note which accrues interest at 6% per annum and is due January 31, 2009. The note is convertible into shares of common stock of the Company at a conversion price of $.20. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.		2,170		2,170
Richard Margulies, Former President/CEO and Chairman of the Board of Directors and shareholder	$5,910 note which accrues interest at 6% per annum and was due October 31, 2008. The note is convertible into shares of common stock of the Company at a conversion price of $.20. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.		5,910		5,910
Richard Margulies, Former President/CEO and Chairman of the Board of Directors and shareholder	$280 note which accrues interest at 6% per annum and was due October 31, 2008. The note is convertible into shares of common stock of the Company at a conversion price of $.20. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.		280		280
Richard Margulies, Former President/CEO and Chairman of the Board of Directors and shareholder	$4,205 note which accrues interest at 6% per annum and is due October 31, 2009. The note is convertible into shares of common stock of the Company at a conversion price of $.20.		4,205		4,205
Richard Margulies, Former President/CEO and Chairman of the Board of Directors and shareholder	$1,725 note which accrues interest at 6% per annum and is due October 31, 2009. The note is convertible into shares of common stock of the Company at a conversion price of $.20.		1,725		1,725
Richard Margulies, Former President/CEO and Chairman of the Board of Directors and shareholder	$1,850 note which accrues interest at 6% per annum and is due October 31, 2009. The note is convertible into shares of common stock of the Company at a conversion price of $.20.		1,850		1,850
Richard Margulies, Former President/CEO and Chairman of the Board of Directors and shareholder	$4,110 note which accrues interest at 6% per annum and was due October 31, 2008. The note is convertible into shares of common stock of the Company at a conversion price of $.20. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.		4,110		4,110
Ivo Heiden	$5,515 note which accrues interest at 10% per annum and was due April 30, 2004. The note was convertible into shares of common stock of the Company at the conversion price of $.20. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.		5,515		5,515
Ivo Heiden	$4,750 note which accrues interest at 10% per annum and was due April 30, 2004. The note was convertible into shares of common stock of the Company at the conversion price equal to the closing bid price of the shares on the date of conversion, but not less than the par value of $.001. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.		4,750		4,750
Ivo Heiden	$4,185 note which accrues interest at 10% per annum and was due February 3, 2006. The note is convertible into shares of common stock of the Company at the conversion price of $.20. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.		4,185		4,185
Richard Margulies, Former President/CEO and Chairman of the Board of Directors and shareholder	$125 note which accrues interest at 6% per annum and was due July 31, 2008. The note is convertible into shares of common stock of the Company at a conversion price of $.20. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.		125		125
Richard Margulies, Former President/CEO and Chairman of the Board of Directors and shareholder	$2,005 note which accrues interest at 6% per annum and was due December 31, 2006. The note is convertible into shares of common stock of the Company at a conversion price of $.20. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.		2,005		2,005

Richard Margulies, Former President/CEO and Chairman of the Board of Directors and shareholder	$176 note which accrues interest at 6% per annum and was due October 31, 2008. The note is convertible into shares of common stock of the Company at a conversion price of $.20. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.	$	176	$	176
Richard Margulies, Former President/CEO and Chairman of the Board of Directors and shareholder	$360 note which accrues interest at 6% per annum and is due January 31, 2009. The note is convertible into shares of common stock of the Company at a conversion price of $.20. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.		360		360
Richard Margulies, Former President/CEO and Chairman of the Board of Directors and shareholder	$3,590 note which accrues interest at 6% per annum and was due July 31, 2008. The note is convertible into shares of common stock of the Company at a conversion price of $.20. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.		3,590		3,590
Frank Rovito, CEO, CFO and shareholder	$29,980 note which accrues interest at 6% per annum and was due December 31, 2007. The note is convertible into shares of common stock of the Company at a conversion price of $.50. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.		29,980		29,980
Frank Rovito, CEO, CFO and shareholder	$1,600 note which accrues interest at 6% per annum and was due April 25, 2008. The note is convertible into shares of common stock of the Company at a conversion price of $.50. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.		1,600		1,600
Frank Rovito, CEO, CFO and shareholder	$2,100 note which accrues interest at 6% per annum and was due October 31, 2008. The note is convertible into shares of common stock of the Company at a conversion price of $.20. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.		2,100		2,100
Frank Rovito, CEO, CFO and shareholder	$2,112 note which accrues interest at 6% per annum and was due July 31, 2008. The note is convertible into shares of common stock of the Company at a conversion price of $.20. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.		2,112		2,112
Frank Rovito, CEO, CFO and shareholder	$3,900 note which accrues interest at 6% per annum and is due October 31, 2009. The note is convertible into shares of common stock of the Company at a conversion price of $.20.		3,900		3,900
Frank Rovito, CEO, CFO and shareholder	$1,600 note which accrues interest at 6% per annum and is due January 31, 2009. The note is convertible into shares of common stock of the Company at a conversion price of $.20. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.		1,600		1,600
Frank Rovito, CEO, CFO and shareholder	$660 note which accrues interest at 6% per annum and was due October 31, 2008. The note is convertible into shares of common stock of the Company at a conversion price of $.20. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.		660		660
Frank Rovito, CEO, CFO and shareholder	$1,000 note which accrues interest at 6% per annum and is due October 31, 2009. The note is convertible into shares of common stock of the Company at a conversion price of $.20.		1,000		1,000
Frank Rovito, CEO, CFO and shareholder	$100 note which accrues interest at 6% per annum and is due October 31, 2009. The note is convertible into shares of common stock of the Company at a conversion price of $.20.		100		-
Aaron Goldstein, a Director (Secretary) and shareholder	$134,737 note which accrues interest at 6% per annum and was due April 25, 2008. The note is convertible into shares of common stock of the Company at a conversion price of $.50. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.		134,737		134,737
Aaron Goldstein, a Director (Secretary) and shareholder	$10,000 note which accrues interest at 6% per annum and was due December 31, 2006. The note is convertible into shares of common stock of the Company at a conversion price of $.20. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.		10,000		10,000
Aaron Goldstein, a Director (Secretary) and shareholder	$75,000 note which accrues interest at 6% per annum and was due December 31, 2007. The note is convertible into shares of common stock of the Company at a conversion price of $.50. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.		75,000		75,000
Aaron Goldstein, a Director (Secretary) and shareholder	$2,000 note which accrues interest at 6% per annum and was due July 31, 2008. The note is convertible into shares of common stock of the Company at a conversion price of $.20. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.		2,000		2,000
Aaron Goldstein, a Director (Secretary) and shareholder	$13,000 note which accrues interest at 6% per annum and was due January 31, 2008. The note is convertible into shares of common stock of the Company at a conversion price of $.20. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.		13,000		13,000
Aaron Goldstein, a Director (Secretary) and shareholder	$179,523 note which accrues interest at 6% per annum and was due December 31, 2007. The note is convertible into shares of common stock of the Company at a conversion price of $.50. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.		179,523		179,523
Aaron Goldstein, a Director (Secretary) and shareholder	$5,097 note which accrues interest at 6% per annum and was due October 31, 2008. The note is convertible into shares of common stock of the Company at a conversion price of $.20. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.		5,097		5,097
Aaron Goldstein, a Director (Secretary) and shareholder	$15,000 note which accrues interest at 6% per annum and was due April 30, 2008. The note is convertible into shares of common stock of the Company at a conversion price of $.20. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.		15,000		15,000
Aaron Goldstein, a Director (Secretary) and shareholder	$2,800 note which accrues interest at 6% per annum and was due July 31, 2008. The note is convertible into shares of common stock of the Company at a conversion price of $.20. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.		2,800		2,800
Aaron Goldstein, a Director (Secretary) and shareholder	$33,000 note which accrues interest at 6% per annum and is due October 31, 2009. The note is convertible into shares of common stock of the Company at a conversion price of $.20. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.		33,000		33,000
Aaron Goldstein, a Director (Secretary) and shareholder	$794 note which accrues interest at 6% per annum and was due October 31, 2008. The note is convertible into shares of common stock of the Company at a conversion price of $.20. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.		794		794
Aaron Goldstein, a Director (Secretary) and shareholder	$5,200 note which accrues interest at 6% per annum and was due October 31, 2009. The note is convertible into shares of common stock of the Company at a conversion price of $.20.		5,200		5,200
Aaron Goldstein, a Director (Secretary) and shareholder	$2,500 note which accrues interest at 6% per annum and was due October 31, 2009. The note is convertible into shares of common stock of the Company at a conversion price of $.20.		2,500		2,500
Aaron Goldstein, a Director (Secretary) and shareholder	$6,700 note which accrues interest at 6% per annum and was due October 31, 2009. The note is convertible into shares of common stock of the Company at a conversion price of $.20.		6,700		6,700
Aaron Goldstein, a Director (Secretary) and shareholder	$6,100 note which accrues interest at 6% per annum and was due October 31, 2009. The note is convertible into shares of common stock of the Company at a conversion price of $.20.		6,100		-
Aaron Goldstein, a Director (Secretary) and shareholder	$66,000 note which accrues interest at 6% per annum and was due October 31, 2007. The note is convertible into shares of common stock of the Company at a conversion price of $.20. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.		60,000		60,000
Aaron Goldstein, a Director (Secretary) and shareholder	$15,233 note which accrues interest at 6% per annum and was due October 31, 2008. The note is convertible into shares of common stock of the Company at a conversion price of $.20. The shareholder has agreed to extend the maturity date of the obligation to October 31, 2009.		15,233		15,233
			717,469		711,269
	Less: current portion		717,469		711,269
		$	-	$	-

As of July 31, 2009 future maturities of debt for the next two years are as follows:

Years ending July 31:
2010	717,469

As of July 31, 2009 and April 30, 2009, the Company had recorded $155,310 and $144,390 of accrued interest on the convertible notes payable to officers, respectively. Interest expense on these notes was $10,920 and $10,498 for the three months ended July 31, 2009 and 2008, respectively, and $127,724 for the period from inception (April 26, 2006) to July 31, 2009.

Note 7 – Related Party Transactions

James Goldstein, the father of Aaron Goldstein, who is an officer and director of the Company, is one of the principal owners of Brickell North Investments, Inc. ("Brickell"), the landlord for the Florida entertainment facility lease, and is the holder of the related convertible note payable for $327,774 discussed in Note 5. The note was issued to pay accrued rent for 2005 and 2004 of $207,570 and $8,500, respectively, and real estate taxes of $111,704 during the development stage of MRG (February 25, 2004) to December 31, 2004). $110,500 of rent due for the period from February 25, 2004 to December 31, 2004 was forgiven by Brickell in 2005.

For the period during the development stage of MRG (February 25, 2004) through July 31, 2009, MRG incurred $1,824,073 of rent and real estate taxes under the lease, of which basic rent incurred to Brickell totaled $1,214,792. The Company’s Consolidated Statements of Operations for the three months ended July 31, 2009 and 2008 includes $58,467 of basic rent, and $27,926 of real estate taxes incurred by MRG under the lease.

The sub-landlord for the office lease, Comp Tech Technologies, is a company principally owned by Frank Rovito, an officer and director of the Company. For the period from February 25, 2004 to April 30, 2009, MRG incurred $63,600 of rent expense under the sublease. The Company’s Consolidated Statements of Operations for the years ended April 30, 2009 and 2008, and for the period from inception (April 26, 2006) to April 30, 2009, respectively includes $7,200 and $14,400 and $50,400 of rent expense incurred by MRG under the sublease. On October 31, 2008 the Company terminated the sub-lease agreement with Comp Tech Technologies, Inc.

On March 1, 2005, MRG issued 1,025,000 shares of its common stock to Robert Margulies, the brother of the former officer and director Richard Margulies.

Note 8 – Equity Transactions

During the six months ended October 31, 2006, the Company issued 8,950 shares of common stock pursuant to a private offering to accredited investors that was to expire June 30, 2006 at $20 per share (with gross proceeds of $179,000), in accordance with Regulation D of the Securities Act of 1933, as amended, and Rule 501 promulgated thereunder. The Company's officers and directors directed the sale and received no commissions or other remuneration. In addition, the Company received $20,000 for 1,000 shares of common stock to be issued in the future under this offering. The 1,000 shares were issued on November 27, 2006.

On May 24, 2006, the Company issued 200,000 shares of common stock to Les Beilinson, subject to Rule 144 restrictions, in consideration of architectural services. The Company has capitalized $40,000 in the cost of leasehold improvements related to this stock issuance, based on the $.20 share price received by the Company in the Private Placement described in the preceding paragraph.

On December 18, 2006, the Company issued 350,000 shares of common stock to S. G. Martin Securities, LLC subject to Rule 144 restrictions, in consideration of professional services. The Company has expensed $52,500 in the statement of operations related to this stock issuance, based on the $.15 share price of the Company’s common stock on that date.

Preferred shares converted to common

On September 12, 2008, the Board of Directors of the Company adopted resolutions calling for the Corporation’s acceptance and for the conversion of all the 167,650 issued and outstanding preferred stock of the Company into common stock at the ratio of 1 shares of common stock for each share of preferred stock as set forth in the schedule below.

Based upon the conversion by holder’s of the Company’s preferred stock as set forth on the schedule below, a total of 160,450restricted shares of common stock of the Company to the Company’s affiliates and 7,200 shares to Robert Margulies, a non- affiliate as follows:

Name	Number of Preferred Shares Being Converted	Number of Shares of Common Stock to be Issued
Richard Margulies	78,700	7,870,000
Aaron  M. Goldstein	78,700	7,870,000
Frank Rovito	3,050	305,000
Robert Margulies (Non-Affiliate)	7,200	720,000
Total	167,650	16,765,000

Common stock issued on settlement of accrued expenses

On September 12, 2008 the Board of Directors of the Company agreed and resolved to convert and as a result to issue 45,000 shares of the Company’s common stock in consideration of certain amounts of accrued and deferred compensation due and payable to 3 shareholders for an amount of $115,000. This resulted in the recognition of a gain reflected in the Statement of Operations for the period ended April 30, 2009 in the amount of $79,339.

Note 9 – Going Concern

These consolidated financial statements are presented on the basis that the Company is a going concern. Going concern contemplates the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable period of time.

As shown in the accompanying consolidated financial statements, the Company had incurred cumulative losses of $4,521,458 from inception. The Company's existence in the current period has been dependent upon advances from related parties and other individuals, and the sale of convertible notes payable.

The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Note 10 - Stock Subscription Receivable

MRG issued 18,860,000 and 1,640,000 shares of common stock respectively in 2005 and 2004 to various individuals, and directors of MRG in exchange for stock subscription agreements. The amounts due on the stock subscription agreements were $20,500 at April 30, 2007. The amounts are non-interest bearing and due on demand. The stock subscription receivable amounts have been offset against stockholders' deficit.

Note 11- Commitments and Other Matters

[1] The Company has no current pending litigation.

[2] On June 15, 2004, MRG entered into a lease with Brickell North Investments, Inc., a related party, for the parcels of land and buildings for use in the entertainment facility. The lease term is ten years, with annual increases based on the consumer price index, approximately 3% per year.

[3] In February 2004, MRG entered into a sublease with a related party for office space in Edison, NJ for $1,200 per month. Since the lease expiration in October 2004, the Company has continued to lease the space under a month-to-month arrangement. Management does not consider use of this office space essential to business operations. On October 31, 2008 the Company terminated the sub-lease agreement with Comp Tech Technologies, Inc.

[4] 5 Year Table of obligations under leases:

The minimum future obligations for rent under agreements outlined in [2] are as follows:

Years Ending July 31,		Amounts
2010		237,678
2011		244,806
2012		252,150
2013		259,712
2014		221,810
	$	1,216,156

PENDING SALE OF MRG SUBSIDIARY TO CERTAIN AFFILIATED PARTIES

On February 8, 2008, the Company's board of directors approved the sale of MRG to certain affiliated parties. The decision to sell MRG was based mainly due to lack of funding availability and restrictions in building permits issuance in Miami, which have been in place for some time. The board decided to solicit shareholder approval to divest MRG. Management expects the sale of MRG to be completed by October 31, 2009.

SUBSEQUENT EVENT

On April 6, 2009 the Company’s Board of Directors unanimously adopted and the consenting stockholders approved a resolution to effect a one-for-hundred (1:100) reverse stock split (the "Reverse Split") of the Common Stock of East Coast Diversified Corporation pursuant to clearance and final approval by FINRA. The resulting share ownership interest including resulting fractional shares for each individual shareholder shall be rounded up to the third whole integer in such a manner that every shareholder shall own at least 100 shares as a result of the Reverse Split.

On April 15, 2009 the Board of Directors unanimously adopted Resolutions calling for the acceptance of the conversion of certain Promissory Notes payable to Richard Margulies, Frank Rovito and Aaron Goldstein, in the aggregate amount(s) of $91,433 $42,953 and $555,384 respectively into shares of the Corporation’s common stock, based upon a post-reverse conversion price of $0.10 per share again pursuant to pursuant to clearance and final approval by FINRA .

On June 29, 2009 the Company was notified by NASDAQ that has it had received the necessary documentation to process the Reverse Split (1 for 100) and issue a new symbol (“ECDC”) and that this action would take effect at the open of business June 30, 2009.

On August 7, 2009 the Company, pursuant to the conversion of the Promissory Notes was then able to and issued shares of common stock, with restrictive legend, as follows: Richard Margulies – 914,330 shares of common stock; Frank Rovito - 429,530 shares of common stock; and Aaron Goldstein – 5,553,840 shares of common stock.