Inn at Pelican Bay, Naples, Florida

On August 1, 2005, GM Hospitality, LLC was organized as a Florida limited liability company to focus on commercial hotel projects to purchase the Inn at Pelican Bay. GM Hospitality specializes in the conversion of hotels into a condominium form of real estate ownership. GM Hospitality was founded by its two owners; GATES, a construction/development company located in Naples, Florida and Alliance Hotel Group, Inc., an affiliate of Accord Real Estate Group, Inc. which is owned by Scott R. Lodde.

In August, 2005, GM Hospitality formed IPB Development, LLC ("Company") and raised equity through a private placement offering. The offering was sold in reliance on an exemption from the registration requirements under the Federal Securities Act of 1933 and certain state securities laws. The Company converted the hotel into the condominium form of real estate ownership. Each condominium parcel includes an interest in a particular unit and an appurtenant undivided interest in the common elements of the condominium. Following the legal conversion, the Company began offering the condominium guestroom units to the public as separate legal parcels of real property.

Simultaneously with the sale of guestroom units, GM Hotel Management, LLC, an affiliate of GM Hospitality began offering a rental service to initial owners of the guestroom units under which those owners could elect to have GM Hotel Management serve as the rental agent for their Units. Those owners who elected to retain GM Hotel Management entered into a management agreement in which GM Hotel Management leases the guestroom units to hotel guests and provides marketing, cleaning and bookkeeping services for a portion of the gross revenue.

The Inn at Pelican Bay is a six-story, 100-room, boutique hotel located at 800 Vanderbilt Beach Road, Naples, Florida. The hotel web address is www.innatpelicanbay.com. The property was built in 1994 and is part of the community known as Pelican Bay, a residential and commercial development consisting of 570 acres of natural preserves with 40 acres of parks and nature trails.

In addition to a deferred maintenance program, the Company completed an interior upgrade program in both the common areas and guestrooms of hotel. Items completed during the renovation included painting of all guestrooms and common areas of the hotel, installation of crown molding in the guestrooms, carpeting replacement throughout, tile replacement in the guestrooms and lobby and new furniture. The total cost of the renovation was approximately $2,250,000 or $22,500 per room. Total development costs for the project (including the acquisition, hard costs, soft costs and other development costs were approximately $16,786,000).

The project was financed through a combination of debt and equity. Prior to closing, GM Hospitality raised $7,000,000 of equity from the investor members through a private placement offering. IPB financed the balance of the acquisition price and closing costs with an acquisition loan in the amount of $7,000,000 from Florida Community Bank. Following the receipt of executed contracts for the sale of guestrooms units equaling $5,000,000, the Company commenced borrowing under a renovation loan in the amount of $2,000,000 and the renovation of IPB and completion of the deferred maintenance program was commenced in September, 2005. The renovation of Pelican Bay was substantially completed in December, 2005 at which time initial closings of the guestroom units commenced.

As of December 2007, the Company had closed 34 of the guestroom units. Total sales proceeds for the 34 guestroom units were $8,684,900. Based upon the closings completed to date, the Company has achieved an average selling price of $255,438 or $686.82 per square foot.

Through the closings of the first 34 units, the balance of the original loans has been reduced from $9,000,000 to approximately $1,800,000.