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GREEN BUILDERS S-1/A Filing

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GREEN BUILDERS S-1/A Filing Powered By Docstoc
					              As filed with the Securities and Exchange Commission on April 10, 2007
                                                                       Registration No. 333- 140747
__________________________________________________________________________________________
               UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                                       Washington, D.C. 20549
                                      ———————————
                                                            Amendment No. 2 to
                                                               FORM S-1
                         REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
                                          ———————————
                                                 WILSON HOLDINGS, INC.
                                                  (Exact Name of Registrant as Specified in its Charter)
                                                           ———————————
                      Nevada                                    1531                                                       76-0547762
           (State or Other Jurisdiction of                     (Primary Standard Industrial                              (I.R.S. Employer
          Incorporation or Organization)                       Classification Code Number)                              Identification No.)
                                                               8121 Bee Caves Road
                                                                 Austin, TX 78746
                                                                  (512) 732-0932
                 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)
                                                             Clark N. Wilson
                                                  President and Chief Executive Officer
                                                          Wilson Holdings, Inc.
                                                      8121 Bee Caves Road, Austin, TX 78746
                                                                  (512) 732-0932
                        (Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)
                                                           ———————————
                                                                        Copies to:
                           Carmelo M. Gordian                                                           J oel D. Mayersohn
                           Andrews Kurth LLP                                                           Arnstein & Lehr LLP
                      111 Congress Avenue, Suite 1700                                            200 East Las Olas Blvd, Suite 1700
                            Austin, Texas 78701                                                   Fort Lauderdale, Florida 33301
                            Fax: (512) 320-9292                                                         Fax: (954) 713-7700

                                                              _________________________

             Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration
Statement.

             If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933 check the following box.    

           If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, please check
the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

           If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering.

           If this Form is a post-effective amendment filed pursuant to Rule 462(e) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering.
                                                             ____________________


                                             CALCULATION OF REGISTRATION FEE

                                                                                        Proposed
                                                                                       Maximum              Proposed Maximum
               Title of Class of                          Amount to be                Offering Price            Aggregate                Amount of
          Securities to be Registered                      Registered                 Per Share(1)           Offering Price(1)         Registration Fee
Units consisting of one share of
common stock, $0.001 par value and
one Class A warrant to purchase one
share of common stock                                   5,750,000(2)                      $4.25             $24,437,500(2)               $2,614.82
Common Stock included in the units
(3)                                                     5,750,000(2)                        --                        --                       --
Class A warrants to purchase
Common Stock included in the units
(3)                                  5,750,000(2)      --          --           --
Common Stock Underlying Class A
warrants included in the Units       5,750,000 (2)    $6.00    $34,500,000   $3,691.50
Units underlying the Underwriter‘s
Unit
Purchase Option (―Underwriter‘s
Units‖)                                500,000       $5.3125   $2,656,250    $284.22
Shares of common stock included as
part of the Underwriter‘s Units (3)           500,000                   --                --              --
Warrants included as part of the
Underwriters Units (3)                        500,000                   --                --              --
Shares of common stock underlying the s
warrants included in the Underwriter‘s
Units                                         500,000                 $7.50          $4,312,500        $461.44
Total                                                                               $65,800,000      $7,052.00 (4)
(1)        Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(c)
           promulgated under the Securities Act.
(2)        Includes 750,000 units which the underwriters have the option to purchase to
           cover over-allotments, if any.
(3)        No registration fee required pursuant to Rule 457 of
           the Securities Act.
(4)        $7,063.07 previously paid.

The Registrant hereby amends this registration statement on such date or dates as may be necessary to
delay its effective date until the Registrant shall file a further amendment that specifically states that
this registration statement shall thereafter become effective in accordance with Section 8(a) of the
Securities Act or until this registration statement shall become effective on such date as the Securities and
Exchange Commission, acting pursuant to said Section 8(a), may determine.
The information in this prospectus is not complete and is subject to change. We may not sell these securities
until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities and we are not soliciting offers to buy these securities in any state where
an offer or sale of these securities is not permitted.

                          SUBJECT TO COMPLETION, DATED APRIL 10, 2007

PROSPECTUS


                             WILSON HOLDINGS, INC.
                                                  5,000,000 Units

                                              each unit consisting of

          one share of common stock and one Class A redeemable five year warrant to purchase
                                      one share of common stock

                                           _______________________

         We are offering, on a firm commitment basis, 5,000,000 units, with each unit consisting of one share of
our common stock and one redeemable five year warrant to purchase one share of our common stock. Each
Class A redeemable five year warrant entitles its holder to purchase one share of common stock at an exercise
price of $6.00 per share. The warrants are exercisable at any time after they become separately tradable until
their expiration date, five years after the date of this prospectus. We may redeem some or all of the warrants at a
price of $0.001 per warrant at any time after they become separately tradable and after the closing sales price of
our common stock, as reported on the principal market on which our stock trades, was at or above 200% of the
unit offering price for 30 consecutive trading days, by giving holders not less than 30 days‘ notice.

         We anticipate that the initial public offering price of the units will be in the range of $4.00 to $4.50 per
unit.

         Initially, only the units will trade. The common stock and the Class A warrants will begin trading
separately on the 30 th calendar day following the date of this prospectus. Once separate trading in the common
stock and warrants begins, trading in the units will cease, and the units will be delisted.

        We have applied to list the common stock, units and warrants on the American Stock Exchange under
the symbols ―WIH,‖ ―WIH.U,‖ and ―WIH.WS,‖ respectively.

        Our common stock is not listed on any national securities exchange or on the NASDAQ Stock Market.
Our common stock is currently quoted on the Over-the-Counter Bulletin Board (the ―OTC Bulletin Board‖)
under the symbol ―WSHD.OB‖. As of April 9, 2007, the last reported sale price for our common stock was on
March 29, 2007 at $5.00.

     INVESTING IN THESE SECURITIES INVOLVES SIGNIFICANT RISKS. SEE “RISK
FACTORS” BEGINNING ON PAGE 8.

                                           _______________________

       NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

                                            ______________________
                                                                                             Shares
                                                                                  Per Unit            Total
 Public offering price                                                              $                  $
 Underwriting discount                                                              $                  $
 Proceeds to us, before expenses                                                    $                  $

          We have granted the underwriters a 30-day option to purchase up to an additional 750,000 units. The
expenses for this offering will include a non-accountable expense allowance of 1.75% of the gross proceeds of
this offering payable to Capital Growth Financial, LLC, the representative of the underwriters of this offering
(not including units sold as part of the over-allotment).

                                       Capital Growth Financial, LLC

                                           _______________, 2007.
                                           T ABLE OF CONTENTS

Cautionary Note Regarding Forward-Looking Statements                                                          1
Industry and Market Data                                                                                      1
Prospectus Summary                                                                                            2
This Offering                                                                                                 4
Summary Financial Data                                                                                        6
Risk Factors                                                                                                  8
Use of Proceeds                                                                                               16
Dividend Policy                                                                                               16
Capitalization                                                                                                16
Dilution                                                                                                      17
Price Ranges of Our Common Stock                                                                              18
Selected Financial Data                                                                                       19
Management‘s Discussion and Analysis of Financial Condition and Results of Operations                         21
Business                                                                                                      31
Management                                                                                                    41
Compensation Discussion And Analysis                                                                          45
Principal Stockholders                                                                                        52
Certain Relationships and Related Transactions                                                                53
Description of Securities                                                                                     55
Shares Eligible for Future Sale                                                                               59
Underwriting                                                                                                  60
Legal Matters                                                                                                 62
Experts                                                                                                       62
Where You Can Find More Information                                                                           63

         You should rely only on the information contained in this prospectus. We have not, and the
underwriters have not, authorized any other person to provide you with different information. If anyone
provides you with different or inconsistent information, you should not rely on it. The information in this
prospectus may only be accurate as of the date appearing on the cover page of this prospectus, regardless of the
time this prospectus is delivered or our common stock is sold.

          We are not, and the underwriters are not, making an offer to sell the common stock in any jurisdiction
where the offer or sale is not permitted. No action is being taken in any jurisdiction outside the United States to
permit a public offering of our common stock or the possession or distribution of this prospectus in any such
jurisdiction. Persons who come into possession of this prospectus in jurisdictions outside of the United States
are required to inform themselves about and to observe any restrictions as to this offering and the distribution of
this prospectus applicable in that jurisdiction.

          All brand names and trademarks appearing in this prospectus are the property of their respective
owners.


                                                         i
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                 C AUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

         This prospectus contains forward-looking statements. All statements regarding our expected financial
position and operating results, our business strategy, and our financing plans are forward-looking statements.
These statements can sometimes be identified by our use of forward-looking words such as ―may,‖ ―will,‖
―anticipate,‖ ―estimate,‖ ―expect,‖ ―project,‖ or ―intend.‖ These forward-looking statements reflect our plans,
expectations and beliefs and, accordingly, are subject to certain risks and uncertainties. We cannot guarantee
that any of such forward-looking statements will be realized.

          Statements regarding factors that may cause actual results to differ materially from those contemplated
by such forward-looking statements, or cautionary statements, include, among others, those under the captions
―Risk Factors‖ and ―Management‘s Discussion and Analysis of Financial Condition and Results of Operations -
Overview,‖ and elsewhere in this prospectus, including in conjunction with the forward-looking statements
included in this prospectus. All of our subsequent written and oral forward-looking statements (or statements
that may be attributed to us) are expressly qualified by the cautionary statements. You should carefully review
the risk factors described in our other filings with the Securities and Exchange Commission from time to time,
including our reports on Forms 10-Q and 10-K which will be filed in the future, as well as our other reports and
filings with the Securities and Exchange Commission. Our forward-looking statements are based on information
available to us today, and we will not update these statements. Our actual results may differ significantly from
the results discussed.

                                     I NDUSTRY AND MARKET DATA

         Industry and market data throughout this prospectus were obtained through our research, surveys and
studies conducted by third parties and from general industry publications. We have not independently verified
market and industry data from third-party sources. While we believe our internal surveys are reliable and our
market definitions are appropriate, neither these surveys nor these definitions have been verified by any
independent sources. While we believe our third party sources are reliable, we have not independently verified
industry and market data supplied by third parties. Accordingly, we cannot assure you of the accuracy of our
industry and market data. We have not sought the consent of any third party sources to refer to their data in this
prospectus.


                                                         1
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                                         P ROSPECTUS SUMMARY

          This is only a summary and does not contain all the information that may be important to you. You
should read the more detailed information contained in this prospectus, including but not limited to, the risk
factors beginning on page 8. References to “we,” “us,” “our” or the “company” mean Wilson Holdings, Inc.,
a Nevada corporation, and, unless the context indicates otherwise, its predecessors and subsidiaries, including
its wholly owned subsidiary, Wilson Family Communities, Inc., a Delaware corporation.

                                                 Our Company

        We make strategic land acquisitions, develop residential communities and provide limited services to
local homebuilders.

         To date, our revenues have been from sales of undeveloped parcels of land plus revenue from sales by
two-homebuilder customers, whose revenues have been consolidated into our results in accordance with
generally accepted accounting standards. We anticipate that an increasing portion of our future revenues will be
generated through development of residential communities and sales of land, sections of developed lots and
entitled developed lots, primarily to national and regional homebuilders. Additional revenues will be generated
through sales of small parcels (5-15 lots per parcel) of developed lots. We plan to enter the homebuilding
business and generate revenues by year end. We also provide services to our homebuilder customers.

         Our long-term plan is to further expand our business by entering markets outside the Austin
Metropolitan Statistical Area, or MSA, and San Antonio MSA within the next two to three years. We believe
that our expertise plus our land acquisition and strategic marketing processes will allow us to develop desirable
residential communities and become a preferred supplier of finished lots to national homebuilders, which will
accelerate absorption of our communities and contribute to the growth of our company.

          We are led by experienced land acquisition and development professionals knowledgeable about both
the local and national real estate markets. Currently, our activities are centered on securing and developing
approximately $30 million to $50 million in real estate holdings in the central Texas region, which we define as
encompassing the Austin MSA, along with the San Antonio MSA. We intend to primarily utilize conventional
real estate loans to secure and develop our real estate holdings.

         We believe that two trends distinguish the land acquisition, development and homebuilding industries
in central Texas today: rapid population growth and the rising influence of national homebuilding companies.
The increase in population in the Austin MSA from 1990 to 2000 was more than double the growth rate of
Texas and almost four times the national average growth rate. From 2000 to 2005, population growth has
continued at 16.2% per year. Due to this rapid population growth, we expect there will continue to be a high
demand for housing in the Austin MSA and nearby metropolitan areas which will fuel the demand for our
homebuilding products and sales of our residential lots.

         We believe that growth of national homebuilders and nationwide consolidation within the homebuilder
industry has created opportunities for smaller companies with long-term experience and relationships in their
local markets. We believe that such companies can benefit from:

            •   better knowledge of local product demand;
            •   superior understanding of the entitlement process;
            •   long term relationships with local regulatory authorities, land owners, designers and
                contractors; and
            •   faster and less cumbersome decision making processes.

                                                        2
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       It is our plan to utilize these advantages to move more quickly and address the needs of underserved
segments in our market.

        Our company, Wilson Holdings, Inc., is a Nevada corporation formerly known as Cole Computer
Corporation. In connection with our acquisition of Wilson Family Communities, Inc., or WFC, in October
2005, Cole Computer Corporation changed its name to Wilson Holdings, Inc. Wilson Holdings, Inc. is the sole
stockholder of WFC, which is our sole operating company. Our common stock currently trades on the
Over-the-Counter Bulletin Board under the symbol ―WSHD.OB‖. Our business was originally conducted,
beginning in 2002, by Athena Equity Partners-Hays. L.P., or Athena. In May 2005, Athena merged into WFC.
Our principal executive offices are located at 8121 Bee Caves Rd., Austin, Texas 78746 and the telephone
number of our offices in (512) 732-0932. Our website address is www.wilsonfamilycommunities.com
Information contained on our website or any other website does not constitute part of this prospectus.


                                                      3
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                                            T HIS OFFERING

 Securities offered:                                       5,000,000 units, each unit consisting of one share of
                                                           common stock and one five year redeemable warrant
                                                           to purchase one share of common stock. Initially, only
                                                           the units will trade. The common stock and the
                                                           warrants included in the units will not trade separately
                                                           until the 30 th calendar day following the date of this
                                                           prospectus or the first trading day thereafter if the 30 th
                                                           day is a weekend or a holiday. Once separate trading
                                                           in the common stock and warrants commences, the
                                                           units will cease trading and will be delisted.
 Shares of common stock to be outstanding after this       23,055,538
 offering:
 Class A warrant terms:                                    Each warrant entitles its holder to purchase one share
                                                           of common stock at an exercise price equal to $6.00
                                                           per share. The warrants are exercisable at any time
                                                           after they become separately tradable for five years
                                                           after the date of this prospectus.
 Expiration date of the Class A warrants:                  • , 2012
 Redemption of Class A warrants:                           We may redeem some or all of the warrants at any
                                                           time after they become separately tradable, at a price
                                                           of $0.001 per warrant, on 30 days‘ notice to the
                                                           holders. However, we may redeem the warrants only
                                                           if the closing sale price of our common stock, as
                                                           reported on the principal market on which our stock
                                                           trades, is at or above 200% of the unit offering price
                                                           for 30 consecutive trading days ending on the tenth
                                                           day prior to the day on which notice is given.
 Use of proceeds:                                          We intend to use the net proceeds for the following
                                                           purposes: land acquisitions, homebuilding and land
                                                           development and general corporate purposes. See
                                                           ―Use of Proceeds.‖
 Current OTC Bulletin Board symbol:                        WSHD.OB
 Proposed AMEX symbols:                                    "WIH" common stock
                                                            "WIH.U" units
                                                            "WIH.WS" Class A warrants
 Risk factors:                                             Investing in our common stock involves a high degree
                                                           of risk. Investors should be able to bear a complete
                                                           loss of their investment. Investors should carefully
                                                           consider the information set forth in the ―Risk
                                                           Factors‖ section.


                                                       4
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         There were 18,055,538 shares of our common stock issued and outstanding as of April 5, 2007 . Unless
the context indicates otherwise, all share and per-share common stock information in this prospectus:

       •   includes 5,000,000 shares and 5,000,000 class A warrants included in the units to be issued in the
           offering;
       •   assumes no exercise of the underwriters‘ over-allotment option to purchase up to 750,000 shares;
           and
       •   excludes the issuance of up to:
            •   925,000 shares of common stock issuable upon exercise of options granted under our stock
                option/stock issuance plan as of December 31, 2006;
            •   8,375,000 shares of common stock issuable upon the conversion of convertible promissory
                notes in the aggregate principal amount of $16,750,000 outstanding as of December 31, 2006;
            •   942,187 shares of common stock issuable upon exercise of warrants issued to the holders of the
                convertible promissory notes outstanding as of December 31, 2006;
            •   215,000 shares of common stock issuable upon exercise of warrants issued to the placement
                agent that assisted in the placement of our convertible promissory notes and warrants in
                December 2005 and September 2006;
            •   5,000,000 shares issuable upon the exercise of the class A warrants included in the units to be
                issued in the offering;
            •   500,000 shares of common stock issuable upon the exercise of option to purchase units to be
                issued to the underwriters in this offering (See the section captioned ―Underwriting‖); and
            •   500,000 shares of common stock issuable upon the exercise of warrant issuable upon exercise
                of option to purchase units to be issued to the underwriters in this offering (See the section
                captioned ―Underwriting‖).

                                                      5
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                                                     S UMMARY FINANCIAL DATA

          The following summary consolidated financial information has been derived from our audited
consolidated financial statements for the fiscal years ended December 31, 2006, 2005 and 2004, included
elsewhere in this prospectus, and from our unaudited consolidated financial statements for the years ended,
2003 and 2002. The unaudited summary consolidated financial information and the actual and as adjusted
consolidated balance sheet data include all adjustments, consisting principally of normal recurring adjustments,
that we consider necessary for a fair presentation. Our historical results are not necessarily indicative of the
results to be expected in the future, and the results of interim periods are not necessarily indicative of the results
for the entire year.

        You should read this information together with ―Management‘s Discussion and Analysis of Financial
Condition and Results of Operations‖ and our consolidated financial statements and related notes, included
elsewhere in this prospectus.

                                  Mar.
                                   31,    Jun. 30,       Sep. 30,           Dec. 31,       Mar. 31,         Jun. 30,        Sep. 30,      Dec. 31,
                                  2005     2005           2005                2005           2006             2006           2006          2006
Revenues:                                                               (In thousands, except per share data)
  Homebuilding and related
services                   $          -              -              -                -             417           2,285           1,483         1,033
  Land sales                          -              -          255                   -            616                 50          414           437
        Total revenues                -              -          255                   -          1,033           2,335           1,897        1,470
Cost of revenues:
  Homebuilding and related
services                              -              -              -                -             332           1,893           1,256           866
  Land sales                          -              -          115                  -             327                 24          273           446
       Total cost of
revenues                              -              -          115                  -             659           1,917           1,529         1,312
Gross profit:
  Homebuilding and related
services                              -              -              -                -              85             392             227           167
  Land sales                          -              -          140                  -             289                 26          141           (9)
        Total gross profit            -              -          140                  -             374             418             368           158
Costs and expenses:
  Corporate general and
administration                        1           65            369                765             990           1,211           1,168           983
  Sales and marketing                 -            7            105                113             129             229             282           177
    Total costs and expenses          1           72            474                878           1,119           1,440           1,450         1,160
      Operating loss                (1)         (72)          (334)              (878)           (745)         (1,023)         (1,083)       (1,002)
Other income (expense):
  Loss on fair value of
derivatives                           -              -              -            (173)           (345)         (2,588)           (460)       (5,077)
  Interest and other income           -            8             36                 56              97             109              54            30
  Interest expense                    -         (16)          (128)              (213)           (514)           (558)           (570)         (718)
    Total other expense               -          (8)           (92)              (330)           (762)         (3,037)           (976)       (5,765)
                         Net
                         loss $     (1)         (80)          (426)            (1,208)         (1, 508)        (4,059)         (2,059)       (6,767)

Basic and diluted loss per
share                        $        -       (0.02)          (0.04)            (0.16)          (0.08)           (0.23)          (0.12)       (0.38)

Basic and diluted weighted
average common shares
outstanding                           -   3,333,333      10,000,000        17,689,252      17,706,625      17,706,625       17,706,625    17,726,026




                                                                           6
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STATEMENT OF
OPERATIONS DATA:                                             Years ended December 31,
                                       2002               2003           2004          2005             2006
                                                       (in thousands, except per share data)
                                  (Unaudited)        (Unaudited)
Revenues                      $                 81            16,774           -             255            6,735
Gross Profit                                    81             3,059           -             140            1,317
                                                                                         (1,284
Operating gain (loss)                           71             3,056        (48)               )           (3,853)
                                                                                           (430
Total other expense                         (178)              (143)        (11)               )          (10,540)
                                                                                         (1,714
Net loss                      $             (107)              2,913        (59)               )          (14,393)

Basic and diluted loss per                                                                 (0.22
share                         $                                                                )            (0.81)
Basic and diluted weighted
average common shares                                                                   7,755,64
outstanding                                                                                    6        17,711,405


STATEMENT OF FINANCIAL
CONDITION DATA:                                                    As of December 31,
                                           2002                 2003          2004           2005         2006
                                                           (in thousands, except per share data)
                                       (Unaudited)        (Unaudited)
                                                                                                                4,86
Cash and cash equivalents          $                  1                 2           9         10,020               5
                                                                                                               30,75
Total Inventory                    $            13,712                  -         375         12,955               6
                                                                                                               37,37
Total assets                       $            13,819                  2         385         24,514               4
                                                                                                               36,59
Total liabilities                 $             10,691                  2         312         18,459               9
Total stockholders‘ and partners‘
equity                            $              3,128                  -          73           6,055           775



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                                               R ISK FACTORS

         An investment in our common stock involves a high degree of risk and many uncertainties. You should
carefully consider the specific factors listed below before purchaser our securities. If one or more of the
possibilities described as risks below actually occur, our operating results and financial condition would likely
suffer and the trading price of our common stock could fall, causing you to lose some or all of your investment
in the shares of common stock you purchase. The following is a description of what we consider our key
challenges and material risks.

                                        Risks Related to Our Business

Our current operating business has a limited operating history and revenues.

         In October 2005, we acquired Wilson Family Communities, Inc., or WFC, which has a limited
operating history. Accordingly, our business is subject to substantial risks inherent in the commencement of a
new business enterprise in an intensely competitive industry. The business of WFC was conducted, beginning in
2002, by Athena Equity Partners-Hays, L.P., or Athena, to engage in land acquisition and development and,
beginning in 2005, to provide homebuilder services. Prior to its merger with WFC, Athena did not generate
significant revenues, and, through December 31, 2006, our company has generated revenues of only
approximately $7 million and has incurred cumulative net losses of approximately $15.7 million.

         There can be no assurance that we will be able to successfully acquire, develop and/or market land,
develop and market our homebuilder services, commence our homebuilding activities, generate revenues, or
ever operate on a profitable basis. We currently have only one active homebuilder for our homebuilder services
and are evaluating whether to continue providing services to homebuilders. Any investment in our company
should be considered a high-risk investment because the investor will be placing funds at risk in a company
with unknown costs, expenses, competition, and other problems to which new ventures are often subject.
Investors should not invest in our company unless they can afford to lose their entire investment.

We have incurred a significant amount of debt, but will require additional substantial capital to continue
to pursue our operating strategy.

         We had approximately $4.8 million in cash and cash equivalents at December 31, 2006, which includes
approximately $2.2 million of restricted cash. We plan to commit several million dollars in cash to exercise
option rights to purchase land, develop land and guarantee certain payments regarding the development of
optioned land over the next year. We have secured lines of credit totaling approximately $25.5 million.
Approximately $6.4 million was drawn against these lines of credit as of December 31, 2006, which will be
repaid as finished lots and completed homes are sold. Approximately $600,000 of the notes payable relate to
variable interest entities, or VIEs, that had drawn on the lines of credit, which we have guaranteed, to build
homes that will be repaid as the completed homes are sold. We anticipate investing approximately $23 million
for purchase of land, installment payments, options fees and development costs over the next twelve months.
This amount includes costs for development of land, such as installation of water and wastewater infrastructure,
streets and common areas. We intend to purchase or obtain options to purchase additional acreage for
development and additional finished lots for sale.

         We have issued and sold an aggregate of $16.75 million in principal amount of convertible promissory
notes since December 2005. These notes bear interest at a fixed rate of 5.0% per annum, with the principal
amount of such notes convertible into shares of our common stock at the rate of one share per $2.00 of
principal, which conversion rate is subject to proportionate adjustment for stock splits, stock dividends and
recapitalizations as well as a ―ratchet‖ adjustment which will apply if we sell shares of our common stock in the
future at a price per share of less than $2.00, provided that such conversion rate may not be reduced below a rate
of one share of common stock for each $1.00 of note principal.

        Our growth plans will require substantial amounts of cash for earnest money deposits, land purchases,
development costs and interest payments, and to provide financing or surety services to our homebuilder clients.
Until we begin to sell an adequate number of lots and services to cover our monthly operating expenses,


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costs associated with our sales, marketing and general and administrative activities will deplete cash. Our
articles of incorporation contain no limits on the amount of indebtedness we may incur.

We are seeking additional credit lines to finance land purchases and development costs.

         Through December 31, 2006, we have closed on four major land development projects that used $14
million in cash to exercise land purchase options, develop and entitle land and acquire entitled acreage. We
anticipate purchasing and committing to various agreements to purchase land that could have performance
clauses requiring several million dollars in cash and borrowings. The majority of our expenditures in the past
have been for inventory, consisting of land, land development and land options totaling almost $30 million as of
December 31, 2006. To secure additional inventory, we will be required to put up earnest money deposits, make
cash down payments, acquire acreage tracts and pay for certain land development activities costing several
million dollars. This amount includes the development of land, including costs for the installation of water,
sewage, streets and common areas. We intend to continue our growth plan and expect to purchase or obtain
options to purchase additional acreage for development and additional finished lots to provide ample supplies
for our homebuilder customers. We intend to use debt and may utilize joint venture financing as well as cash
generated from lot and land sales to finance these activities.

         In the normal course of business, we enter into various land purchase option agreements that require
earnest money deposits. In order for us to start or continue the development process, we may incur development
costs before we exercise an option agreement. We currently have approximately $451,000 in capitalized
development costs, earnest money and deposits outstanding of which the entire amount would be forfeited and
expensed if we were to cancel all of these agreements.

          Should our financing efforts be insufficient to execute our business plan, we may be required to seek
additional sources of capital, which may include partnering with one or more established operating companies
that are interested in our emerging business or entering into joint venture arrangements for the development of
certain of our properties. However, if we were required to resort to partnering or joint venture relationships as a
means to raise needed capital or reduce our cost burden, we likely will be required to cede some control over
our activities and negotiate our business plan with our business or joint venture partners.

We are vulnerable to concentration risks because our initial operations have been limited to the central
Texas area.

        Our real estate activities have to date been conducted almost entirely in the central Texas region, which
we define as encompassing the Austin Metropolitan Statistical Area, or Austin MSA, and the San Antonio
Metropolitan Statistical Area, or San Antonio MSA. This geographic concentration, combined with a limited
number of projects that we plan to pursue, make our operations more vulnerable to local economic downturns
and adverse project-specific risks than those of larger, more diversified companies.

         The performance of the central Texas economy will affect our sales and, consequently, the underlying
values of our properties. For example, the economy in the Austin MSA is heavily influenced by conditions in
the technology industries. During periods of weakness or instability in technology industries, we may
experience reduced sales, particularly with respect to ―high-end‖ properties, which can significantly affect our
financial condition and results of operations. The San Antonio MSA economy is dependent on the service
industry (including tourism), government/military and businesses specializing in international trade. To the
extent there is a significant reduction in tourism or in staffing levels of military or other government employers
in the San Antonio MSA, we would expect to see reduced sales of lower priced homes due to a likely reduction
in lower paying tourism- and government-related jobs.

Fluctuations in market conditions may affect our ability to sell our land at expected prices, if at all, which
could adversely affect our revenues, earnings and cash flows.

         We are subject to the potential for significant fluctuations in the market value of our land inventories.
There is a lag between the time we acquire control of undeveloped land and the time that we can improve that


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land for sale to home builders. This lag time varies from site to site as it is impossible to determine in advance
the length of time it will take to obtain government approvals and permits. The risk of owning undeveloped land
can be substantial as the market value of undeveloped land can fluctuate significantly as a result of changing
economic and market conditions. Inventory carrying costs can be significant and can result in losses in a poorly
performing development or market. Material write-downs of the estimated value of our land inventories could
occur if market conditions deteriorate or if we purchase land at higher prices during stronger economic periods
and the value of those land inventories subsequently declines during weaker economic periods. We could also
be forced to sell land or lots for prices that generate lower profit than we anticipate, and may not be able to
dispose of an investment in a timely manner when we find dispositions advantageous or necessary.
Furthermore, a decline in the market vale of our land inventories may give rise to a breach of financial
covenants contained in our credit facilities, which could cause a default under one or more of those credit
facilities.

Our operations are subject to an intensive regulatory approval process, including governmental and
environmental regulation, which may delay, increase the cost of, prohibit or severely restrict our
development projects and reduce our revenues and cash flows.

         We are subject to extensive and complex laws and regulations that affect the land development process.
Before we can develop a property, we must obtain a variety of approvals from local, state and federal
governmental agencies with respect to such matters as zoning, density, parking, subdivision, site planning and
environmental issues. Certain of these approvals are discretionary by nature. Because certain government
agencies and special interest groups have in the past expressed concerns about development plans in or near the
central Texas region, our ability to develop these properties and realize future income from them could be
delayed, reduced, made more expensive or prevented altogether.

         Real estate development is subject to state and federal regulations as well as possible interruption or
termination because of environmental considerations, including, without limitation, air and water quality and
the protection of endangered species and their habitats. We are making and will continue to make expenditures
and other accommodations with respect to our real estate development for the protection of the environment.
Emphasis on environmental matters may result in additional costs to us in the future or a reduction in the
amount of acreage that we can use for development or sales activities.

We may be subject to risks as a result of our entry into joint ventures.

          To the extent that we undertake joint ventures to develop properties or conduct our business, we may
be liable for all obligations incurred by the joint venture, even though such obligations may not have been
incurred by us, and our share of the potential profits from such joint venture may not be commensurate with our
liability. Moreover, we will be exposed to greater risks in joint ventures should our co-venturers‘ financial
condition become impaired during the term of the joint venture, as creditors will increasingly look to our
company to support the operations and fund the obligations of the joint venture.

Our operations are subject to weather-related risks.

         Our land development operations and the demand for our homebuilder services may be adversely
affected from time to time by weather conditions that damage property. The central Texas region is prone to
tornados, hurricanes entering from the Gulf of Mexico, floods, hail storms, severe heat and droughts. We
maintain only limited insurance coverage to protect the value of our assets against natural disasters.
Additionally, weather conditions can delay development and construction projects by weeks or months which
could delay and decrease our anticipated revenues. To the extent we encounter significant weather-related
delays, our business would suffer.

The availability of water could delay or increase the cost of land development and adversely affect our
future operating results.

         The availability of water is becoming an increasingly difficult issue in the central Texas region and
other areas of the Southwestern United States. Many jurisdictions are now requiring that builders provide
detailed information regarding the source of water for any new community that they intend to develop.

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Similarly, the availability of treatment facilities for sanitary sewage is a growing concern. Many urban areas
have insufficient resources to meet the demand for waste-water and sanitary sewage treatment. To the extent we
are unable to find satisfactory solutions to these issues with respect to future development projects, our
operations could be adversely affected.

We are subject to risks related to environmental damages.

         We may be required to undertake expensive and time-consuming clean-up or remediation efforts in the
event that we encounter environmental hazards on the lots we own, even if we were not originally responsible
for or aware of such hazards. In the event we are required to undertake any such remediation activities, our
business could suffer.

We are at risk of loss for loans or advances to our customers.

         To the extent we offer surety or financing to our homebuilder customers, we could suffer losses if the
funds advanced are not used for their intended purposes and we are forced to exercise legal remedies or incur
expenses to recoup our collateral. Although we closely monitor the activities for which the money is intended, it
is possible for the funds to be wasted or misappropriated. We do not believe we are required to obtain any
license to provide these loans or advances, nor are we limited by our charter on the amount of surety or
financing we can offer, but regulatory changes could require that we do so in the future.

Our President and Chief Executive Officer is subject to a non-compete agreement that limits the activities
in which we may engage until June 2007.

          Clark N. Wilson, our President and Chief Executive Officer, served as the President and Chief
Executive Officer of Clark Wilson Homes, Inc., a subsidiary of Capital Pacific Holdings, from 1992 to 2002.
Pursuant to an agreement that was executed in connection with the sale of Clark Wilson Homes to J.M. Peters
Company in 1994, Mr. Wilson agreed not to engage in the businesses of acquisition, ownership, development,
construction or sale of dwelling units in certain portions of the United States in which we plan to do business,
including the central Texas region, as well as in any other county in the United States in which J.M. Peters
Company conducts business. The stated term of this covenant not-to-compete is five years, expiring in June
2007, for certain enumerated counties in Texas, including the counties in and around, Austin, Dallas, Houston
and San Antonio, Texas. The covenant not to compete relates to the business of building homes and not the
purchase and sale of real estate as contemplated by us. It is our opinion that our current activities do not violate
the terms of the covenant because we do not currently and we do not intend to engage in homebuilding activities
until after the covenant terminates in June 2007.

We are a small company and have a correspondingly small financial and accounting organization. Being
a public company may strain our resources, divert management’s attention and affect our ability to
attract and retain qualified directors.

         We are a small company with a finance and accounting organization that we believe is of appropriate
size to support our current operations; however, the rigorous demands of being a public reporting company may
lead to a determination that our finance and accounting group is undersized. As a public company, we are
subject to the reporting requirements of the Securities Exchange Act of 1934 and the Sarbanes-Oxley Act of
2002. The requirements of these laws and the rules and regulations promulgated thereunder entail significant
accounting, legal and financial compliance costs, and have made, and will continue to make, some activities
more difficult, time consuming or costly and may place significant strain on our personnel, systems and
resources.

         The Securities Exchange Act requires, among other things, that we maintain effective disclosure
controls and procedures and internal control over financial reporting. In order to maintain and improve the
effectiveness of our disclosure controls and procedures and internal control over financial reporting, significant
resources and management oversight are required. As a result, management‘s attention may be diverted from
other business concerns, which could have a material adverse effect on our business, financial condition and
results of operations.


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         These rules and regulations also have made it more difficult and more expensive for us to maintain
director and officer liability insurance, and in the future we may be required to accept reduced coverage or incur
substantially higher costs to maintain such coverage. If we are unable to maintain adequate director and officer
insurance, our ability to recruit and retain qualified officers and directors, especially those directors who may be
deemed independent, will be significantly curtailed.

We depend on our key personnel to manage our business effectively.

         We believe our future success will depend in large part upon our ability to attract and retain highly
skilled managerial and sales and marketing personnel. In particular, due to the relatively early stage of our
business, we believe that our future success is highly dependent on Clark N. Wilson, our chief executive officer
and the founder of WFC, to provide the necessary leadership to execute our growth plans. Although we intend
to acquire a key-man life insurance policy for Mr. Wilson, the loss of the services of any of our key employees,
the inability to attract or retain qualified personnel in the future or delays in hiring required personnel, and in
particular sales personnel, could impede our ability to expand our sales and marketing activities as desired, and
negatively impact our profitability.

We have borrowed money at floating interest rates and if interest rates were to significantly increase, our
financial results could suffer.

         We have borrowed approximately $15.9 million at interest rates of prime plus 0.50% to 2.00% that
adjust in relation to the prime rate. If the prime rate were to significantly increase, we will be required to pay
additional amounts in interest under these notes and line of credit and our financial results could suffer.

We are vulnerable to concentration risks because we intend to focus on the residential rather than
commercial market.

         We intend to focus on residential rather than commercial properties. Economic shifts affect residential
and commercial property markets, and thus our business, in different ways. A developer with diversified
projects in both sectors may be better able to survive a downturn in the residential market if the commercial
market remains strong. Our focus on the residential sector can make us more vulnerable than a diversified
developer.

Our growth strategy to expand into new geographic areas poses risks.

        We may expand our business into new geographic areas outside of the central Texas region. We will
face additional risks if we expand our operations in geographic areas or climates in which we do not have
experience, including:

        •   adjusting our land development methods to different geographies and climates;
        •   obtaining necessary entitlements and permits under unfamiliar regulatory regimes;
        •   attracting potential customers in a market in which we do not have significant experience; and
        •   the cost of hiring new employees and increased infrastructure costs.
         We may not be able to successfully manage the risks of such an expansion, which could have a
material adverse effect on our revenues, earnings, cash flows and financial condition.

If we are unable to generate sufficient cash from operations or secure additional borrowings, we may find
it necessary to curtail our development activities.

        We anticipate that we will need at least $23 million to fund our acquisition and development
expenditures for the next twelve months. Our performance continues to be substantially dependent on future
cash flows from real estate financing and sales and there can be no assurance that we will generate sufficient
cash flow or otherwise obtain sufficient funds to meet the expected development plans for our current and


                                                         12
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future properties. If we are unsuccessful in obtaining adequate loans or in generating positive cash flows, we
could be forced to: abandon some of our development activities, including the development of sub-divisions and
entitling of land for development; forfeit option fees and deposits; default on loans; violate covenants with our
current lenders and convertible note holders thereby putting us in default; and possibly be forced to liquidate a
substantial portion of our asset holdings at unfavorable prices.

Our results of operations and financial condition are greatly affected by the performance of the real
estate industry.

        Our real estate activities are subject to numerous factors beyond our control, including local real estate
market conditions, substantial existing and potential competition, general national, regional and local economic
conditions, fluctuations in interest rates and mortgage availability and changes in demographic and
environmental conditions. Real estate markets have historically been subject to strong periodic cycles driven by
numerous factors beyond the control of market participants.

         Real estate investments often cannot easily be converted into cash and market values may be adversely
affected by these economic circumstances, market fundamentals, competition and demographic conditions.
Because of the effect these factors have on real estate values, it is difficult to predict with certainty the level of
future sales or sales prices that will be realized for individual assets.

         Our real estate operations are also dependent upon the availability and cost of mortgage financing for
potential customers, to the extent they finance their purchases, and for buyers of the potential customers‘
existing residences.

                                 Risks Related to Investment in Our Securities

There is currently a limited market for our common stock. We have limited trading volume which causes
significant stock price fluctuation. Any trading market that develops in our common stock may be highly
illiquid and may not reflect the underlying value of our net assets or business prospects.

          Although our common stock is currently quoted on the OTC Bulletin Board, we have applied to have
our common stock quoted on the American Stock Exchange on or promptly after the date of this prospectus.
However, there is currently only a limited market for our common stock and there can be no assurance that an
improved market will ever develop or be sustained. Any trading market that does develop may be volatile, and
significant competition to sell our common stock in any such trading market may exist, which could negatively
affect the price of our common stock, including shares of our common stock issuable upon conversion of our
outstanding convertible promissory notes. Prior to this offering, we have a minimal number of shares that are
freely tradable and therefore our stock price fluctuates significantly based on trades of very small volume. As a
result, the value of our common stock may decrease. Additionally, if a trading market does develop, such
market may be highly illiquid, and our common stock may trade at a price that does not accurately reflect the
underlying value of our net assets or business prospects. Investors are cautioned not to rely on the possibility
that an active trading market may develop or on the prices at which our stock may trade in any market that does
develop in making an investment decision.

Our company is a holding company, and the obligations of our company are subordinate to those of our
operating subsidiary.

         Our company is a holding company with no material assets other than our equity interest in our wholly
owned subsidiary, Wilson Family Communities, or WFC. WFC conducts substantially all of our operations and
directly owns substantially all of our assets. The holding company structure places any obligations of Wilson
Holdings subordinate to those of our operating subsidiary, WFC. Therefore, in the event of a liquidation,
creditors of WFC would be repaid prior to any distribution to the stockholders of Wilson Holdings. After the
repayment of all obligations incurred by WFC and the repayment of all obligations of Wilson Holdings, any
remaining assets could then be distributed to Wilson Holdings as the holder of all shares of common stock of
WFC and subsequently would be distributed among the holders of our common stock.


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Our largest stockholder, who is also our President and Chief Executive Officer, will continue to control
our company.

         Clark N. Wilson, our President and Chief Executive Officer, owns or controls approximately 69% of
the issued and outstanding shares of our common stock. Upon completion of this offering, Mr. Wilson will
continue to own or control approximately 54.5% of the issued and outstanding shares of our common stock.
This ownership position will provide Mr. Wilson with the voting power to significantly influence the election of
all members of our Board of Directors and, thereby, to exert substantial control over all corporate actions and
decisions for an indefinite period.

We issued $16.75 million in convertible notes and if these notes are converted into shares of common
stock, or if the warrants issued in conjunction with such notes are exercised, our stockholders would
suffer substantial dilution.

         In December 2005 and September 2006, we issued convertible promissory notes which may be
converted, at the election of the holders of the notes, into shares of our common stock at a conversion price of
$2.00 per share. In conjunction with these note financings, we also issued warrants to the purchasers which have
vested and to the placement agent evidencing the right to purchase an aggregate of 1,283,750 shares of our
common stock at an exercise price of $2.00 per share. While the holders of these notes and warrants have not
indicated to us that they plan to convert their notes into, or exercise their warrants for, shares of our common
stock, in the event they elect to do so we would be required to issue up to 8,375,000 additional shares of our
common stock in conversion of the notes and 1,283,750 shares of our common stock upon exercise of the
warrants, which would be dilutive to our existing stockholders. Each convertible note is convertible into shares
of our common stock at the option of the holder. The conversion price is subject to adjustment for stock splits,
reverse stock splits, recapitalizations and similar corporate actions. A ―ratchet‖ adjustment in the conversion
price, and the corresponding rate at which the convertible notes may be converted into shares of our common
stock, also is triggered upon the issuance of certain equity securities or equity-linked securities with a
conversion price, exercise price or share price of less than $2.00 per share, provided, that the conversion price
cannot be lower than $1.00 per share.

Future sales or the potential for sale of a substantial number of shares of our common stock could cause
the trading price of our common stock to decline and could impair our ability to raise capital through
subsequent equity offerings.

          Sales of a substantial number of shares of our common stock in the public markets, or the perception
that these sales may occur, could cause the market price of our stock to decline and could materially impair our
ability to raise capital through the sale of additional equity securities. For example, the grant of a large number
of stock options or other securities under an equity incentive plan or the sale of our equity securities in private
placement transactions at a discount from market value could adversely affect the market price of our common
stock.

We have anti-takeover provisions that could discourage, delay or prevent our acquisition.

         Provisions of our articles of incorporation and bylaws could have the effect of discouraging, delaying
or preventing a merger or acquisition that a stockholder may consider favorable. Our authorized but unissued
shares of common stock are available for our board to issue without stockholder approval. We may use these
additional shares for a variety of corporate purposes, including future public offerings to raise additional capital,
corporate acquisitions and employee benefit plans. The existence of our authorized but unissued shares of
common stock could render it more difficult or discourage an attempt to obtain control of us by means of a
proxy context, tender offer, merger or other transaction. In the future, we may elect to amend our charter to
provide for authorized but unissued shares of preferred stock that would be issuable at the discretion of the
Board of Directors. We can amend and restate our charter by action of the Board of Directors and the written
consent of a majority of stockholders.

         We may become subject to Nevada‘s Control Share Acquisition Act (Nevada Revised Statutes 78.378
-78.3793), which prohibits an acquirer, under certain circumstances, from voting shares of a corporation‘s stock
after crossing specific threshold ownership percentages, unless the acquirer obtains the approval of the issuing
corporation‘s stockholders. The first such threshold is the acquisition of at least one-fifth but less that one-third
of the outstanding voting power. Wilson Holdings may become subject to Nevada‘s Control Share Acquisition
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Act if it has 200 or more stockholders of record at least 100 of whom are residents of the State of Nevada and
does business in the State of Nevada directly or through an affiliated corporation. Currently, we do not conduct
business in the State of Nevada directly or through an affiliated corporation.

         As a Nevada corporation, we also are subject to Nevada‘s Combination with Interested Stockholders
Statute (Nevada Revised Statutes 78.411 - 78.444) which prohibits an ―interested stockholder‖ from entering
into a ―combination‖ with the corporation, unless certain conditions are met. An ―interested stockholder‖ is a
person who, together with affiliates and associates, beneficially owns (or within the prior three years, did
beneficially own) 10 percent or more of the corporation‘s voting stock.

          Clark N. Wilson, our President and Chief Executive Officer, also owns approximately 69% of the
issued and outstanding shares of our common stock and will own approximately 54.5% of our common stock
after the offering. All of these factors may decrease the likelihood that we would be, or the perception that we
can be, acquired, which may depress the market price of our common stock.


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                                             U SE OF PROCEEDS

          Assuming an anticipated offering price of $4.25 per unit, we estimate that the net proceeds from the
sale of the 5,000,000 units that we are selling in this offering will be approximately $18,700,000 or $21,617,500
if the underwriters exercise their over-allotment option in full, after deducting an underwriting discount of $0.36
per unit, and estimated offering expenses of approximately $750,000 payable by us.

        We intend to use the net proceeds of this offering as follows:

                                                               Amount                           Percentage
 Land Acquisitions                                            $7,000,000                          37%
 Land Development                                             $8,000,000                          43%
 Homebuilding                                                 $3,000,000                          16%
 General corporate uses                                        $700,000                            4%
         Total:                                              $18,700,000                         100%

         The foregoing discussion is an estimate based on our current business plan. We may find it necessary
or advisable to use portions of the net proceeds we receive from this offering for other purposes, and we will
have broad discretion in applying the net proceeds. Pending these uses, we intend to invest the net proceeds of
the offering in short-term, interest-bearing, investment grade securities.

                                             D IVIDEND POLICY

         We have not declared or paid any dividends, and do not intend to pay any dividends in the foreseeable
future, with respect to our common stock. We intend to retain any future earnings for use in the operation and
expansion of our business. Any future decision to pay dividends on our common stock will be at the discretion
of our Board of Directors and will depend upon our financial condition, results of operations, capital
requirements and other factors our Board of Directors may deem relevant.

                                              C APITALIZATION

          The following table sets forth our actual capitalization as of January 31, 2007 and as adjusted to give
effect to the sale of 5,000,000 units (consisting of 5,000,000 shares of common stock and 5,000,000 Class A
warrants) at an assumed offering price of $4.25 per unit, less the underwriting discount and offering expenses.

                                                                                       December 31, 2006
                                                                                  Actual              As adjusted
          STOCKHOLDERS’ EQUITY
          Common stock, par value $0.001 per share:
          80,000,000 shares actual authorized;
          18,055,538 shares issued and outstanding actual;                     18,055,538            23,055,538
          Additional paid in capital                                           16,809,885
          23,055,538 shares issued and outstanding as adjusted
                  Retained deficit                                            (10,976,186)
                            Total capitalization                                5,851,755

         You should read this table in conjunction with the sections of this prospectus captioned ―Use of
Proceeds‖ and ―Management‘s Discussion and Analysis of Financial Condition and Results of Operations‖ as
well as the consolidated financial statements and related notes included elsewhere in this prospectus.


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                                                   D ILUTION

         If you invest in our common stock, your interest will be diluted to the extent of the difference between
the public offering price per share of our common stock and the pro forma as adjusted net tangible book value
per share of our common stock immediately after this offering. Pro forma net tangible book value per share
represents the amount of our total tangible assets less total liabilities, divided by the number of shares of
common stock outstanding at December 31, 2006.

         Investors participating in this offering will incur immediate, substantial dilution. Our pro forma net
tangible book value was $1.00 per share of common stock outstanding at December 31, 2006, computed as total
stockholders‘ equity less goodwill and other intangible assets. Assuming the sale by us of units including one
share of our common stock and one Class A redeemable warrant offered in this offering at a public offering
price of $4.25 per unit, and after deducting estimated underwriting discounts and commissions and estimated
offering expenses, our pro forma as adjusted net tangible book value at December 31, 2006, would have been
$1.69 per share of common stock. This represents an immediate increase in pro forma net tangible book value
of $0.69 per share of common stock to our existing stockholders and an immediate dilution of $2.56 per share to
the new investors purchasing shares in this offering. The following table illustrates this per share dilution:

          Assumed offering price per share                                                               $     4.25
          Net tangible book value per share at December 31, 2006                    $    1.00
          Increase per share attributable to new investors                          $    0.69
          Pro forma net tangible book value per share after this offering                                $     1.69
                   Dilution per share to new investors                                                   $     2.56

         The following table sets forth on a pro forma as adjusted basis, at December 31, 2006, the number of
shares of common stock purchased or to be purchased from us, the total consideration paid or to be paid and the
average price per share paid or to be paid by existing holders of common stock, by holders of options and
warrants outstanding at December 31, 2006 and by the new investors, before deducting estimated underwriting
discounts and estimated offering expenses payable by us.

                                                                                                             Average
                                            Shares Purchased                 Total Consideration               Price
                                         Number            Percent          Amount             Percent       Per Share
                                                                                                   47
          Existing stockholders      18,055,538                78%   $18,474,833            %                 $ 1.02
                                                                                                   53
          New investors               5,000,000              22%     $ 21,250,000           %                 $ 4.25
                 Total               23,055,538             100%     $ 39,724,833                100%         $ 1.72

        The discussion and tables above are based on the number of shares of common stock and preferred
stock outstanding at December 31, 2006.


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                               P RICE RANGES OF OUR COMMON STOCK

        Our common stock is traded on the National Association of Securities Dealers Inc. , or NASD, OTC
under the symbol ―WSHD.OB.‖ We intend to apply to list our shares of common stock on the American Stock
Market under the symbol "WIH" .

         The following table represents the range of the high and low bid prices of our common stock as
reported by the OTC Bulletin Board Historical Data Service. These quotations represent prices between dealers
and may not include retail markups, markdowns, or commissions and may not necessarily represent actual
transactions. The market prices reported prior to October 11, 2005 were prices reported for Cole Computer
Corporation, our predecessor entity that was a shell corporation with no material assets or liabilities. The share
prices reported below have been adjusted to take into account a 350-to-1 reverse stock split with respect to the
outstanding shares of our common stock that was effected on September 22, 2005.

                                    2007                          High                           Low
                        First Quarter (through                    $6.25                          $4.50
                        March 5, 2007)
                                    2006                           High                           Low
                        First Quarter                             $7.50                          $2.90
                        Second Quarter                            $5.25                          $3.00
                        Third Quarter                             $4.95                          $2.00
                        Fourth Quarter                            $6.00                          $2.50
                                    2005                           High                           Low
                        First Quarter                             $10.49                         $3.85
                        Second Quarter                            $13.46                         $3.85
                        Third Quarter                             $13.99                         $3.85
                        Fourth Quarter                            $13.00                         $4.00
                                    2004                           High                           Low
                        First Quarter                             $7.00                          $3.50
                        Second Quarter                            $7.00                          $7.00
                        Third Quarter                             $17.50                         $14.00
                        Fourth Quarter                            $21.00                         $14.00


        As of April 9, 2007, the last reported sale price of our common stock on the OTC Bulletin Board was
on March 29, 2007 at a price of $5.00 per share. According to the records of our transfer agent, there were
approximately 345 record holders of our common stock as of April 5, 2007.


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                                          S ELECTED FINANCIAL DATA

         The following summary consolidated financial information has been derived from our audited
consolidated financial statements for the fiscal years ended December 31, 2006, 2005 and 2004, and from our
unaudited consolidated financial statements for the years ended December 31, 2002 and 2003. The unaudited
summary consolidated financial information and the actual and as adjusted consolidated balance sheet data
include all adjustments, consisting principally of normal recurring adjustments that we consider necessary for a
fair presentation. Our historical results are not necessarily indicative of the results to be expected in the future.

        You should read this information together with ―Management‘s Discussion and Analysis of Financial
Condition and Results of Operations‖ and our consolidated financial statements and related notes, included
elsewhere in this prospectus.

STATEMENT OF FINANCIAL
CONDITION DATA:                                                         As of December 31,
                                             2002                    2003          2004           2005            2006
                                                                (in thousands, except per share data)
                                         (Unaudited)           (Unaudited)
                                                                                                                      4,86
Cash and cash equivalents           $                      1                 2           9         10,020                5
                                                                                                                     30,75
Total Inventory                     $            13,712                      -         375         12,955                6
                                                                                                                     37,37
Total assets                        $            13,819                      2         385         24,514                4
                                                                                                                     36,59
Total liabilities                 $              10,691                      2         312         18,459                9
Total stockholders‘ and partners‘
equity                            $                3,128                     -          73              6,055           775


STATEMENT OF
OPERATIONS DATA:                                                      Years ended December 31,
                                            2002                     2003          2004          2005            2006
                                                                (in thousands, except per share data)
                                        (Unaudited)            (Unaudited)
                                                                                                      25
Revenues                            $                 81               16,774            -             5             6,735
                                                                                                      14
Gross Profit                                          81                3,059            -             0             1,317
                                                                                                  (1,284
Operating loss                                        71                3,056        (48)              )            (3,853)
                                                                                                    (430           (10,540
Total other expense                              (178)                  (143)        (11)              )                  )
                                                                                                  (1,714           (14,393
Net loss                            $            (107)                  2,913        (59)              )                  )

                                                                                                   (0.22
Basic and diluted loss per share    $                                                                  )            (0.81)
Basic and diluted weighted
average common shares                                                                           7,755,64
outstanding                                                                                            6        17,711,405




                                                                19
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Quarterly Results of Operations

                                  Mar.
                                   31,    Jun. 30,       Sep. 30,           Dec. 31,       Mar. 31,         Jun. 30,        Sep. 30,      Dec. 31,
                                  2005     2005           2005                2005           2006             2006           2006          2006
Revenues:                                                               (In thousands, except per share data)
  Homebuilding and related
services                   $          -              -              -                 -            417           2,285           1,483         1,033
  Land sales                          -              -          255                   -            616                 50          414           437
         Total revenues               -              -          255                  -           1,033           2,335           1,897        1,470
Cost of revenues:
  Homebuilding and related
services                              -              -              -                -             332           1,893           1,256           866
  Land sales                          -              -          115                  -             327                 24          273           446
         Total cost of
revenues                              -              -          115                  -             659           1,917           1,529         1,312
Gross profit:
  Homebuilding and related
services                              -              -              -                -              85             392             227           167
  Land sales                          -              -          140                  -             289                 26          141           (9)
        Total gross profit            -              -          140                  -             374             418             368           158
Costs and expenses:
  Corporate general and
administration                        1           65            369                765             990           1,211           1,168           983
  Sales and marketing                 -            7            105                113             129             229             282           177
    Total costs and expenses          1           72            474                878           1,119           1,440           1,450         1,160
      Operating loss                (1)         (72)          (334)              (878)           (745)         (1,023)         (1,083)       (1,002)
Other income (expense):
  Loss on fair value of
derivatives                           -              -            -              (173)           (345)         (2,588)           (460)       (5,077)
  Interest and other income           -            8             36                 56              97             109              54            30
  Interest expense                    -         (16)          (128)              (213)           (514)           (558)           (570)         (718)
    Total other expense               -          (8)           (92)              (330)           (762)         (3,037)           (976)       (5,765)
                         Net
                         loss $     (1)         (80)          (426)             (1,208)        (1, 508)        (4,059)         (2,059)       (6,767)

Basic and diluted loss per
share                        $        -       (0.02)          (0.04)             (0.16)         (0.08)           (0.23)          (0.12)       (0.38)

Basic and diluted weighted
average common shares
outstanding                           -   3,333,333      10,000,000        17,689,252      17,706,625      17,706,625       17,706,625    17,726,026




                                                                           20
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                         M ANAGEMENT’S DISCUSSION AND ANALYSIS OF
                      FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This discussion contains forward-looking statements reflecting our current expectations that involve risks and
uncertainties. When used herein, the words “believes,” “plans,” “expects,” “anticipates,” “intends,”
“continue,” “may,” “will,” “could,” “should,” “future,” “potential,” “estimate,” or the negative of such
terms and similar expressions as they relate to us or our management are intended to identify forward-looking
statements. Actual results and the timing of events may differ materially from those contained in these
forward-looking statements due to a number of factors, including those discussed herein. These risks and
uncertainties are beyond our control and, in many cases, we cannot predict the risks and uncertainties that
could cause our actual results to differ materially from those indicated by the forward-looking statements.
Historical results and percentage relationships among any amounts in our consolidated financial statements
are not necessarily indicative of trends in operating results for any future periods.

         The following discussion and analysis of our financial condition and results of operations should be
read in conjunction with ―Selected Consolidated Financial Information‖ and our financial statements and
accompanying notes included elsewhere in this document.

Overview

         Our business plan focuses on the acquisition of undeveloped land that is strategically located based on
our understanding of population growth patterns and infrastructure development. This portion of our business
focus has required, and is expected to continue to require, the majority of our financial resources. In tandem
with our land acquisition efforts, and based upon our strategic market analysis, we also plan to prepare land for
homebuilding and to sell developed land. We believe that as the central Texas economy expands, our strategic
land purchases, land development activities and partnering model with local builders will enable us to capitalize
on the new growth centers we expect will be created.

          To both increase and accelerate lot sales, we also intend to deliver residential lots and financial support
to local homebuilders who have strong technical skills but who may lack the personnel and financial resources
to compete effectively against national homebuilding companies. Under these arrangements, we derive revenue
from the sale of real estate and residential lots, as well as from services provided to clients. The payments that
we receive are typically determined by the gross selling price of the builders‘ finished homes as well as the
specific services we provide to individual homebuilders. We currently have signed agreements to provide these
services to two homebuilder clients, although we have informed one homebuilder client that we would like to
phase out the program with them in 2007. We do not expect to generate significant revenues from these
services. We exercise significant influence over, but hold no controlling interest in, homebuilder clients, but we
may retain the majority of the risk of loss. At December 31, 2006, we determined that we were the primary
beneficiary in certain homebuilder agreements, as defined under FASB Interpretation No. 46(R), or FIN 46(R),
entitled ―Consolidation of Variable Interest Entities‖, where we have a significant, but less than controlling,
interest in our clients. In accordance with FIN 46(R), the results of these clients have been consolidated into our
financial statements.

         Currently we are not engaged in homebuilding. We expect to commence homebuilding in June 2007.
We will build homes on some of our land which is currently under development. Our home designs will be
selected and prepared for each of our markets based on local community tastes and preferences of homebuyers.
Substantially all of our construction work will be performed by subcontractors. Subcontractors will be retained
for specific subdivisions pursuant to contracts which we plan to enter into during 2007. We plan to enter into
homebuilding under the name ―Green Builders, Inc.‖ We currently have an option to purchase the local
homebuilding company Green Builders, Inc. Under the terms of the option, we have an exclusive right to
purchase Green Builders at any time prior to June 19, 2009 at a mutually agreeable price on the date of
purchase. We paid $15,000 to Green Builders, Inc. to enter into the option. Green Builders is a local
homebuilding company which has built four homes in central Texas in 2006. Our strategy on homebuilding is to
build homes which are environmental responsive, resource efficient and culturally sensitive.

        We merged with Wilson Family Communities, Inc., or WFC, in October 2005. WFC was formed early
in 2005 with the intention of focusing on acquiring and developing residential land in the central Texas region.
21
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In May 2005, WFC merged with a limited partnership that had engaged in various land acquisition and
development services.

Results of Operations

Homebuilding and Related Services Revenues

         Homebuilding and related services consists of home sales and homebuilder services. All of the home
sales are generated by our clients utilizing our homebuilder services. We consolidate these clients into our
operating results based on accounting requirements according to FIN 46(R) and refer to these clients as Variable
Interest Entities, or VIEs.

          During the year ended December 31, 2006, home sales accounted for approximately 77% of revenues
at a gross profit margin of approximately 17%. All of the homebuilding revenues were generated by our two
VIEs consolidated into our operating results. Revenues from each homebuilder client (i.e.VIE) were
approximately $1.8 and $3.4 million, respectively. The client that generated $1.8 million of revenues has not
commenced any new homes or utilized our homebuilding services since June 30, 2006. This client has
expressed its intention to begin building homes and utilizing our services in early 2007. We have purchased an
exclusive two year option to buy this client. Our other client which generated approximately $3.4 million of
revenues for the year ended December 31, 2006 has seven unsold homes that it expects to complete and sell
during the first half of 2007. We have notified this client that we would like to terminate our relationship once
the existing inventory of homes is completed. The client has a note payable to us in the principal amount of
approximately $165,000. We may not be able to recover the full amount of this note, which may force us to
pursue collection activities and a write off for the entire amount. In addition to the note payable, we may need to
provide funds to complete the construction and sale of the homes the client currently has under construction and
for sale. We have accrued approximately $50,000 for this contingency. The loss of this client will cause
revenues from homebuilding to be substantially lower, possibly dropping to zero, for the second and third
quarters of 2007.

        We plan to commence our own homebuilding activities beginning in June 2007.

        We had no homebuilding revenues during the year ended December 31, 2005 and 2004, as no homes
were built.

Land Sales

         Land sales accounted for approximately 23% of our total revenues, totaling approximately $1.5 million
for the year ended December 31, 2006, at a gross profit margin of approximately 29%. For the year ended
December 31, 2006, approximately $616,000 of our land sale revenue came from the sale of undeveloped
acreage tracts of land, approximately $851,000 of the revenue from the sale of developed finished lots and
$50,000 from miscellaneous land revenue.

          During the year ended December 31, 2005, we were in the process of acquiring and developing land
and generated revenues of approximately $255,000 through the sale of undeveloped acreage lots at a gross
profit of approximately $140,000. There were no revenues for the year ended December 31, 2004.

         We have been developing and acquiring land for sale to homebuilders and expect to see a material
increase in our land sales as we offer more land for sale to national and regional homebuilders as well as to local
homebuilders. Developing finished lots from land takes approximately one to three years. We plan to sell the
majority of our lots to national, regional and local homebuilders that may purchase anywhere from five to 100
or more lots at a time. We expect lot sales to vary significantly from quarter to quarter causing significant
fluctuations in our revenues and gross profit.


                                                        22
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Costs and Expenses

General and Administrative Expenses

         General and administrative expenses are composed primarily of salaries of general and administrative
personnel and related employee benefits and taxes, accounting and legal, and general office expenses and
insurance. During the year ended December 31, 2006, salaries, benefits, taxes and related employee expenses
totaled approximately $1.5 million and represented approximately 35% of total general and administrative costs
for the period. Also included is an accrual of approximately $180,000 for severance payments that will be paid
to our former Chief Financial Officer over the next ten months. Stock compensation expense totaled
approximately $545,000, which is 13% of total general and administrative expenses. Legal, accounting, and
audit expense which includes the expense of filing our registration statements and other SEC filings, totaled
approximately $776,000. Transaction cost amortization and other transaction costs totaled approximately
$367,000. Warranty expense, architecture fees, and consulting services were approximately $482,000.
Miscellaneous expenses were approximately $643,000 for general overhead, including rent, office expenses and
insurance. Depreciation expense included in general and administrative expenses was approximately $56,000
for the year ended December 31, 2006. General and administrative expenses included from the consolidation of
our VIEs were less than 5% of the total general and administrative expenses for the year ended December 31,
2006. We expect total general and administrative expenses to increase over the next year as we enter the
homebuilding business.

         Prior to our merger with Athena in May 2005, we had minimal business activity. From June 2005 until
December 2005, we spent money on developing our business strategy, hiring staff, acquiring a 752 acre land
tract and merging with a public company, issuing $10 million of convertible debt and preparing all the
documents and filings related to the merger activities. At December 31, 2005, we had nine employees as
compared to three at June 30, 2005. The majority of expenses were for salaries and related employee expenses
of $386,000, legal fees of $203,000, consulting relating to the preparation of home plans and designs of
$283,000, accounting and auditing fees of $89,000 and office rent, software, equipment and general expenses of
$156,000. Legal and accounting expenses related primarily to the mergers of WFC with Athena, and Wilson
Holdings and Cole. 64% of our general and administrative expenses were incurred in the fourth quarter of 2005.

Sales and Marketing Expenses

          Sales and marketing expenses include salaries and related taxes and benefits, marketing activities
including website, brochures, catalogs, signage, and billboards, and market research. Sales and marketing
salaries, benefits, taxes and related employee expenses for the year ended December 31, 2006 were
approximately $243,000 and represented approximately 30% of our total marketing costs for the period.
Expenses for advertising, brochures and catalogs, signage, public relations and other selling expenses for the
year ended December 31, 2006 were approximately $378,000 and represented approximately 46% of total sales
and marketing costs for the period. The remaining expenses for the year ended December 31, 2006, were for
other incidental items and services. Approximately 17% of the sales and marketing expenses in the period
resulted from the consolidation of the VIEs.

        Sales and marketing expenses for the year ended 2005 were for salaries and related expenses which
included $129,000 and $73,000 of website expenses, signage, advertising and marketing. Sales and marketing
expenses for the years ended December 31, 2005 and 2004 reflect our limited operations prior to June 2005.

Interest Expense and Income

          Interest expense for the year ended December 31, 2006 of approximately $2.4 million is related to debt
on properties purchased, convertible debt interest costs and amortization of the convertible debt discounts. The
convertible debt discount amortization was approximately $917,000 for the year ended December 31, 2006.
Interest on the convertible debt was approximately $586,000 for the year ended December 31, 2006. Our
interest expense will increase because of the increase in principal amount of convertible debt outstanding
following our September 2006 private placement. We intend to finance a major portion of land purchases and
expect interest expense to increase with borrowings in future periods.


                                                       23
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         Interest expense for the year ended December 31, 2005 of approximately $358,000 was for interest
costs on land acquired and held for sale or development, a line of credit, bridge loans and convertible debt.

          We experienced a loss on the fair value of derivatives during the years ended December 31, 2006 and
2005 of approximately $8.5 million and $173,000, respectively, due to the increases in the fair value of the
derivative liabilities related to the convertible notes and contingent warrants. These increases were primarily the
result of the increase in value of our common stock and warrants.

         Interest income of approximately $290,000 and $100,000 for the years ended December 31, 2006 and
2005 respectively, consisted of interest earned on our cash and cash equivalents and immaterial amounts of
other income.

Financial Condition and Capital Resources

Liquidity

         We had approximately $4.8 million in cash and cash equivalents at December 31, 2006, of which
approximately $2.2 million was restricted. We also plan to commit several million dollars in cash to exercise
option rights to purchase land, develop land and guarantee certain payments regarding the development of the
optioned land over the next year. We estimate that our future needs for development of our existing projects
over the next twelve months is approximately $23 million, with approximately $16 million coming from
anticipated bank financing.

         At December 31, 2006, we had secured notes payable and lines of credit totaling approximately $25.5
million. We had approximately $6.4 million drawn against these lines of credit, which will be repaid as finished
lots and completed homes are sold. Approximately $600,000 of the lines of credit liability relate to VIEs that
had drawn on lines of credit, guaranteed by us, to build homes that will be repaid as the completed homes are
sold. We do not expect to experience losses from these guarantees.

          We plan on investing approximately $23 million for the purchase of land, installment payments,
options fees and development costs over the next year. This includes the development of land including the
installation of water and wastewater infrastructure, streets and common areas. We intend to purchase or obtain
options to purchase additional acreage for development and additional finished lots for sale. We are actively
seeking additional debt financing in addition to funds raised in this offering, including possibly using joint
venture financing as well as cash generated from lot and land sales, to finance these activities.

        Our growth will require substantial amounts of cash for earnest money deposits, land purchases,
development costs, interest payments and to provide financing or surety services to its homebuilder clients.
Until we begin to sell an adequate number of lots and services to cover monthly operating expenses, sales,
marketing, general and administrative costs will deplete cash.

         To maintain our liquidity, we have financed the majority of our land and development activities with
debt and equity, and we believe we can continue to do so in the future, through a combination of conventional
and subordinated convertible debt, joint venture financing, sales of selected lot positions, sales of land and lot
options, and by raising additional equity.

          Our current short term financing is indexed to the prime rate, which could increase substantially in the
future. An increase in interest rates could have a material adverse effect on our operations by increasing
expenses and cash outlays, decreasing profitability or increasing losses, depleting cash and thereby making it
difficult to meet our cash obligations, and make it unlikely that we could meet the borrowing criteria of future
lenders.

          Land comprises the majority of our assets, which could suffer devaluation if the housing and real estate
market suffers a significant downturn, due to interest rate increases or other reasons. Our debt might then be
called, requiring liquidation of assets to satisfy our debt obligations or the use of our cash. A significant
downturn could also make it more difficult for us to liquidate assets, to raise cash and pay off debts, which
could have a material adverse effect upon our business.
24
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         In the normal course of our business, we enter into various land purchase option agreements that
require earnest money deposits. In order for us to start or continue the development process on optioned land,
we may incur development costs before we purchase the land. At December 31, 2005, we had capitalized
development costs of $345,745, of which $245,000 is non-refundable if we do not exercise the option and
purchase the land. As of December 31, 2006, we had approximately $451,000 in earnest money and deposits
outstanding classified in inventory, of which the entire amount would be forfeited and expensed if we were to
cancel the agreements.

         On December 19, 2005, we issued $10 million in aggregate principal amount of 5% Convertible Debt
due December 1, 2012, with interest payments due each May 1 and December 1 beginning in 2006 until the
debt is converted or repaid at maturity. These interest payments will be paid from cash and total approximately
$500,000 per year.

         In September 2006 we issued $6.5 million and in October 2006 we issued an additional $250,000,
totaling $6.75 million in aggregate principal amount of subordinated convertible debt notes due September 1,
2013, bearing interest at 5% per annum with semi-annual interest payments due each February 1 and September
1 beginning in February 1, 2007 until the debt is converted or repaid at maturity. These interest payments will
be paid from cash and total approximately $338,000 per year.

          During October 2006, we secured a $15.5 million line of credit for the purchase and development of
approximately 534 acres located in eastern Travis County and subsequently closed on the purchase of the
property. The first phase of the line of credit is $10.2 million and covers the purchase, a portion of the first two
phases of construction, offsite utilities and provide letters of credit totaling $4.3 million, required for the
development of municipal utility facilities, at the bank‘s prime rate plus 0.50%, and is secured by the underlying
property. Loan origination fees were 1% of the $10.2 million. Interest will be payable quarterly, commencing
January 2007. Principal will be payable in quarterly installments commencing 90 days after completion of
construction which is projected to be during 2007. The required pay down amount under the loan is equal to
75% of gross sales price as set forth in our contracts for sales of lots. Our current projects require pay down
amounts of approximately $600,000 per quarter. The purchase price of the property was approximately $8.5
million, with $2.5 million of owner financing, $3.6 million from the bank loan and cash from us of
approximately $2.4 million. We have invested an additional amount for development of the property of
approximately $1.9 million. The debt has financial covenants which (1) require us to keep a debt to equity ratio
of 2:1, and (2) keep liquid assets in excess of $7 million, except for 2006 and first and second quarters of 2007
in which we are required to maintain $4 million in liquid assets, which includes $2.6 million of restricted cash,
in the financial institution. In February 2007, we obtained a release from the bank whereby our restricted cash
was released, except for $315,000, and financial covenants for the third quarter of 2007 were modified requiring
the us to keep liquid assets of only $4 million. Should we be unable to raise additional capital, we will be in
default of the bank‘s covenants in 2007. We have obtained a commitment letter from another lending source
whereby we will refinance our existing facility . The new facility will not have any financial covenants.

          In December 2006, we paid cash and issued a note payable of $792,000 with a maturity date of
December 21, 2007 at an interest rate of the bank‘s prime rate plus 0.5% (currently 8.75%) for the purchase of
approximately 30 acres of land. The terms of the note payable call for interest only, payable quarterly, and the
balance of the principal and accrued interest due and payable upon maturity. The note is secured by the real
estate purchased. The note has the same covenants as the line of credit above and the bank has granted the same
covenant changes and waivers. We have obtained a commitment letter from another lending source whereby we
will refinance the existing note.

Capital Resources

         During June 2006, we refinanced $6.2 million of notes. The terms of the new loan include a $6.2
million principal balance; an interest rate indexed to the New York prime rate plus 0.75% per annum with a
floor of 7.0%, a term not to exceed 24 months and required principal reductions of $800,000 per quarter
beginning June 2007. Principal reductions from sales of real estate are credited towards the $800,000 per
quarter requirement. We have obtained a commitment letter from another lending source to refinance this note.


                                                        25
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          We have raised approximately $16.8 million of subordinated convertible debt. We raised $10 million of
subordinated convertible debt in December 2005 maturing December 1, 2012, at 5% per annum with
semi-annual interest payments due each June and December, beginning in June 2006. In September 2005, we
obtained a $2 million line of credit for interim construction financing which was paid at December 31, 2006. In
March 2006, we obtained an additional construction loan of approximately $3.0 million, which will be repaid
following completion, through lot sales. We must make cumulative principal reductions in the aggregate
amount of approximately $494,000 every three months beginning in the fourth quarter of 2006. At December
31, 2006, we had drawn approximately $2.9 million with approximately $2.2 million owed at December 31,
2006. In September and October 2006, we issued an additional $6.75 million in aggregate principal amount of
subordinated convertible debt notes due September 1, 2013, bearing interest at 5% per annum with semi-annual
interest payments due each February 1 and September 1 beginning in February 1, 2007. These interest payments
will be paid from cash and total approximately $338,000 per year.

         We also may participate in joint ventures to develop and secure additional land holdings, which would
decrease our need for cash, compared to purchasing the property outright, but could pose other risks such as
dependence on the financial condition of the joint venture partner, which would be disclosed upon reaching
definitive agreements.

         Based on current financial projections prepared by management, we expect to have adequate capital
resources to execute on our existing projects for the year ending December 31, 2007. These financial
projections are prepared based on assumptions and estimates which will significantly change during the year.
Accordingly, no assurance can be made that we will have adequate capital to execute on our current business
strategy during 2007.

Off-Balance Sheet Arrangements

         As of December 31, 2006, we had no off-balance sheet arrangements.

Critical Accounting Policies and Estimates

         Our accounting policies are more fully described in the notes to our consolidated financial statements.

         As discussed in the notes to the consolidated financial statements, the preparation of financial
statements in conformity with accounting principles generally accepted in the United States of America requires
management to make estimates and assumptions about future events that affect the amounts reported in our
consolidated financial statements and accompanying notes. Future events and their effects cannot be determined
with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual
results could differ from those estimates, and such differences may be material to our consolidated financial
statements. Listed below are those policies and estimates that we believe are critical and require the use of
significant judgment in their application.

Consolidation of Variable Interest Entities

          We offer certain homebuilder clients surety for their interim construction loans and cash advances to
facilitate sales of our residential lots. We may be considered the primary beneficiary as defined under FASB
Interpretation No. 46(R) (―FIN 46(R)‖), ―Consolidation of Variable Interest Entities‖ (VIE), and the Company
may have a significant, but less than controlling, interest in the entities. We account for each of these entities in
accordance with FIN 46(R). Management uses its judgment when determining if the we are the primary
beneficiary of, or has a controlling interest in, any of these entities. Factors considered in determining whether
we have significant influence or has control include risk and reward sharing, experience and financial condition
of the other partners, voting rights, involvement in day-to-day capital and operating decisions and continuing
involvement.

Inventory

       Inventory is stated at cost unless it is determined to be impaired, in which case the impaired inventory
would be written down to the fair market value. Inventory costs include land, land development costs, deposits
26
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on land purchase contracts, model home construction costs, advances to builders and capitalized interest and
real estate taxes incurred during development and construction phases.

Land Held Under Option Agreements Not Owned

         In order to ensure the future availability of land for development, we enter into lot option purchase
agreements with unaffiliated third parties. Under the agreements, we pay a stated deposit in consideration for
the right to purchase land at a future time, usually at predetermined prices or percentage of proceeds as homes
are sold. These options generally do not contain performance requirements from us nor do they obligate us to
purchase the land. Lot option payments are initially capitalized as inventory costs. If the lot option is exercised
the option cost is included in the cost of the land acquired. At the earlier of the time that it is determined that the
lot option will not be exercised or the lot option expires, the cost of the lot option is expensed. As of December
31, 2006 and 2005 there were $451,000 and $345,745, respectively, of cash deposits included in the land
account on the balance sheet of which approximately $451,000 and $245,000, respectively, are non-refundable
and subject to forfeiture should we not exercise the options.

Revenue Recognition

         Revenues from property sales are recognized in accordance with SFAS No. 66, ―Accounting for Sales
of Real Estate.‖ Revenues from land development services to builders are recognized when the properties
associated with the services are sold, when the risks and rewards of ownership are transferred to the buyer and
when the consideration has been received, or the title company has processed payment. For projects that are
consolidated, homebuilding revenues and services will be categorized as homebuilding revenues and revenues
from property sales or options will be categorized as land sales.

Income Taxes

          Prior to the merger of Athena with WFC at May 31, 2005, Athena was a partnership and therefore did
not have income taxes as the income and losses passed through to the partners. Also, the VIEs are pass through
entities. Since the merger, income taxes are accounted for in accordance with SFAS No. 109, ―Accounting for
Income Taxes,‖ deferred tax amounts and liabilities are determined based on temporary differences between
financial reporting carrying amounts of existing assets and liabilities and their respective tax bases and net
operating loss and credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates will be recognized
in the period that includes the enactment date. A valuation allowance is recorded for the entire deferred tax asset
due to the uncertainty of the net realizable value of the asset.

Use of Estimates

         We have estimated and accrued liabilities for real estate property taxes on our purchased land in
anticipation of development, and other liabilities including the beneficial conversion liability, the fair value of
warrants and options. To the extent that the estimates are dramatically different to the actual amounts, it could
have a material effect on the financial statements.

         We have two properties that are in Municipal Utility Districts, or MUDs and one property in a Water
Control and Improvement District. We incur development costs for water, sewage lines and associated
treatment plants and other development costs and fees for these properties. Under the agreement with the
MUDs, we expect to be reimbursed partially for the above developments costs. The MUDs will issue bonds to
repay us once there is enough assessed value on the property for the MUD taxes to repay the bonds. As homes
are sold, the assessed value increases in the MUD. It can take several years before there is enough assessed
value to recapture the costs. We estimate that we will recover approximately 50% to 70% of eligible costs spent
through December 31, 2006, which total approximately $1.8 million. In some circumstances, the MUDs will
pay for property set aside for the preservation of endangered species. To the extent that the estimates are
dramatically different to the actual amounts, it could have a material effect on the financial statements.


                                                          27
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Concentrations

          Our current activities are limited to the geographical area of central Texas which we define as
encompassing the Austin Metropolitan Statistical Area, or Austin MSA, and the San Antonio Metropolitan
Statistical Area, or San Antonio MSA. This geographic concentration makes our operations more vulnerable to
local economic downturns than those of larger, more diversified companies.

        We are also dependent upon a limited number of homebuilder services customers which are subject to
numerous uncertainties related to homebuilding including weather delays and damage, labor and material
shortages, insufficient capital, materials theft or poor workmanship. Revenues from our two homebuilder
customers accounted for 66% and 34%, respectively, of the total homebuilding revenue for the years ended
December 31, 2006. We had no homebuilding service revenue for the years ended December 31, 2005 and
2004.

         During the years ended December 31, 2006, home sales accounted for approximately 77% of revenues
at a gross profit margin of approximately 17%. One client has seven unsold homes that it expects to complete
and sell during the first quarter of 2007. The client does not expect to continue building homes under its current
builder services agreement. The client has a note payable to us of approximately $165,000. We may not be able
to recover the full amount of this note forcing it to pursue collection activities and a write off for the entire
amount. In addition to the note payable, we may need to provide funds to complete the construction and sale of
the homes the client currently has under construction and for sale. We have accrued approximately $50,000 for
this contingency. All of the homebuilding revenues were generated by two VIEs consolidated into our operating
results, which have not performed as expected. Homebuilder services revenues are eliminated in the
consolidation of our financial statements as cost of revenues to the our VIEs.

Convertible Debt

         The convertible debt and the related warrants have been accounted for in accordance with Emerging
Issues Task Force ―EITF‖ No. 98-5, ―Accounting for Convertible Securities with Beneficial Conversion
Features or Contingently Adjustable Conversion Ratios‖, EITF No. 00-19, ―Accounting for Derivative Financial
Instruments Indexed to, and Potentially Settled in, a Company‘s Own Stock,‖ EITF 00-27, ―Application of issue
98-5 to Certain Convertible Instruments,‖ EITF 05-02 ―Meaning of ‗Conventional Convertible Debt Instrument‘
in Issue No. 00-19,‖ and EITF 05-04 ―The Effect of a Liquidated Damages Clause on a Freestanding Financial
Instrument Subject to Issue No. 00-19.‖ See ―Recent Accounting Pronouncements.‖ We have obtained an
independent third party valuation as of the date of convertible debt issuances and as of December 31, 2005 to
determine the fair market value of our common stock. Management determined that the price of stock quoted on
the Over-the-Counter Bulletin Board was not reflective of the market price of the stock as of those days due to
insufficient trading and a lack of public information regarding our financial performance. Beginning with the
quarter ended September 30, 2006, we determined that there was enough public float available to provide
sufficient information about us to the public, and we began using the stated Over-the Counter Bulletin Board as
the market price of its common stock.

Derivative Financial Instruments

         Wilson Holdings accounts for all derivative financial instruments in accordance with SFAS No. 133.
Derivative financial instruments are recorded as liabilities in the consolidated balance sheet, measured at fair
value. When available, quoted market prices are used in determining fair value. However, if quoted market
prices are not available, Wilson Holdings estimates fair value using either quoted market prices of financial
instruments with similar characteristics or other valuation techniques.

          The value of the derivative liabilities relating to the Convertible Note in the consolidated financial
statements are subject to the changes in the trading value of Wilson Holdings common stock and other
assumptions. As a result, our quarterly financial statements may fluctuate from quarter to quarter based on
factors, such as the trading value of Wilson Holdings common stock, the amount of shares converted by
Convertible Debt Holders in connection with the Convertible Note and exercised in connection with the
Convertible Debt Holders Penalty Warrant. Consequently, the consolidated financial position and results of
operations may vary from quarter to quarter based on conditions other than Wilson Holdings operating revenues
and expenses.
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        Derivative financial instruments that are not designated as hedges or that do not meet the criteria for
hedge accounting under SFAS No. 133 are recorded at fair value, with gains or losses reported currently in
earnings. All derivative financial instruments held by us as of December 31, 2006 and 2005, were not
designated as hedges.

Accounting for Stock Based Compensation

          Effective January 1, 2006, we adopted the provisions of SFAS No. 123 (revised 2004), Share-Based
Payment, (―SFAS 123R‖) using the prospective-transition method. Under this transition method, compensation
expense recognized during the year ended December 31, 2006 included: (a) compensation expense for all
share-based awards granted prior to, but not yet vested as of December 31, 2005, based on the grant date fair
value estimated in accordance with the original provisions of SFAS 123, and (b) compensation expense for all
share-based awards granted subsequent to January 1, 2006, based on the grant date fair value estimated in
accordance with the provisions of SFAS 123R. In accordance with the modified-prospective-transition method,
results for prior periods have not been restated. The adoption of SFAS 123R resulted in a charge to net losses of
approximately $545,000 for the year ended December 31, 2006. Before January 1, 2006, we accounted for our
stock options using the intrinsic value method under ―Accounting Principles Board Opinion No. 25.‖

         If we had elected to recognize compensation expense for options granted based on their fair values at
the grant dates, consistent with SFAS No. 123, net income and earnings per share for the years ended December
31, 2005 would have changed to the pro forma amounts indicated below:

                                                                                           Year Ended
                                                                                        December 31, 2005

                        Net loss as reported                                        $                  (1,714,443)
                        Deduct: Total stock based employee compensation
                        expense determined under the fair value based
                        method for all awards, net of the related tax effects       $                    (123,479)
                        Pro forma net loss                                          $                  (1,837,922)
                        Net loss per share
                                 Basic and diluted - as reported                    $                       (0.22)
                                 Basic and diluted - pro forma                      $                       (0.23)


The fair value of the options was calculated at the date of grant using the Black-Scholes pricing model with the
following weighted-average assumptions for the year ended 2006: risk free interest rate of 4.25% to 4.75%,
dividend yield of 0%, weighted-average life of options of 5 years, and a 60% volatility factor. For the year
ended 2005, the following assumptions were used: risk free interest rate of 4.25%, dividend yield of 0%,
weighted-average life of options of 5 years, and a 60% volatility factor.

During 2004, we had no stock compensation plan.

Recent Accounting Pronouncements

         In July 2006, the FASB released FASB Interpretation No. 48, ―Accounting for Uncertainty in Income
Taxes, an interpretation of FASB Statement No. 109‖ (―FIN 48‖). FIN 48 prescribes a comprehensive model for
the financial statement recognition, measurement, presentation and disclosure of income tax uncertainties with
respect to positions taken or expected to be taken in income tax returns. We must adopt FIN 48 in the first
quarter of fiscal 2008, and we do not expect the impact to be material to our consolidated financial statements.

         In September 2006, the Financial Accounting Standards Board (―FASB‖) issued Statement No. 157,
―Fair Value Measurements‖ (―FAS 157‖), which addresses how companies should measure fair value when
they are required to use a fair value measure for recognition or disclosure purposes under generally accepted
accounting principles (―GAAP‖). As a result of FAS 157, there is now a common definition of fair value to be
used throughout GAAP, which is expected to make the measurement of fair value more consistent and
comparable. We must adopt FAS 157 in fiscal 2009, and we do not expect the impact to be material to our
consolidated financial statements.
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          In December 2006, the FASB issued the FASB Staff Position (FSP) No. EITF 00-19-2, (―FSP EITF
00-19-2‖), Accounting for Registration Payment Arrangements. This FSP addresses an issuer‘s accounting for
registration payment arrangements. This FSP specifies that the contingent obligation to make future payments
or otherwise transfer consideration under a registration payment arrangement, whether issued as a separate
agreement or included as a provision of a financial instrument or other agreement, should be separately
recognized and measured in accordance with FASB Statement No. 5, Accounting for Contingencies. The
guidance in this FSP amends FASB Statements No. 133, Accounting for Derivative Instruments and Hedging
Activities, and No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities
and Equity, and FASB Interpretation No. 45, Guarantor‘s Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others, to include scope exceptions for
registration payment arrangements. This FSP further clarifies that a financial instrument subject to a registration
payment arrangement should be accounted for in accordance with other applicable generally accepted
accounting principles (GAAP) without regard to the contingent obligation to transfer consideration pursuant to
the registration payment arrangement. This FSP shall be effective immediately for registration payment
arrangements and the financial instruments subject to those arrangements that are entered into or modified
subsequent to the date of issuance of this FSP, or for financial statements issued for fiscal years beginning after
December 15, 2006, and interim periods within those fiscal years.

         We intend to adopt FSP EITF 00-19-2 beginning in 2007. The adoption of this FSP will have a material
effect upon our financial statements. The pro forma below shows the effect of the new FSP on the 2006
financial results, had the FSP been effective during 2006:

                                                 As Presented             Pro Forma              Difference

          Net loss                          $ (14,393,057)              (5,125,384)            9,267,673
          Convertible notes, net of
            discount                        $      8,395,876            15,491,410             7,095,534
          Derivative liabilities            $      9,345,911                     –            (9,345,911)
          Stockholders‘ equity              $        774,798             9,267,673             8,492,875

Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.

         In connection with the closing of our acquisition of Wilson Family Communities, Inc., on October 12,
2005 our Board of Directors engaged Helin, Donovan, Trubee & Wilkinson, LLP, or HDT&W (now known as
PMB Helin Donovan, LLP ), to serve as our independent public accountants and dismissed our former
independent accountants, Chisholm, Bierwolf & Nilson , or CBN. The change in auditors was effective October
12, 2005. HDT&W have audited our financial statements for the fiscal years ended December 31, 2006, 2005
and 2004, HDT&W‘s audit reports on our consolidated financial statements for the past two fiscal years did not
contain an adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit
scope or accounting principles, except for the ―going concern‖ assumption in the Report of Independent
Registered Public Accounting Firm filed in connection with the Forms 10-K filed on April 15, 2005, and April
14, 2004. HDT&W recently merged with another accounting firm and changed its name to PMB Helin
Donovan, LLP .

        In connection with its audits of our consolidated financial statements for the fiscal years ended
December 31, 2006, 2005 and 2004 and through the date of this prospectus, there were no disagreements with
our accountants on any matter of accounting principles or practices, financial statement disclosure, or auditing
scope or procedure which, if not resolved to PMB Helin Donovan, LLP‘s, satisfaction, would have caused them
to make reference to the subject matter in connection with their reports on our consolidated financial statements
and supporting schedules for such years; and there were no reportable events, as listed in Item 304(a)(1)(v) of
Regulation S-K.


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                                                  B USINESS

Overview

       We acquire and develop land, create communities and provide homebuilding services in central Texas.
Our management team includes experienced land acquisition and development professionals who are
knowledgeable about both the local and national real estate and housing markets.

          Since our inception, we have acquired or have options to acquire approximately 2,430 acres of land in
central Texas that we expect will yield approximately 6,000 lots for sale. We have an inventory of
approximately 120 developed lots which are ready for sale to homebuilders and we are in the process of
entitling and developing approximately 1,328 acres.

         Our 2007 business activities will be focused on developing our current land holdings and entering into
the homebuilding business. Over the next 3 to 5 years we intend to expand our land development and
homebuilding activities into additional regional and national markets. We will focus on markets that have
steady employment and population growth, increasing home prices, presence of national homebuilders and a
sensitivity for environmentally conscious development.

Industry Overview

         The real estate industry is fragmented and highly competitive. We compete with numerous developers,
builders and others for the acquisition of property and with local, regional and national developers,
homebuilders and others with respect to the sale of residential lots. Additionally, in 2007, we expect to compete
with local, regional and national homebuilders in the sale of new homes. We also compete with builders and
developers to obtain financing on commercially reasonable terms.

         We have concentrated our activities in central Texas where we are developing land and where we
expect to build homes in the future. Most of our competitors have substantially greater financial resources than
we do, as well as much larger staffs and marketing organizations. However, we believe we compete effectively
in our existing market as a result of our development expertise, and our reputation as a producer of quality
residential lots. We have seen the financial resources of our competitors increase as a result of the industry
consolidation experienced in the past few years.

Our Strategy

        Our business strategy is focused on two segments:

        •   Land acquisition, development and related services; and
        •   Homebuilding and related services
Land Acquisition

         The core of our business plan is to secure land strategically, based on our understanding of population
growth patterns and infrastructure development. We believe that national homebuilding companies focus their
acquisition efforts on very large tracts of land. In our opinion, these factors create an opportunity for us to
secure high-quality, smaller tracts (i.e. less than 1,000 acres) that may be overlooked. Additionally, by
providing a timely and diligent land acquisition effort with decisions approved locally, we expect to have an
advantage in the pursuit of larger tracts that become available in our market.

         We expect to use our available assets, (primarily cash from issuances of equity and subordinated notes,
plus cash from operations) for land acquisition, development and homebuilding activities. We are not limited by
the amount we can invest in any particular stage of development of the land. Almost all of the land and related
development projects will be financed by conventional real estate loans. Based upon individual project


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parameters, we expect to finance approximately 50% to 75% of our acquisition and development activities with
conventional real estate loans. Additionally, we will defer payment for land when possible and use
owner-financed payment plans, such as the rolling option. The rolling option has a variety of forms. One
variation allows us to pay the landowner for sections of lots as they are actually needed and utilized in our
business. We expect that a substantial portion of our future revenues will be generated through the development
of subdivisions and land sales. Our anticipated land sales will include sections of lots that are ready for
immediate home construction with all infrastructure in place, as well as sections of lots that have all necessary
approvals to begin construction but have yet to be physically improved.

         While we anticipate that the majority of our revenues will come from sales to national and regional
homebuilders, we also expect additional revenues from the sale of lots and homebuilding services to smaller,
local builders. Lot sales to local builders will typically involve fewer lots per transaction than sales to larger
national and regional companies.

         We plan to support the purchase of land and development of our communities with specific analysis of
our target markets. Our analysis will go beyond benchmarking the current competition in the marketplace. We
intend to utilize more thorough research processes used within the auto, retail and banking industries. For
example, successful automakers target their products to a type of consumer, based on the consumer‘s age range,
family and lifestyle attributes. We will utilize a similar approach, gathering consumer preference data and
customizing our product offerings for a variety of buyer segments. We strive to attract a diverse group of buyers
by designing multi-product neighborhoods within each community that will be desirable for homebuyers at
differing income levels and with different needs. By providing a more customized product mix of varying lot
sizes and amenities in our communities and addressing underserved segments, we believe we can accelerate the
absorption of our subdivisions and earn superior returns for our stockholders.

Land Development and Related Services

          In tandem with our land acquisition efforts and based upon our strategic market analysis, we plan to
subcontract for the preparation of land for development. We seek to add value to the land through the process of
development, which may include permitting and constructing water and wastewater infrastructure,
master-planning of the community, and the construction of roads and community amenities. We also plan to sell
entitled land to others for development. Entitled land is land subject to development agreements, tentative maps
or recorded plats, depending on the jurisdiction within which the land is located. We anticipate offering
assistance and site-specific analysis to land owners desiring to maximize land values. Such analysis can help
owners design neighborhoods with pocket parks, natural space and varying lot sizes to attract a broader range of
buyers, accelerating the absorption of the subdivision and thereby maximizing value.

          In conjunction with our land acquisition activities, we expect a portion of our land revenues to come
from sales of entitled land, developed land and bulk lot sales. To date, our revenues have been derived from lot
sales and sales of undeveloped parcels of land plus revenues from services provided to two homebuilder
customers. The revenue from these sales has been consolidated into our results. We expect that sales of large
parcels of land and sections of developed lots will be sporadic, resulting in fluctuations in our revenues and
gross margins, while the sale of parcels of developed lots and delivery of services to homebuilders will be less
volatile.

         We intend to invest in real estate and real estate related activities and are not limited as to the
percentage of our assets that we may invest in any single type of investment or as to the kinds of real estate
assets in which we can invest. A vote of our security holders is not required to change the allocation or
concentration of such assets. However, we may be subject to certain limits from time to time because of
covenant requirements under our agreements with lenders.

Current and Future Properties

         We intend to sell some of the lots in our various projects and buying and selling additional properties
on an opportunistic basis as market conditions warrant. We believe that our properties are adequately insured,
and are suitable for their intended purposes. Because of the nature of our land sales and land development
services operations, significant amounts of property are held as inventory in the ordinary course of our business.
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         In March 2007, we obtained a valuation from Kauttu Valuation, an independent real estate valuation
firm, that valued our Austin, Texas area land holdings at $102,300,000. Details of the properties we own or
have options to purchase are set forth below:

                                    Approx.
             Name of Project        Acreage    Date Purchased /Optioned                 Location

         Rutherford West              697         June 30, 2005            Northern Hays County, Texas,
                                                                           Hays Independent School District
         Georgetown Village           665         August 22, 2005          The City of Georgetown, Texas,
                                                                           Georgetown Independent School
                                                                           District
         Villages of New              534         October 18, 2005         Eastern Travis County, Texas,
         Sweden                                                            Pflugerville Independent School
                                                                           District
         Bohls                        428         January 25, 2006         Eastern Travis County, Texas,
                                                                           Pflugerville Independent School
                                                                           District
         Elm Grove                     91         December 15, 2005        The City of Buda, Texas, Hays
                                                                           Independent School District
         Highway 183                   15         May 31, 2005             U.S. Route 183 at Evelyn Rd.,
                                                                           Travis County, Texas


         Rutherford West – Rutherford West is a planned 291 lot residential community on approximately 697
acres located southwest of Austin, Texas, in the Texas Hill Country. Rutherford West is planned as an acreage
development and each lot includes a deed restricted conservation easement. The land for this project was
purchased in June 2005, with a combination of bank financing and cash on hand. Development of this project
commenced in October, 2006 and will continue through 2010. The property is pledged as collateral on a $6.2
million land, development, and construction loan, with an outstanding balance of $6.2 million as of December
31, 2006. Interest payments are at 0.75% over prime (i.e. 9.00% as of December 31, 2006) and are due monthly
and principal payments in the amount of $800,000 are due quarterly beginning June, 2007. The bank financing
matures in June 2008.

          Georgetown Village – Georgetown Village is an approximately 665 acre master planned development
in Williamson County, Texas, located just north of Austin in Georgetown. Employers such as Dell, Toppan
Printing Co., Ltd., Photronics, Inc. in Round Rock and Abbot Laboratories, Motorola, and Solectron in Austin
are all less than 20 minutes via the new Highway 130 corridor. Currently, Georgetown Village includes
approximately 350 single-family residential homes. The land for this project was purchased under an option
contract in August 2005. Under the option contract we are required to purchase a minimum of 30 acres on an
annual basis through 2017. We have purchased approximately 52 acres and 25 residential lots as of December
31, 2006. The initial purchase of land for this project was acquired in November 2005 with a combination of
bank financing and cash on hand. Development of this project commenced in January 2006 and will continue
through 2013. The property is pledged as collateral on a $3.0 million land, development, and construction loan,
with an outstanding balance of $2.25 million as of December 31, 2006. Interest payments are at 0.5% over
prime (i.e. 8.75% as of December 31, 2006) and are due monthly and minimum principal payments in the
amount of $494,000 are due quarterly. The bank financing matures in March 2008.

          Villages of New Sweden – New Sweden is a planned approximately 1,700 residential lot project located
on approximately 534 acres in Manor, Texas. New Sweden is planned for mixed use master planned community
which includes single family residential homes, commercial properties, an onsite school, an amenity center, a
fire station, and an open


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green space. The land for this project was purchased in October 2005 with a combination of bank financing,
seller financing and cash on hand. Development of this project is expected to commence in second half of 2007,
and will continue through 2017. The property is pledged as collateral on a $15.5 million land, development, and
construction loan and $2.5 million of seller financed notes payable, with an outstanding balance of $3.6 million
and $2.5 million as of December 31, 2006, respectively. Interest payments on the bank financing are at 0.5%
over prime (i.e. 8.75% as of December 31, 2006) and are due quarterly and principal payments in the amount of
approximately $600,000 are due quarterly beginning 90 days after the completion of construction. Interest
payments on the seller-financed notes payable are fixed at 7% and at 2% over prime (i.e. 10.25% as of
December 31, 2006) and are due quarterly and principal payments are due annually in the amount of
approximately $1.1 million in 2007, $0.3 million in 2008, $0.5 million in 2009 and $0.5 million in 2010. The
bank financing and seller financed notes payable mature in October 2009 and October 2010, respectively.

         Bohls – Bohls tract is part of the New Sweden master planned community and has approximately 1600
residential lots located on 428 acres in Manor, Texas. The land for this project is under an option contract
entered into by us in January 2006. Under the terms of the contract and related amendments, we are under
contract to purchase the land for approximately $7.3 million. We are currently exploring our financing options.

         Elm Grove Elm Grove is a 320 lot residential project located on 91 acres south of Austin, Texas in the
city of Buda. The master plan includes single-family residential and open green space all within walking
distance to Elm Grove elementary school. The first phase of land for this project was acquired in December
2006 with a combination of bank financing and cash on hand. Development of this project is expected to
commence in first half of 2007 and will continue through 2010. The property is pledged as collateral on a
$792,000 land, development, and construction loan, with an outstanding balance of $792,000 as of December
31, 2006. Interest payments are at 0.5% over prime (i.e. 8.75% as of December 31, 2006) and are due quarterly
and the outstanding principal balance is payable upon maturity in December 2007.

         Highway 183 We own approximately 15 acres in Travis County that has a note payable of $280,000.
The land is along the Highway 130 corridor and 10 acres of such land is currently under condemnation by the
State of Texas. We are in the process of obtaining an appraisal and have hired a law firm that specializes in
condemnation hearings to represent us to obtain the best price for the property. The offer from the State of
Texas is currently approximately $498,000 for 10 acres and will leave us with a remaining parcel of 5 acres.

         The core of our business plan is to secure land strategically, based on our understanding of population
growth patterns and infrastructure development in central Texas and its surrounding areas. We believe that our
management team has the expertise to acquire large tracts of land in central Texas, and get them entitled in a
relatively short time frame. In our opinion, this creates an opportunity for us to secure high-quality tracts that
may have been overlooked. We expect to finance 50% to 75% of acquisition and development activities with
conventional real estate loans. Additionally, we have developed a set of guidelines which address environmental
responsiveness, resource efficiency, and cultural sensitivity. Some of our guidelines are:

        •   planning of homesite orientation;
        •   preserving natural open space;
        •   respecting Conservation Easements;
        •   connecting and enhancing our communities with walking and biking paths that provide easy access
            for meeting neighbors;
        •   reserving land to provide public space for neighborhood public gardens;
        •   establishing common areas irrigated with ―gray water‖ along with rainwater collection and drip
            irrigation systems that will help minimize water usage;

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        •   ensuring that storm water runoff is filtered and/or treated by the use of wet ponds and vegetative
            filter strips prior to its release;
        •   respecting the local history of the land and cultural diversity;
        •   creating mixed-used communities that encourage foot traffic with less vehicular traffic;
        •   seeking opportunities to enhance our relationships with builders, partners, governmental agencies,
            and partnerships with environmental and community-based organizations; and
        •   restoring or recycling of existing structures.
Homebuilding and Related Services

         Currently we are not engaged in homebuilding. We expect to commence homebuilding in June 2007.
We intend to build homes on portions of our land currently under development. We plan to select and prepare
our home designs for each of our markets based on local community tastes and preferences of homebuyers.
Substantially all of our construction work will be performed by subcontractors. We plan to retain subcontractors
for specific subdivisions pursuant to contracts which we plan to enter into during 2007. We plan to enter into
homebuilding under the name Green Builders, Inc. We currently have an option to purchase the local
homebuilding company Green Builders, Inc. Under the terms of the option, we have an exclusive right to
purchase Green Builders for a period of two years at a ―fair market price‖ as agreed to by both parties or based
on an independent valuation on the date of purchase. We paid $15,000 to Green Builders to enter into the
option. Green Builders is a local homebuilding company which built four homes in central Texas in 2006.
Green Builders is one of our homebuilder services clients. Our strategy on homebuilding is to build homes
which are environmentally responsive, resource efficient, and culturally sensitive.

         Our strategy is to target ―green‖ building. Green building today is most often thought of in terms of
products and technology. ―True‖ green building is more importantly an approach to the entire business from
land planning to plan design, from administration procedures to field processes. ―Green‖ is a recognition that
there are other options and choices within most areas of how we conduct our business. We will start by
evaluating our process options for earth-friendly alternatives that are attainable yet reasonably cost-effective and
are a sustainable value for the customer. To address our homebuilding activities we will consider a unilateral
awareness of earth-friendly and efficient processes to create our ―Whole-System Thinking‖ such as:

        •   considering employees‘ attitude and awareness of efficiency in their office space, processes and
            daily routines;
        •   partnering with vendors and trades in the field to eliminate waste, and create earth-friendly
            processes and procedures for job site that efficient and mutually beneficial;
        •   incorporating sustainable building practices and energy-saving systems that respond to the demands
            of a particular environment in a specific region;
        •   monitoring of the marketplace and industry for new technology;
        •   emphasizing job-site awareness, supervision and communication pursuing earth-friendly
            procedures;
        •   evaluating the marketplace for new home design and product technology acceptance;
        •   exploring earth-friendly options for consumer choice, efficient applications and implementations;
        •   emphasizing lot and site considerations, home orientations, sustainable lot improvements,
            low-maintenance landscaping and impervious cover; and

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        •   using environmentally-friendly products.
Geographic Expansion

          We are pursuing a strategic expansion philosophy based on potential growth opportunities within what
we believe are the most stable areas throughout the United States. We plan to grow by investing available
capital in our existing market and into operations and strategic acquisitions in new markets. After reviewing the
market activity in the top 100 sub-markets, we believe that within the next two to five years we can expand into
five to ten markets that have shown the following trends:

        •   a steady increase in the employment rate over the past three to five years ;
        •   an unemployment rate below the national average ;
        •   population growth reported steady and positive population rates greater than the national average ;
        •   an increase in average home price or less devaluation than the national average ;
        •   the presence of national builders that have been active for a considerable amount of time (Greater
            than ten years) ;
        •   being rated in the top 50 cities with the most stable growth rate ; and
        •    being rated in the top 50 cities moving in the direction of being environmentally sensitive either in
             their governmental attitudes or in their planning and entitlement processes for each city.
         We believe that preliminary markets outside Texas that exemplify the criteria above are : Denver,
Colorado; Las Vegas, Nevada; Nashville, Tennessee; Phoenix, Arizona and Raleigh, North Carolina. These
markets will allow geographic diversification in our sources of revenues and earnings. We believe this
diversification strategy will mitigate the effects of regional economic cycles and position us for greater future
growth. Through strategic acquisitions in markets with the qualifications above we hope to gain established land
positions and inventories; existing relationships with local governments, land owners, and developers; and a
positive impact on our sources of revenues.

Target Market and Market Data

         Our current market, Austin, Texas, was ranked in the top three places to live in May 2005 among the
150 metro areas ranked by Forbes magazine on such criteria as business costs, living costs, number of
engineers, crime rates, job growth and employment rates. According to Forbes, Austin‘s gross metro product is
expected to rebound to seven percent annual growth rate through 2008, thanks to one of the nation‘s most
highly educated work forces. Two of the key indicators of Austin‘s economic health are the steady growth of
the employment base and above average employment growth rate compared to Texas and the nation, with the
exceptions of 2001 through 2003. Over the past ten years, Austin has added nearly 180,000 jobs and has
typically exceeded Texas and national job growth rates.

         According to Metrostudy – MetroUSA, in October 2006 Texas was second in terms of job growth
across the county.


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                            TOP 15 STATES RANKED BY JOB GROWTH – (Oct. 2006)

                             Rank             State           Annual Job Growth % Change
                              1         Florida                   218,800         2.8%
                              2         Texas                     216,300         2.2%
                              3         California                164,200         1.1%
                              4         Arizona                   121,200         4.7%
                              5         Washington                 81,200         2.9%
                              6         Georgia                    79,000         2.0%
                              7         Louisiana                  75,500         4.4%
                              8         New York                   68,500         0.8%
                              9         North Carolina             62,000         1.6%
                              10        Illinois                   61,600         1.0%
                              11        Nevada                     55,600         4.4%
                              12        Minnesota                  54,200         2.0%
                              13        Utah                       53,500         4.6%
                              14        Pennsylvania               51,600         0.9%
                              15        Oregon                     49,400         2.9%


                           Source: Metrostudy - MetroUSA


          Austin has also experienced significant population growth. Since 1990, the Austin metropolitan
statistical area, or MSA, has been one of the fastest-growing areas in the United States. According to the Austin
Chamber of Commerce, the increase in population in the Austin MSA from 1990 to 2000 was more than double
the growth rate of Texas and almost four times the national growth rate. While the population growth rate in the
Austin MSA has slowed to 16.2% from 2000 to 2005 , population growth continues to exceed the Texas and
national averages by a significant margin. In 2005 , the population in the Austin MSA reached 1.4 million. We
expect the Austin MSA to continue its strong history of both employment and population growth, based on its
desirability as a place to live. The worldwide employee relocation council and relocation services provider
Primacy Relocation LLC ranked Austin as the s econd best city among those with populations in excess of
500,000 people for families to relocate, based on cost of living, taxes, home costs, home appreciation, schools,
climate, commute times, out-of-state tuition rules at local universities and regulation of long-term care facilities.

         According to Alamo Workforce, the San Antonio MSA added 11,000 new jobs from Q2 2004 to Q2
2005. Additionally, according to the San Antonio Economic Development Foundation, or the SAEDF, San
Antonio is far more affordable than comparable cities. For example, the SAEDF estimates that moving from
San Diego to San Antonio would result in more than a $21,000 annual savings to the average family. We
believe that job growth, as well as the affordability of San Antonio, will continue to draw new residents.

         As an example of some of the market differences (regional, national), land prices in Austin and San
Antonio have remained relatively low compared to those in other areas of Texas. We currently estimate that
land in the Austin and San Antonio areas targeted for new housing development can typically be acquired at
prices less than comparable property in the Dallas and Houston areas. We expect land prices to appreciate due
to the positive economic climate in the Austin and San Antonio areas – fueled by employment and population
growth. We also believe that the Austin and San Antonio MSA‘s are both positioned for an increase in housing
prices. The projected increase in population and employment growth, combined with relatively modest housing
price inflation over the past few years, should increase housing demand and housing prices.

         The Austin market remains strong and the outlook is positive for continued growth. New home annual
starts and closings continue to increase in the central Texas area as evidenced by the table below.


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        Homebuilders, developers and market researchers generally consider a 24 month supply of vacant
developed lots to be at equilibrium in the marketplace. According to metrostudy and as indicated in the chart
below, the Austin market during fourth quarter 2006 had a less than 18 months supply of vacant developed lots.




Municipal Utility District Receivables

         A Municipal Utility District, or MUD, is a political subdivision of the State of Texas, created by and
subject to the oversight of the Texas Environmental Quality Commission, or TECQ.

        MUDs, by definition, may in engage in some, or all, of the following: residential and commercial
supply of water and wastewater services, solid waste disposal, wastewater treatment, conservation, irrigation,
drainage, fire fighting, emergency services, and recreational facilities. Texas law gives a MUD the power to
incur debt, levy taxes, charge for specific services, and adopt rules for those services, enter into contracts, obtain
easements, and condemn property.

          Typically, MUDs are formed by real estate developers in areas where the provision of utility services
will not otherwise be furnished by another public or private entity (e.g. an area outside the geographic confines
of a city or village, or a rural area). Funding for a MUD is necessary to provide the initial infrastructure (e.g.
pipelines, water storage plants, and treatments facilities). Usually, this funding is either secured or guaranteed
by the real estate developer. Once critical numbers of customers are secured, the lender allows the debt


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obligations to be transferred to the MUD. At that point, the MUD is controlled and owned, for all practical
purposes, by the neighborhood it serves and the developer is no longer responsible for the ongoing MUD debt.
If the developer incurs costs in the development of a MUD, these investment costs can be recouped from the
initial revenues generated once the MUD is operating pursuant to an agreement whereby the developer
guarantees the new MUD‘s debts in exchange from a return of a portion, or all, of some defined initial revenue
stream (e.g. at a minimum until such time as the developer has recovered its costs of creating and funding the
MUD). For instance, the developer may be paid the revenues associated with the first 50 homes. Alternatively,
the developer may recover its initial infrastructure investments in a mark-up of the price of its developed sales
properties. Existing MUDs are able to issue bonds and obtain loans using unencumbered assets as collateral and
projected revenue streams to support debt service cash-flow.

          The recovery of the initial development costs for a MUD can be over either a long or short period of
time. If the recovery is based upon ―hook-up‖ fees for new residences, and the residential development moves at
a rapid pace, full recovery can occur, but cannot be guaranteed, as quickly as within six to eighteen months.
Residential developments that grow more slowly will, accordingly, result in a more extended period of time for
the recovery of the MUD initial development costs. Similarly, if the recovery mechanism is by a mark-up of
developed property sales, the recovery will correspond with the speed of the development of the planned
subdivision.

        MUDs typically charge its customers for the following services:

        •    an initial ―hook-up‖ fee to recover a proportionate share of the storage plant and treatment facilities
             and to pay for extending pipeline services to the specific customer/home. Depending on the MUD, a
             one-time hook-up fee ranges from approximately $2,000 to $7,000;
        •    an annual ad valorem tax to recover its annual costs of providing drainage, fire fighting, emergency
             services, and recreational facilities; and
        •    a monthly fee for water and wastewater services, based on some sort of consumption model.
        The costs for these services are determined by the MUD and are not subject to any county or state
review board for reasonableness.

        Although MUD operations are geographically limited, if a nearby area lacks any utility service,
approval for expansion is relatively easy. MUDs rarely agree to expand their services unless the recovery of its
expansion investments are guaranteed or paid up-front, as most neighborhoods are reluctant to make speculative
investments, irrespective of their apparent attractiveness.

         We currently have two planned communities that are within the boundaries of a Municipal Utility
Districts, namely Villages of New Sweden and the Bohls tract and one planned community in a Water Control
and Improvement District, namely Rutherford West. We incur development costs for water, sewage lines and
associated treatment plants and other development costs and fees for these properties. Under the agreement with
the MUDs, we expect to be reimbursed partially for the above developments costs. The MUDs will issue bonds
to repay us once there is enough assessed value on the property for the MUD taxes to repay the bonds. As
homes are sold within the MUD, the assessed value increases. It can take several years before there is enough
assessed value to recapture the costs. We estimate that we will recover approximately 50 to 70% of eligible
costs spent through December 31, 2006, which will total approximately $1.8 million. In some circumstances,
the MUDs will pay for property set aside for the preservation of endangered species. To the extent that the
estimates are dramatically different to the actual amounts, it could have a material effect on the financial
statements.

Regulation

          The housing and land development industries are subject to increasing environmental, building, zoning
and real estate sales regulations by various federal, state and local authorities. Such regulations affect home
building by specifying, among other things, the type and quality of building materials that must be used, certain
aspects of land use and building design. Some regulations affect development activities by directly affecting the
viability and timing of projects.


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         We must obtain the approval of numerous governmental authorities that regulate such matters as land
use and level of density, the installation of utility services, such as water and waste disposal, and the dedication
of acreage for open space, parks, schools and other community purposes. If these authorities determine that
existing utility services will not adequately support proposed development, building moratoria may be imposed.
As a result, we use substantial resources to evaluate the impact of government restrictions imposed upon new
residential development. Furthermore, as local circumstances or applicable laws change, we may be required to
obtain additional approvals or modifications of approvals previously obtained or we may be forced to stop
work. These increasing regulations may result in a significant increase in resources between our initial
acquisition of land and the commencement and the completion of developments. In addition, the extent to which
we participate in land development activities subjects us to greater exposure to regulatory risks.

         As our homebuilding activities commence, we will be subject to additional regulations. The residential
homebuilding industry is also subject to a variety of local, state and federal statutes, ordinances, rules and
regulations concerning the protection of health and the environment. These environmental laws include such
areas as storm water and surface water management, soil, groundwater and wetlands protection, subsurface
conditions and air quality protection and enhancement. Environmental laws and existing conditions may result
in delays, may cause us to incur substantial compliance and other costs and may prohibit or severely restrict
homebuilding activity in environmentally sensitive regions or areas.

Employees

        On April 5, 2007, we had ten employees and two full-time consultants. None of our employees are
represented by a labor union. We consider our relations with our employees to be good.

Property

        During September 2006, we entered into an agreement to lease approximately 5,000 square feet for our
corporate offices, which we began occupying on October 1, 2006. The lease requires monthly payments of
approximately $6,042 per month for 36 months. Our prior lease was terminated with no penalties. We believe
this new facility is adequate to meet our requirements at the current level of business activity.

Legal Proceedings

        We are not a party to any legal proceedings.

Company History

        Wilson Holdings, Inc., a Nevada corporation, is a holding company formerly known as Cole Computer
Corporation (OTC Bulletin Board: COLV.OB). In connection with our acquisition of Wilson Family
Communities, Inc., or WFC, in October 2005, we changed our name to Wilson Holdings, Inc. Wilson Family
Communities, Inc. is our wholly-owned subsidiary and the operating company for our business. The symbol
under which our common stock is quoted on the OTC Bulletin Board is WSHD.OB. Our predecessor company
was incorporated in Nevada in 1987 and became Cole Computer in 1998 until it ceased operations in early
2004.

         WFC‘s business was originally conducted in 2002, by Athena Equity Partners-Hays, L.P., a Texas
limited partnership, or Athena. Athena engaged in various land acquisition and development activities,
including the purchase, entitling, and sale of a 2,400 acre mixed-use tract composed of office, retail and
residential lots in central Texas. From October 2003 to May 2005, Athena did not have significant operations.
In May 2005, Athena merged with Wilson Family Communities, Inc.


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                                               M ANAGEMENT

Directors and Executive Officers

       Our directors and executive officers, and certain information about them, including their ages as of
March 5, 2007, are as follows:

 Name                           Age     Position
 Directors:
 Clark N. Wilson                50      Chairman of the Board, President and Chief Executive Officer
 Jay Gouline                    54      Director
 Sidney Christopher Ney         38      Director
 Barry A. Williamson            49      Director

 Executive Officers:
 Arun Khurana                   39      Vice President and Chief Financial Officer
 David Goodrum                  44      Vice President of Land Development

 Other Key Employees
 Mark J. Gram                   57      Vice President of Marketing
 Donald Turner                  51      Vice President of Finance and Accounting

         The following is a brief description of the principal occupation and recent business experience of each
of our directors, executive officers and other key employees:

Directors

         Clark N. Wilson has served as the Chairman of the Board and as our President and Chief Executive
Officer since October 2005. Beginning in 2002, Mr. Wilson served as a principal in Athena Equity
Partners-Hays, L.P., a Texas limited partnership that specialized in commercial real estate investments, which
merged with Wilson Family Communities, Inc. in May 2005. Mr. Wilson served as the President and Chief
Executive Officer of Clark Wilson Homes, Inc., a subsidiary of Capital Pacific Holdings, from 1992 to 2002.
Previously, Mr. Wilson was the President of Doyle Wilson Homebuilder, Inc., serving in that position in 1992.
Mr. Wilson served as Vice President of Doyle Wilson Homebuilder, Inc. from 1986 to 1992. Mr. Wilson
attended Amarillo College and the University of Texas at Austin, and has nearly 25 years of experience in the
homebuilding industry. Mr. Wilson also currently sits on the board of directors of Tejas Incorporated, the public
parent company of Tejas Securities Group, Inc., a full-service brokerage and investment-banking firm
headquartered in Austin.

          Jay Gouline has served as a director of our company since March 2006. Since 1982, Mr. Gouline has
served as the President of Springlake Corporation and Managing Member of Mayfield Associates, LLC, and the
President of the General Partner of its predecessor in interest, Mayfield Associates Limited Partnership, both of
which are private companies that engage in real estate acquisition, development and property management
activities. Since 1991, Mr. Gouline also has served as an instructor at the Edward Saint John School of Real
Estate at Johns Hopkins University. From September 1985 to May 1991, Mr. Gouline served as an instructor at
the University of Maryland, University College. Mr. Gouline holds a B.A. in Economics and Political Science
from Lake Forest College and an MBA with majors in Finance and Accounting from the University of Chicago.

         Sidney Christopher Ney has served as a director of our company in October 2005. Since 1998, Mr. Ney
has served as the founder and Chief Executive Officer of CoreTrac, Inc., a software company specializing in the
financial industry. Prior to founding CoreTrac, from 1990 to 1998, Mr. Ney worked for Lehman Brothers and
Paine Webber, focusing on both investment banking and brokerage activities. Mr. Ney is a graduate of Texas
A&M University.

        Barry A. Williamson has served as a director of our company since October 2005. Mr. Williamson has
been an attorney in private practice since 1999 and represents clients in matters involving energy, utilities,


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telecommunication, transportation, environment, deregulation, and advanced technology. From 1993 to 1999,
Mr. Williamson served a six-year term on the Texas Railroad Commission, including as its Chairman in 1995.
From 1988 to 1992, Mr. Williamson worked in the administration of President Ronald Reagan as a principal
advisor to the U.S. Secretary of Energy, and then in the administration of President George H.W. Bush as the
Director of the Minerals Management Service in the U.S. Department of the Interior. Mr. Williamson currently
serves as Chairman of the Board of SPACEHAB, Inc., a publicly traded commercial and government space
services company, and on the board of Tejas Incorporated. Mr. Williamson holds a B.A. in Political Science
from the University of Arkansas and a J.D. from the University of Arkansas Law School.

Executive Officers

         Arun Khurana has served as our Vice President and Chief Financial Officer since September 2006, and
as our Vice President, Corporate Development and Governance from July 2006 to September 2006, and as an
accounting and financial consultant from September 2005 to July 2006. From April 2005 to September 2005,
Mr. Khurana served as a partner with Stout Casey, providing financial advisory services to public companies.
From 2004 to April 2005, he served with David Powell of Texas, providing corporate governance services to
public companies. From 1989 to 2003, Mr. Khurana was a senior audit manager with PricewaterhouseCoopers
and Ernst & Young. Mr. Khurana holds an undergraduate degree in accounting from the University of New
Delhi, India, and an MBA from the University of Missouri. He is a Certified Public Accountant licensed in
Texas and Missouri and a Chartered Accountant from the Institute of Chartered Accountants, India.

          David Goodrum has served as our Vice President of Land Development since October 2005 and served
in the same capacity at Wilson Family Communities. From 2003 to 2005, Mr. Goodrum was a partner and
General Manager of Operations, Sales and Marketing for HBH SYSTEMS, a company which provides liquid
petroleum gas to residential subdivisions with contracts in Dallas, Waco and Austin, Texas. From 1998 to 2002,
Mr. Goodrum served as General Manager of the El Paso County Water Authority, prior to which he served as
Contracts Manager for Eco Resources, Inc. from 1994 to 1998. Mr. Goodrum also has worked as a project
engineer for Warner Engineering in Palm Desert, California from 1988 to 1994, and as a civil designer with
Murfee Engineering Co. in Austin from 1984 to 1988. Mr. Goodrum is a graduate of Texas State Technical
Institute.

Other Key Employees

         Don Turner has served as our non-executive Vice President of Finance and Accounting since
December 2006. Since July 2005, Mr. Turner has served as a Consultant for our SEC Reporting, Interim
Controller and CFO services. From 2004 to 2005 Mr. Turner served as Chief Financial Officer for
GIGANEWS, Inc./Data Foundry, Inc. From 2002 to 2004 Mr. Turner served as Chief Financial Officer for
RealVue Simulation Technologies, Inc. From 1999 to 2002 Mr. Turner served as Vice President and Chief
Financial Officer of CALEB Technologies Corporation. Mr. Turner has over 25 years of experience as a
Consultant, CFO and Controller with both private and public companies, in electronics, software development,
distribution and homebuilding. Mr. Turner holds a B.B.A in Accounting from the University of Texas in San
Antonio, Texas.

          Mark J. Gram has served as our Vice President of Marketing since October 2005. From July 2005 to
October 2005, he served in the same capacity at Wilson Family Communities. From 1992 to 2005, Mr. Gram
served as a consultant to Centex Homes-Austin, and from 2004 to 2005, as a consultant to Grenadier Homes.
Since 1978, Mr. Gram has been an independent consultant conducting real estate market research in several
states, prior to which he was head of research for the Irvine Company in Newport Beach, California, which
managed an 80,000-acre master planned community that eventually became Irvine, California. Mr. Gram is a
graduate of Arizona State University.

Board Committees

       Our Board of Directors has three standing committees: an Audit Committee, a Compensation
Committee and a Nominating and Corporate Governance Committee.


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         Audit Committee . Our Audit Committee oversees our accounting and financial reporting processes,
internal systems of accounting and financial controls, relationships with independent auditors, and audits of
financial statements. Specific responsibilities include the following:

        •   selecting, hiring and terminating our independent auditors;
        •   evaluating the qualifications, independence and performance of our independent auditors;
        •   approving the audit and non-audit services to be performed by our independent auditors;
        •   reviewing the design, implementation, adequacy and effectiveness of our internal controls and
            critical accounting policies;
        • overseeing and monitoring the integrity of our financial statements and our compliance with legal
            and regulatory requirements as they relate to financial statements or accounting matters;
        • reviewing any earning announcements and other public announcements regarding our results of
            operations in collaboration with our management and independent auditors; and
        • preparing the report that the Securities and Exchange Commission requires in our annual proxy
            statement.
         Our Audit Committee is comprised of Messrs. Gouline, Ney and Williamson. Mr. Gouline serves as
Chairman of the Audit Committee. Our Board of Directors has determined that all members of the Audit
Committee are independent under the rules of the Securities and Exchange Commission . The Board further has
determined that Mr. Gouline qualifies as an ―audit committee financial expert,‖ as defined by the rules of the
Securities and Exchange Commission.

         Compensation Committee . Our Compensation Committee assists our Board of Directors in
determining the compensation of our directors, officers and other key employees. Specific responsibilities
include:

        •   approving the compensation and benefits of our executive officers and other key employees;
        •   reviewing the performance objectives and actual performance of our executive officers and other
            key employees;
        •   administering our stock option and other equity compensation plans; and
        • reviewing and discussing with management the compensation discussion and analysis that the
          Securities and Exchange Commission requires in registration statements, annual reports on Form
          10-K and proxy statements that are filed with the Securities and Exchange Commission.
       Our Compensation Committee is comprised of Messrs Williamson and Ney. Mr. Williamson serves as
Chairman of the Compensation Committee.

        Nominating and Corporate Governance Committee . Our Nominating and Corporate Governance
Committee assists the board by identifying and recommending individuals qualified to become members of our
Board of Directors, reviewing correspondence from our stockholders, and establishing, evaluating and
overseeing our corporate governance guidelines. Specific responsibilities include the following:

        •   evaluating the composition, size and governance of our Board of Directors and its committees and
            making recommendations regarding future planning and the appointment of directors to our Board
            committees;

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        •   establishing a policy for considering stockholder nominees for election to our Board of Directors;
            and
        •   evaluating and recommending candidates for election to our Board of Directors.
        Our Nominating and Corporate Governance Committee is comprised of Messrs. Ney, Williamson and
Wilson. Mr. Ney serves as chairman of our Nominating and Corporate Governance Committee.

Code of Ethics

         We have adopted a Code of Business Conduct and Ethics that applies to all officers, directors,
employees and consultants. The code is intended to comply with Item 406 of Regulation S-B and Item 406 of
Regulation S-K of the Securities Exchange Act of 1934. Our Code of Business Conduct and Ethics is posted on
our Internet website under the ―Investor Relations‖ tab of our ―Corporate‖ page. Our internet website address is
http://www.wilsonfamilycommunities.com .


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                            C OMPENSATION DISCUSSION AND ANALYSIS

Executive Compensation

General Philosophy

         We began expanding our operations in 2005 after the merger of WFC and Athena and have ten
employees and two independent contractors as of April 5 , 2007. Our overall strategy is to attract talented
individuals by compensating them with a mix of cash compensation in the form of base salary and equity
compensation in the form of stock options. Currently we do not have an incentive based compensation plan,
however in 2007 we intend to implement a formal incentive based compensation plan which integrates our
salary, bonus and equity incentive compensation components.

Overall Compensation

          Our Compensation Committee provides oversight on our overall compensation strategy. The
Compensation Committee reviews and approves compensation for executive officers annually. We perform an
annual review of compensation for employees and submits recommendations to the Compensation Committee
for their review and approval. Some of the factors addressed during the annual review include: our performance,
individual performance, compensations prevalent in our industry and geographical markets.

        For compensation relating to our Chief Executive Officer, we considered the following factors:

        •   Anticipated level of difficulty of replacing our Chief Executive Officer with someone of comparable
            experience and skill.
        •   Our performance since he has held his position.
        •   Compensation of chief executive officers at five comparable companies. These comparables
            included three direct competitors and two companies with market capitalizations similar to us.
         Based on our analysis, we established the targeted overall compensation of our Chief Executive Officer
for 2006 at $240,000. This amount was lower than the targeted compensation for chief executive officers of
other comparable companies, mainly because of the significant equity ownership interest in our company
currently held by our Chief Executive Officer.

         We followed a similar, albeit slightly less elaborate, process with respect to establishing targeted
overall compensation for our Chief Financial Officer. Based upon our analysis, we set the overall targeted
compensation for our Chief Financial Officer at $225,000 for 2006.

Allocation among Components:

        Under our current compensation structure, the mix of base salary and equity compensation varies
depending upon level:


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                                                                                Typical
                                                        Typical Base           Incentive         Typical Equity
                                                          Salary                Target              Target
      Chief Executive Officer                              100%                    –                   –
      Chief Financial Officer                               70%                    –                  30%
      Vice Presidents                                       70%                    –                  30%

         In allocating compensation among these elements, we believe that the compensation of our senior most
levels of management should be predominately performance based and tied to our success (i.e. equity based).
We did not have an incentive compensation plan during 2006 and expect to introduce a formal incentive
compensation plan in 2007.

Base Salaries

         We want to provide our senior management with a level of assured cash compensation in the form of
base salary that facilitates what we believe is appropriate compensation given their professional status and
accomplishments. For our Chief Executive Officer, for 2006 we concluded that a base salary of $240,000 was
appropriate in this regard. Similarly for 2006, we concluded that a base salary of $225,000 was appropriate for
our Chief Financial Officer. These ranges were not objectively determined, but instead reflect levels that we
concluded were appropriate based upon our general experience. We performed a similar analysis with respect to
other senior management. Given the competition for employees of similar experience within the central Texas
area, we provide a slightly larger portion of the compensation to our Vice Presidents in the form of base salary.

Equity Compensation

        The primary form of equity compensation that we have awarded consists of non-qualified and incentive
stock options. We selected this form because of the favorable accounting and tax treatments and the expectation
by employees in emerging growth companies in our region that they would receive stock options.

         Our practice is to determine the total dollar amount of equity compensation that we want to provide and
to then grant employees a certain number of stock options. These grants are typically made once a year. The
awards also are made as early as practicable in the year in order to maximize the time-period for the incentives
associated with the awards. The Compensation Committee schedule is determined several months in advance,
and the proximity of any awards to earnings announcements or other market events is coincidental. We are in
the process of engaging a compensation consultant to assist the Compensation Committee in determining
appropriate equity incentive grants for our executive officers and directors for 2007. In February 2007 our
compensation committee approved stock option grants for each of our employees, other than our Chief
Executive Officer and Chief Financial Officer.

         In establishing award levels, we generally do not consider the equity ownership levels of the recipients
or prior awards that are fully vested, except in the case of our Chief Executive Officer. It is our belief that
competitors who might try to hire away our employees would not give credit for equity ownership in our
company, and accordingly, to remain competitive we typically cannot afford to give credit for that factor either.
However, we recognize that our Chief Executive Officer‘s equity ownership in our company is so substantial
that it would make it difficult for a competitor to recruit him. As a result, we subjectively considered his equity
ownership in our establishment of his overall targeted compensation discussed above. For our Chief Executive
Officer and our Chief Financial Officer, the cash value of the of the option awards totaled $0 and $157,500,
respectively, in 2006.

Severance Benefits

         We believe that companies should provide reasonable severance benefits to employees. With respect to
senior management, these severance benefits should reflect the fact that it may be difficult for employees to find
comparable employment within a short period of time. They should also disentangle us from a former employee
as soon as practicable.


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         We have employment agreements for our Chief Executive Officer and Chief Financial Officer. Our
severance benefits typically consist of 12 months salary. During 2006, we entered into an employment
agreement with Mr. Daniel Allen, our former Chief Financial Officer. The employment agreement provided for
payment of severance benefits to Mr. Allen in certain circumstances. The benefits included payment of one year
of base salary; continuation of health benefits for a period of twelve months, and acceleration of vesting of stock
options issued to Mr. Allen. Mr. Allen resigned effective November 9, 2006 and we have continued to pay for
Mr. Allen‘s salary and health benefits per the employment agreement.

          On February 14, 2007, we entered into an employment agreement with Clark N. Wilson, our President
and Chief Executive Officer. In the event of the involuntary termination of Mr. Wilson‘s service with us, the
agreement provides for monthly payments equal to Mr. Wilson‘s monthly salary payments to continue for 12
months. The agreement contains a provision whereby Mr. Wilson is not permitted to be employed in any
position in Texas or within 200 miles of any area in which we engage in land development or homebuilding
activities in which his duties and responsibilities comprise residential land development and homebuilding for a
period of one year from the termination of his employment, if such termination is voluntary or for cause, or
involuntary and in connection with a corporate transaction.

         On February 14, 2007, we entered into an employment agreement with Arun Khurana, our Chief
Operating Officer and Chief Financial Officer. Pursuant to the agreement, Mr. Khurana will receive a base
salary in the amount of $225,000 and a bonus in an amount up to $150,000. The agreement contains a provision
whereby Mr. Khurana is not permitted to be employed in any position in Texas or within 200 miles of any area
in which we engage in land development or homebuilding activities in which his duties and responsibilities
comprise residential land development and homebuilding for a period of one year from the termination of his
employment, if such termination is voluntary or for cause, or involuntary and in connection with a corporate
transaction. Mr. Khurana‘s employment is not restricted as to the provision of financial and accounting services.
In the event of the involuntary termination of Mr. Khurana‘s service with us, the agreement provides for
monthly payments equal to Mr. Khurana‘s monthly salary payments to continue for twelve months, the
continuation of his benefits (including health insurance) for twelve months, and the immediate vesting of
Mr. Khurana‘s options to purchase our common stock.

Retirement Plans

         In 2006, we instituted a defined contribution plan under section 401(k) of the Internal Revenue Code.
The plan allows all employees who are over 21 years old to defer a predetermined portion of their compensation
for federal income tax purposes. We will contribute up to fifty percent of an employees' contribution to the plan.
During 2006, we contributed an aggregate of approximately $13,350 to the employee defined contribution plan.

Change in Control

          Our senior management and other employees continue to successfully build our Company and we
believe that it is important to protect them in the event of a change in control. Further, it is our belief that the
interests of the stockholders will be best served if the interests of our senior management are aligned with them,
and providing change in control benefits should eliminate, or at least reduce, the reluctance of senior
management to pursue potential change in control transactions that may be in the best interests of the
stockholders. In the event of a change in control in which members of our senior management are terminated,
we would accelerate the vesting of all equity compensation. Based upon a hypothetical termination date of
December 31, 2006 the change in control termination benefits for our Chief Executive Officer and Chief
Financial Officer would be $94,265 and $63,000, respectively. For purposes of these benefits, a change in
control is deemed to occur, in general, if (a) a stockholder or group of stockholders acquires 50% or more of our
common stock, or (b) 25% or more of the directors in office were not nominated for initial election to the Board
of Directors who were in office at the time of their nomination.

Perquisites and Other Benefits

        Effective February 2007, we do not provide perquisites or other benefits to any of our employees.
During 2006, our Chief Executive Officer was reimbursed up to a maximum of $1,000 per month for


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reimbursement of golf and social club dues. We paid $637.50 in 2006 and $637.50 in January 2007 for
reimbursement of golf and social club dues. During 2006, we began providing transportation allowances of
$1,000 per month to our Chief Executive Officer and $500 per month to our vice president of land development.
During 2006, we paid $3,000 and $6,000 of transportation allowance to our Chief Executive Officer and Vice
President of land development, respectively.

Board Process

         The Compensation Committee of the Board of Directors approves all compensation and awards to
executive officers, which include our Chief Executive Officer and Chief Operating Officer and other vice
presidents. Generally on its own initiative the Compensation Committee reviews the performance and
compensation of the Chief Executive and Chief Financial Officer. For the remaining executive officers, the
Chief Executive Officer and Chief Operating Officer makes recommendations to the Compensation Committee
that generally, with minor adjustments are approved.

Summary Compensation Table

                                                                                              Nonqualified
                                                    Stock     Option         Non-Equity         Deferred
      Name & Principal          Salary     Bonus   Awards     Awards        Incentive Plan    Compensation       All Other       Total
         Position        Year     ($)       ($)      ($)        ($)        Compensation ($)    Earnings ($)   Compensation ($)    ($)

     Clark N. Wilson,
         Chairman &      2006    240,000     –       –               –            –                –                  4,275      244,275
         CEO(1)          2005    100,000                        27,590                                                    –      127,590

     Arun Khurana,       2006     75,000     –       –          94,500            –                –                 96,000(2)   265,500
        COO & CFO(2)     2005          –     –       –               –            –                –                      –            –

     Daniel Allen,       2006    149,965     –       –                            –                –                 29,166
         CFO(3)          2005     54,687     –       –         135,051            –                –                      –      189,738

     David Goodrum,
         Director of     2006    102,500     –       –           5,250            –                                   6,000      113,750
         Land
         Development     2005     39,280     –       –          28,029            –                –                      –       67,309

     Bob Antle, VP of
         Homebuilding
     &
         Homebuilding    2006    146,667     –       –          23,250            –                –                      –      169,917
         Svs(4)          2005          –     –       –              –             –                –                      –            –

     Mark Gram
         Senior VP of    2006     80,000     –       –              –             –                –                 16,459       96,459
         Marketing       2005     46,666     –       –          27,814            –                –                      –       74,480

     Donald Turner,      2006                –       –                 –          –                –                144,000(2)   144,000
        VP of            2005                –       –                 –          –                –                      –            –
     Finance(2)

(1) Clark Wilson served as our President and Chief Executive Officer beginning in October 2005 following our
    merger with Wilson Family Communities, Inc.
(2) Mr. Khurana and Mr. Turner are both partners in Izon Consulting LLC. Prior to joining Wilson as an
    employee, Mr. Khurana performed services as a consultant to us. The amounts reflect the total amount paid
    by us prior to Mr. Khurana joining Wilson as an employee. Mr. Turner continues to perform services as a
    contractor and partner of Izon Consulting LLC.
(3) Amounts paid under severance agreement.
(4) Mr. Antle served as our non-executive Vice President of Homebuilding and Homebuilding Services in
    2006.


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Stock Option Grants In Last Fiscal Year

        We issued the following options to our executive officers and other key employees in 2006:

            • On July 13, 2006, we granted an option to purchase 125,000 shares to Arun Khurana at an
              exercise price of $2.26 per share, such option to expire ten years from the date of grant.
          • On July 13, 2006, we granted an option to purchase 50,000 shares to Daniel Allen at an
              exercise price of $2.26 per share, such option to expire ten years from the date of grant.
          • On July 13, 2006, we granted an option to purchase 50,000 shares to David Goodrum at an
              exercise price of $2.26 per share, such option to expire ten years from the date of grant.
          • On March 28, 2006, we granted an option to purchase 100,000 shares to Bob Antle at an
              exercise price of $2.00 per share, such option to expire ten years from the date of grant.
          • On July 13, 2006, we granted an option to purchase 50,000 shares to Bob Antle at an exercise
              price of $2.26 per share, such option to expire ten years from the date of grant.
Option Exercises and Stock Vested

        No options were exercised during 2005 or 2006.

2005 Stock Option/Stock Issuance Plan

          In connection with our acquisition of Wilson Family Communities, Inc., we assumed the 2005 Stock
Option/Stock Issuance Plan that had previously been adopted by the Board of Directors and stockholders of
Wilson Family Communities, Inc., a Delaware corporation, pursuant to the merger of WFC into our company.
The Plan permits grants of options or restricted stock to employees, board members, officers or consultants. The
Plan is administered by the Compensation Committee of our Board of Directors. The Compensation Committee
has the authority to determine the persons to whom awards are to be granted, the time at which awards will be
granted, the number of shares to be represented by each award, and the consideration to be received, if any. The
Compensation Committee also has the power to interpret the Plan and to create or amend its rules. In February
2007, our Board approved a 819,522 share increase in the number of shares issuable pursuant to our option plan
for a total of 2.5 million shares issuable pursuant to the plan. In April 2007 our shareholders will approve this
increase.


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Outstanding Equity Awards at 2006 Fiscal Year-End

                                           Option Awards                                                            Stock Awards
                                                                                                                                   Equity
                                                                                                                     Equity       Incentive
                                                       Equity                                            Market     Incentive   Plan Awards:
                                                   Incentive Plan                             Number Value of Plan Awards:       Market or
                                                      Awards:                                 of Shares Shares or Number of Payout Value
                                Number of            Number of                                or Units   Units of  Unearned     of Unearned
               Number of         Securities          Securities                                of Stock   Stock   Shares, Units Shares, Units
                Securities      Underlying          Underlying                                   That     That      or Other      or Other
               Underlying       Unexercised         Unexercised      Option       Option      Have Not Have Not Rights That      Rights That
               Options(#)       Options(#)           Unearned        Exercise    Expiration     Vested   Vested    Have Not       Have Not
    Name       Exercisable     Unexercisable         Options(#)      Price ($)     Date           (#)      ($)     Vested (#)     Vested ($)
     (a)           (b)              (c)                 (d)             (e)         (f)           (g)      (h)         (i)           (j)
 Clark N.            100,000                   –         –            $2.00      5/28/2015         –        –           –             –
 Wilson (1)
 Arun               125,000                    –         –            $2.26      7/10/2016       –          –           –             –
 Khurana (2)
 Daniel             100,000                    –         –            $2.00       2/9/2007       –          –           –             –
 Allen (3)
 David              100,000                    –         –            $2.00      8/29/2015       –          –           –             –
 Goodrum (4)
                     50,000                    –         –            $2.26      7/12/2016
 Bob Antle          100,000                    –         –            $2.00      3/27/2006       –          –           –             –
 (5)

                     50,000                    –         –            $2.26      7/12/2016
 Mark Gram          100,000                    –         –            $2.00      5/30/2015       –          –           –             –
 (6)

 Donald                   –                    –         –              –            –           –          –           –             –
 Turner

(1) All outstanding options can be exercised. 26,667 options were vested as of December 31, 2006.
(2) All outstanding options can be exercised. 75,000 options were vested as of December 31, 2006.
(3) 100,000 shares granted August 30, 2005, all of which were vested at December 31, 2006, and expired
    in February, 2007.
(4) All outstanding options can be exercised. 100,000 shares granted August 30, 2005, 26,667 shares were
    vested as of December 31, 2006. 50,000 shares granted July 13, 2006, none of which were vested as of
    December 31, 2006.
(5) All outstanding options can be exercised. 100,000 shares were granted March 28, 2006, 26,667 shares of
    which were vested as of December 31, 2006. 50,000 shares were granted July 13, 2006, none of which
    were vested as of December 31, 2006.
(6) All outstanding options can be exercised. 100,000 shares were granted August 30, 2005, 26,667 of which
    were vested as of December 31, 2006.
Inapplicability of ERISA

         Based upon current law and published interpretations, we do not believe the Plan is subject to any of
the provisions of the Employee Retirement Income Security Act of 1974.


                                                                50
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Director Compensation

        As the only director on our Board of Directors who also is an employee of our company, Mr. Clark
Wilson does not receive any additional compensation for his service as a member of our Board of Directors. We
reimburse our directors for travel and lodging expenses in connection with their attendance at Board and
committee meetings. Our non-employee directors each received an option to purchase 20,000 shares of common
stock upon joining our Board. To the extent that options were granted to our Board members by Wilson Family
Communities, Inc., we assumed all of those options in connection with our acquisition of WFC. In addition, in
2006 our non-employee directors received an annual retainer of $25,000. Mark Dotzour joined us as an advisor
to our Board of Directors in December 2006. His annual compensation is comprised of an annual retainer of
$15,000 and an option to purchase 5,000 shares of common stock.

Director Compensation -2006

                                                                                                                   Nonqualified
                                                                                                                     Deferred
                                      Fees Earned or        Stock                               Non-Equity         Compensation
                                       Paid in Cash        Awards                              Incentive Plan        Earnings            All Other
                  Name                      ($)              ($)        Option Awards ($)     Compensation ($)         ($)            Compensation ($)   Total ($)

                   (a)                      (b)             (c)                (d)                  (e)                  (f)                 (g)           (h)
       Clark N. Wilson                                 -            -                     -                   -                   -                  -           -
       Jay Gouline                                23,884            -                24,000                   -                   -                  -      47,884
       Michael Luigs (1)                          30,750            -                26,357                   -                   -                  -      57,107
       Sidney Christopher Ney                     37,000            -                26,357                   -                   -                  -      63,357
       Barry A. Williamson                        37,000            -                26,357                   -                   -                  -      63,357

(1) Mr. Lu igs served on our board until November 2, 2006. All stock options granted to Mr. Luigs expired unexercised following his resignation.


Compensation Committee Interlocks and Insider Participation

        None of our executive officers serves as a member of the board of directors or compensation committee
of any entity that has one or more of its executive officers serving as a member of our Board of Directors or
Compensation Committee. No member of the Compensation Committee of our Board of Directors serves or has
served as an officer or employee of Wilson Holdings.


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                                       P RINCIPAL STOCKHOLDERS

         The following table sets forth information regarding the beneficial ownership of our common stock as
of April 5, 2007, and as adjusted to reflect the sale of the common stock offered by this prospectus (assuming
no purchase of such offered common stock by an existing stockholders, directors or officers), by:

        •   each person known to us to be the beneficial owner of more than 5% of our outstanding shares of
            common stock;
        •   each of our current executive officers and directors; and
        •   all of our directors and executive officers as a group.
         For purposes of this table, beneficial ownership is determined in accordance with Rule 13d-3
promulgated under the Securities Exchange Act of 1934. Ownership percentages reflected are calculated based
on 18,055,538 shares of common stock issued and outstanding as of the date hereof and include securities
exercisable to purchase shares of common stock or convertible into shares of common stock only for the holder
of such derivative securities. We also currently have outstanding options to purchase 925,000 shares of common
stock, warrants to purchase 1,157,187 shares of our common stock at an exercise price of $2.00 per share, and
convertible promissory notes which can be converted into 8,375,000 shares of our common stock. Except as
indicated below, the security holders listed possess sole voting and investment power with respect to the shares
beneficially owned by that person.

                                                                               Amount and
                                                                                Nature of
                                                                                Beneficial         Percentage
 Name of Beneficial Owner                                                      Ownership            of Class

 Directors and Executive Officers:
 Clark N. Wilson (1)                                                               12,699,889        69.4%
 Jay Gouline (2)                                                                       30,000          *
 Sidney Christopher Ney (2)                                                            40,000          *
 Barry A. Williamson (2)                                                               40,000          *
 Arun Khurana (2)                                                                     125,000          *
 David Goodrum (2)                                                                    150,000          *
 All Directors and Executive Officers (7 persons)                                  13,084,889        70.4%

 Other 5% Stockholders:
 Tejas Securities Group, Inc. 401(k) Plan & Trust FBO John J.
 Gorman, John J. Gorman TTEE (3)                                                     4,025,213       21.1%
 Grandview LLC (4)                                                                   1,890,625       9.5%
 LC Capital Master Fund (5)                                                          2,168,804       9.9%

* Indicates ownership of less than 1%.
_____________
(1) Includes 100,000 shares issuable upon exercise of stock options, 125,000 shares issuable upon the
    conversion of convertible promissory notes, and 14,063 shares issuable upon the exercise of warrants.
    Includes 1,000,000 shares held by certain trusts for the benefit of Mr. Wilson‘s minor children. Mr. Wilson
    does not have voting or dispositive power over such shares and Mr. Wilson disclaims beneficial ownership
    of such shares.
(2) All shares listed as owned are issuable upon exercise of stock options.
(3) Share ownership pursuant to Schedule 13D/A filed October 10, 2006. Includes 900,000 shares issuable
    upon conversion of convertible promissory notes and 101,250 shares issuable upon the exercise of
    warrants.
(4) Share ownership pursuant to Schedule 13D/A filed October 3, 2006. All shares listed as owned are issuable
    upon conversion of convertible promissory notes and the exercise of warrants.
(5) Shares ownership pursuant to Schedule 13D filed November 14, 2006. All shares listed as owned are
    issuable upon conversion of convertible promissory notes and the exercise of warrants. Pursuant to certain
    transactional documents, LC Capital Master Fund may only elect to convert that number of shares issuable
    upon conversion of its convertible promissory notes or exercise that number of shares issuable upon
    exercise of its warrants equal to 9.9% of our outstanding common stock.
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                    C ERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         In 2004, Clark N. Wilson became the sole remaining partner of Athena, a predecessor entity to Wilson
Family Communities, Inc., or WFC. On May 31, 2005, Athena merged with WFC and the remaining Athena
assets and partnership interests were exchanged for 857,142.86 shares of WFC common stock. Also at the time
of the merger, trusts belonging to various members of Mr. Wilson‘s family purchased 1,000,000 shares of
common stock of WFC for $60,000.

         In March 2005, three trusts for the benefit of Clark Wilson‘s minor children, but for which Mr. Wilson
has no voting or dispositive power, purchased a promissory note for $279,800 from an unrelated third party.
The land that underlies the promissory note was sold to Athena by the unrelated third party that sold the
promissory notes to the three trusts. The notes are secured by approximately 15 acres of land originally
purchased by Athena. The terms of the notes payable to the trusts remained the same as the prior note issuer
with interest at 8% per annum, but the maturity date was changed from October 7, 2008 to April 4, 2006, and
then further extended to April 4, 2008 when the entire principal and interest will be due and payable.

         In June 2005, Clark N. Wilson, our President and CEO and a director, purchased 2,200,000 shares of
Series A Convertible Preferred Stock from WFC for $1.00 per share. These shares were converted into
2,200,000 shares of our common stock at the time of the merger of WFC into our company. In September 2006,
Mr. Wilson purchased $250,000 in principal amount of convertible promissory notes in a financing which raised
gross proceeds to us of $6.75 million.

        In December 2005, John Gorman, one of our 5% stockholders, purchased $800,000 in principal amount
of convertible promissory notes in a financing which raised gross proceeds to us of $10 million. In September
2006, Mr. Gorman purchased $1 million in principal amount of convertible promissory notes in a financing
which raised gross proceeds to us of $6.75 million.

        In August 2005, WFC repaid $121,000 that Mr. Wilson had advanced to Athena prior to its merger
with WFC for working capital. In October 2005, WFC repaid the remaining $140,000 advanced by Mr. Wilson
to Athena.

         During 2005, Mr. Wilson‘s brother provided services to us of approximately $36,000. During 2006,
Mr. Wilson‘s brother provided services to us for which he was paid approximately $20,000. These services
were primarily related to the development of information systems for us. Management believes that these
services were provided at fair market value.

         Prior to becoming CFO, Arun Khurana provided his services and the services of other professionals to
us through the consulting firm of Izon Consulting LLC (aka Khurana LLC). Izon Consulting LLC received
payments of approximately $66,000 and $264,000 for the years ended 2005 and 2006, respectively. The
services provided included SEC and financial statement document preparation, and various accounting and
consulting projects. Donald Turner, a partner in Izon Consulting LLC, also provided services during the same
periods and was compensated out of the amounts paid to Izon Consulting LLC.

Real Property Purchase

          SGL Development, Ltd. and SGL Investments, Ltd., referred to together as SGL, were owners of
approximately 736 acres of undivided land in Hays County, Texas. Clark N. Wilson directly and beneficially
(through Steamboat Joint Venture) owned 13.59% of the property and John O. Gorman indirectly owned
12.33% of the property. In June 2005, SGL distributed to Mr. Wilson and Mr. Gorman their beneficial
ownership in the property which they sold to WFC in exchange for 1,260,826 and 1,143,963, respectively, of
the 2,404,789 preferred shares issued by WFC in the transaction. SGL then sold the remaining property,
approximately 74.08%, to WFC in exchange for notes payable of approximately $6.9 million. We believe that
WFC purchased the property at fair market value due to the price paid for the preferred stock by the other
parties involved in the transaction. The notes payable issued had principal and interest due at maturity on June
30, 2006, with interest at the prime rate as reported in The Wall Street Journal adjusted for changes, for the first
six months, prime rate plus 2.00% for the second six months and prime rate plus 2.25% thereafter with an
exercise of an extension period of 90 days on the notes if the notes are not in default. The interest rate on the
notes increased to 9.75% as of March 31, 2006. The notes are secured by the entire property acquired. There is a
provision for partial releases of the land, lots, and tracts, with assignments ranging from 100% to 140% of the
par value per acre as a condition of the releases.


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        As of June 2006, we had repaid approximately $700,000 in principal through the sale of acreage lots
and during June 2006, we refinanced the loan balance of $6.2 million with a financial institution.

Agreements with Tejas Securities Group, Inc.

          In connection with the placement of $10.0 million of our convertible promissory notes in December
2005, we entered into an agreement with Tejas Securities Group, Inc., or Tejas, pursuant to which Tejas served
as our placement agent in connection with the offering. Pursuant to this agreement, we paid Tejas $450,000 in
cash and granted a warrant to Tejas to purchase 750,000 shares of our common stock. In connection with the
placement of an additional $6.75 million of our convertible promissory notes in September 2006, we entered
into an additional agreement with Tejas pursuant to which Tejas served as our placement agent in connection
with the offering. Pursuant to this agreement, we paid Tejas commissions of $70,000 and have reimbursed Tejas
for its expenses. John J. Gorman is the Chairman of the Board of Tejas Securities Group, Inc. and of Tejas
Incorporated, the parent company of Tejas Securities Group, Inc. Mr. Gorman is the beneficial owner of
4,043,963 shares of our common stock. In December 2006, Tejas exercised the warrant we issued to them in
connection with the December 2005 private placement pursuant to the net-exercise provision of the warrant. We
issued 348,913 shares of common stock to them in connection with their complete exercise of this warrant.

        Clark N. Wilson, who serves as our President and Chief Executive Officer and is a director, has served
on the board of directors of Tejas Incorporated, since October 1999, and is compensated for such service.
Mr. Wilson owns 1,000 shares of Tejas Incorporated common stock and options to purchase an additional
10,000 shares of common stock.

         Barry A. Williamson is a member of our Board of Directors and, until January 31, 2006, was a member
of the board of directors of Tejas Incorporated, the parent company of our placement agent for the sale of our
convertible notes. Mr. Williamson was appointed to the Board of Tejas Incorporated in November 2006.

Employment Agreements with Executive Officers

         On February 14, 2007, we entered into an employment agreement with Clark N. Wilson, our President
and Chief Executive Officer. In the event of the involuntary termination of Mr. Wilson‘s service with us, the
agreement provides for monthly payments equal to Mr. Wilson‘s monthly salary payments to continue for 12
months. The agreement contains a provision whereby Mr. Wilson is not permitted to be employed in any
position in which his duties and responsibilities comprise residential land development and homebuilding in
Texas or in areas within 200 miles of any city in which we are conducting land development or homebuilding
operations at the time of such termination of employment for a period of one year from the termination of his
employment, if such termination is voluntary or for cause, or involuntary and in connection with a corporate
transaction.

         On February 14, 2007, we entered into an employment agreement with Arun Khurana, our Chief
Operating Officer and Chief Financial Officer. Pursuant to the agreement, Mr. Khurana will receive a grant of
options in an amount to be determined following the retention of a third-party compensation consultant and
approval by the Compensation Committee. The agreement contains a provision whereby Mr. Khurana is not
permitted to be employed in any position in which his duties and responsibilities comprise residential land
development and homebuilding in Texas or in areas within 200 miles of any city in which we are conducting
land development or homebuilding operations at the time of such termination of employment for a period of one
year from the termination of his employment, if such termination is voluntary or for cause, or involuntary and in
connection with a corporate transaction. Mr. Khurana‘s employment is not restricted as to the provision of
financial and accounting services. In the event of the involuntary termination of Mr. Khurana‘s service with us,
the agreement provides for monthly payments equal to Mr. Khurana‘s monthly salary payments to continue for
twelve months, the continuation of his benefits (including health insurance) for twelve months, and the
immediate vesting of Mr. Khurana‘s options to purchase our common stock.

Consulting Arrangement with Audrey Wilson

         In March 2007 we entered into a consulting agreement with Audrey Wilson, the wife of Clark N.
Wilson, our President and Chief Executive Officer. Pursuant to the consulting agreement, we have agreed to pay
Ms. Wilson $10,000 per month for a maximum of 6 months. Ms. Wilson has agreed to devote at least
twenty-five hours per week assisting us with the following activities: (i) the establishment of ―back-office‖
processes for homebuilding activities, including procurement, sales and marketing and other related activities,
and (ii) developing our marketing strategy for marketing and sale of land to homebuilders. We can end our
consulting relationship with Ms. Wilson at any time by giving Ms. Wilson 30 days notice. We believe that the
services Ms. Wilson is providing to us are being provided at fair market value. We do not anticipate extending
our consulting relationship with Ms. Wilson beyond the six month period provided in the consulting agreement.

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                                       D ESCRIPTION OF SECURITIES

Units

          Each unit consists of one share of common stock and one Class A Warrant. Each Class A Warrant
entitles the holder thereof to purchase one share of common stock at an exercise price of $6.00 per share.
Initially, only the units will trade. The common stock and warrants included in the units will not separately trade
until the 30 th calendar day following the date of this prospectus or the first trading day thereafter if the 30 th day
is a weekend or holiday. Once separate trading in the common stock and Class A Warrants commences, the
units will cease trading and will be delisted.

          At closing, we will deliver only unit certificates. An investor may request physical delivery of the
certificate and may immediately request that the unit certificate be exchanged for stock and Class A Warrant
certificates. If the investor does so before the stock and unit warrants trade separately, trades based on the stock
and Class A Warrant certificates will not clear until trading in those securities commences.

Common Stock

         We are authorized to issue 100,000,000 shares of common stock, par value $0.001 per share. As of the
date of this prospectus, 18,055,538 shares of our common stock are issued and outstanding. Each share of
common stock is entitled to one vote per share in the election of directors and on all other matters submitted to a
vote of our stockholders. There are no cumulative voting rights. Common stockholders do not have preemptive
rights or other rights to subscribe for additional shares of our capital stock, and the common stock is not subject
to conversion or redemption. In the event of liquidation, the holders of common stock will share equally in any
balance of corporate assets available for distribution to them. Subject to the rights of holders of any other
securities subsequently issued, holders of the common stock are entitled to receive dividends when and as
declared by our Board of Directors out of funds legally available. We have not paid any dividends since our
inception and we have no intention of paying any dividends in the foreseeable future. Any future dividends will
be subject to the discretion of our Board of Directors and will depend, among other things, on our earnings, our
operating results and financial condition, our anticipated capital requirements, and general business conditions.

Class A Redeemable Warrants

         General . Immediately after this offering, there will be 5,000,000 Class A warrants issued and
outstanding, all of which are included in the units sold in this offering. The Class A warrants issued in this
offering may be exercised at any time beginning 30 days after the date of this prospectus and ending on the fifth
anniversary of the date of this prospectus. Each Class A warrant entitles the holder to purchase one share of
common stock at an exercise price of $6.00 per share. This exercise price will be adjusted if specific events,
summarized below, occur. A holder of Class A warrants will not be deemed a holder of the underlying stock for
any purpose until the Class A warrant is exercised.

         Redemption . At any time after they separate from the units, we will have the right to redeem the Class
A warrants at a price of $0.001 per warrant, after providing 30 days‘ prior written notice to the warrant holders,
at any time after the closing price for our common stock, as reported on the principal market on which our stock
trades, was at or above 200% of the unit offering price for any 30 consecutive trading days ending on the 10th
day prior to the day on which notice is given and there is an effective registration statement covering the resale
of the underlying common stock. We will send a written notice of redemption by first class mail to the holders
of the Class A warrants at their last known addresses appearing on the registration records maintained by the
warrant agent. No other form of notice or publication or otherwise will be required. If we call the Class A
warrants for redemption, the holders of the Class A warrants will then have to decide whether to sell the Class A
warrants, exercise them before the close of business on the business day preceding the specified redemption
date or hold them for redemption. If the Class A warrants are not covered by an effective registration statement
or are not qualified for sale under the laws of the state in which holders reside, warrant holders may not be able
to exercise them.


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         Exercise. The holders of Class A warrants may exercise them only if an appropriate registration
statement is then in effect and if the common stock issuable upon their exercise are qualified for sale under the
securities laws of the state in which the holder resides. To exercise a Class A warrant, the holder must deliver to
our warrant agent the Class A warrant certificate on or before the expiration date or the redemption date, as
applicable, with the form on the reverse side of the certificate executed as indicated, accompanied by payment
of the full exercise price for the number of Class A warrants being exercised. Fractional shares of common
stock will not be issued upon exercise of the Class A warrants.

          In order for you to exercise the warrants, the shares of common stock underlying them must be covered
by an effective registration statement and, if the issuance of shares is not exempt under state securities laws,
must be properly registered with state securities regulators. At present, we plan to have a registration statement
current when the warrants are redeemed and, to the extent that the underlying shares do not qualify for one or
more exemptions under state securities laws, we intend to use our best efforts to register the shares with the
relevant authorities. However, we cannot provide absolute assurances that state exemptions will be available,
the state authorities will permit us to register the underlying shares, or that an effective registration statement
will be in place at the relevant time(s). These factors may have an adverse effect on the demand for the warrants
and the prices that can be obtained from reselling them.

         If at the warrant expiration date the warrants are not exercisable because of our failure to maintain an
effective registration statement, the expiration date shall be extended to a date that is 30 calendar days following
notice to the holders of the warrants that the warrants are again exercisable. Under no circumstances may we be
required to effect a cash settlement of the warrants.

        Adjustments to exercise price . The exercise price of the Class A warrants will be adjusted if we declare
any stock dividend to stockholders or effect any split or share combination with regard to our common stock. If
we effect any stock split or stock combination with regard to our common stock, the exercise price in effect
immediately before the stock split or combination will be proportionately reduced or increased, as the case may
be. Any adjustment of the exercise price will also result in an adjustment of the number of shares underlying a
Class A warrant or, if we elect, an adjustment of the number of Class A warrants outstanding.

Preferred Stock

          Our board of directors will have the authority, without further action by the shareholders, to issue up to
10,000,000 shares of preferred stock in one or more series, to fix the rights, preferences, privileges and
restrictions of the authorized preferred stock and to issue shares of each such series. The issuance of preferred
stock could have the effect of restricting dividends on the common stock, diluting the voting power for the
common stock, impairing the liquidation rights of the common stock or delaying or preventing our change in
control without further action by the shareholders. At present, we have no plans to issue any shares of preferred
stock.

Warrants and Options

         In connection with our acquisition of WFC, we adopted the Wilson Family Communities, Inc. 2005
Stock Option/Stock Issuance Plan, or the Plan, pursuant to which we may issue to our officers, directors,
employees and consultants incentive stock options, non-qualified stock options and shares of restricted stock.
The Plan provides for the issuance of up to 1,680,478 shares of our common stock pursuant to awards made
under the Plan. As of the date of this prospectus, we had options outstanding under the Plan to purchase a total
of 925,000 shares of our common stock. In April 2007, we increased the number of shares issuable under the
plan to a total of 2,500,000 shares.

         All of our outstanding options expire ten years after the date of grant. The Plan is designed to qualify
under the Internal Revenue Code as an incentive stock option plan. We may issue incentive awards covering up
to an additional 2,500,000 shares of our common stock under the Plan.

        In connection with our sale of convertible notes in December 2005, we issued warrants to purchase an
aggregate of 750,000 shares of common stock to the purchasers of the convertible notes. 187,500 of the shares
under such warrants will never vest and 562,500 shares have vested and are currently exercisable.
         In connection with our sale of convertible notes in September 2006, we issued warrants to purchase an
aggregate of 506,250 shares of common stock to the purchasers of the convertible notes. Of these warrants,
126,563 shares will not vest and the remaining warrants to purchase 379,687 shares have vested and are
currently exercisable.


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          The convertible notes that we sold in December 2005 and September 2006 were placed by Tejas
Securities Group, Inc., a wholly-owned broker-dealer subsidiary of Tejas Incorporated, a public company. In
connection with these placements and as a portion of the placement agent fees in connection with the
placements, we have issued to Tejas Securities Group, Inc. a warrant to purchase 750,000 shares of our common
stock. The warrant has an exercise price of $2.00 per share and may be exercised on a net exercise, cashless
basis. In December 2006, Tejas exercised the warrant we issued to them in connection with the December 2005
private placement pursuant to the net exercise provision of the warrant. We issued 348,913 shares of common
stock to them in connection with their complete exercise of this warrant.

Anti-Takeover Provisions

         Provisions of Nevada law, our articles of incorporation, or our bylaws could have the effect of delaying
or preventing a third party from acquiring us, even if the acquisition would benefit our stockholders. The
provisions of Nevada law and in our articles of incorporation and bylaws are intended to enhance the likelihood
of continuity and stability in the composition of our Board of Directors and in the policies formulated by the
Board of Directors and to discourage certain types of transactions that may involve an actual or threatened
change of control of our company. These provisions are designed to reduce our vulnerability to an unsolicited
proposal for a takeover that does not contemplate the acquisition of all of our outstanding shares, or an
unsolicited proposal for the restructuring or sale of all or part of our company.

         Nevada Anti-Takeover Statute . We may become subject to Nevada‘s Control Share Acquisition Act
(Nevada Revised Statutes 78.378 –78.3793), which prohibits an acquirer, under certain circumstances, from
voting shares of a corporation‘s stock after crossing specific threshold ownership percentages, unless the
acquirer obtains the approval of the issuing corporation‘s stockholders. The first such threshold is the
acquisition of at least one-fifth but less than one-third of the outstanding voting power. We may become subject
to Nevada‘s Control Share Acquisition Act at such time as we have 200 or more stockholders of record at least
100 of whom are residents of the State of Nevada, and if we conduct business in the State of Nevada directly or
through an affiliated corporation. Currently, we do not conduct business in the State of Nevada directly or
through an affiliated corporation.

         As a Nevada corporation, we also are subject to Nevada‘s Combination with Interested Stockholders
Statute (Nevada Revised Statutes 78.411 -78.444) which prohibits an ―interested stockholder‖ from entering
into a ―combination‖ with the corporation, unless certain conditions are met. An ―interested stockholder‖ is a
person who, together with affiliates and associates, beneficially owns (or within the prior three years, did
beneficially own) 10 percent or more of the corporation‘s voting stock.

        Provisions of Charter and Bylaws . In addition, provisions of our articles of incorporation and bylaws
may also have an anti-takeover effect. These provisions may delay, defer or prevent a tender offer or takeover
attempt of our company that a stockholder might consider in his or her best interest, including attempts that
might result in a premium over the market price for the shares held by our stockholders. The following
summarizes these provisions:

        •   Authorized but Unissued Share s . Our authorized but unissued shares of common stock are
            available for our Board of Directors to issue without stockholder approval. We may use these
            additional shares for a variety of corporate purposes, including future public offerings to raise
            additional capital, corporate acquisitions and employee benefit plans. The existence of our
            authorized but unissued shares of common stock could render it more difficult or discourage an
            attempt by a third party to obtain control of our company by means of a proxy context, tender offer,
            merger or other transaction.
        •   Supermajority Vote Provisions . The Nevada Revised Statutes provide generally that the affirmative
            vote of a majority of the shares entitled to vote on any matter is required to amend a Nevada
            corporation‘s articles of incorporation or bylaws, unless a corporation‘s articles of incorporation or
            bylaws, as the case may be, require a greater percentage. Our articles and bylaws do not currently
            require any approval of more than a majority of our outstanding shares in order to amend our
            articles of incorporation or bylaws.

                                                        57
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        •  Indemnification . Our articles of incorporation and bylaws require us to indemnify our directors and
           officers to the fullest extent permitted by Nevada law. In addition, our charter limits the personal
           liability of our board members for breaches by the directors of their fiduciary duties to the fullest
           extent permitted under Nevada law. We also enter into indemnification agreements with our officers
           and directors.
Registration Rights

          In connection with our sale of convertible notes in December 2005, we entered into a Registration
Rights Agreement with the original purchasers of such notes. A similar Registration Rights Agreement was
entered into in connection with our sale of convertible notes in September 2006. Pursuant to these registration
rights, we are obligated to file within 45 days of the closing date of the sale of the convertible notes a
registration statement to register the resale from time to time of the shares of common stock issuable upon the
conversion of such convertible notes and the shares of common stock issuable upon the exercise of the warrants
issued in conjunction with the note financings, which are collectively referred to as the Registrable Shares. We
are obligated to use our commercially reasonable efforts to cause the registration statement to be declared
effective as promptly as possible, but in no event later than 120 days after the closing date of the closing of each
note financing. Subject to certain blackout restrictions, we will be required to maintain such registration
statement‘s effectiveness for two years, or earlier at such time as either (i) the purchasers of the convertible
notes may sell all of their Registrable Shares without regard to the volume limitations in accordance with Rule
144(k) under the Securities Act, or (ii) all Registrable Shares have been sold by the holders of such Registrable
Shares, which effective period is referred to as the Effectiveness Period.

         If the Registrable Shares are not able to be resold pursuant to an effective registration statement at any
time during the Effectiveness Period, holders of at least 25% of the outstanding Registrable Shares may request
that we effect a registration of such Registrable Shares as soon as practicable, and in any event within 30 days
of such request. We are not required to effect more than three such registrations during any consecutive
12-month period. Also, if the Registrable Shares are not able to be resold pursuant to an effective registration
statement at any time during the Effectiveness Period and we propose to register any of our common stock
(other than a registration filed on Form S-4 or Form S-8), we are required to offer the holders of the notes the
opportunity to register such number of Registrable Shares on such registration statement as each such holder
may request. If such a registration involves an underwritten offering, the number of Registrable Shares that may
be registered pursuant to the preceding sentence and may be included in such registration statement is subject to
adjustment if we are advised by the managing underwriter in an underwritten offering that the inclusion of such
Registrable Shares is likely to affect materially and adversely the success of the offering or the price that would
be received for any shares of common stock offered in such offering.

         We have agreed to pay all costs and expenses associated with the registration of the Registrable Shares
other than legal fees for more than one legal counsel for the selling holders and underwriters‘ fees, discounts or
commissions relating to the sale of the Registrable Shares. Each Registration Rights Agreement also contains
customary indemnification provisions between us and the holders of the Registrable Shares.

Convertible Debt

        The convertible debt and the related warrants will be accounted for in accordance with Emerging Issues
Task Force (EITF) No. 98-5, ―Application of Issue No. 98-5 to Certain Convertible Instruments‖ and EITF No.
00-19, ―Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company‘s
Own Stock.‖ We obtained an independent third party valuation to determine the fair market value of our
common stock. Based on the fair market value of our common stock, we booked the amount of the beneficial
conversion feature in accordance with accounting treatment stated in the above EITF‘s.

Our Transfer Agent and Registrar

        The transfer agent and registrar for our common stock is Standard Registrar and Transfer Co., 12528
South 1840 East, Draper, UT 84020.


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                                 S HARES ELIGIBLE FOR FUTURE SALE

This Offering

          Upon completion of this offering, we expect to have 23,055,538 shares of common stock outstanding.
This number assumes no exercise of the underwriters‘ over-allotment option or any other outstanding options
and warrants or the conversion of any indebtedness under outstanding convertible promissory notes. We expect
to have 23,805,538 shares of common stock outstanding if the underwriters‘ over-allotment option is exercised
in full. Of these shares, the 5,000,000 shares of common stock issued in this offering (5,750,000 shares if the
underwriters‘ over-allotment option is exercised in full) will be freely tradable without restrictions or further
registration under the Securities Act, except that any shares purchased by or ―affiliates‖, as that term is defined
under the Securities Act, may generally only be sold in compliance with the limitations of Rule 144 under the
Securities Act.

Restricted Stock, Lock-Up Agreements and Rule 144

         Of the 18,055,538 shares of common stock currently outstanding, 17,153,702 shares are restricted
securities within the meaning of Rule 144 promulgated under the Securities Act and may not be sold in the
absence of registration under the Securities Act unless an exemption from registration is available, including the
exemption offered by Rule 144. Our officers and directors have agreed not to sell or otherwise dispose of any of
their shares of common stock totaling 13,460,826 shares for a period of twelve months after completion of this
offering. In addition, we are in the process of obtaining agreements with the holders of our convertible debt
pursuant to which they will agree not to sell or otherwise dispose of any of their convertible debt (or shares of
common stock issuable upon conversion thereof) (i) acquired in December 2005 for a period of 90 days after
completion of this offering and (ii) acquired in September 2006 for a period of 180 days after completion of this
offering, without the prior written consent of Capital Growth Financial, LLC, the representative of the
underwriters. After the expiration of the lock-up period, or earlier with the prior written consent of Capital
Growth Financial, LLC, all off the outstanding restricted shares subject to the lock-up may be sold in the public
market pursuant to Rule 144.

          In general, under Rule 144 as currently in effect, a person who has beneficially owned restricted shares
for at least one year, including a person who may be deemed to be our affiliate, may sell within any three-month
period a number of shares of common stock that does not exceed a specified maximum number of shares. This
maximum is equal to the greater of 1% of the then outstanding shares of our common stock or the average
weekly trading volume in the common stock during the four calendar weeks immediately preceding the sale.
Sales under Rule 144 are also subject to restrictions relating to manner of sale, notice and availability of current
pubic information about our company. In addition, under Rule 144(k) promulgated under the Securities Act, a
person who is not our affiliate, has not been an affiliate of ours within three months prior to the sale and has
beneficially owned shares for at least two years would be entitled to sell such shares immediately without regard
to volume limitations, manner of sale provisions, notice or other requirements of Rule 144.

Options, Convertible Debt and Warrants

         As of April 5, 2007, 925,000 shares of common stock were issuable upon exercise of outstanding stock
options, 8,375,000 shares are issuable upon the conversion of indebtedness under outstanding convertible
promissory notes and 1,582,187 shares are issuable upon exercise of outstanding warrants. Of such shares, • are
subject to lock-up agreements with the underwriters with terms as described above.


                                                        59
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                                                 U NDERWRITING

         Capital Growth Financial, LLC is acting as the representative of the underwriters. We and the
underwriters named below have entered into an underwriting agreement with respect to the securities being
offered. In connection with this offering and subject to certain conditions, each of the underwriters named
below has severally agreed to purchase, and we have agreed to sell, the number of units set forth opposite the
name of each underwriter:

            Underwriters                                                                        Number of Shares
            Capital Growth Financial, LLC

                Total

          The underwriting agreement provides that the underwriters are obligated to purchase all of the shares
offered by this prospectus, other than those covered by the over-allotment option, if any shares are purchased.
The underwriting agreement also provides that the obligations of the several underwriters to pay for and accept
delivery of the shares are subject to the approval of certain legal matters by counsel and other conditions. These
conditions include, among other things, the requirements that no stop order suspending the effectiveness of the
registration statement be in effect and no proceedings for this purpose have been instituted or threatened by the
Securities and Exchange Commission.

         The representative of the underwriters has advised us that the underwriters propose to offer our shares
to the public at the offering price set forth on the cover page of this prospectus and to selected dealers at that
price less a concession of not more than $ per share. The underwriters and selected dealers may reallow a
concession to other dealers, including the underwriters, of not more than $• per share. After completion of the
pubic offering of the shares, the offering price, the concession to selected dealers and the reallowance to their
dealers may be changed by the underwriters.

        The underwriters have informed us that they do not expect to confirm sales of the units offered by this
prospectus on a discretionary basis.

Over-Allotment Option

         Pursuant to the underwriting agreement, we have granted the underwriters an option, exercisable for 30
days from the date of this prospectus, to purchase up to an additional 750,000 units on the same terms as the
other units being purchased by the underwriters from us. The underwriters may exercise the option solely to
cover over-allotments, if any, in the sale of the units that the underwriters have agreed to purchase. If the
over-allotment option is exercised in full, the total public offering price, underwriting discount and proceeds to
us before offering expenses, based on an estimated offering price of $4.25 per unit, will be $24,437,500,
$2,070,000 and $22,367,500, respectively.

Stabilization

         The rules of the Securities and Exchange Commission generally prohibit the underwriters from trading
in our securities on the open market during this offering. However, the underwriters are allowed to engage in
some open market transactions and other activities during this offering that may cause the market price of our
securities to be above or below the price that would otherwise prevail in the open market. These activities may
include stabilization, short sales and over-allotments, syndicate covering transactions and penalty bids, further
described as follows:

        •     stabilizing transactions consist of bids or purchases made by the managing underwriter for the
              purpose of preventing or slowing a decline in the market price of our securities while this offering is
              in progress;
        •     short sales and over-allotments occur when the managing underwriter, on behalf of the underwriting
              syndicate, sells more of our securities than it purchases from us in this offering. In order to cover the

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              resulting short position, the managing underwriter may exercise the over-allotment option described
              above or may engage in syndicate covering transactions; there is no contractual limit on the size of
              any syndicate covering transaction; the underwriters will deliver a prospectus in connection with any
              such short sales; and purchasers of securities sold short by the underwriters are entitled to the same
              remedies under the federal securities laws as any other purchaser of securities covered by the
              registration statement of which this prospectus is a part;

          •syndicate covering transactions are bids for, or purchases of, our securities on the open market by
           the managing underwriter on behalf of the underwriters in order to reduce a short position incurred
           by the managing underwriter on behalf of such underwriters; and
       • a penalty bid is an arrangement permitting the managing underwriter to reclaim the selling
           concession that would otherwise accrue to an underwriter if the shares of common stock originally
           sold by the underwriter were later repurchased by the managing underwriter and therefore were not
           effectively sold to the public by such underwriter.
       If the underwriters commence these activities, they may discontinue them at any time without notice.
The underwriters may carry out these transactions on the American Stock Exchange or otherwise.

Indemnification

         The underwriting agreement provides for indemnification between us and the underwriters against
specified liabilities, including liabilities under the Securities Act, and for contribution by us and the
underwriters to payments that may be required with respect to those liabilities. We have been advised that, in
the opinion of the Securities and Exchange Commission, indemnification for liabilities under the Securities Act
is against public policy as expressed in the Securities Act and is therefore unenforceable.

Underwriters’ Compensation

         We have agreed to sell the units to the underwriters at the offering price of $ • per unit, which
represents the offering price of the shares set forth on the cover page of this prospectus less the 8% underwriting
discount The underwriting agreement also provides that Capital Growth Financial, LLC will be paid a
non-accountable expense allowance equal to 1.75% of the gross proceeds from the sale of the units offered by
this prospectus, excluding any units purchased upon exercise of the over-allotment option. These amounts are
shown assuming both no exercise and full exercise of the underwriters‘ over-allotment option.

                                                                                        Total
                                                                                      Without
                                                                     Per Unit      Over-Allotment   With Over-Allotment

  Underwriting discount
  Non-accountable expense allowance (1)
(1)
      The non-accountable expense allowance is not payable with respect to the units sold upon exercise of the
      underwriters' over-allotment option. The non-accountable expense allowance is intended to reimburse the
      underwriters for legal, accounting, due diligence and other administrative fees associated with the
      underwriters professional services rendered. We have paid $50,000 to the representative of the underwriter
      as an advance against the expense allowance, which will reduce the expense allowance payable at the
      closing of the offering.


           We have agreed to sell the underwriter, for nominal consideration, an option to purchase up to a total
of 10% of the units sold in this offering not including units sold in any over-allotment. The units issuable upon
exercise of these options are identical to those offered by the prospectus except that the option is exercisable at
an exercise price equal to 125% of the unit offering price per unit of the units of this offering commencing one
year from the date of this prospectus and expiring five years from the date of this prospectus and the warrants,
included in the units, are exercisable at an exercise price equal to 125% of the exercise price of the warrants in
the units in this offering commencing one year from the date of this prospectus and expiring five years from the
date of this prospectus. The units and the warrants and the shares of common stock underlying the units and
warrants may not be sold, transferred, assigned, pledged or hypothecated for a period of 180 days from the
effective date of the offering except officers and partners of the underwriter and members of the selling group
and/or their officers and partners. The option grant to holders demand and ―piggyback‖ rights for a period of
five and seven years, respectively, from the date of this prospectus with respect to registration under the
Securities Act of the securities directly and indirectly issuable upon the exercise

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of the option. We will bear all fees and expenses related to registering the securities, other than underwriting
commissions, which shall be paid for by the holders. The exercise price and the number of units issuable upon
exercise of the option may be adjusted in certain circumstances including in the event of a stock dividend, or
recapitalization, reorganization, merger or consultation.

        We have granted the representative of the underwriters the right to have a designee present at all
meetings of our board of directors for a period of two years from the effective date of this prospectus. The
designee will be entitled to the same notice and communications sent by us to our directors and to attend
directors' meetings but will not have voting rights. The representative has not named a designee as of the date of
this prospectus.

        As of the closing of this offering, we will enter into a two-year consulting agreement with the
representative, Capital Growth Financial, LLC, whereby it will be retained as the Company's non-exclusive
consultant to provide general financial advisory and investment banking services. As consideration for Capital
Growth Financial, LLC's consulting services, we have agreed to pay a fee of $5,000 per month with the
aggregate amount of $ 120,000 payable at the closing of this offering.

                                        NASD's Conflict of Interest Rule

         In connection with this public offering, Tejas Securities Group, Inc. , or Tejas, will provide services as a
selected dealer. Certain affiliates of Tejas beneficially own more than 10% of the Company's common stock. In
addition, Clark N. Wilson, our President, Chief Executive Officer and director, and Barry A. Williamson, a
director, serve on the board of directors of Tejas Incorporated, the parent company of Tejas. As a result of the
foregoing, Tejas is deemed to have a "conflict of interest" as defined in Rule 2720(b)(7) of the Conduct Rules of
the NASD. Accordingly, this offering will be made in compliance with the applicable provisions of Rule 2720
which requires that the initial public offering prices of the common stock and warrants be no higher than that
recommended by a "qualified independent underwriter," as defined in Rule 2720. Capital Growth Financial,
LLC has assumed the responsibilities of acting as qualified independent underwriter, has performed due
diligence investigations and has reviewed and participated in the preparation of the registration statement and
the prospectus related to this offering. Capital Growth Financial, LLC will receive no compensation for such
role. In accordance with Rule 2720, no underwriter may make sales in this offering to any discretionary account
without prior approval of the customer.


                                              L EGAL MATTERS

        The validity of the common stock offered by this prospectus will be passed upon on our behalf by
Woodburn and Wedge, Reno, Nevada. Certain legal maters will be passed upon for the underwriters by
Arnstein & Lehr LLP.

                                                    EXPERTS

         The consolidated financial statements of Wilson Family Communities, Inc. as of December 31, 2006,
2005 and 2004 and for the years then ended, have been included herein in reliance upon the report of PMB
Helin, Donovan, LLP, Independent Registered Public Accounting Firm, appearing elsewhere herein, and upon
the authority of said firm as experts in accounting and auditing.

          The results of the valuation of our real estate holdings in the Austin, Texas area as of March 12, 2007
have been included herein in reliance on the report of Kauttu Valuation, independent of Wilson Holdings, Inc.,
appearing elsewhere herein, and upon the authority of said firm as experts in real estate valuation. A copy of the
report is included as Exhibit 99.1 to this Registration Statement on Form S-1.

                                                         62
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                            WHERE YOU CAN FIND MORE INFORMATION

          In connection with the shares offered by this prospectus, we have filed a registration statement on Form
S-1 under the Securities Act with the Securities and Exchange Commission. This prospectus, filed as part of the
registration statement, does not contain all of the information included in the registration statement and the
accompanying exhibits. For further information with respect to our shares and us, you should refer to the
registration statement and the accompanying exhibits. Statements contained in this prospectus regarding the
contents of any contract or any other document are not necessarily complete and you should refer to the copy of
the contract or other document filed as an exhibit to the registration statement, each statement being qualified in
all respects by the actual contents of the contract or other document referred to herein. You may inspect a copy
of the registration statement and the accompanying exhibits without charge at the Securities and Exchange
Commission‘s public reference facilities, 100 F Street, N.E., Washington, D.C. 20549, and you may obtain
copies of all or any part of the registration statement from those offices for a fee. You may obtain information
on the operation of the Public Reference Room by calling the Securities and Exchange Commission at
1-800-SEC-0330. The Securities and Exchange Commission maintains a web site that contains registration
statements, reports, proxy and information statements and other information registrants that file electronically.
The address of the site is http://www.sec.gov .

         We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended,
that require us to file reports, proxy statements and other information with the Securities and Exchange
Commission. Such reports, proxy statements and other information may be inspected at the public reference
room facilities of the Securities and Exchange Commission at the address set forth above, and copies of such
material may be obtained from the Public Reference Section of the Securities and Exchange Commission at
prescribed rates. Because we file documents electronically with the Securities and Exchange Commission, you
may also obtain this information by visiting the web site of the Securities and Exchange Commission at
http://www.sec.gov .



                                                        63
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                          INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

FINANCIAL STATEMENTS FOR WILSON HOLDINGS, INC.
Report of Independent Registered Public Accounting Firm                                           F-2
Consolidated Balance Sheets as of December 31, 2006 and 2005                                      F-3
Consolidated Statements of Operations for the years ended December 31, 2006, 2005 and 2004        F-4
Consolidated Statements of Partners‘ Equity and Stockholders‘ Equity for the years ended
December 31, 2006, 2005 and 2004                                                                  F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2006, 2005 and 2004        F-6
Notes to Consolidated Financial Statements for the years ended December 31, 2006, 2005 and 2004   F-7


                                                   F-1
Table of Contents


R eport of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders

Wilson Holdings, Inc.

We have audited the accompanying consolidated balance sheets of Wilson Holdings, Inc. as of December 31,
2006 and 2005, and the related consolidated statements of operations, partners‘ equity and stockholders‘ equity
and cash flows for the years ended December 31, 2006, 2005 and 2004. These financial statements are the
responsibility of the Company‘s management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits 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 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.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
financial position of the Company as of December 31, 2006 and 2005 and the consolidated results of their
operations and their cash flows for the years ended December 31, 2006, 2005 and 2004 in conformity with
generally accepted accounting principles in the United States of America.


PMB HELIN, DONOVAN, LLP


/s/ PMB Helin, Donovan, LLP

Austin, Texas

February 12, 2007


                                                        F-2
Table of Contents



                                     W ILSON HOLDINGS, INC.
                                       Consolidated Balance Sheets
                                    As of December 31, 2006 and 2005

                                                                              2006         2005
ASSETS
                                                                                           10,019,81
    Cash and cash equivalents                                             $    2,673,056           6
    Restricted cash                                                            2,192,226           -
    Inventory
                                                                                           12,299,87
      Land                                                                    20,735,131           2
                                                                                              655,14
      Construction in progress                                                10,020,847           5
                                                                                           12,955,01
    Total inventory                                                           30,755,978           7
    Other assets                                                                 196,195      48,056
                                                                                            1,420,66
    Debt issuance costs, net of amortization                                   1,458,050           9
    Equipment and software, net of accumulated depreciation and
    amortization of $46,358 and $4,961, respectively                             97,956       70,875
                                                                                           24,514,43
             Total assets                                                     37,373,461           3

LIABILITIES AND STOCKHOLDERS‘ EQUITY
                                                                                              111,27
    Accounts payable                                                           1,376,117           5
                                                                                              148,16
    Accrued real estate taxes payable                                           454,764            2
                                                                                              135,16
    Accrued expenses                                                            529,090            8
                                                                                              237,59
    Accrued interest                                                            302,555            2
    Deferred revenue                                                             11,223       11,223
                                                                                              253,94
    Lines of credit                                                            6,436,706           5
                                                                                            6,683,87
    Notes payable                                                              9,466,621           9
    Notes payable, related party                                                 279,800     279,800
    Subordinated convertible debt, net of $8,196,014 and $5,002,500                         4,997,50
    discount, respectively                                                     8,395,876           0
                                                                                            4,500,00
    Derivative liability, convertible note compound embedded derivative        7,462,659           0
    Derivative liability, contingent warrants issued to subordinated                          675,00
    convertible debt holders                                                   1,883,252           0
                                                                                           18,458,94
    Total liabilities                                                         36,598,663           4

STOCKHOLDERS‘ EQUITY
  Common stock, $0.001 par value, 80,000,000 shares authorized,
  18,055,538 and 17,706,625 shares issued and outstanding at December
  31, 2006 and 2005, respectively                                                18,056        17,707
                                                                                             7,697,86
   Additional paid in capital                                                 16,809,885            8
                                                                              (16,053,14   (1,660,086
   Retained deficit                                                                   3)            )
                 Total stockholders‘ equity                                      774,798     6,055,48
                                                                                            9
                                                                                    24,514,43
                   Total liabilities and stockholders‘ equity      $   37,373,461           3

See accompanying notes to the consolidated financial statements.


                                                      F-3
Table of Contents



                                       W ILSON HOLDINGS, INC.
                                    Consolidated Statements of Operations
                           For the Years Ended December 31, 2006, 2005 and 2004

                                                                     2006             2005              2004
Revenues:
 Homebuilding and related services                         $         5,217,564               -                 -
                                                                                        255,00
 Land sales                                                          1,516,952    0                            -
                                                                                        255,00
     Total revenues                                                  6,734,516    0                            -

Cost of revenues:
 Homebuilding and related services                                   4,346,186               -                 -
                                                                                        114,58
 Land sales                                                          1,070,856    7                            -
                                                                                        114,58
     Total cost of revenues                                          5,417,042    7                            -

Gross profit:
 Homebuilding and related services                                     871,378               -                 -
                                                                                        140,41
 Land sales                                                            446,096    3                            -
                                                                                        140,41
     Total gross profit                                              1,317,474    3                            -

Costs and expenses:
                                                                                       1,199,57            48,29
 Corporate general and administration                                4,352,999    7                6
                                                                                        224,93
 Sales and marketing                                                   817,595    6                            -
                                                                                       1,424,51            48,29
Total costs and expenses                                             5,170,594    3                6
                                                                                      (1,284,101          (48,29
     Operating loss                                                 (3,853,120)   )                6)
Other income (expense):
                                                                                       (172,500
 Loss on fair value of derivatives                                  (8,469,457)   )                            -
                                                                                        100,34                 2
 Interest and other income                                             290,335    5                6
                                                                                       (358,188           (10,79
 Interest expense                                                   (2,360,815)   )                3)
                                                                                       (430,343           (10,76
Total other expense                                                (10,539,937)   )                7)
                                                                                      (1,714,443          (59,06
              Net loss                                     $       (14,393,057)   )                3)

                                                                                           (0.22
Basic and diluted loss per share                           $             (0.81)   )                            -


Basic and diluted weighted average common shares                                       7,755,64
outstanding                                                         17,711,405    6                            -

See accompanying notes to the consolidated financial statements.

                                                    F-4
Table of Contents



                                                                                   W ILSON HOLDINGS, INC.
                                                                 Consolidated Statements of Partners‘ Equity and Stockholders‘ Equity
                                                                           Years Ended December 31, 2006, 2005 and 2004

                                                                  Series A Preferred Stock                                                             Common Stock
                                                                                                                                                                         Additional Paid In
                            Partners‘ Equity       Shares                      Amount            Additional Paid In Capital       Shares                Amount                Capital             Accumulated Deficit               Total
Balances at December
31, 2003                    $      -                               -       $        -            $         -                               -       $        -            $         -              $         -               $   -
Contributions                          131,706               -                           -                          -                      -                     -                        -                      -                            131,706
Net Loss                               (59,063)              -                           -                          -                      -                     -                        -                      -                            (59,063)
Balances at December
31, 2004                                72,643                         -                     -                                -            -                         -                        -                         -                       72,643

Net loss through May
31, 2005                               (54,357)                        -                     -                                -            -                         -                        -                         -                     (54,357)
Common Stock issued in
exchange for Cash and                                                                                                               9,000,00
Partnership interests                  (18,286)                        -                     -                                -            0                9,000                        9,286                          -                             -
                                                                                                                                    1,000,00
Sale of Common Stock                           -                       -                     -                                -            0                1,000                       59,000                          -                       60,000
Sales of Series A
Convertible Preferred
Stock                                          -            4,400,000                   4,400                      4,395,600               -                         -                        -                         -                    4,400,000
Series A Preferred Stock
exchanged for land                             -            2,404,789                   2,405                      2,402,384               -                         -                        -                         -                    2,404,789
Preferred Stock
exchanged for Common                                                                                                                6,804,78
Stock                                          -        (6,804,789)                 (6,805)                     (6,797,984)                9                6,805                 6,797,984                             -                             -
                                                                                                                                      901,83
Shares Issued in Merger                        -                       -                     -                                -            6                     902                     (902)                          -                             -

Warrants issued for
transaction costs for
subordinated convertible
debt                                           -                       -                     -                                -            -                         -                 832,500                          -                      832,500
Net loss from June 1
through December 31,
2005                                           -                       -                     -                                -            -                         -                        -            (1,660,086)                      (1,660,086)
Balances at December                                                                                                               17,706,62
31, 2005                                       -                       -                     -                                -            5               17,707                 7,697,868                (1,660,086)                       6,055,489

Stock-based
compensation expense                           -                       -                     -                                -            -                         -                 544,866                          -                      544,866
Warrants issued at fair
value                                          -                       -                     -                                -            -                         -            1,117,500                             -                    1,117,500
Recharacterization of
derivative liabilities to
equity                                         -                       -                     -                                -           -                          -            7,450,000                             -                    7,450,000
Cashless exercise of                                                                                                                 348,91
warrants                                       -                       -                     -                                -           3                      349                     (349)                       -                             -
Net loss                                       -                       -                     -                                -                -                   -                         -            (14,393,057)                  (14,393,057)
Balances at December
31, 2006                          $            -                       -        $            -                 $              -   18,055,538              $ 18,056             $ 16,809,885             $(16,053,143)                        $ 774,798


See accompanying notes to the consolidated financial statements.

                                                                                         F-5
Table of Contents


                                        W ILSON HOLDINGS, INC.
                                    Consolidated Statements of Cash Flows
                            For the Years Ended December 31, 2006, 2005 and 2004
                                                                     2006           2005         2004
Cash flows from operating activities:
        Net loss                                              $    (14,393,057)    (1,714,443)   (59,063)
        Non cash adjustments:
          Loss on fair value of derivative liability                  8,469,457       172,500           -
          Amortization of subordinated convertible debt
        discount                                                        917,330             -    (95,554)
          Amortization of debt issuance costs                           216,037             -            -
          Stock-based compensation expense                              544,866             -            -
          Depreciation and amortization                                  55,577         4,961           -
        Adjustments to reconcile net loss to net cash used in
        operating activities:
          Increase in total inventory                              (10,935,701)    (3,283,886)           -
          Increase in other assets                                    (148,139)       (48,056)           -
                                                                                        111,27
         Increase in accounts payable                                1,264,842               6          -
         Increase in accrued real estate taxes payable                 305,902         148,862          -
                                                                                        135,10
       Increase in accrued expenses                                    393,922               8     9,134
                                                                                          5,64
         (Decrease) increase in deferred revenue                       (11,223)              1           -
                                                                                        232,38
         Increase in accrued interest                                   64,963               0           -
                                                                                                   (145,4
        Net cash used in operating activities                      (13,255,224)    (4,235,657)        83)
Cash flows from investing activities:
   Purchase of fixed assets                                            (82,658)      (75,836)            -
        Net cash used in investing activities                          (82,658)      (75,836)            -
Cash flows from financing activities:
     Increase in restricted cash                                    (2,192,226)              -          -
     Issuance (repayments) of notes payable related parties,
   net                                                                        -      (21,000)     21,000
                                                                                       217,59
     Issuances (repayments) of notes payable, net                    (908,579)              1           -
     Partnership contributions                                               -              -    131,706
                                                                                       253,94
     Advances on lines of credit, net of repayments                  2,595,345              5            -
     Proceeds from issuance of subordinated convertible                             10,000,00
   debt                                                              6,750,000              0            -
     Proceeds from common stock sales                                        -         60,000            -
     Proceeds from issuance of Series A convertible                                  4,400,00
     preferred stock                                                         -              0            -
     Cash paid for debt issuance costs                               (253,418)      (588,170)            -
                                                                                    14,322,36
   Net cash provided by financing activities                         5,991,122              6    152,706
             Net increase (decrease) in cash and cash                               10,010,87
             equivalents                                            (7,346,760)             3      7,223
                                                                                         8,94
Cash and cash equivalents at beginning of period                    10,019,816              3      1,720
                                                                                    10,019,81
Cash and cash equivalents at end of period                     $     2,673,056              6      8,943

 Cash paid for interest                                        $     1,519,168         96,168            -
 Cash paid for income taxes                                  $             -          -         -

Supplemental disclosures of cash flow information:
                                                                               6,890,98
 Notes payable issued for land                               $     3,266,621          8   279,800
 Line of credit issued for land                                    3,587,416          -             -
                                                                               2,404,78
 Preferred stock issued for land                                           -          9             -
                                                                               9,295,77
                                                             $     6,854,037          7   279,800
 Common stock exchanged for partnership interests            $             -     18,286             -
 Warrants issued for subordinated convertible debt                             1,087,50
 transaction costs                                           $     1,117,500          0             -
 Cashless exercise of warrants                               $          349           -             -
See accompanying notes to the consolidated financial statements.

                                                 F-6
Table of Contents


                                           W ilson Holdings, Inc.
                                Notes to Consolidated Financial Statements
                           For the Years Ended December 31, 2006, 2005 and 2004

(1)   Organization and Business
      Activity
      Wilson Holdings, Inc., (the ―Company‖) is a Nevada corporation formerly known as Cole Computer
      Corporation, a Nevada corporation. Effective October 11, 2005 pursuant to an Agreement and Plan of
      Reorganization dated as of September 2, 2005 by and among Wilson Holdings, Inc., a Delaware
      corporation and a majority of its stockholders, Wilson Acquisition Corp., a Delaware corporation and
      now, a Subsidiary of the Company and Wilson Family Communities, Inc., a Delaware corporation
      (―WFC‖), Wilson Acquisition Corp. and WFC merged and WFC became a wholly-owned Subsidiary of
      the Company. The Company‘s common stock is quoted on the Over-the-Counter Bulletin Board under
      the symbol ―WSHD.OB‖.
      The Company is currently focused on making strategic land acquisitions, developing residential
      communities and, beginning in June 2007, building and selling homes.

         •   Land Acquisition and Development: The core of the Company‘s business plan is to secure land
             strategically, based on its understanding of population growth patterns and infrastructure
             development. In tandem with its land acquisition efforts and based upon its strategic market
             analysis, the Company plans to subcontract for the preparation of land for development. They
             seek to add value to the land through the process of development, which may include permitting
             and constructing water and wastewater infrastructure, master-planning of the community, and the
             construction of roads and community amenities. The Company also plans to sell entitled land to
             others for development. The Company anticipates offering assistance and site-specific analysis to
             land owners desiring to maximize land values. Such analysis can help owners design
             neighborhoods with pocket parks, natural space and varying lot sizes to attract a broader range of
             buyers, accelerating the absorption of the subdivision and thereby maximizing value.
          • Homebuilding and Related Services: Currently the Company is not engaged in homebuilding. It
             expects to commence homebuilding in June 2007. The Company intends to build homes on
             portions of its land currently under development. Its home designs will be selected and prepared
             for each of its markets based on local community tastes and preferences of homebuyers.
             Substantially all of the Company‘s construction work will be performed by subcontractors.
             Subcontractors will be retained for specific subdivisions pursuant to contracts which the
             Company plans to enter into during 2007. The Company plans to enter into homebuilding under
             the name Green Builders, Inc. It currently has an option to purchase the local homebuilding
             company Green Builders, Inc. Under the terms of the option, the Company has an exclusive right
             to purchase Green Builders for a period of two years at a ―fair market price‖ as agreed to by both
             parties or based on an independent valuation on the date of purchase. Green Builders is a local
             homebuilding company which built four homes in central Texas in 2006. Our strategy on
             homebuilding is to build homes which are environmentally responsive, resource efficient, and
             culturally sensitive.
(2)   Summary of Significant Accounting
      Policies
       (a)      Basis of Accounting
                These financial statements are presented on the accrual basis of accounting in accordance with
                U.S. generally accepted accounting principles whereby revenues are recognized in the period
                earned and expenses when incurred. The balance sheet has been changed to a non-classified
                presentation to conform to standard industry practices. Certain prior year balances have been
                reclassified to conform to the 2006 presentation.
       (b)     Cash and Cash Equivalents
                For purposes of the statements of cash flows, the Company considers all short term, highly
                liquid investments with an original maturity of three months or less to be cash and cash
                equivalents. At December 31, 2006 and 2005, the Company‘s cash and cash equivalents
                consisted of money market funds which are secured by high quality short-term securities,
                totaling approximately $1.7 million, $9.9 million, respectively.
The Company has restricted cash of approximately $2.2 million with a financial institution as
part of a $15.5 million land and development loan. During February 2007, the restricted cash
was released by the bank.


                                 F-7
Table of Contents


                                            Wilson Holdings, Inc.
                                 Notes to Consolidated Financial Statements
                            For the Years Ended December 31, 2006, 2005 and 2004

(2)   Summary of Significant Accounting Policies
      (continued)
        (c)    Consolidation of Variable Interest
               Entities
                The Company offers certain homebuilder clients surety for their interim construction loans and
                cash advances to facilitate sales of the Company‘s residential lots. The Company may be
                considered the primary beneficiary as defined under FASB Interpretation No. 46(R) (―FIN
                46(R)‖), ―Consolidation of Variable Interest Entities‖ (VIE), and the Company may have a
                significant, but less than controlling, interest in the entities. The Company accounts for each of
                these entities in accordance with FIN 46(R). Management uses its judgment when determining
                if the Company is the primary beneficiary of, or has a controlling interest in, any of these
                entities. Factors considered in determining whether the Company has significant influence or
                has control include risk and reward sharing, experience and financial condition of the other
                partners, voting rights, involvement in day-to-day capital and operating decisions and
                continuing involvement.
        (d)    Inventory
                Inventory is stated at cost unless it is determined to be impaired, in which case the impaired
                inventory would be written down to the fair market value. Inventory costs include land, land
                development costs, deposits on land purchase contracts, model home construction costs,
                advances to builders and capitalized interest and real estate taxes incurred during development
                and construction phases.
       (e)      Land Held Under Option Agreements Not Owned
                In order to ensure the future availability of land for development, the Company enters into lot
                option purchase agreements with unaffiliated third parties. Under the agreements, the Company
                pays a stated deposit in consideration for the right to purchase land at a future time, usually at
                predetermined prices or percentage of proceeds as homes are sold. These options generally do
                not contain performance requirements from the Company nor obligate the Company to
                purchase the land. Lot option payments are initially capitalized as inventory costs. If the lot
                option is exercised the option cost is included in the cost of the land acquired. At the earlier of
                the time that it is determined that the lot option will not be exercised or, at the date the lot
                option expires, the cost of the lot option will be expensed. As of December 31, 2006 and 2005,
                there were $451,000 and $345,745, respectively, of cash deposits included in the Land account
                on the Balance Sheet of which approximately $451,000 and $245,000, respectively, are
                non-refundable and subject to forfeiture should the Company not exercise the agreements.
        (f)    Interest and Real Estate
               Taxes
                Interest and real estate taxes attributable to land and homes are capitalized as inventory while
                they are being actively developed. As of December 31, 2006, approximately $46,000 of
                estimated real estate taxes and approximately $241,000 of interest are included in inventory. As
                of December 31, 2005, approximately $151,000 of estimated real estate taxes and an
                immaterial amount of interest are included in inventory.
        (g)     Revenue Recognition
                Revenues from property sales are recognized in accordance with SFAS No. 66, ―Accounting
                for Sales of Real Estate.‖ Revenues from land development services to builders are recognized
                when the properties associated with the services are sold, when the risks and rewards of
                ownership are transferred to the buyer and when the consideration has been received, or the
                title company has processed payment. For projects that are consolidated, homebuilding
                revenues and services will be categorized as homebuilding revenues and revenues from
                property sales or options will be categorized as land sales.
        (h)     Income Taxes
                 Prior to the merger of Athena with WFC at May 31, 2005, Athena was a partnership and
                 therefore did not have income taxes as the income and losses passed through to the partners.
Also, the VIEs are pass through entities. Since the merger, income taxes are accounted for in
accordance with


                                  F-8
Table of Contents


                                           Wilson Holdings, Inc.
                                Notes to Consolidated Financial Statements
                           For the Years Ended December 31, 2006, 2005 and 2004

(2)   Summary of Significant Accounting Policies (continued)
               SFAS No. 109, ―Accounting for Income Taxes,‖ deferred tax assets and liabilities are
               determined based on temporary differences between financial reporting carrying amounts of
               existing assets and liabilities and their respective tax bases and net operating loss and credit
               carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates
               expected to apply to taxable income in the years in which those temporary differences are
               expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change
               in tax rates will be recognized in the period that includes the enactment date. A valuation
               allowance is recorded for the entire deferred tax assets due to the uncertainty of the net
               realizable value of the asset.
        (i)    Advertising Costs
               The Company has incurred advertising, marketing and promotion costs as part of the sales
               efforts to market the real estate for sale and services offered. These costs, including the cost of
               developing and printing various brochures and mail out documents, are expenses as incurred.
               For the years ended December 31, 2006, 2005 and 2004, the Company incurred approximately
               $87,000, $15,000, and $0 of advertising costs, respectively.
        (j)    Property and Equipment
                Property and equipment is carried at cost less accumulated depreciation. Depreciation and
                amortization is recorded using the straight-line method over the estimated useful life of the
                asset. Depreciation and amortization for equipment and computer software typically ranges
                from 2 to 5 years. Leasehold improvements are depreciated over the shorter of the life of the
                respective leases or the assets. Repairs and maintenance are expensed as incurred. Costs and
                accumulated depreciation applicable to assets retired or sold are eliminated from the accounts
                and any resulting gains or losses are recognized at such time.
        (k)    Use of Estimates
               The preparation of 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 financial statements and the reported amounts
               of revenues and expenses during the reporting period. Accordingly, actual results could differ
               from those estimates.
               The Company has estimated and accrued liabilities for real estate property taxes on its
               purchased land in anticipation of development, and other liabilities including the beneficial
               conversion liability, the fair value of warrants and options. To the extent that the estimates are
               dramatically different to the actual amounts, it could have a material effect on the financial
               statements.
               The Company has three of its properties which are in Municipal Utility Districts (MUDs). The
               Company incurs development costs for water, sewage lines and associated treatment plants and
               other development costs and fees for these properties. Under the agreement with the MUDs,
               the Company expects to be reimbursed partially for the above developments costs. The MUDs
               will issue bonds to repay the Company, once there is enough assessed value on the property for
               the MUD taxes to repay the bonds. As homes are sold within the MUD, the assessed value
               increases. It can take several years before there is enough assessed value to recapture the costs.
               The Company has estimated that it will recover approximately 50% to 70% of eligible costs
               spent through December 31, 2006 which total approximately $1.8 million. In some
               circumstances, the MUDs will pay for property set aside for the preservation of endangered
               species, greenbelts and similar uses. To the extent that the estimates are dramatically different
               to the actual amounts, it could have a material effect on the financial statements.

        (l)    Impairment of Long-Lived
               Assets
The Company reviews its long-lived assets, which consist primarily of equipment and
software, and real estate inventory for impairment according to whenever events or changes in


                                 F-9
Table of Contents


                                           Wilson Holdings, Inc.
                                Notes to Consolidated Financial Statements
                           For the Years Ended December 31, 2006, 2005 and 2004

(2)   Summary of Significant Accounting Policies (continued)
       (l)     Impairment of Long-Lived Assets (continued)
                circumstances indicate. Inventory is stated at the lower of cost (including direct construction
                costs, capitalized interest and real estate taxes) or fair value less cost to sell. Equipment and
                software is carried at cost less accumulated depreciation. The Company assesses these assets
                for recoverability in accordance with the provisions of statement of Financial Accounting
                Standards No. 144, ―Accounting for the Impairment or Disposal of Long-Lived Assets,‖ or
                SFAS No. 144. SFAS No. 144 requires that long-lived assets be reviewed for impairment
                whenever events or changes in circumstances indicate that the carrying amount of an asset may
                not be recoverable. Recoverability of assets is measured by comparing the carrying amount of
                an asset to future undiscounted net cash flows expected to be generated by the asset. These
                evaluations for impairment are significantly impacted by estimates of revenues, costs and
                expenses and other factors. If long-lived assets are considered to be impaired, the impairment
                to be recognized is measured by the amount by which the carrying amount of the assets
                exceeds the fair value of the assets. No significant impairments of long-lived assets were
                recorded in 2006 or 2005.
        (m)    Loss per Common
               Share
               Earnings per share is accounted for in accordance with SFAS No. 128, ―Earnings per Share,‖
               which require a dual presentation of basic and diluted earnings per share on the face of the
               statements of earnings. Basic loss per share is based on the weighted effect of common shares
               issued and outstanding, and is calculated by dividing net loss by the weighted average shares
               outstanding during the period. Diluted loss per share is calculated by dividing net loss by the
               weighted average number of common shares used in the basic loss per share calculation plus
               the number of common shares that would be issued assuming exercise or conversion of all
               potentially dilutive common shares outstanding.
                The Company has issued stock options, warrants convertible into shares of common stock.
                These shares and warrants have been excluded from loss per share at December 31, 2006 and
                2005 because the effect would be anti-dilutive as summarized in the table below:
                                                                         2006                2005
        Stock options                                                       925,000             780,000
        Common stock warrants                                             1,283,750           1,500,000
        Subordinated convertible debt warrants                            8,375,000           5,000,000
                Total                                                    10,583,750           7,280,000

                During 2004, there were no shares of common stock outstanding.
       (n)     Financial Instruments and Credit Risk
               Financial instruments that potentially subject the Company to credit risk include cash and cash
               equivalents. Cash is deposited in demand accounts in federally insured domestic institutions to
               minimize risk. Although the balances in theses accounts exceed the federally insured limit from
               time to time, the Company has not incurred losses related to these deposits. Cash equivalents
               consist of money market accounts and are typically held in accounts with investment brokers or
               banks which are secured with high quality short maturity investment securities.
                The amounts reported for cash and cash equivalents, notes payable, accounts payable, accrued
                liabilities, and line of credit are considered to approximate their market values based on
                comparable market information available at the respective balance sheet dates and their
                short-term nature.


                                                  F-10
Table of Contents


                                           Wilson Holdings, Inc.
                                Notes to Consolidated Financial Statements
                           For the Years Ended December 31, 2006, 2005 and 2004

(2)   Summary of Significant Accounting Policies (continued)
      (o)    Concentrations
               The Company‘s current activities are limited to the geographical area of Central Texas which
               the Company defines as encompassing the Austin Metropolitan Statistical Area, or Austin
               MSA, and the San Antonio Metropolitan Statistical Area, or San Antonio MSA. This
               geographic concentration makes the Company‘s operations more vulnerable to local economic
               downturns than those of larger, more diversified companies.
               The Company is also dependent upon a limited number of homebuilder services customers
               which are subject to numerous uncertainties related to homebuilding including weather delays
               and damage, labor and material shortages, insufficient capital, materials theft or poor
               workmanship. Revenues from two customers accounted for 66% and 34%, respectively, of the
               total homebuilding revenue for the year ended December 31, 2006. There were no
               homebuilding service revenues for the year ended December 31, 2005 and 2004.
               During the year ended December 31, 2006, home sales accounted for approximately 77% of
               revenues at a gross profit margin of approximately 17%. One client has seven unsold homes
               that it expects to complete and sell during the first quarter of 2007. The client does not expect
               to continue building homes under its current builder services agreement. The client has a note
               payable to the Company of approximately $165,000. The Company may not be able to recover
               the full amount of this note forcing it to pursue collection activities and a write off for the
               entire amount. In addition to the note payable, the Company may need to provide funds to
               complete the construction and sale of the homes the client currently has under construction and
               for sale. The Company has accrued approximately $50,000 for this contingency. All of the
               homebuilding revenues were generated by two VIEs consolidated into our operating results,
               which have not performed as expected. Homebuilder services revenues are eliminated in the
               consolidation of the Company‘s financial statements as cost of revenues to the Company‘s
               VIEs.
       (p)     Subordinated Convertible Debt
                The subordinated convertible debt and the related warrants have been accounted for in
                accordance with Emerging Issues Task Force (EITF) No. 98-5, ―Accounting for Convertible
                Securities with Beneficial Conversion Features or Contingently Adjustable Conversion
                Ratios‖, EITF No. 00-19, ―Accounting for Derivative Financial Instruments Indexed to, and
                Potentially Settled in, a Company‘s Own Stock,‖ EITF 00-27, ―Application of issue 98-5 to
                Certain Convertible Instruments‖, EITF 05-02 ―Meaning of ‗Conventional Convertible Debt
                Instrument‘ in Issue No. 00-19‖, and EITF 05-04 ―The Effect of a Liquidated Damages Clause
                on a Freestanding Financial Instrument Subject to Issue No. 00-19‖. Company has obtained an
                independent third party valuation as of the date of subordinated convertible debt issuances and
                as of December 31, 2005 to determine the fair market value of its common stock. Management
                determined that the price of stock quoted on the Over-the-Counter Bulletin Board was not
                reflective of the market price of the stock as of those days due to insufficient trading and a lack
                of public information regarding Company financial performance. Beginning with the quarter
                ended September 30, 2006, the Company determined that there was enough public float
                available to provide sufficient information about the Company to the public, and it began using
                the stated Over-the-Counter Bulletin Board as the market price of its common stock.

       (q)     Derivative Financial Instruments
               Wilson Holdings accounts for all derivative financial instruments in accordance with SFAS
               No. 133. Derivative financial instruments are recorded as liabilities in the consolidated balance
               sheet, measured at fair value. When available, quoted market prices are used in determining
               fair value.


                                                   F-11
Table of Contents


                                           Wilson Holdings, Inc.
                                Notes to Consolidated Financial Statements
                           For the Years Ended December 31, 2006, 2005 and 2004

(2)   Summary of Significant Accounting Policies (continued)
      q)       Derivative Financial Instruments (continued)
               However, if quoted market prices are not available, Wilson Holdings estimates fair value using
               either quoted market prices of financial instruments with similar characteristics or other
               valuation techniques.
                The value of the derivative liabilities relating to the convertible note in the consolidated
                financial statements are subject to the changes in the trading value of Wilson Holdings
                common stock and other assumptions. As a result, our quarterly financial statements may
                fluctuate from quarter to quarter based on factors, such as the trading value of Wilson Holdings
                common stock, the amount of shares converted by subordinated convertible debt holders in
                connection with the subordinated convertible notes and exercised in connection with the
                subordinated convertible debt holders‘ penalty warrants. Consequently, the consolidated
                financial position and results of operations may vary from quarter to quarter based on
                conditions other than Wilson Holdings operating revenues and expenses. See Note 10
                regarding valuation methods used for derivative liabilities.
                Derivative financial instruments that are not designated as hedges or that do not meet the
                criteria for hedge accounting under SFAS No. 133 are recorded at fair value, with gains or
                losses reported currently in earnings. All derivative financial instruments held by the Company
                as of December 31, 2006 and 2005, were not designated as hedges. There were no derivative
                financial instruments held by the Company as of December 31, 2004.
        (r)     Stock-Based Compensation
                Effective January 1, 2006, the Company adopted the provisions of SFAS No. 123 (revised
                2004), Share-Based Payment, (―SFAS 123R‖) using the prospective-transition method. Under
                this transition method, compensation expense recognized during the year ended December 31,
                2006 included: (a) compensation expense for all share-based awards granted prior to, but not
                yet vested as of December 31, 2005, based on the grant date fair value estimated in accordance
                with the original provisions of SFAS 123, and (b) compensation expense for all share-based
                awards granted subsequent to January 1, 2006, based on the grant date fair value estimated in
                accordance with the provisions of SFAS 123R. In accordance with the
                modified-prospective-transition method, results for prior periods have not been restated. The
                adoption of SFAS 123R resulted in a charge to net losses of approximately $545,000 for the
                year ended December 31, 2006. Before January 1, 2006, the Company accounted for its stock
                options using the intrinsic value method under ―Accounting Principles Board Opinion No. 25.‖
                If the Company had elected to recognize compensation expense for options granted based on
                their fair values at the grant dates, consistent with SFAS No. 123, net income and earnings per
                share for the year ended December 31, 2005 would have changed to the pro forma amounts
                indicated below:
                                                                                           2005
        Net loss as reported                                                    $           (1,714,443)
        Deduct: Total stock based employee compensation expense
        determined under the fair value based method for all awards, net of the
        related tax effects                                                                   (123,479)
        Pro forma net loss                                                      $           (1,837,922)
        Net loss per share
                 Basic and diluted - as reported                                $                 (0.22)
                 Basic and diluted - pro forma                                  $                 (0.23)

                The fair value of the options was calculated at the date of grant using the Black-Scholes pricing
                model with the following weighted-average assumptions for the year ended 2006: risk free
                interest rate of 4.25% to 4.75%, dividend yield of 0%, weighted-average life of options of 5
years, and a 60% volatility factor. For the year ended 2005, the following assumptions were
used: risk free interest rate of 4.25%, dividend yield of 0%, weighted-average life of options of
5 years, and a 60% volatility factor.
During 2004, the Company had no stock compensation plan.


                                  F-12
Table of Contents


                                            Wilson Holdings, Inc.
                                 Notes to Consolidated Financial Statements
                            For the Years Ended December 31, 2006, 2005 and 2004

(2)   Summary of Significant Accounting Policies (continued)
        (s)    Recent Accounting
               Pronouncements
               In July 2006, the FASB released FASB Interpretation No. 48, ―Accounting for Uncertainty in
               Income Taxes, an interpretation of FASB Statement No. 109‖ (―FIN 48‖). FIN 48 prescribes a
               comprehensive model for the financial statement recognition, measurement, presentation and
               disclosure of income tax uncertainties with respect to positions taken or expected to be taken in
               income tax returns. The Company must adopt FIN 48 in the first quarter of fiscal 2007, and
               management currently does not expect the impact to be material to its consolidated financial
               statements.
                In September 2006, the Financial Accounting Standards Board (―FASB‖) issued Statement No.
                157, ―Fair Value Measurements‖ (―FAS 157‖), which addresses how companies should
                measure fair value when they are required to use a fair value measure for recognition or
                disclosure purposes under generally accepted accounting principles (―GAAP‖). As a result of
                FAS 157, there is now a common definition of fair value to be used throughout GAAP, which
                is expected to make the measurement of fair value more consistent and comparable. The
                Company must adopt FAS 157 in fiscal 2008, and management currently does not expect the
                impact to be material to its consolidated financial statements.
                In December 2006, the FASB issued the FASB Staff Position (FSP) No. EITF 00-19-2, (―FSP
                EITF 00-19-2‖), Accounting for Registration Payment Arrangements. This FSP addresses an
                issuer‘s accounting for registration payment arrangements. This FSP specifies that the
                contingent obligation to make future payments or otherwise transfer consideration under a
                registration payment arrangement, whether issued as a separate agreement or included as a
                provision of a financial instrument or other agreement, should be separately recognized and
                measured in accordance with FASB Statement No. 5, Accounting for Contingencies. The
                guidance in this FSP amends FASB Statements No. 133, Accounting for Derivative
                Instruments and Hedging Activities, and No. 150, Accounting for Certain Financial
                Instruments with Characteristics of both Liabilities and Equity, and FASB Interpretation No.
                45, Guarantor‘s Accounting and Disclosure Requirements for Guarantees, Including Indirect
                Guarantees of Indebtedness of Others, to include scope exceptions for registration payment
                arrangements. This FSP further clarifies that a financial instrument subject to a registration
                payment arrangement should be accounted for in accordance with other applicable generally
                accepted accounting principles (GAAP) without regard to the contingent obligation to transfer
                consideration pursuant to the registration payment arrangement. This FSP shall be effective
                immediately for registration payment arrangements and the financial instruments subject to
                those arrangements that are entered into or modified subsequent to the date of issuance of this
                FSP, or for financial statements issued for fiscal years beginning after December 15, 2006, and
                interim periods within those fiscal years.
                The Company intends to adopt FSP EITF 00-19-2 beginning in 2007. The adoption of this FSP
                will have a material effect upon the Company‘s financial statements. The pro forma below
                shows the effect of the new FSP on the 2006 financial results, had the FSP been effective
                during 2006:
                                                As Presented          Pro Forma              Difference
                                                    (14,393,05            (5,125,38                9,267,6
        Net loss                         $ 7)                    4)                    73
        Convertible notes, net of                     8,395,8             15,491,4                7,095,5
        discount                         $ 76                    10                    34
                                                      9,345,9                                    (9,345,91
        Derivative liabilities           $ 11                                         - 1)
                                                        774,7          9,267,6              8,492,8
        Stockholders‘ equity             $ 98                   73                75
(3) Inventory
     The Company‘s inventory includes real estate held for sale or development and land, which includes real
     estate under development, development costs, prepaid development costs, development costs on land
     under option but not yet owned, and earnest money on land purchase options. As of December 31, 2006,
     it had approximately 2,430 acres of land under contract, including 749 acres under development and
     construction in Hays County, Travis County and Williamson County, Texas. Earnest money deposits for


                                                 F-13
Table of Contents


                                                               Wilson Holdings, Inc.
                                                    Notes to Consolidated Financial Statements
                                               For the Years Ended December 31, 2006, 2005 and 2004


(3)      Inventory (continued)
          land costs and development costs on land under option, not owned, totaled $451,000 at December 2006,
          all of which is non-refundable if the Company does not exercise the option and purchase the land. At
          December 31, 2005, earnest money deposits for land options were approximately $345,745 of which
          $245,000 was non-refundable. Below is a summary of the property that is owned or under contract by the
          Company at December 31, 2006:


                                                                                  Land and
                                                                               Project Costs at
                                                     Approximate Approximate December 31, Approximate
                                     Approximate       Owned     Acreage Under      2006        Acreage under
     Property                          Acreage         Acreage      Option       (thousands)    Development Texas County
Rutherford West                          697             697          n/a              $11,251       697       Hays
Highway 183                               15             15           n/a                  377        -        Travis
Georgetown
Village                                     665              52                   613                              5,342                52             Williamson
Villages of New
Sweden                                      534             534                     -                            10,120                      -              Travis
Elm Grove                                    91             30                     61                             1,755                      -              Hays
Bohls Ranch                                 428              -                    428                             1,011                      -              Travis
Other land
projects                                      -             -                     -                                  52
Sub-total land                              2,430         1,328                 1,102                            29,908                749
Homebuilding
inventory                                     -             -                     -                               837                   -
  Total inventory                           2,430         1,328                 1,102                         $30,745                  749


The land costs in the above projects are Rutherford West, approximately $9.3 million, Highway 183 is all land,
Georgetown Village, approximately $1.5 million, and Elm Grove, approximately $1.3 million. All other land
and project costs for listed properties are associated with earnest money deposits, feasibility and development.

Below is a summary of the property that is owned or under contract by the Company at December 31, 2005:

                                                                                                                                                 Land and Project Costs at December 31, 2005
                             Property                   Approximate Acreage   Approximate Owned Acreage   Approximate Acreage Under Option                       (thousands)                        Approximate Acreage under Development
 Rutherford West                                                732                      732                            n/a                                                                $9,592                     -
 Highway 183                                                     15                       15                            n/a                                                                   388                     -
 Georgetown Village                                             665                       52                            613                                                                 1,614                    52
 Villages of New Sweden                                         534                        -                            534                                                                   270                     -
 Elm Grove                                                       91                        -                             91                                                                    50                     -
 Other land projects                                              -                        -                              -                                                                 1,041
 Sub-total land                                                2,040                     799                           1,238                                                               12,218                   784
 Homebuilding inventory                                           -                        -                              -                                                                   737                    -
                          Total inventory                      2,040                     799                           1,238                                                              $12,955                   784



All of the costs for land and project costs in the above table are land costs with the exception of Elm Grove and
other land projects which are associated with earnest money, feasibility and development.

(4)       Consolidation of Variable Interest
          Entities
          The Company exercises significant influence over, but holds no controlling interest in our homebuilder
          clients. It bears the majority of the rewards and risk of loss. At December 31, 2006, the Company
          determined it was the primary beneficiary in certain homebuilder agreements as defined under FASB
          Interpretation No. 46(R) (―FIN 46(R)‖), ―Consolidation of Variable Interest Entities‖ (VIEs), (Note 2 (a))
          that it has a significant, but less than controlling, interest in the entities. The results of these clients have
          been consolidated into its financial statements.
F-14
Table of Contents


                                                  Wilson Holdings, Inc.
                                       Notes to Consolidated Financial Statements
                                  For the Years Ended December 31, 2006, 2005 and 2004


(4)     Consolidation of Variable Interest Entities (continued)
        Below is a summary of the effect of the consolidation of these entities for the year ended December 31,
        2006:
                                                                    Year Ended December 31, 2006
                                                                                 Consolidating
                                                  WFC                 VIEs          entries                      Consolidated
      Revenues                   $                2,592,878          5,229,564       (1,087,926) (a)                 6,734,516
      Expenses
        Cost of Revenues                          1,654,436          4,850,532             (1,087,926) (a)               5,417,042
        General, administrative,
        sales and marketing                       4,674,060           342,467                  154,067 (b)               5,170,594
          Costs and expenses
          before interest                         6,328,496          5,192,999               (933,859)                10,587,636
            Operating
      income/(loss)              $               (3,735,618)            36,565               (154,067)               (3,853,120)

          (a) Eliminates WFC revenues in VIE expenses, eliminates VIE expenses in WFC.
          (b) Loss of VIEs.

        No VIEs were consolidated into the operating results during the years ended December 31, 2005 and
        2004.

  (5)     Operating and Reporting
          Segments
        The Company has two reporting segments: Homebuilding and Related Services, and Land Sales. The
        Company‘s reporting segments are strategic business units that offer different products and services. The
        homebuilding and related services segment includes home sales and services provided to homebuilders.
        The Company does not build or sell homes but is required to consolidate its homebuilder services clients
        per FIN 46(R), (Note 4). The Company identifies the clients it consolidates as ―VIEs‖. Land sales consist
        of land in various stages of development sold, including finished lots. The Company eliminates land sales
        to its homebuilder clients. The Company charges identifiable direct expenses and interest to each segment
        and allocates corporate expenses and interest based on an estimate of each segment‘s relative use of those
        expenses. Depreciation expense is included in selling, general and administrative and is immaterial.
        During the year ended December 31, 2004, the Company had no significant operations. The following
        table presents segment operating results before taxes for the years ended December 31, 2006 and 2005:
                                                     2006                                                   2005
                               Homebuilding                                              Homebuilding
                                and Related                                               and Related
                                  Services         Land Sales            Total              Services        Land Sales           Total
 Revenues from external
 customers                 $         5,217,564          1,516,952          6,734,516                    -       255,000        255,000
 Costs and expenses:
                                                                                                                 114,58
                                                                                                                               114,587
   Cost of revenues                  4,346,186          1,070,856          5,417,042                    -             7
   Selling, general and                                                                                          483,20
 administrative                      3,342,924          1,827,670          5,170,594            63,477                0        546,677
   Loss of fair value of
 derivatives                                -           8,469,457          8,469,457                    -                -            -
                                     (129,840
   Interest & other income                  )           (160,495)          (290,335)                    -       (44,122)       (44,122)
   Interest expense                   907,716           1,453,099          2,360,815                    -        144,710        144,710
     Total costs and
 expenses                            8,466,986         12,660,587         21,127,573             63,477          698,375        761,852
         Loss before taxes $       (3,249,422)       (11,143,635)       (14,393,057)           (63,477)        (443,375)      (506,852)

 Segment Assets            $         4,293,166         33,080,295         37,373,461                    -     14,092,338     14,092,338
Capital expenditures   $       81,229          1,429         82,658         46,406      29,430       75,836



 (6)     Related Party Transactions
       In 2004, Clark N. Wilson, the Company President and Chief Executive Officer, became the sole
       remaining partner of Athena Equity Partners-Hays, L.P., a Texas limited partnership. On May 31, 2005
       Athena merged with WFC and the remaining Athena assets and partnership interests were exchanged for
       9,000,000 shares of WFC common stock. In addition, at the time of the merger, trusts belonging to
       various members of the Wilson family purchased 1,000,000 shares of WFC common stock for $60,000.


                                                F-15
Table of Contents


                                           Wilson Holdings, Inc.
                                Notes to Consolidated Financial Statements
                           For the Years Ended December 31, 2006, 2005 and 2004

(6)   Related Party Transactions
      (continued)
      In March of 2005, some of the trusts belonging to the Wilson family purchased a note for approximately
      $280,000 from a third party that is secured by approximately 15 acres of land. At the time of purchase,
      the terms of the note payable to the trusts belonging to family members of Clark Wilson remained the
      same at 8% per annum but the maturity date was changed from October 7, 2005 to April 4, 2006 when
      the entire principal and interest would be due and payable. On March 29, 2006, the note was extended for
      two years, changing the maturity date to April 4, 2008 (Note 10).
      In June 2005, Clark N. Wilson, President and CEO of the Company and another investor purchased
      2,200,000 and 2,000,000 shares, respectively, of Series A Convertible Preferred Stock from WFC for
      $1.00 per share.
      In August 2005, WFC repaid $121,000 that Mr. Wilson had advanced to WFC before the merger with
      Athena for working capital. In October 2005, WFC repaid the remaining $140,000 advanced by
      Mr. Wilson to WFC.
      In 2005, WFC obtained a line of credit of $2 million that was personally guaranteed by Mr. Wilson. The
      personal guarantee was released during May 2006.
      During the twelve months ended December 31, 2006, Mr. Wilson‘s brother provided services to the
      Company for which he was paid approximately $20,000. These services were primarily related to the
      development of information systems for the Company. Management believes that these services were
      provided at fair market value.
      Real Property Purchase
      SGL Development, Ltd. and SGL Investments, Ltd., (collectively, ―SGL‖) were owners of approximately
      736 acres of undivided land in Hays County, Texas. Clark N. Wilson directly and beneficially (through
      Steamboat Joint Venture) owned 13.59% (the ―Wilson Beneficial Interest‖) of the property and John O.
      Gorman indirectly owned 12.33% (the ―Gorman Beneficial Interest‖) of the property. In June 2005, SGL
      distributed to Mr. Wilson and Mr. Gorman their beneficial ownership in the property which they sold to
      WFC in exchange for 1,260,826 and 1,143,963, respectively, of the 2,404,789 preferred shares issued by
      WFC in the transaction. SGL then sold the remaining property, approximately 74.08%, to WFC in
      exchange for notes payable of approximately $6.9 million. The Company believes that WFC purchased
      the property at fair market value due to the price paid for the preferred stock paid by the other parties
      involved in the transaction. The notes payable issued had principal and interest due at maturity on June
      30, 2006, with interest at the prime rate as reported in the Wall Street Journal adjusted for changes,
      (―Prime Rate‖) for the first six months, Prime Rate plus 2.00% for the second six months and Prime Rate
      plus 2.25% with an exercise of an extension period of 90 days on the notes if the notes are not in default.
      The interest rate on the notes increased to 9.75% as of March 31, 2006. The notes were secured by the
      entire property acquired. There is a provision for partial releases of the land, lots, and tracts, with
      assignments ranging from 100% to 140% of the par value per acre as a condition of the releases.
      During June 2006, the Company refinanced the loan balance of $6.2 million with a financial institution
      (Note 10).
      Issuance of Convertible Debt
      As part of the December 2005 subordinated convertible debt issuance discussed in Note 10, an existing
      common stock investor purchased $800,000 of the $10 million of subordinated convertible debt that was
      issued. As part of the subordinated convertible debt 2006 discussed in Note 10, existing common stock
      investors purchased $1.0 million of the $6.75 million subordinated convertible debt that was issued.
      In connection with the placement of an additional $6.75 million of the Company‘s convertible promissory
      notes in September 2006, it entered into an additional agreement with Tejas Securities Group, Inc.
      pursuant to which Tejas served as the Company‘s Placement Agent in connection with the offering.
      Pursuant to this agreement, the Company paid Tejas commissions of $70,000 and reimbursed the
      Placement Agent for its expenses. John J. Gorman is the Chairman of the Board of the Placement Agent
      and of Tejas Incorporated (Tejas), the parent company of the Placement Agent. Mr. Gorman is the
F-16
Table of Contents


                                           Wilson Holdings, Inc.
                                Notes to Consolidated Financial Statements
                           For the Years Ended December 31, 2006, 2005 and 2004

(6)    Related Party Transactions (continued)
      beneficial owner of 4,088,963 shares of our common stock. Clark N. Wilson, who serves as our President
      and Chief Executive Officer and is a director of the Company, has served on the board of directors of
      Tejas Incorporated, since October 1999, and is compensated for such service. Mr. Wilson owns 1,000
      shares of Tejas Incorporated common stock and options to purchase an additional 10,000 shares of
      common stock. Our largest stockholder, who is also our President and Chief Executive Officer, will
      continue to control our company.
      Barry A. Williamson is a member of our Board of Directors and, until January 31, 2006 was a member of
      the Board of Directors of Tejas Incorporated, the parent company of our Placement Agent for the sale of
      our convertible notes. Mr. Williamson was re-elected to the Board of Directors of Tejas Incorporated in
      November 2006.
      In September 2006, the Company entered into an agreement to lease approximately 5,000 square feet for
      its corporate offices, which it began occupying on October 1, 2006. The lease requires monthly payments
      of approximately $6,042 per month for 36 months. The lease is with an affiliate of Tejas Incorporated.
      The Company believes that the lease is at fair market value for similar space in the Austin, TX
      commercial real estate market.
      In September 2006, the Company‘s CEO purchased $250,000 of subordinated convertible debt under the
      same terms and conditions as the others participating in the issuance (Note 10).
      In December 2006, Tejas Securities Group, Inc exercised 535,000 warrants which were exercisable at
      $2.00 per share, in a cashless exercise netting the warrant holder 348,913 shares of common stock.
(7)   Liquidity and Capital
      Resources
      Liquidity
      The Company had approximately $4.8 million in cash and cash equivalents at December 31, 2006 of
      which approximately $2.2 million was restricted. It plans to commit several million dollars in cash to
      exercise option rights to purchase land, develop land and guarantee certain payments regarding the
      development of the optioned land over the next year. The Company estimates that its future needs for
      development of its existing projects over the next twelve months is approximately $23 million with
      approximately $16 million coming from anticipated bank financing.
      At December 31, 2006, the Company had secured lines of credit totaling approximately $25.5 million. It
      had approximately $6.4 million drawn against these lines of credit, which will be repaid as finished lots
      and completed homes are sold. Approximately $600,000 of the lines of credit liability relate to VIEs that
      had drawn on lines of credit, guaranteed by the Company, to build homes that will be repaid as the
      completed homes are sold. It currently does not expect to experience losses from these guarantees.
      The Company plans on investing approximately $23 million for the purchase of land, installment
      payments, options fees and development costs over the next year. This includes the development of land
      including the installation of water and wastewater infrastructure, streets and common areas. It intends to
      and expects to purchase or obtain options to purchase additional acreage for development and additional
      finished lots for sale. The Company is actively seeking additional debt financing and intends to raise
      additional equity, possibly using joint venture financing as well as cash generated from lot and land sales,
      to finance these activities.
      The Company‘s growth will require substantial amounts of cash for earnest money deposits, land
      purchases, development costs, interest payments and to provide financing or surety services to its
      homebuilder clients. Until it begins to sell an adequate number of lots and services to cover monthly
      operating expenses, sales, marketing, general and administrative costs will deplete cash.
      To maintain its liquidity, the Company has financed the majority of its land and development activities
      with debt and equity, and believes it can continue to do so in the future, through a combination of
      conventional and subordinated convertible debt, joint venture financing, sales of selected lot positions,
sales of land and lot options, and by raising additional equity. The Company has engaged an investment
banking firm to assist it in raising additional capital
The Company‘s current short term financing is indexed to the prime rate, which could increase
substantially in the future. An increase in interest rates could have a material adverse effect on its
operations by increasing expenses and cash outlays, decreasing profitability or increasing losses,
depleting cash and thereby making it difficult to meet its cash obligations, and make it unlikely that the
Company could meet the borrowing criteria of future lenders.


                                            F-17
Table of Contents


                                            Wilson Holdings, Inc.
                                 Notes to Consolidated Financial Statements
                            For the Years Ended December 31, 2006, 2005 and 2004

(7)   Liquidity and Capital Resources
      (continued)
      Liquidity (continued)
      Land comprises the majority of the Company‘s assets, which could suffer devaluation if the housing and
      real estate market suffers a significant downturn, due to interest rate increases or other reasons. Its debt
      might then be called, requiring liquidation of assets to satisfy its debt obligations or the use of its cash. A
      significant downturn could also make it more difficult for the Company to liquidate assets, to raise cash
      and pay off debts, which could have a material adverse effect upon it.
      In the normal course of business, the Company enters into various land purchase option agreements that
      require earnest money deposits. In order for it to start or continue the development process on optioned
      land, it may incur development costs before it purchases the land. At December 31, 2006, the Company
      had capitalized development costs and earnest money deposits of $451,000, all of which is
      non-refundable if it does not exercise the option and purchase the land.
      On December 19, 2005, the Company issued $10 million in aggregate principal amount of 5%
      Convertible Debt due December 1, 2012, with interest payments due May 1 and December 1 beginning in
      2006 until converted. These interest payments will be paid from cash and total approximately $50,000 per
      year.
      In September 2006, the Company issued $6.5 million and in October 2006, it issued an additional
      $25,000, totaling $6.75 million in aggregate principal amount of subordinated convertible debt notes due
      September 1, 2013, bearing interest at 5% per annum with semi-annual interest payments due February 1
      and September 1 beginning in February 1, 2007. These interest payments will be paid from cash and total
      approximately $338,000 per year.
      During October 2006, the Company secured a $15.5 million line of credit for the purchase and
      development of approximately 534 acres located in eastern Travis County and subsequently closed on the
      purchase of the property. The first phase of the line of credit is $10.2 million and covers the purchase, a
      portion of the first two phases of construction, offsite utilities and provide letters of credit totaling $4.3
      million, required for the development of municipal utility facilities, at the bank‘s prime rate plus 0.50%,
      and is secured by the underlying property. Loan origination fees were 1% of the $10.2 million. Interest is
      payable quarterly, commencing January 2007. Principal is payable in quarterly installments commencing
      90 days after completion of construction which is projected to be during 2007. The required pay down
      amount under the loan is equal to 75% of gross sales price as set forth in the Company‘s contracts for
      sales of lots. Its current projects require pay down amounts of approximately $600,000 per quarter. The
      purchase price of the property was approximately $8.5 million, with $2.5 million of owner financing,
      $3.6 million from the bank loan and cash from us of approximately $2.4 million. The Company has
      invested an additional amount for development of the property of approximately $1.9 million. The debt
      has financial covenants which (1) require the Company to keep a debt to equity ratio of 2:1, and (2) keep
      liquid assets in excess of $7 million, except for 2006 and first and second quarters of 2007 in which it is
      required to maintain $4 million in liquid assets, which includes $2.2 million of restricted cash, in the
      financial institution. During February 2007, the Company obtained a release from the bank whereby its
      restricted cash was released, except for $315,000, and financial covenants for the third quarter of 2007
      were modified requiring the Company to keep liquid assets of only $4 million. Should the Company be
      unable to raise additional capital, it will be in default of the bank‘s covenants in 2007. As discussed in
      subsequent events, the Company has obtained a commitment letter from another lending source whereby
      the Company will refinance its existing facility. The Company will not be subject to any financial
      covenants with its new facility.
      In December 2006, the Company paid cash and issued a note payable of $792,000 with a maturity date of
      December 21, 2007 at an interest rate of the bank‘s prime rate plus 0.5% (currently 8.75%) for the
      purchase of approximately 30 acres of land. The terms of the note payable call for interest only, payable
      quarterly, and the balance of the principal and accrued interest due and payable upon maturity. The note
      is secured by the real estate purchased. The note has the same covenants as the line of credit above and
      the bank has granted the same covenant changes and waivers. As discussed in subsequent events, the
Company has obtained a commitment letter from another lending source whereby the Company will
refinance the existing note.


                                        F-18
Table of Contents


                                            Wilson Holdings, Inc.
                                 Notes to Consolidated Financial Statements
                            For the Years Ended December 31, 2006, 2005 and 2004

(7)   Liquidity and Capital Resources (continued)
      Capital Resources
      During June 2006, the Company refinanced $6.2 million of notes. The terms of the new loan include a
      $6.2 million principal balance; an interest rate indexed to the New York prime rate plus 0.75% per annum
      with a floor of 7.0%, a term not to exceed 24 months and required principal reductions of $800,000 per
      quarter beginning June 2007. Principal reductions from sales of real estate are credited towards the
      $800,000 per quarter requirement. As discussed in subsequent events, the Company has obtained a
      commitment letter from another lending source to refinance this note.
      To address its cash needs, the Company has engaged an investment banker to assist it in raising capital.
      The Company has raised approximately $16.8 million of subordinated convertible debt. It raised $10
      million of subordinated convertible debt in December 2005 maturing December 1, 2012, at 5% per
      annum with semi-annual interest payments due May and December, beginning in May 2006. In
      September 2005, the Company obtained a $2 million line of credit for interim construction financing
      which was paid at December 31, 2006. In March 2006, it obtained an additional construction loan of
      approximately $3.0 million, which will be repaid following completion, through lot sales. The Company
      must make cumulative principal reductions in the aggregate amount of approximately $494,000 every
      three months beginning in the fourth quarter of 2006. At December 31, 2006, it had drawn approximately
      $2.9 million with approximately $2.2 million owed at December 31, 2006. In September and October
      2006, the Company issued an additional $6.75 million in aggregate principal amount of subordinated
      convertible debt notes due September 1, 2013, bearing interest at 5% per annum with semi-annual interest
      payments due February 1 and September 1 beginning in February 1, 2007. These interest payments will
      be paid from cash and total approximately $338,000 per year.
      The Company also may participate in joint ventures to develop and secure additional land holdings,
      which would decrease the need for cash, compared to purchasing the property outright, but could pose
      other risks such as dependence on the financial condition of the joint venture partner, which would be
      disclosed upon reaching definitive agreements.
      Based on current financial projections prepared by management, the Company expects to have adequate
      capital resources to execute on its existing projects for the year ending December 31, 2007. These
      financial projections are prepared based on assumptions and estimates which will significantly change
      during the year. Accordingly, no assurance can be made that the Company will have adequate capital to
      execute on its current business strategy during 2007.
(8)   Commitments and
      Contingencies
      Options Purchase Agreements
      In order to ensure the future availability of land for development and homebuilding, the Company plans
      to enter into lot-option purchase agreements with unaffiliated third parties. Under the proposed option
      agreements, the Company pays a stated deposit in consideration for the right to purchase land at a future
      time, usually at predetermined prices or a percentage of proceeds as homes are sold. These options
      generally do not contain performance requirements from the Company nor obligate the Company to
      purchase the land. In order for the Company to start or continue the development process on optioned
      land, it may incur development costs on land it does not own, before it exercises its option agreement. At
      December 31, 2006, the Company had capitalized development costs of $2.5 million, all of which is
      non-refundable if the Company does not exercise the option and purchase the underlying land.
      In December 2006, the Company made a non-refundable payment of $15,000 and entered into an option
      to purchase Green Builders, Inc. Under the purchase option agreement, the Company has a two year
      exclusive right to purchase Green Builders, Inc. at the fair market value on the date of the exercise of the
      option by the Company or, if the parties are unable to agree on the fair market value, at a price that will
      be based on an independent valuation of Green Builders, Inc. as of the date of exercise of the option by
      the Company.
F-19
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                                            Wilson Holdings, Inc.
                                 Notes to Consolidated Financial Statements
                            For the Years Ended December 31, 2006, 2005 and 2004

(8)   Commitments and Contingencies (continued)
      Options Purchase Agreements (continued)
      During the years ended December 31, 2006 and 2005, Green Builders, Inc. was a homebuilding services
      customer of the company. Revenue from homebuilding related services amounted to $1.8 million and $0
      for the years ended December 31, 2006 and 2005, respectively. The pro forma results of the acquisition of
      Green Builders, Inc. are not expected to be material as the financial results of Green Builders, Inc. are
      already consolidated under FIN 46(R) as the Company is deemed to be a primary beneficiary.
      Non-Compete
      Clark Wilson, the Company‘s executive officer, served as the President and Chief Executive Officer of
      Clark Wilson Homes, Inc., a subsidiary of Capital Pacific Holdings, from 1992 to 2002. Pursuant to an
      agreement executed in connection with the sale of Clark Wilson Homes to J.M. Peters Company in 1994,
      Mr. Wilson agreed not to engage in the businesses of acquisition, ownership, development, construction
      or sale of dwelling units in certain portions of the United States in which the Company plan to do
      business, including the Central Texas region, as well as in any other county in the United States in which
      J.M. Peters Company conducts business.
      The stated term of the covenant not to compete is five years from the date his employment terminated, for
      certain enumerated counties in Texas, including the counties in and around Austin, Dallas, Houston and
      San Antonio, Texas, and for three years for certain other counties in the United States, beginning on the
      date Mr. Wilson‘s employment with Capital Pacific terminated, which occurred in 2002. The covenant
      not to compete relates to the business of building homes and not the purchase and sale of real estate as
      contemplated by us. In the Company‘s opinion, its current activities do not violate the terms of the
      covenant and it do not intend to engage in homebuilding activities
      Non-Compete
      until the covenant terminates in June of 2007. The Company‘s consolidation of its homebuilding clients
      required under certain reporting requirements, specifically FIN 46(R) should not be construed as a legal
      merger of the entities. If J. M. Peters determines that these activities do violate the covenant, and if that
      determination results in a claim, the Company will likely incur material legal costs as a result.
      The Company is not aware of any material pending legal proceedings, or other litigation incidental to our
      business, which would have a material adverse affect, to which the Company or any of its subsidiaries is
      a party or of which any of their property is the subject.
      Lease Obligations
      In September 2006, the Company entered into an agreement to lease approximately 5,000 square feet for
      its corporate offices, which it began occupying on October 1, 2006. The lease requires monthly payments
      of approximately $6,042 per month for 36 months. The Company also has other office equipment leases.
      The Company‘s future minimum lease payments are as follows:
                                      2007    2008   2009   2010  2011 Thereafter
              Lease obligations    $ 123,175 105,875 81,287 3,548   240    -


      Severance Agreement
      During 2006, the Company entered into an employment agreement with Mr. Daniel Allen, Chief
      Financial Officer. The employment agreement provided for payment of severance benefits where the
      termination is without ―cause‖. The severance benefits included payment of one year of base salary;
      continue to provide health benefits for a period of twelve months, and acceleration of vesting of stock
      options issued to him. Mr. Allen involuntarily resigned from the Company effective November 9, 2006.
      Effective November 9, 2006 the Company has continued to pay for Mr. Allen‘s salary and benefits. At
      December 31, 2006, the Company had approximately $180,000 accrued for this contingency.
F-20
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                                            Wilson Holdings, Inc.
                                 Notes to Consolidated Financial Statements
                            For the Years Ended December 31, 2006, 2005 and 2004

(9)   Income Taxes
      Prior to the merger on May 31, 2005, the partnership gains and losses passed through to the individual
      partners and income taxes are not applicable to previous periods. A reconciliation of expected income
      tax benefit (computed by applying a statutory income tax rate of 34% to income before income tax
      expense) to total tax expense (benefit) in the accompanying consolidated statements of operations
      follows:
                                                                          2006                2005

            Tax benefit at Statutory Rate (34%)                   $        4,893,639            505,779
            State income tax benefit                                         379,977             59,503
            Loss on fair value of derivatives                            (3,218,394)                  -
            Other                                                            194,615                  -
            Net increase in valuation allowance                   $      (2,249,837)          (565,282)
                                                                                   -                  -

      The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and
      liabilities at December 31, 2006 and 2005 are as follows:
                                                                          2006                2005
            Deferred tax assets (liabilities)
                Deferred stock compensation                        $         207,049                  -
                Accrued expenses                                               38,000                 -
                Other temporary differences                                   (4,107)                 -
                Net operating loss carryforwards                           2,574,177            565,282
                Valuation allowance                                      (2,815,119)          (565,282)
                  Net deferred tax asset (liability)               $                -                 -



      In assessing the realizability of deferred tax assets, management considers whether it is more likely than
      not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of
      deferred tax assets is dependent upon the generation of future taxable income during the periods in which
      those temporary differences become deductible. Management considers the scheduled reversal of
      deferred tax liabilities, projected future taxable income, and tax planning strategies in making this
      assessment. Based upon the lack of historical taxable income and projections for future taxable income
      over the periods which the deferred tax assets are deductible, management believes it is more likely than
      not the Company will not realize the benefits of these deductible differences. For the years ended
      December 31, 2006 and 2005, the Company had net operating loss carryforwards of approximately $6.7
      million and $1.5 million. The Company has provided a 100% valuation allowance on its deferred tax
      assets.
(10) Indebtedness
      The following schedule lists the Company‘s notes payable and lines of credit balances at December 31,
      2006 and 2005:
                      (Thousands)                                       Maturity Date                2006     2005
2005 $10MM, 5% Subordinated convertible notes, net                      December
of discount of $4,288 and $5,002 MM, respectively                       2012              $          5,712    4,998
2006 $6.75MM, 5% Subordinated convertible notes,                        September
net of discount of $4,066                                               2013                         2,684         -
                                                                               October
Notes payable, 7%, seller financed, due 2009 and 2010                          2009/10               2,474        -
Notes payable, land                                                     June 2008                    6,200    6,700
Notes payable, family trust                                             April 2008                     280      280
                                                        December
Notes payable, land, due 2009                           2009                  792        -
Line of Credit, $15.5MM purchase and development        October 2008        3,587        -
$3 MM Line of Credit, development, due March 2008       March 2008          2,250        -
$5 MM master line of Credit construction, due January
2007                                                    January 2007          600        -
                            Total                                      $   32,933   24,579


                                               F-21
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                                           Wilson Holdings, Inc.
                                Notes to Consolidated Financial Statements
                           For the Years Ended December 31, 2006, 2005 and 2004

(10) Indebtedness (continued)
      The following schedule provides the principal payments due related to notes payable and lines of credit
      for the next five years, and thereafter:
         (Thousands)            Balance Due       2007        2008        2009         2010         Thereafter
Subordinated convertible debt $      16,750              -          -            -              -        16,750
Notes payable                         9,746          4,317      4,406          543            480              -
Lines of Credit                       6,437          2,575        275        3,587              -              -
Total                         $      32,933          6,892      4,681        4,130            480        16,750

      In June 2005, the Company issued notes payable of approximately $6.9 million with a maturity date of
      June 30, 2006 at an escalating interest rate for approximately 74% of 736 acres of land. These notes had a
      total balance of approximately $6.7 million at December 31, 2005. The Company reduced the principal
      balance through sales of acreage tracts to approximately $6.2 million and during June 2006, it refinanced
      the notes payable, land, with a new lender. The terms of the new loan include a $6.2 million principal
      balance, an interest rate indexed to the New York prime rate plus 0.75% per annum with a floor of 7.0%,
      a term not to exceed 24 months or June 2008, and required principal reductions of $800,000 per quarter
      beginning June 12, 2007. Principal reductions from sales of the real estate are credited towards the
      $800,000 per quarter requirement.
      In November of 2005, the Company paid cash and issued a long-term note payable of approximately
      $425,000 with a maturity date of February 15, 2008 at an interest rate of 6.5% for the purchase of
      approximately 31 acres of land. The terms of the note payable called for one installment of approximately
      $213,000 plus interest, payable on February 15, 2007, and the balance of the principal and accrued
      interest due and payable on February 15, 2008. The interest rate would increase to 12% on matured,
      unpaid amounts. The note can be prepaid at anytime without penalty and is secured by the real estate
      purchased. The Company repaid the note in March 2006.
      In October 2003, a predecessor entity of the Company exchanged notes payable of approximately
      $280,000 and approximately $95,000 in cash for approximately 15 acres of land in Travis County, Texas.
      Interest on the note was 8% per annum, payable quarterly with a maturity date of October 7, 2008. In
      March of 2005, the note was purchased by trusts belonging to some members of Clark Wilson‘s family.
      The interest rate remained the same at 8% per annum but the maturity date changed to April 4, 2006. In
      March 2006, the Company renegotiated an extension on the notes payable, family trust, 8%, due April
      2008. All other terms remained the same.
      In December of 2006, the Company paid cash and issued notes payable, land, due 2009, a long-term note
      payable of $792,000 with a maturity date of December 21, 2007 at an interest rate of the bank‘s prime
      rate plus 0.5% (currently 8.75%) for the purchase of approximately 30 acres of land. The terms of the
      note payable called for interest only payable quarterly, and the balance of the principal and accrued
      interest due and payable upon maturity. The note is secured by the real estate purchased.
      In September 2005, the Company secured a $2 million one year line of credit master construction loan
      that provides for draws and repayments for construction and lots. Interest is payable monthly and each
      draw must be repaid within one year. At December 31, the interest rate on borrowings was 7.25% per
      annum. Loans made on specific lots and construction is collateralized by such property and construction
      with interest due monthly. Mr. Wilson personally guaranteed the Loan. The Company had drawn
      approximately $254,000 against the loan at December 31, 2005 which was the balance owed. During
      May 2006, the lending institution released Mr. Wilson‘s personal guarantee and extended the maturity
      date to April 2007. As of December 31, 2006 the balance owed on the line is zero.
      The Company has a $5 million master construction line of credit that matures on January 11, 2007, used
      by one of its homebuilding clients. Under the agreement, the Company, as Guarantor, is subject to certain
      covenants. Among others, the Company must maintain a minimum tangible net worth of $2.5 million, its
      debt to equity ratio shall not exceed 7.5 to 1 as of the end of any calendar quarter, and Mr. Clark Wilson
      must remain active in the day to day business management affairs of the Company. At December 31,
      2006, approximately $600,000 drawn against the line and the Company was in compliance with the above
loan covenants. As discussed in subsequent events, the line of credit was replaced in February 2007,
increased to $10 million and the maturity date is February 6, 2008.


                                           F-22
Table of Contents


                                             Wilson Holdings, Inc.
                                  Notes to Consolidated Financial Statements
                             For the Years Ended December 31, 2006, 2005 and 2004

(10)    Indebtedness (continued)
       In March 2006, the Company secured, from a different lending institution, a $3.0 million line of credit,
       development loan, maturing on March 30, 2008, at prime plus 0.50% with a minimum floor of 7.00%,
       and interest payable monthly. The loan is secured by property being developed into single-family home
       lots, totaling approximately 32.6 acres located in Williamson County, Texas. Each of the lots will be
       released upon payment to the bank of either 125% of the loan basis or 90% of the net sales proceeds for
       each lot to be released. The Company must make cumulative principal reductions in the aggregate
       amount of approximately $494,000 every three months in the calendar year beginning at the end of the
       first calendar month in which the completion date occurs, which was during July, 2006. At December 31,
       2006, the Company had drawn approximately $3 million against the line of credit and repaid
       approximately $712,000 with a balance owed of approximately $2.3 million.
       During October 2006, the Company secured a $15.5 million line of credit for the purchase and
       development of approximately 534 acres located in eastern Travis County and subsequently closed on the
       purchase of the property. The first phase of the loan is $10.2 million and covers the purchase, a portion of
       the first two phases of construction, offsite utilities and provides letters of credit totaling $4.3 million,
       required for the development of municipal utility facilities, at the bank‘s prime rate plus 0.50%, and is
       secured by the underlying property. Loan origination fees were 1% of the $10.2 million. The debt has
       financial covenants which (1) require the Company to keep a debt to equity ratio of 2:1, and (2) keep
       liquid assets in excess of $7 million, except for 2006 and first and second quarters of 2007 in which it is
       required to maintain $4 million in liquid assets, which includes $2.2 million of restricted cash, in the
       financial institution. During February 2007, the Company obtained a release from the bank whereby its
       restricted cash was released, except for $315,000, and financial covenants for the third quarter of 2007
       were modified requiring the Company to keep liquid assets of only $4 million. Should the Company be
       unable to raise additional capital, it will be in default of the bank‘s covenants in 2007. As discussed in
       subsequent events, the Company has obtained a commitment letter from another lending source whereby
       the Company will refinance the existing facility. Interest is payable quarterly, commencing January 2007.
       Principal is payable in quarterly installments commencing 90 days after completion of construction which
       is projected to be during 2007. The required pay down amount under the loan is equal to 75% of gross
       sales price as set forth in the Company‘s contracts for sales of lots. Its current projects require pay down
       amounts of approximately $600,000 per quarter. The purchase price of the property was approximately
       $8.5 million, with $2.5 million of owner financing, $3.6 million from the bank loan and cash from us of
       approximately $2.4 million. The Company has invested an additional amount for development of the
       property of approximately $1.9 million.
       In December of 2006, the Company paid cash and issued notes payable, land, due 2009, a long-term note
       payable of $792,000 with a maturity date of December 21, 2007 at an interest rate of the bank‘s prime
       rate plus 0.5% (currently 8.75%) for the purchase of approximately 30 acres of land. The terms of the
       note payable called for interest only payable quarterly, and the balance of the principal and accrued
       interest due and payable upon maturity. The note is secured by the real estate purchased.
       As part of the purchase of 534 acres in Travis County, the Company entered into four notes payable,
       seller financed due 2009 and 2010, with a cumulative balance of approximately $2.5 million. The notes
       payable have a maturity date of October 12, 2010. Three of the notes payable with a cumulative balance
       of $1.9 million are at an interest rate of 7.0% and the fourth note payable issued for approximately $0.6
       million is at an interest rate of the Wall Street Journal‘s prime rate plus 2.0% (currently 10.25%). The
       terms of the notes payable call for annual principal repayments of $1.1 million in 2007, $0.3 million in
       2008, $0.5 million in 2009 and $0.5 million in 2010, payable on October 12. The notes can be prepaid at
       anytime without penalty and is secured by the real estate purchased.
       2005, $10MM, 5%, Subordinated Convertible Debt.
       On December 19, 2005, the Company issued $10 million in aggregate principal amount of 5%
       subordinated convertible debt due December 1, 2012 to certain purchasers. The following are the key
       features of the subordinated convertible debt: Interest accrues on the principal amount of the subordinated
       convertible debt at a rate of 5% per annum, the debt is payable semi-annually on May 1 and December 1
       of each year, with interest payments beginning on June 1, 2006. The subordinated convertible debt is due
on December 1, 2012 and is convertible, at the option of the holder, into shares of our common stock at a
conversion


                                           F-23
Table of Contents


                                             Wilson Holdings, Inc.
                                  Notes to Consolidated Financial Statements
                             For the Years Ended December 31, 2006, 2005 and 2004

(10)    Indebtedness (continued)
       2005, $10MM, 5%, Subordinated Convertible Debt (continued)
       price of $2.00 per share. The conversion price is subject to adjustment for stock splits, reverse stock
       splits, recapitalizations and similar corporate actions. An adjustment in the conversion price is also
       triggered upon the issuance of certain equity or equity-linked securities with a conversion price, exercise
       price, or share price less than $2.00 per share. The anti-dilution provisions state the conversion price
       cannot be lower than $1.00 per share.
       The Company may redeem all or a portion of the subordinated convertible debt after December 1, 2008 at
       a redemption price that incorporates a premium that ranges from 3% to 10% during the period beginning
       December 1, 2008 and ending on the due date. In addition, the redemption price will include any accrued
       but unpaid interest on the subordinated convertible debt. Upon a change in control event, each holder of
       the subordinated convertible debt may require us to repurchase some or all of its subordinated convertible
       debt at a purchase price equal to 100% of the principal amount of the subordinated convertible debt plus
       accrued and unpaid interest. The due date may accelerate in the event the Company commences any case
       relating to bankruptcy or insolvency, or related events of default. The Company‘s assets will be available
       to pay obligations on the subordinated convertible debt only after all senior indebtedness has been paid.
       The subordinated convertible debt has a registration rights agreement whereby the Company must use its
       best efforts to have its associated registration statement effective not later than 120 days after the closing
       (December 19, 2005). Further, the Company must maintain the registration statement in an effective
       status until the earlier to occur of (i) the date after which all the registrable shares registered thereunder
       shall have been sold and (ii) the second anniversary of the later to occur of (a) the closing date, and (b)
       the date on which each warrant has been exercised in full and after which by the terms of such Warrant
       there are no additional warrant shares as to which the warrant may become exercisable; provided that in
       either case, such date shall be extended by the amount of time of any suspension period. Thereafter the
       Company shall be entitled to withdraw the registration statement, and upon such withdrawal and notice to
       the investors, the investors shall have no further right to offer or sell any of the registrable shares pursuant
       to the registration statement. The registration statement filed pursuant to the registration rights agreement
       was declared effective by the SEC on August 1, 2006.
       The Company also issued warrants to purchase an aggregate of 750,000 shares of common stock to the
       purchasers of the subordinated convertible debt, 562,500 shares of which were vested on June 30, 2006.
       The warrants were exercisable only upon the occurrence of certain events and then only in the amount
       specified as follows: (i) with respect to 25% of the warrant shares, on February 3, 2006 if this registration
       statement shall not have been filed with the SEC by such date (the Company filed a Form SB-2
       registration statement on February 2, 2006); (ii) with respect to an additional 25% of the warrant shares,
       on April 19, 2006 if this registration statement shall not have been declared effective by the SEC by such
       date; (iii) with respect to an additional 25% of the warrant shares, on May 19, 2006 if this registration
       statement shall not have been declared effective by the SEC by such date; and (iv) with respect to the
       final 25% of the warrant shares, on June 18, 2006 if this registration statement shall not have been
       declared effective by the SEC by such date. Management has recorded the fair value of these warrants
       due to the uncertainty surrounding the timeline of getting the registration statement effected and the high
       probability that these warrants would be issued. The Company received notice that the shelf registration
       relating to these warrants was declared effective on August 1, 2006 and 562,500 of these warrants have
       vested and the remaining 187,500 warrants will never vest.
       Wilson Holdings accounts for all derivative financial instruments in accordance with SFAS No. 133. The
       derivative financial instruments are recorded as liabilities in the consolidated balance sheet and measured
       at fair value. These derivative liabilities will be marked-to-market each quarter with the change in fair
       value recorded in the income statement.
       The convertible note is a hybrid instrument which contains both freestanding derivative financial
       instruments and more than one embedded derivative feature which would individually warrant separate
       accounting as derivative instruments under SFAS 133. The freestanding derivative financial instruments
are the penalty warrants, which were initially valued individually and totaled approximately $653,000.
The various embedded derivative features have been bundled together as a single, compound embedded


                                          F-24
Table of Contents


                                             Wilson Holdings, Inc.
                                  Notes to Consolidated Financial Statements
                             For the Years Ended December 31, 2006, 2005 and 2004

(10)    Indebtedness (continued)
       2005, $10MM, 5%, Subordinated Convertible Debt (continued)
       derivative instrument that has been bifurcated from the debt host contract, referred to as the ―single
       compound embedded derivatives.‖ The single compound embedded derivative features include the
       conversion feature within the convertible note, the early redemption option and the fixed price conversion
       adjustment. The initial value of the single compound embedded derivative liability was bifurcated from
       the debt host contract and recorded as a derivative liability, which resulted in a reduction of the initial
       carrying amount (as unamortized discount) of the convertible note of approximately $4.4 million. The
       unamortized discount will be amortized using the straight-line method over the life of the convertible
       note, or 7 years. The penalty warrants were valued based on the fair value of the Company‘s common
       stock on the issuance date of $1.60, using a Black-Scholes valuation model, risk free interest rate of
       4.25%; dividend yield of 0%; weighted-average expected life of the warrants of 10 years; and a 60%
       volatility factor. The unamortized discount is being amortized to interest expense over the 7-year life of
       the notes using the straight-line method.
       The Company also incurred closing costs of $588,000 which included placement agent fees of $450,000,
       plus, reimbursement of expenses to the placement agent of $125,000, plus 750,000 fully vested warrants
       to purchase the Company‘s common stock at $2.00 per share with a 10 year exercise period, valued at
       $829,000, for a total of $1.4 million, recorded as debt issuance costs, to be amortized over the 7-year life
       of the notes using the effective interest rate method. These warrants were valued based on the fair value
       of the Company‘s common stock of $1.60, using a Black-Scholes valuation model, at a $2.00 exercise
       price, risk free interest rate of 4.25%; dividend yield of 0%; weighted-average expected life of warrants
       of 10 years; and a 60% volatility factor.
       Using a Black-Scholes model, the fair value of the derivative liability with single compound embedded
       derivatives within convertible note was computed at approximately $4.4 million as of December 31,
       2005, using substantially the same assumptions as stated above. The fair value of the additional
       embedded derivative instruments was immaterial at December 31, 2005. The value of this single,
       compound embedded derivative instrument was bifurcated from the debt host contract and recorded as a
       derivative liability which resulted in a reduction of the initial carrying amount (as unamortized discount)
       to the notional amount of the convertible note.
       Subordinated Convertible Note at December 31, 2006 and at December 31, 2005

                                                                                2006              2005
        Notional balance                                                $      10,000,000        10,000,000
        Unamortized discount                                                    4,287,857         5,002,500
        Subordinated convertible debt balance, net of unamortized
        discount                                                        $        5,712,143        4,997,500


       The above derivative liabilities were re-valued as of December 31, 2005 based on fair value of the
       Company‘s common stock of $1.64, using an independent valuation, and substantially the same
       assumptions stated above. This resulted in a loss on fair value of derivative liabilities and an increase in
       the derivative liabilities by approximately $173,000.
       During the first six months ended June 30, 2006, the derivative liabilities were re-valued based on the fair
       value of the Company‘s common stock of $2.26, using an independent valuation. These warrants were
       valued using a Black-Scholes valuation model, at a $2.00 exercise price, risk free interest rate of 4.25%;
       dividend yield of 0%; weighted-average expected life of warrants of 10 years; and a 60% volatility factor.
       The valuation resulted in a loss on the fair value of the derivative liabilities and an increase in the
       derivative liabilities by approximately $3.6 million. During the three months ended September 30 2006,
       the registration statement to register the underlying shares of the subordinated convertible debt and
       warrants became effective.
The derivatives were revalued on the effective date, using the same assumptions above, resulting in a
charge to Loss on Fair Value of Derivatives of $460,000. In accordance with EITF 00-19, the related
derivative liabilities were reclassified as equity as additional paid in capital, and totaled approximately
$8.6 million as of September 30, 2006.


                                             F-25
Table of Contents


                                             Wilson Holdings, Inc.
                                  Notes to Consolidated Financial Statements
                             For the Years Ended December 31, 2006, 2005 and 2004

(10)    Indebtedness (continued)
       2006, $6.75MM, 5%, Subordinated Convertible Debt
       On September 29, 2006, the Company raised capital of $6.75 million in aggregate principal amount of
       5% subordinated convertible debt due September 1, 2013, to certain purchasers. As of December 31,
       2006, $6.75 million had been received in cash, the remaining $250,000 is a receivable from an owner of
       land that the Company has under option to purchase. The Company has delayed the closing of the parcel
       and does not expect to receive the additional $250,000. The following are the key features of the
       subordinated convertible debt: Interest accrues on the principal amount of the subordinated convertible
       debt at a rate of 5% per annum, the interest is payable semi-annually on February 1 and September 1 of
       each year, with interest payments beginning on February 1, 2006. The subordinated convertible debt is
       due on September 1, 2013 and is convertible, at the option of the holder, into shares of common stock at a
       conversion price of $2.00 per share. The conversion price is subject to adjustment for stock splits, reverse
       stock splits, recapitalizations and similar corporate actions. An adjustment in the conversion price is also
       triggered upon the issuance of certain equity or equity-linked securities with a conversion price, exercise
       price, or share price less than $2.00 per share. The anti-dilution provisions state the conversion price
       cannot be lower than $1.00 per share.
       The Company may redeem all or a portion of the subordinated convertible debt after September 1, 2009
       at a redemption price that incorporates a premium that ranges from 3% to 10% during the period
       beginning September 1, 2009 and ending on the due date. In addition, the redemption price will include
       any accrued but unpaid interest on the subordinated convertible debt. Upon a change in control event,
       each holder of the subordinated convertible debt may require us to repurchase some or all of its
       subordinated convertible debt at a purchase price equal to 100% of the principal amount of the
       subordinated convertible debt plus accrued and unpaid interest. The due date may accelerate in the event
       the Company commences any case relating to bankruptcy or insolvency, or related events of default. The
       Company‘s assets will be available to pay obligations on the subordinated convertible debt only after all
       senior indebtedness has been paid.
       The subordinated convertible debt has a registration rights agreements (RRA), whereby the Company
       must use its best efforts to have its associated registration statement effective not later than 120 days after
       the closing (i.e., January 27, 2007). Further, the Company must maintain the registration statement in an
       effective status until the earlier to occur of (i) the date after which all the registrable shares registered
       thereunder shall have been sold and (ii) the second anniversary of the later to occur of (a) the closing
       date, and (b) the date on which each warrant has been exercised in full and after which by the terms of
       such warrant there are no additional warrant shares as to which the warrant may become exercisable;
       provided that in either case, such date shall be extended by the amount of time of any suspension period.
       Thereafter the Company shall be entitled to withdraw the registration statement, and upon such
       withdrawal and notice to the investors, the investors shall have no further right to offer or sell any of the
       registrable shares pursuant to the registration statement.
       The Company also issued warrants to purchase an aggregate of 506,250 shares of common stock to the
       purchasers of the subordinated convertible debt. The warrants are exercisable only upon the occurrence of
       certain events and then only in the amount specified as follows: (i) with respect to 25% of the warrant
       shares, on November 13, 2006 if the registration statement shall not have been filed with the SEC by such
       date (the Company filed a Form SB-2 registration statement on October 16, 2006); (ii) with respect to an
       additional 25% of the warrant shares, on January 27, 2007 if the registration statement shall not have been
       declared effective by the SEC by such date; (iii) with respect to an additional 25% of the warrant shares,
       on February 26, 2007 if the registration statement shall not have been declared effective by the SEC by
       such date; and (iv) with respect to the final 25% of the warrant shares, on March 28, 2007 if the
       registration statement shall not have been declared effective by the SEC by such date. Management has
       recorded 75% of the fair value of these warrants since it has filed the initial registration in (i) above so the
       first 25% of the warrants don‘t vest, and due to the uncertainty surrounding the timeline of getting the
       registration statement effected and the high probability that the remaining warrants would be issued.
       The Company accounts for all derivative financial instruments in accordance with SFAS No. 133. The
       derivative financial instruments are recorded as liabilities in the consolidated balance sheet and measured
F-26
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                                              Wilson Holdings, Inc.
                                   Notes to Consolidated Financial Statements
                              For the Years Ended December 31, 2006, 2005 and 2004

(10)       Indebtedness (continued)
       2006, $6.75MM, 5%, Subordinated Convertible Debt (continued)
       at fair value. When available, quoted market prices are used in determining fair value. However, if quoted
       market prices are not available, the Company estimates fair value using either quoted market prices of
       financial instruments with similar characteristics or other valuation techniques. These derivative liabilities
       will be marked-to-market each quarter with the change in fair value recorded in the income statement.
       The Company employed an independent valuation firm to calculate the fair values of the derivatives.
       The convertible note is a hybrid instrument which contains both freestanding derivative financial
       instruments and more than one embedded derivative feature which would individually warrant separate
       accounting as derivative instruments under SFAS 133. The freestanding derivative financial instruments
       are the penalty warrants, which were initially valued individually and totaled approximately $698,000.
       The penalty warrants value were based on the fair value of the Company‘s common stock on the issuance
       date of $1.91, using a Black-Scholes approach, risk free interest rate of 4.64%; dividend yield of 0%;
       weighted-average expected life of the warrants of 10 years; and a 60% volatility factor.
       At December 31, 2006, the penalty warrants were revalued at approximately $1.9 million based on the
       market value of the Company‘s common stock of $6.00, using the same methodology as above with the
       following changes: risk free interest rate of 4.71%, weighted-average expected life of the warrants of 9.75
       years, and a 45% volatility factor giving each option a fair value of $4.96. The derivative liability for
       contingent warrants will be increased for the increase in value and total approximately $1.2 million and a
       loss will be recognized.
       The various embedded derivative features have been bundled together as a single, compound embedded
       derivative instrument that has been bifurcated from the debt host contract, referred to as the ―single
       compound embedded derivatives‖. In the analysis of the fair value of the embedded derivatives,
       consideration was given to the following scenarios: (1) the Company experiences an event of default on
       the notes and they are redeemed by the holders, (2) the
       Company experiences a change in control and the notes are redeemed by the holders, (3) the notes are
       converted into Company stock by the holders, or (4) the notes are repurchased by the Company.
       In order to consider these scenarios a decision tree was set up taking into account their likelihood of
       occurring, given assumptions provided by the Company.
       •      In year one, there is a 30% chance of default on the notes.
       •      In year two there is a 15% chance of default.
       •      Thereafter, there is no chance of default on the notes.

       This was broken down into approximate biannual chances of 15% in the first two periods and 7.5% in the
       next two biannual periods in the probability weighted cash flow model. In years four through seven, there
       is a 20% chance of change in control each year. This was broken down into a 10% chance of change in
       control per biannual period beginning after year three. It is assumed the Company would elect to
       repurchase the shares once the stock price reaches $4 per share after two years. If the share price reached
       $4 per share and the Company elected to redeem the notes, the note holders would most likely convert
       their notes before they could be repurchased. It is highly likely that the Company would issue new equity,
       but the price is not expected to drop below $2 per share which would not cause any repricing of the
       convertible shares.
       Finally, the holders of the notes would most likely exercise the conversion feature of the notes once the
       share price reaches $4 per share. Given these assumptions, the possible outcomes are redemption of the
       notes upon default or a change in control, or a conversion of the notes into stock once a $4 per share price
       is reached. These percentage chances are incorporated into the embedded derivatives scenario model. In
       order to determine the expected time to conversion of the notes, a binomial model was used. Once this
       time was known, a probability weighted cash flow model was developed.
       The risk-free rate was the next input required for the model. Although there is no true risk free security
       from which to derive a risk-free rate, we utilized Treasury securities backed by the U.S. government,
F-27
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                                             Wilson Holdings, Inc.
                                  Notes to Consolidated Financial Statements
                             For the Years Ended December 31, 2006, 2005 and 2004

(10)    Indebtedness (continued)
       2006, $6.75MM, 5%, Subordinated Convertible Debt (continued)
       which reflect minimal level of reinvestment risk. Because the contractual life of the Notes was seven
       years, it used the yield on the seven-year U.S. Treasury note as of the Valuation Date of 4.60%.
       A proprietary binomial model was used in the valuation. The model began with a traditional binomial
       model based on the Cox, Ross, and Rubinstein binomial-lattice model first introduced in 1979. This
       model requires the same six parameters as Black- Scholes model, which are:
         1. The stock price
         2. The exercise price
         3. The life of the option
         4. The expected dividend yield
         5. The risk-free rate of interest
         6. The expected stock price volatility
       The Cox, Ross and Rubinstein model provides an equivalent valuation for the conversion feature as the
       Black-Scholes model. The model was then adjusted to account for the following additional factor relevant
       to the conversion feature: Early exercise behavior—since investors in the notes are expected to convert
       when the stock price reaches $4 per share, it is likely that the notes will be converted prior to the notes
       due date. Given the assumptions from Management, the notes are expected to be converted into common
       stock after approximately four years, in the model which assumes this occurs on September 1, 2010.
       Based on discussions with Management, it was assumed that the Company would have a debt rating of
       between CC and CCC+. Based on the analysis of 109 non-convertible bonds with maturities of between
       five to seven years and debt ratings of between CC and CCC+, the average yield to maturity was 11.01%
       as of November 3, 2006. Therefore, it elected to use 11% as an appropriate discount rate for the
       Company‘s debt. This discount rate was incorporated into both discounted cash flow models. In order to
       determine the fair value for the embedded derivatives the valuation firm developed cash flow models for
       the embedded derivatives scenario and a normal bond scenario without embedded derivatives. The
       difference between the two is the fair value of the embedded derivatives. The difference between the
       present value of the debt with the embedded derivatives and without gives a fair value of approximately
       $7,739,054. The initial value of the single compound embedded derivative liability was bifurcated from
       the debt host contract and recorded as a derivative liability, which resulted in a reduction of the initial
       carrying amount (as unamortized discount) of the convertible note of approximately $3.4 million. The
       unamortized discount will be amortized using the effective interest rate method over the life of the
       convertible note, or 7 years.
       At December 31, 2006 the compound embedded derivatives were revalued using the same methodology.
       The difference between the present value of the debt with the embedded derivatives and without gives a
       fair value of approximately $7,739,054. The initial value of the single compound embedded derivative
       liability was bifurcated from the debt host contract and recorded as a derivative liability, which resulted in
       a reduction of the initial carrying amount (as unamortized discount) of the convertible note of
       approximately $3.4 million.
       The Company also incurred closing costs of $140,000, including placement agent fees of $70,000, plus,
       reimbursement of expenses to the placement agent of $25,000, for a total of $95,000, recorded as debt
       issuance costs, to be amortized over the 7-year life of the notes using the effective interest rate method.
       Convertible Note at December 31, and inception:
                                                                              2006            Inception
        Notional balance                                          $           6,750,000         6,500,000
        Unamortized discount                                                  4,066,267         4,110,844
        Subordinated convertible debt balance, net of unamortized
        discount                                                  $           2,683,733         2,389,156
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                                             Wilson Holdings, Inc.
                                  Notes to Consolidated Financial Statements
                             For the Years Ended December 31, 2006, 2005 and 2004

(10)    Indebtedness (continued)
       2006, $6.75MM, 5%, Subordinated Convertible Debt (continued)
       The following is a summary of derivative liabilities:
                                                                             2006            Inception
         Convertible note compound embedded derivatives               $      7,462,659         3,412,500
         Warrants                                                            1,883,252           698,344
         Total derivative liabilities                                 $      9,345,911         4,110,844
(11) Common Stock
     The Company is authorized to issue 80,000,000 shares of common stock. Each common stockholder is
     entitled to one vote per share of common stock owned.
(12) Common Stock Option / Stock Incentive
     Plan
     In August 2005, the Company adopted the ―Wilson Family Communities, Inc. 2005 Stock Option/Stock
     Issuance Plan‖, the ―Stock Option Plan.‖ The plan contains two separate equity programs: 1) the Option
     Grant Program for eligible persons at the discretion of the plan administrator, be granted options to
     purchase shares of common stock and 2) the Stock Issuance Program under which eligible persons may,
     at the discretion of the plan administrator, be issued shares of common stock directly, either through the
     immediate purchase of such shares or as a bonus for services rendered to the Company or any parent or
     subsidiary. The market value of the shares underlying option issuance prior to the Merger was determined
     by the Board of Directors as of the grant date. This plan was assumed by Wilson Holdings, Inc. at the
     time of the merger of the Company and WFC. The fair value of the options granted under the plan was
     determined by the Board of Directors (―Board‖) prior to the merger of the Company and WFC.
       The Board is the plan administrator and has full authority (subject to provisions of the plan) and it may
       delegate a committee to carry out the functions of the administrator. Persons eligible to participate in the
       plan are employees, non-employee members of the Board or members of the board of directors of any
       parent or subsidiary.
       The stock issued under the Stock Option Plan shall not exceed 1,680,478 shares. Unless terminated at an
       earlier date by action of the Board of Directors, the Plan terminates upon the earlier of (1) the expiration
       of the ten year period measured from the date the Plan is adopted by the Board or (2) the date on which
       all shares available for issuance under the Plan shall have been issued as fully-vested shares.
       The Company had 755,478 shares of common stock available for future grants under the Plan at
       December 31, 2006. Compensation expense related to the Company‘s share-based awards during the year
       ended December 31, 2006, was approximately $545,000. The compensation expense for the year ended
       December 31, 2005, was approximately $123,000.
       Before January 1, 2006, options granted to non-employees were recorded at fair value in accordance with
       SFAS No. 123 and EITF 96-18. These options are issued pursuant to the Plan and are reflected in the
       disclosures below. None of the options issued to date were vested as of December 31, 2005. The
       Company issued options to purchase 850,000 shares of common stock at a strike price of $2.00 per share
       during 2005. These options had a fair value of $1.45 per share at the grant date. The fair value of options
       issued in 2005 was calculated at the date of grant using the Black-Scholes pricing model with the
       following weighted-average assumptions for the year ended December 31, 2005: risk free interest rate of
       4.25%; dividend yield of 0%; weighted-average expected life of options of 5 years; and a 60% volatility
       factor. Options issued during 2005 to employees had a fair value of $1.45 per share. There were no
       options issued before the Plan‘s inception in August 2005.
       During the year ended December 31, 2006, the Company issued options to purchase 555,000 shares of
       common stock at an average strike price of $2.16 per share. The Black-Scholes pricing model was used
       with the following assumptions during the year: risk free interest rate of 4.25%-4.75%; dividend yield of
       0%; weighted-average expected life of options of 5 years; and a 60% volatility factor.
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                                            Wilson Holdings, Inc.
                                 Notes to Consolidated Financial Statements
                            For the Years Ended December 31, 2006, 2005 and 2004

(12)    Common Stock Option / Stock Incentive Plan (continued)
       A summary of activity in common stock options for the years ended December 31, 2006 and 2005 are as
       follows:
                                                                  Range of Exercise       Weighted-Average
                                               Shares                  Prices              Exercise Price
Options granted at plan inception                     850,000                   $2.00                     $2.00
 Options exercised                                          -                       -                         -
 Options forfeited                                   (70,000)                   $2.00                     $2.00
Options outstanding, December 31,
2005                                                  780,000                    $2.00                     $2.00
 Options granted                                      555,000            $2.00 - $2.26                     $2.16
 Options exercised                                          -                        -                         -
 Options forfeited                                  (410,000)            $2.00 - $2.26                     $2.03
Options outstanding, December 31,
2006                                                    925,000          $2.00 - $2.26                     $2.17
Add: Available for issuance                             755,478
Total available under plan                                  1,680,478
       The following is a summary of options outstanding and exercisable at December 31, 2006:
                        Outstanding                                Vested and Outstanding
                                                 Weighted          Weighted Average
 Number of Shares     Weighted Average           Average Number of    Remaining           Weighted
 Subject to Options Remaining Contractual        Exercise Vested   Contractual Life (in   Average
   Outstanding         Life (in years)            Price    Shares        years)         Exercise Price
      925,000                8.2                  $2.17   418,333          6.9              $2.04

       At December 31, 2006, there was approximately $605,000 of unrecognized compensation expense related
       to unvested share-based awards granted under the Company‘s stock option plan. That expense is expected
       to be recognized over a weighted-average period of 3.5 years. In February 2007, the Company‘s Board
       approved a 819,522 share increase in the number of shares issuable pursuant to its option plan for a total
       of 2.5 million shares issuable under the plan. This increase will be effective when approved by the
       Company‘s shareholders.
(13) Employee Benefits
     In 2006, the Company instituted a defined contribution plan under section 401(k) of the Internal Revenue
     Code. The plan allows all employees who are over 21 years old to defer a predetermined portion of their
     compensation for federal income tax purposes. The Company will contribute up to fifty percent of an
     employees‘ contribution to the plan up to 6% of their contribution subject to Internal Revenue Service
     limitations. During 2006, the Company contributed approximately $13,000 to the employee defined
     contribution plan.


                                                  F-30
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                                                      Wilson Holdings, Inc.
                                           Notes to Consolidated Financial Statements
                                      For the Years Ended December 31, 2006, 2005 and 2004

(14)      Quarterly Results (Unaudited)
        The following tables set forth selected quarterly consolidated statements of operations information for the
        years ended December 31 2006 and 2005.
                                  Mar.
                                   31,    Jun. 30,       Sep. 30,         Dec. 31,        Mar. 31,        Jun. 30,        Sep. 30,      Dec. 30,
                                  2005     2005           2005             2005             2006           2006            2006          2006
Revenues:                                                               (In ,000s, except per share data)
  Homebuilding and related
services                   $          -              -              -              -             417           2,285           1,483         1,033
  Land sales                          -              -          255                -             616                 50          414           437
         Total revenues               -              -          255                -           1,033           2,335           1,897        1,470
Cost of revenues:
  Homebuilding and related
services                              -              -              -              -             332           1,893           1,256           866
  Land sales                          -              -          115                -             327                 24          273           446
         Total cost of
revenues                              -              -          115                -             659           1,917           1,529         1,312
Gross profit:
  Homebuilding and related
services                              -              -              -              -              85             392             227           167
  Land sales                          -              -          140                -             289                 26          140           (9)
        Total gross profit            -              -          140                -             374             418             367           158
Costs and expenses:
  Corporate general and
administration                        1           65            369              765             990           1,211           1,168           983
  Sales and marketing                 -            7            105              113             129             229             282           177
    Total costs and expenses          1           72            474              878           1,119           1,441           1,450         1,160
      Operating loss                (1)         (72)          (334)            (878)           (745)         (1,022)         (1,083)       (1,002)
Other income (expense):
  Loss on fair value of
derivatives                           -            -              -            (173)           (345)         (2,588)           (460)       (5,077)
  Interest and other income           -            8             36               56              97             109              54            30
  Interest expense                    -         (16)          (128)            (213)           (514)           (558)           (570)         (718)
    Total other expense               -          (8)           (92)            (330)           (763)         (3,037)           (976)       (5,765)
                         Net
                         loss $     (1)         (80)          (426)          (1,208)        (1, 508)         (4,059)         (2,059)       (6,767)

Basic and diluted loss per
share                        $        -       (0.02)          (0.04)          (0.16)          (0.08)           (0.23)          (0.12)       (0.38)

Basic and diluted weighted
average common shares
outstanding                           -   3,333,333      10,000,000      17,689,252      17,706,625      17,706,625       17,706,625    17,726,026

(15) Subsequent Events
     On February 6, 2007, the Company‘s board of director‘s approved the increase in the Company‘s stock
     option pool in the amount of 819,522 shares for an aggregate of 2.5 million shares issuable under the
     plan. This increase will be effective upon approval of the Company‘s shareholders. Additionally, the
     Compensation Committee approved the granting of approximately 400,000 stock options to certain of its
     employees. The stock options will have three year vesting and are contingent upon completion of a
     successful capital raise in 2007. The exercise price of the options will be based on the offering price of
     the Company‘s common stock in such financing. The Company is in the process of engaging a
     compensation consultant to assist its Compensation Committee in determining appropriate equity
     incentive grants for its executive officers and directors in 2007.
        On February 13, 2007 the Company refinanced its land obligation on a land loan of approximately $6.2
        million. The amount of the new loan is approximately $7.2 million with 12.5% interest annually, a
        maturity of two years with monthly interest only payments and the note is renewable for an additional
        year for a 1% loan fee. The loan is secured by the underlying land.
        On February 9, 2007, the Company obtained a commitment letter to refinance a land loan of
        approximately $792,000. The new note is a facility for land and development of approximately $3
million. The interest rate is 3% over the prime rate with a term of 24 months, with two six month
extension options with monthly interest payments. The amount actually loaned is based on 75% of the
costs incurred or 75% of total appraised value. The loan is collateralized by the underlying land.


                                         F-31
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                                            Wilson Holdings, Inc.
                                 Notes to Consolidated Financial Statements
                            For the Years Ended December 31, 2006, 2005 and 2004


(15)    Subsequent Events (continued)

       On February 6, 2007, the Company obtained a $10.0 million master construction line of credit maturing
       February 6, 2008, interest payable monthly at prime plus 0.5%. The loan is for land and home
       construction. The Company is required to keep $2.5 million of tangible net worth and the ratio of debt to
       equity may not exceed 7.5 to 1 as of the end of any calendar quarter.
       On February 9, 2007 the Company obtained a $1.9 million land development loan, maturing February 9,
       2010, interest payable monthly at prime plus 0.5%. The loan will be repaid as finished lots are sold.



                                                  F-32
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                                                      PART II

                           INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

         The following table shows the costs and expenses, other than underwriting discounts and commissions,
payable in connection with the sale and distribution of the securities being registered. All of these expenses will
be paid by Wilson Holdings. All amounts except the SEC registration fee are estimated.


       SEC Registration Fee                                                                   $7,040

       NASD filing fee                                                                        $7,119

       Accounting fees and expenses                                                           $100,000

       Printing and engraving expenses                                                        $50,000

       Legal fees and expenses                                                                $175,000

       Underwriter expenses                                                                   $425,000

       American Stock Market listing fees                                                     $ 70,000

       Miscellaneous                                                                          $20,000

       Total                                                                                  $854,159

Item 14. Indemnification of Directors and Officers

          Chapter 78 of the Nevada General Corporation Law (―NGCL‖) provides that a corporation may
indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding whether civil, criminal, administrative or investigative (other than an
action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including
attorneys‘ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he is not liable pursuant to NGCL Section 78.138 or acted in
good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. NGCL Chapter 78 further provides that a corporation similarly may indemnify any such
person serving in any such capacity who was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of the corporation or is or was serving
at the request of the corporation as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys‘ fees) actually and reasonably
incurred in connection with the defense or settlement of such action or suit if he is not liable pursuant to NGCL
Section 78.138 or acted in good faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the
extent that the court or other court of competent jurisdiction in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in view of all of the circumstances of
the case, such person is fairly and reasonably entitled to indemnity for such expenses which the court or other
court of competent jurisdiction shall deem proper.


                                                        II-1
Table of Contents


          The company‘s Articles of Incorporation and By-laws provide that the company may indemnify its
officers, directors, agents and any other persons to the fullest extent permitted by the NGCL.

         Additionally, each of the company‘s officers and directors are parties to indemnification agreements
with the company pursuant to which they are entitled to indemnification in their capacity as officers of the
company to the fullest extent permitted by the NGCL.

Item 15. Recent Sales of Unregistered Securities.

        Transactions Prior to Acquisition of Wilson Family Communities, Inc.

          During the last three years, we have issued unregistered securities in the transactions described below.
These securities were offered and sold by us in reliance upon the exemptions provided for in Section 4(2) of the
Securities Act, relating to sales not involving any public offering. The sales were made to a limited number of
purchasers without the use of an underwriter and the certificates representing the securities sold contain a
restrictive legend that prohibits transfer without registration or an applicable exemption. The recipients of
securities in each such transaction represented their intention to acquire the securities for investment only and
not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to
the share certificates and other instruments issued in such transactions. The sales of these securities were made
without general solicitation or advertising.

                           Date                                       Number of Common Shares                          Offering Price
                      October 6, 2005                                         658,922                                   $1,126,755

         These shares were issued pursuant to the conversion of outstanding indebtedness of the Company to
shares of common stock.

        Acquisition of Wilson Family Communities, Inc.

        In connection with the closing of our acquisition of Wilson Family Communities, Inc., or WFC, on
October 11, 2005, we issued 16,804,479 shares of unregistered Common Stock to holders of the capital stock of
WFC, in exchange for all issued and outstanding shares of the capital stock of WFC, and reserved for issuance
850,000 shares of common stock pursuant to outstanding options to purchase common stock of WFC pursuant
to WFC‘s 2005 Stock Option/Stock Issuance Plan that were assumed by us.

         The options to purchase common stock were all issued under the Wilson Family Communities, Inc.
2005 Stock Option/Stock Issuance Plan, which we assumed in connection with the Merger. The options vest
over a five year period, are all exercisable for ten years from the date of issuance and may be exercised on a net
cashless basis. The outstanding options to purchase our common stock consist of options to purchase 850,000
shares of common stock in the aggregate at $2.00 per share.

         The issuance of the shares of our common stock and the reservation of shares of common stock to be
issued upon exercise of the options assumed in connection with the Merger was not registered under the
Securities Act of 1933, as amended (the ―Securities Act‖), and the securities issued in reliance upon the
exemption from registration contained in Section 4(2) of the Act and Regulation D promulgated thereunder. The
securities may not be offered or sold in the United States in the absence of an effective registration statement, or
exemption from the registration requirements, under the Securities Act.

         These securities were offered and sold by us in reliance upon the exemptions provided for in Section
4(2) of the Securities Act, relating to sales not involving any public offering. The sales were made to a limited
number of purchasers without the use of an underwriter and the certificates representing the securities sold
contain a restrictive legend that prohibits transfer without registration or an applicable exemption. The
recipients of securities in each such transaction represented their intention to acquire the securities for
investment only and not with a view to or for sale in connection with any distribution thereof and appropriate


                                                       II-2
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legends were affixed to the share certificates and other instruments issued in such transactions. The sales of
these securities were made without general solicitation or advertising.

Transactions After the Acquisition of WFC

        On September 29, 2006, we sold $6.75 million in aggregate principal amount of 5% Convertible Notes
due September 1, 2013 to certain purchasers. The following is a summary of the features of the convertible
notes:

            •       Interest accrues on the principal amount of the convertible notes at a rate of 5% per annum,
                    payable in cash, semi-annually on February 1 and September 1 of each year, beginning on
                    February 1, 2007.

            •       The convertible notes are due on September 1, 2013 and are convertible, at the option of the
                    holder, into shares of our common stock at a conversion price of $2.00 per share. The
                    conversion price is subject to adjustment for stock splits, reverse stock splits, recapitalizations
                    and similar corporate actions. In the event we issue certain of our equity or equity-linked
                    securities with a conversion price, exercise price or share price less than $2.00 per share, the
                    conversion price of the convertible notes will be reduced to the price at which we issue such
                    equity or equity-linked securities, but not below $1.00 per share.

            •       We may redeem all or a portion of the convertible notes after September 1, 2009 at a
                    redemption price that incorporates a premium that ranges from 10% to 3% during the period
                    beginning December 1, 2000 and ending on the maturity date of September 1, 2013. In
                    addition, the redemption price will include any accrued but unpaid interest on the convertible
                    notes through the date of redemption.

            •       Upon a change in control event, each holder of the convertible notes may require us to
                    repurchase some or all of its convertible notes at a purchase price equal to 100% of the
                    principal amount of the convertible notes plus all accrued but unpaid interest thereon.

            •       The maturity date may accelerate in the event we commence any case relating to bankruptcy
                    or insolvency, or related events of default. Our assets will be available to pay obligations on
                    the convertible notes only after all senior indebtedness has been paid.

On December 19, 2005, we sold $10 million in aggregate principal amount of 5% Convertible Notes due
December 1, 2012 to certain purchasers. The following is a summary of the features of these convertible notes:

                •   Interest accrues on the principal amount of the convertible notes at a rate of 5% per annum,
                    payable in cash, semi-annually on June 1 and December 1 of each year, beginning on June 1,
                    2006.

                •   The convertible notes are due on December 1, 2012 and are convertible, at the option of the
                    holder, into shares of our common stock at a conversion price of $2.00 per share. The
                    conversion price is subject to adjustment for stock splits, reverse stock splits,
                    recapitalizations and similar corporate actions. In the event we issue certain of our equity or
                    equity-linked securities with a conversion price, exercise price or share price less than $2.00
                    per share, the conversion price of the convertible notes will be reduced to the price at which
                    we issue such equity or equity-linked securities.

                •   We may redeem all or a portion of the convertible notes after December 1, 2008 at a
                    redemption price that incorporates a premium that ranges from 10% to 3% during the period
                    beginning December 1, 2008 and ending on the maturity date of December 1, 2012. In
                    addition, the redemption price will include any accrued but unpaid interest on the convertible
                    notes to the date of redemption.

                •   Upon a change in control event, each holder of the convertible notes may require us to
                    repurchase some or all of its convertible notes at a purchase price equal to 100% of the
                    principal amount of the convertible notes plus accrued but unpaid interest thereon
•   The maturity date may accelerate in the event we commence any case relating to bankruptcy
    or insolvency, or related events of default. Our assets will be available to pay obligations on
    the convertible notes only after all senior indebtedness has been paid.

                                        II-3
Table of Contents


        No underwriters were involved in any of the foregoing distributions of securities.

Item 16. Exhibits and Financial Statement Schedules.

(a)      Exhibits
Exhibit
No.      Name
1.1       Form of Underwriting Agreement
2.1        Agreement and Plan of Reorganization, dated September 2, 2005 by and among the Registrant,
Wilson Acquisition Corp., Wilson Family Communities, Inc. and the Major Shareholders listed on Schedule A
thereto (filed as Exhibit 2.01 to Registrant‘s Current Report on Form 8-K dated September 2, 2005 and
incorporated herein by reference)

3.1     Amended and Restated Bylaws of Registrant (filed as Exhibit 3.1 to Registrant‘s Current Report on
Form 8-K dated July 19, 2006 and incorporated herein by reference)

3.2       Amended and Restated Articles of Incorporation of Registrant (filed as Exhibit 3.6 to the Registrant‘s
Amendment No. 4 to Registration Statement on Form SB-2 filed July 21, 2006) (not yet approved by
shareholders)

4.1      Specimen certificate for shares of Common Stock of Registrant (filed as Exhibit 4.1 to Registrant‘s
Current Report on Form 8-K dated October 11, 2005 and incorporated herein by reference)

4.2*     Specimen Unit Certificate
4.3      Form of Warrant Agreement, including form of Class A Warrant
4.4*     Form of Underwriter Warrant
5.1*     Opinion of Counsel to Company
10.1+      Wilson Holdings, Inc. 2005 Stock Option/Stock Issuance Plan (filed as Exhibit 10.3 to Registrant‘s
Current Report on Form 8-K dated October 11, 2005 and incorporated herein by reference)

10.2+* Amendment No. 1 to Wilson Holdings, Inc. 2005 Stock Option/Stock Issuance Plan (not yet approved
by shareholders)




                                                     II-4
Table of Contents


10.3      Master Construction Loan Agreement dated September 28, 2005 by and among Registrant and Plains
Capital Bank (filed as Exhibit 10.4 to Registrant‘s Current Report on Form 8-K dated October 11, 2005 and
incorporated herein by reference)

10.4       Promissory Note dated September 28, 2005 issued by Registrant to PlainsCapital Bank (filed as
Exhibit 10.5 to Registrant‘s Current Report on Form 8-K dated October 11, 2005 and incorporated herein by
reference)

10.5     Registration Rights Agreement by and among the Registrant and the holders of the Registrant‘s
Convertible Notes (filed as Exhibit 10.2 to Registrant‘s Current Report on Form 8-K dated December 19, 2005
and incorporated herein by reference)

10.6      Form of Warrant (filed as Exhibit 10.3 to Registrant‘s Current Report on Form 8-K dated December
19, 2005 and incorporated herein by reference)

10.7     Warrant issued by Registrant to Tejas Securities (filed as Exhibit 10.4 to Registrant‘s Current Report
on Form 8-K dated December 19, 2005 and incorporated herein by reference)

10.8       Securities Purchase Agreement by and among the Registrant and the Purchasers set forth therein
(filed as Exhibit 10.1 to Registrant‘s Current Report on Form 8-K dated September 29, 2006 and incorporated
herein by reference)

10.9      Registration Rights Agreement by and among the Registrant and the investors set forth herein (filed
as Exhibit 10.2 to Registrant‘s Current Report on Form 8-K dated September 29, 2006 and incorporated herein
by reference)

10.10     Form of Warrant (filed as Exhibit 10.3 to Registrant‘s Current Report on Form 8-K dated September
29, 2006 and incorporated herein by reference)

10.11     Acquisition Option Agreement dated December 14, 2006 by and among the Registrant and Green
Builders Inc. (filed as Exhibit 10.1 to Registrant's Current Report on Form 8-K dated December 14, 2006 and
incorporated herein by reference)

10.12        Letter Agreement dated December 14, 2006 by and between Registrant and Capital Growth
Financial

10.13       Amendment No. 1 to Letter Agreement by and between Registrant and Capital Growth Financial

10.14+     Employment letter Agreement dated February 14, 2007 by and between Registrant and Clark N.
Wilson (filed as Exhibit 10.10 to Registrant's Annual Report on Form 10-KSB for the year ended December 31,
2006 (the ―2006 10-KSB‖) and incorporated herein by reference.

10.15+    Employment letter Agreement dated February 14, 2007 by and between Registrant and Arun
Khurana (filed as Exhibit 10.11 to the 2006 10-KSB and incorporated herein by reference).

23.1        Consent of PMB, Helin Donovan, LLP

24.1**      Power of Attorney

99.1    Appraisal Report of Kauttu Valuation
________

** Previously filed.
* To be filed by amendment.
+ Indicates a management contract or compensatory plan or arrangement.

(b)     Financial Statement Schedules
         Financial Statement Schedules not included below have been omitted because they are not required or
not applicable, or because the required information is shown in the financial statements or notes thereto.
Item 17. Undertakings.

      (a)       The undersigned registrant hereby undertakes:
      1.         To file, during any period in which offers or sales are being made, a post-effective
amendment to this registration statement:

        (i)     to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

                                                     II-5
Table of Contents


        (ii)     to reflect in the prospectus any facts or events arising after the effective date of the registration
                 statement (or the most recent post-effective amendment thereof) which, individually or in the
                 aggregate, represent a fundamental change in the information set forth in the registration
                 statement. Notwithstanding the foregoing, any increase or decrease in volume of securities
                 offered (if the total dollar value of securities offered would not exceed that which was
                 registered) and any deviation from the low or high end of the estimated maximum offering
                 range may be reflected in the form of prospectus filed with the Commission pursuant to Rule
                 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20%
                 change in the maximum aggregate offering price set forth in the ―Calculation of Registration
                 Fee‖ table in the effective registration statement;
         (iii)   to include any material information with respect to the plan of distribution not previously
                 disclosed in the registration statement or any material change to such information in the
                 registration statement.
          2.        That, for the purpose of determining any liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering
thereof.

        3.        To remove from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering.

          4.        That, for the purpose of determining liability under the Securities Act of 1933 to any
purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an
offering, other than registration statements relying on Form 430B or other than prospectuses filed in reliance on
Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used
after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is
part of the registration statement or made in a document incorporated or deemed incorporated by reference into
the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a
time of contract sale prior to such first use, supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement or made in any such document immediately
prior to such date of first use.

        5.        That, for the purpose of determining liability of the registrant under the Securities Act of
1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a
primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of
the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such
purchaser by means of any of the following communications, the undersigned registrant will be a seller to the
purchaser and will be considered to offer or sell such securities to such purchaser:

                  i.        Any preliminary prospectus or prospectus of the undersigned registrant relating to
         the offering required to be filed pursuant to Rule 424;

                 ii.        Any free writing prospectus relating to the offering prepared by or on behalf of the
         undersigned registrant or used or referred to by the undersigned registrant;

                  iii.     The portion of any other free writing prospectus relating to the offering containing
         material information about the undersigned registrant or its securities provided by or on behalf of the
         undersigned registrant; and

                 iv.        Any other communication that is an offer made by the undersigned registrant to the
         purchaser.


                                                        II-6
Table of Contents


        (b)       The undersigned hereby undertakes to provide to the underwriter at the closing specified in
the underwriting agreements, certificates in such denominations and registered in such names as required by the
underwriter to permit prompt delivery to each purchaser.

          (c)       Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant in a successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

         (d)     The undersigned registrant hereby undertakes that:
         1.        For purposes of determining any liability under the Securities Act of 1933, the information
omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or Rule 497(h) under
the Securities Act shall be deemed to be part of this registration statement as of the time it was declared
effective.

          2.        For the purpose of determining any liability under the Securities Act of 1933, each
post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.


                                                        II-7
Table of Contents


                                                SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has duly
caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in
the city of Austin, State of Texas, on April 10, 2007.

                                                    WILSON HOLDINGS, INC.

                                                    By: /s/ Clark N. Wilson
                                                        Clark N. Wilson,
                                                        President and Chief Executive Officer


         Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed
by the following persons in the capacities indicated on April 10, 2007 .


                          Name                                                       Title

 /s/ Clark N. Wilson                                          President, Chief Executive Officer and Director
                                                              (Principal Executive Officer)
 Clark N. Wilson

  /s/ Arun Khurana                                            Vice President and Chief Financial Officer
                                                              (Principal Financial and Accounting Officer)
 Arun Khurana

  *
 Jay Gouline                                                  Director

  *
 Sidney Christopher Ney                                       Director

  *
 Barry A. Williamson                                          Director


* By Power of Attorney
Table of Contents


                                                Exhibit Index

Exhibit
No.      Name
1.1       Form of Underwriting Agreement
2.1        Agreement and Plan of Reorganization, dated September 2, 2005 by and among the Registrant,
Wilson Acquisition Corp., Wilson Family Communities, Inc. and the Major Shareholders listed on Schedule A
thereto (filed as Exhibit 2.01 to Registrant‘s Current Report on Form 8-K dated September 2, 2005 and
incorporated herein by reference)

3.1     Amended and Restated Bylaws of Registrant (filed as Exhibit 3.1 to Registrant‘s Current Report on
Form 8-K dated July 19, 2006 and incorporated herein by reference)

3.2       Amended and Restated Articles of Incorporation of Registrant (filed as Exhibit 3.6 to the Registrant‘s
Amendment No. 4 to Registration Statement on Form SB-2 filed July 21, 2006) (not yet approved by
shareholders)

4.1      Specimen certificate for shares of Common Stock of Registrant (filed as Exhibit 4.1 to Registrant‘s
Current Report on Form 8-K dated October 11, 2005 and incorporated herein by reference)

4.2*     Specimen Unit Certificate
4.3      Form of Warrant Agreement, including form of Class A Warrant
4.4*     Form of Underwriter Warrant
5.1*     Opinion of Counsel to Company
10.1+      Wilson Holdings, Inc. 2005 Stock Option/Stock Issuance Plan (filed as Exhibit 10.3 to Registrant‘s
Current Report on Form 8-K dated October 11, 2005 and incorporated herein by reference)

10.2+* Amendment No. 1 to Wilson Holdings, Inc. 2005 Stock Option/Stock Issuance Plan (not yet approved
by shareholders)

10.3      Master Construction Loan Agreement dated September 28, 2005 by and among Registrant and Plains
Capital Bank (filed as Exhibit 10.4 to Registrant‘s Current Report on Form 8-K dated October 11, 2005 and
incorporated herein by reference)
Table of Contents

10.4       Promissory Note dated September 28, 2005 issued by Registrant to PlainsCapital Bank (filed as
Exhibit 10.5 to Registrant‘s Current Report on Form 8-K dated October 11, 2005 and incorporated herein by
reference)

10.5     Registration Rights Agreement by and among the Registrant and the holders of the Registrant‘s
Convertible Notes (filed as Exhibit 10.2 to Registrant‘s Current Report on Form 8-K dated December 19, 2005
and incorporated herein by reference)

10.6      Form of Warrant (filed as Exhibit 10.3 to Registrant‘s Current Report on Form 8-K dated December
19, 2005 and incorporated herein by reference)

10.7     Warrant issued by Registrant to Tejas Securities (filed as Exhibit 10.4 to Registrant‘s Current Report
on Form 8-K dated December 19, 2005 and incorporated herein by reference)

10.8       Securities Purchase Agreement by and among the Registrant and the Purchasers set forth therein
(filed as Exhibit 10.1 to Registrant‘s Current Report on Form 8-K dated September 29, 2006 and incorporated
herein by reference)

10.9      Registration Rights Agreement by and among the Registrant and the investors set forth herein (filed
as Exhibit 10.2 to Registrant‘s Current Report on Form 8-K dated September 29, 2006 and incorporated herein
by reference)

10.10     Form of Warrant (filed as Exhibit 10.3 to Registrant‘s Current Report on Form 8-K dated September
29, 2006 and incorporated herein by reference)

10.11     Acquisition Option Agreement dated December 14, 2006 by and among the Registrant and Green
Builders Inc. (filed as Exhibit 10.1 to Registrant's Current Report on Form 8-K dated December 14, 2006 and
incorporated herein by reference)

10.12*     Letter Agreement dated December 14, 2006 by and between Registrant and Capital Growth Financial

10.13      Amendment No. 1 to Letter Agreement by and between Registrant and Capital Growth Financial

10.14+ Employment letter Agreement dated February 14, 2007 by and between Registrant and Clark N.
Wilson (filed as Exhibit 10.10 to Registrant's Annual Report on Form 10-KSB for the year ended December 31,
2006 (the ―2006 10-KSB‖) and incorporated herein by reference.

10.15+    Employment letter Agreement dated February 14, 2007 by and between Registrant and Arun
Khurana (filed as Exhibit 10.11 to the 2006 10-KSB and incorporated herein by reference).

23.1       Consent of PMB, Helin Donovan, LLP

24.1**   Power of Attorney

99.1     Appraisal Report of Kauttu Valuation

________

** Previously filed.
* To be filed by amendment.
+ Indicates a management contract or compensatory plan or arrangement.
                                                                                                  EXHIBIT 1.1

                               FORM OF UNDERWRITING AGREEMENT

                                             5,000,000 UNITS
                                         WILSON HOLDINGS, INC.

                                                           _______________, 2007

Capital Growth Financial, LLC
As Representative of the several Underwriters
1200 N. Federal Highway, Suite 400
Boca Raton, Florida 33432

Ladies and Gentlemen:

          Wilson Holdings, Inc., a Nevada corporation (the ―Company‖) proposes to issue and sell to the several
underwriters named in Schedule I (the ―Underwriters‖) an aggregate of up to 5,000,000 units (the ―Firm Units‖)
each unit comprised of one share (―Share‖) of the Company‘s common stock, par value $0.001 per share (the
―Common Stock‖) and one Class A redeemable five year warrant to purchase one share of the Company‘s
Common Stock (the ―Warrant‖). The aforesaid Firm Units, Common Stock and Warrants are together referred
to as the ―Firm Securities.‖ The Shares and the Warrants will be traded only as Units until the 30 th day
following the date of this Agreement (the ―Separation Date‖). On the Separation Date, the Firm Units will be
deemed separated and the Shares and Warrants shall thereafter be traded only on a separate basis. The Warrants
are to be issued under the terms of the Warrant Agreement (the ―Warrant Agreement‖) by and between the
Company and Standard Registrar & Transfer Company, Inc. (the ―Warrant Agent‖), in substantially the form
most recently filed as an exhibit to the Registration Statement (as hereinafter defined).

         Each Warrant entitles the holder to purchase one Share of Common Stock at an exercise price of $6.00
per share during the period commencing on the Separation Date and terminating on the five year anniversary of
the effective date of the Registration Statement. The Warrants shall be redeemable by the Company on 30 days
prior written notice at a price of $.0001 per Warrant provided (i) that the Warrants are exercisable; (ii) the
Shares are the subject of an effective registration permitting their sale under the Securities Act of 1933, as
amended (the ―Securities Act‖); and (iii) the closing sale price of the Common Stock equals or exceeds 200% of
the offering price of the Units for 30 consecutive trading days ending on the tenth day prior to the day of which
notice is given.

        In addition, the Company has granted to the Underwriters an option to purchase up to an additional
750,000 Units (the ―Optional Units‖), as provided in Section 2 of this Agreement. The Firm Units and, if and to
the extent such option is exercised, the Optional Units, are collectively called the ―Units.‖ The Units, Shares and
Warrants included in the Units are hereinafter collectively referred to as the ―Securities.‖

         Capital Growth Financial, LLC (―CGF‖) has agreed to act as representative of the several Underwriters
(in such capacity, the ―Representative‖) in connection with the offering and sale of the Units.

         The terms Representative and Underwriters shall mean either the singular or plural as the context
requires.

        The Company understands that the Underwriters propose to undertake a public offering of the Units
pursuant to the terms and conditions of this Agreement.



Section 1.      Representations and Warranties.                                                               3
Section 2.      Purchase of the Securities by the Underwriters.                                              11
Section 3.      Delivery of and Payment for Units.                                                           12
Section 4.      Covenants.                                                                                   13
Section 5.      Conditions of Underwriters‘ Obligations.                                                     16
Section 6.      Qualified Independent Underwriter.                                                           19
Section 7.      Indemnification and Contribution.                                                            19
Section 8.      Substitution of Underwriters.                                                                23
Section 9.      Effective Date and Termination.                                                              23
Section 10.     Right to Appoint an Observer                                                                 25
Section 11.     Survival of Indemnities, Contribution, Warranties and
                Representations.                                                                             25
Section 12.     Notices.                                                                                     25
Section 13.     Information Furnished by Underwriters.                                                       25
Section 14.     Parties.                                                                                     26
Section 15.     No Fiduciary Relationship.                                                                   26
Section 16.     Definition of ―Business Day‖ and ―Subsidiary‖                                                26
Section 17.     Governing Law.                                                                               26
Section 18.     Counterparts.                                                                                26


                                                         2
         Section 1.        Representations and Warranties.
                  (a)        A registration statement on Form S-1 (File No. 333-140747) with respect to the
Securities has been prepared by the Company in conformity with the requirements of the Securities Act, and the
rules and regulations of the Securities and Exchange Commission (the ―Commission‖) thereunder and has been
filed with the Commission. Copies of such registration statement and any amendments, and all forms of the
related prospectuses contained therein, have been delivered to the Representative. Such registration statement,
including the prospectus, Part II, any documents incorporated by reference therein and all financial schedules
and exhibits thereto, as amended at the time when it shall become effective, is herein referred to as the
―Registration Statement,‖ and the prospectus included as part of the Registration Statement on file with the
Commission when it shall become effective or, if the procedure in Rule 430A of the Rules and Regulations (as
defined below) is followed, the prospectus that discloses all the information that was omitted from the
prospectus on the effective date pursuant to such Rule 430A, and in either case, together with any changes
contained in any prospectus filed with the Commission by the Company with the Representative‘s consent after
the effective date of the Registration Statement, is herein referred to as the ―Final Prospectus.‖ If the procedure
in Rule 430A is followed, the prospectus included as part of the Registration Statement on the date when the
Registration Statement became effective is referred to herein as the ―Effective Prospectus.‖ Any prospectus
included in the Registration Statement of the Company and in any amendments thereto prior to the effective
date of the Registration Statement is referred to herein as a ―Pre-Effective Prospectus.‖ If the Company has filed
an abbreviated registration statement to register additional Units pursuant to Rule 462(b) under the Securities
Act (including the exhibits thereto, the ―Rule 462 Registration Statement‖), then any reference herein to the
Registration Statement shall also be deemed to include such Rule 462 Registration Statement. For purposes of
this Agreement, the term ―Rules and Regulations‖ means the rules and regulations adopted by the Commission
under either the Securities Act or the Securities Exchange Act of 1934 (the ―Exchange Act‖), as applicable.

                  (b)       No order preventing or suspending the use of any Pre-Effective Prospectus has been
issued by the Commission and each Pre-Effective Prospectus, at the time of filing thereof, did not contain an
untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they were made, not misleading;
except that the foregoing shall not apply to statements in or omissions from any Pre-Effective Prospectus in
reliance upon, and in conformity with, written information furnished to the Company by the Representative, or
by any Underwriter through the Representative, specifically for use in the preparation thereof.

                (c)        As of the Applicable Time (as defined below), the Pricing Prospectus (as defined
below and included on Schedule II hereto), all considered together (collectively, the ―Pricing Disclosure
Package‖) did not include any untrue statement of a material fact or omit to state a material fact necessary in


                                                         3
order to make the statements therein, in the light of the circumstances under which they were made, not
misleading.

                  ―Applicable Time‖ means ______ p.m. (Florida time) on the date of this Agreement or such
other time as agreed to by the Company and the Representative.

                   ―Pricing Prospectus‖ as of any time means the Pre-Effective Prospectus relating to the Units
that is included in the Registration Statement immediately prior to that time.

                   (d)       When the Registration Statement becomes effective and as of the Closing Date (as
defined herein), the Registration Statement, any post-effective amendment thereto and the Effective Prospectus
and the Final Prospectus as amended or supplemented shall conform in all material respects to the requirements
of the Securities Act and the Rules and Regulations. At the time the Registration Statement becomes effective,
the Registration Statement will not contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The Effective Prospectus, at the time the Registration Statement
becomes effective, and the Final Prospectus, at the time the Registration Statement becomes effective and as of
the Closing Date (unless the term ―Final Prospectus‖ refers to a prospectus which has been provided to the
Underwriters for use in connection with the offering of the Units which differs from the prospectus on file at the
Commission at the time the Registration Statement becomes effective, in which case at the time it is first
provided to the Underwriters for such use), will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The representations, warranties and agreements in
this paragraph shall not apply to statements in, or omissions from, any such document in reliance upon, and in
conformity with, written information furnished to the Company by the Representative, or by any Underwriter
through the Representative, specifically for use in the preparation thereof. There is no contract or document
required to be described in the Registration Statement or Pricing Disclosure Package, Effective Prospectus or
Final Prospectus or to be filed as an exhibit to the Registration Statement that is not described or filed as
required.

                   (e)       No such documents when they were filed (or, if amendments with respect to such
documents were filed, when such amendments were filed), contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein, or necessary to make the statements made therein,
in light of the circumstances under which they were made, not misleading.

                  (f)         PMB Helin Donovan, LLP, whose report appears in the Effective Prospectus and
the Final Prospectus, is an independent registered public accounting firm with respect to the Company as
required by the Securities Act and the Rules and Regulations. The financial statements and schedules (including
the related notes) included in the Registration Statement, any Pre-effective Prospectus, the Effective Prospectus


                                                          4
or Final Prospectus, present fairly the financial condition, the results of the operations and changes in financial
condition of the entities purported to be shown thereby at the dates or for the periods indicated and have been
prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout
the periods indicated. All adjustments necessary for a fair presentation of results for such periods have been
made. The selected financial, operating and statistical data set forth in the Pricing Disclosure Package, Effective
Prospectus and Final Prospectus under the captions Prospectus Summary Selected Consolidated Financial Data‖
and ‗Management‘s Discussion and Analysis of Financial Condition and Results of Operations‖ fairly present,
when read in conjunction with the Company‘s financial statements and the related notes and schedules and on
the basis stated in the Registration Statement, the information set forth therein.

                   (g)        Each of the Company and its Subsidiaries (as defined herein) has been duly
organized and is validly existing as a corporation in good standing under the laws of the jurisdiction of its
organization, with full power and authority (corporate and other) to own or lease its properties and conduct its
business as described in the Pricing Disclosure Package, Effective Prospectus and Final Prospectus, and is duly
qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which the
character of the business conducted by it or the location of the properties owned or leased by it makes such
qualification necessary. Each of the Company and its Subsidiaries is in possession of and operating in
compliance with all franchises, grants, authorizations, licenses, permits, easements, consents, certificates and
orders required for the conduct of its business, all of which are valid and in full force and effect except where
any failure to do so would not result in a material adverse change in the condition (financial or otherwise),
business, properties, net worth or results of operations of the Company and its Subsidiaries considered as a
whole, whether or not arising from transactions in the ordinary course of business, (any such change or effect,
where the context so requires, is referred to as a ―Material Adverse Change‖ or a ―Material Adverse Effect‖).
Neither the Company nor any of its Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such franchise, grant, authorization, license, permit, easement, consent,
certificate or order which, individually or in the aggregate, if the subject of an unfavorable decision, would
result in a Material Adverse Effect.

                  (h)       The capitalization of the Company as of _____, 2007, is as set forth under the
caption ―Capitalization‖ in the Pricing Disclosure Package, Effective Prospectus and Final Prospectus, and the
Units, Common Stock and Warrants conform to the description thereof contained under the caption
―Description of Securities‖ in the Pricing Disclosure Package, Effective Prospectus and Final Prospectus; the
outstanding shares of Common Stock have been, and the Units, Shares, Warrants, and Shares of Common Stock
issuable upon exercise of the Warrants (―Warrant Shares‖), upon issuance and delivery and payment therefore
in the manner herein described, will be, duly authorized, validly issued, fully paid and nonassessable. There are
no preemptive rights or other rights to subscribe for or to purchase, or any restriction upon the voting or transfer
of, any shares of Common Stock pursuant to the Company‘s articles of incorporation, by-laws or other
governing documents


                                                          5
or any agreement or other instrument to which the Company or any of its Subsidiaries is a party or by which any
of them may be bound. Neither the filing of the Registration Statement nor the offering or sale of the Securities
as contemplated by this Agreement gives rise to any rights, other than those which have been waived or
satisfied, for or relating to the registration of any shares of Common Stock. All of the outstanding shares of
capital stock of each Subsidiary of the Company have been duly authorized and validly issued, are fully paid
and nonassessable and are owned directly or indirectly by the Company, free and clear of any claim, lien,
encumbrance or security interest.

                  (i)       Subsequent to the respective dates as of which information is given in the Pricing
Disclosure Package, Effective Prospectus and the Final Prospectus, and except as described or contemplated in
the Pricing Disclosure Package, Effective Prospectus and Final Prospectus: neither the Company nor any of its
Subsidiaries has incurred any liabilities or obligations, direct or contingent, nor entered into any transactions not
in the ordinary course of business, which in either case individually or in the aggregate has had a Material
Adverse Effect; and there has been no dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.

                   (j)        Neither the Company nor any of its Subsidiaries is, or with the giving of notice or
lapse of time or both would be, in violation of or in default under, nor will the execution or delivery hereof or
consummation of the transactions contemplated hereby result in a violation of, or constitute a default under, the
articles of incorporation, bylaws or other governing documents of the Company or any of its Subsidiaries, or
any agreement, contract, mortgage, deed of trust, loan agreement, note, lease, indenture or other instrument, to
which the Company or any of its Subsidiaries is a party or by which any of them is bound, or to which any of
their properties is subject, nor will the performance by the Company of its obligations hereunder violate any
law, rule, administrative regulation or decree of any court, or any governmental agency or body having
jurisdiction over the Company, its Subsidiaries or any of their properties, or result in the creation or imposition
of any lien, charge, claim or encumbrance upon any property or asset of the Company or any of its Subsidiaries.
Except for permits and similar authorizations required under the Securities Act and the securities or ―Blue Sky‖
laws of certain jurisdictions, and for such permits and authorizations which have been obtained, no consent,
approval, authorization or order of any court, governmental agency or body or financial institution is required in
connection with the consummation of the transactions contemplated by this Agreement.

                  (k)         This Agreement has been duly authorized, executed and delivered by the Company
and constitutes a legal, valid and binding obligation of the Company and is enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium
and other similar laws affecting creditors‘ rights generally and by general principles of equity.

                  (l)       The Company and its Subsidiaries have good and marketable title in fee simple to all
items of real property and good and marketable title to all personal property owned by them, in each case clear
of


                                                          6
all liens, encumbrances and defects except such as are described or referred to in the Pricing Disclosure
Package, Effective Prospectus and Final Prospectus or such as do not materially affect the value of such
property and do not interfere with the use made or proposed to be made of such property by the Company or
such Subsidiaries. Any real property and buildings held under lease by the Company and its Subsidiaries are
held by them under valid, existing and enforceable leases with such exceptions as would not have a Material
Adverse Effect on the Company and do not interfere with the use made or proposed to be made of such property
and buildings by the Company or such Subsidiaries.

                  (m)          Except as described in the Pricing Disclosure Package, Effective Prospectus and
Final Prospectus, there is no litigation or governmental proceeding to which the Company or any of its
Subsidiaries is a party or to which any property of the Company or any of its Subsidiaries is subject or which is
pending or, to the knowledge of the Company, threatened against the Company which would have a Material
Adverse Effect on the Company, which would materially and adversely affect the consummation of this
Underwriting Agreement or the transactions contemplated hereby or which is required to be disclosed in the
Pricing Disclosure Package, Effective Prospectus and Final Prospectus.

                (n)       Neither the Company nor any Subsidiary is in violation of any law, ordinance,
governmental rule or regulation or court decree to which it may be subject which violation would have a
Material Adverse Effect.

                 (o)        Neither the Company, nor any of its officers, directors or affiliates has taken and
may not take, directly or indirectly, any action designed to cause or result in, or which has constituted or which
might reasonably be expected to constitute, the stabilization or manipulation of the price of the shares of
Common Stock to facilitate the sale or resale of the Securities.

                   (p)       The Company and its Subsidiaries have filed all necessary federal, state and foreign
income and franchise tax returns, and all such tax returns are complete and correct in all material respects, and
the Company and its Subsidiaries have not failed to pay any taxes which were payable pursuant to said returns
or any assessments with respect thereto. The Company has no knowledge of any tax deficiency that has been or
is likely to be threatened or asserted against the Company or its Subsidiaries.

                   (q)         The Company and its Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management‘s
general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with management‘s general or specific
authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.


                                                         7
                  (r)       The Company and its Subsidiaries maintain ―disclosure controls and procedures‖ (as
defined in Rule 13a-14(i) under the Exchange Act) and the Company and its Subsidiaries are in compliance
with all applicable effective provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations issued
thereunder.

                  (s)        The Company and its Subsidiaries maintain insurance of the types and in the
amounts generally deemed adequate for its business, including, but not limited to, directors‘ and officers‘
insurance, insurance covering real and personal property owned or leased by the Company and its Subsidiaries
against theft, damage, destruction, acts of vandalism and all other risks customarily insured against, all of which
insurance is in full force and effect. The Company has not been refused any insurance coverage sought or
applied for, and the Company has no reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not have a Material Adverse Effect on the Company.

                  (t)        Neither the Company nor any of its Subsidiaries nor, to the best of the Company‘s
knowledge, any of its employees or agents has at any time during the last five years (i) made any unlawful
contribution to any candidate for foreign office, or failed to disclose fully any contribution in violation of law,
or (ii) made any payment to any foreign, federal or state governmental officer or official or other person charged
with similar public or quasi-public duties, other than payments required or permitted by the laws of the United
States or any jurisdiction thereof.

               (u)       The Company is not an ―investment company‖ within the meaning of the
Investment Company Act of 1940, as amended.

                 (v)       The Units, Shares, Warrants, and Warrant Shares, are registered pursuant to Section
12(b) of the Exchange Act.

                 (w)         No labor dispute with the employees of the Company exists or, to the knowledge of
the Company, is threatened or imminent, and the Company is not aware of any existing labor disturbance by
any of its employees, or principal suppliers, contractors or customers.

                  (x)       Except as otherwise described in the Pricing Disclosure Package, Effective
Prospectus and the Final Prospectus, the Company owns, licenses or otherwise has rights in all United States
and foreign patents, trademarks, service marks, tradenames, copyrights, trade secrets and other proprietary
rights necessary for the conduct of its business as currently carried on and as currently proposed to be carried on
as described in the Pricing Disclosure Package, Effective Prospectus and the Final Prospectus (collectively, and
together with any applications or registrations for the foregoing, the ―Intellectual Property‖). Except as
specifically described in the Pricing Disclosure Package, Effective Prospectus and the Final Prospectus, (i) no
third parties have obtained rights to any such Intellectual Property from the Company other than licenses
granted in the ordinary course and those that would not result in a Material Adverse Effect on the Company;


                                                         8
(ii) to the Company‘s knowledge, there is no infringement or misappropriation by third parties of any such
Intellectual Property; (iii) there is no pending or, to the Company‘s knowledge, threatened action, suit,
proceeding or claim by others challenging the Company‘s rights in or to any such Intellectual Property, and the
Company is unaware of any facts that would form a basis for any such claim; (iv) there is no pending or, to the
Company‘s knowledge, threatened action, suit, proceeding or claim by others challenging the validity,
enforceability, or scope of any such Intellectual Property, and the Company is unaware of any facts that would
form a basis for any such claim; (v) there is no prior, pending or, to the Company‘s knowledge, threatened
action, suit, proceeding or claim by others that the Company or any of the Company‘s products or product
candidates infringes, misappropriates or otherwise violates, or would infringe upon, misappropriate or otherwise
violate the development or commercialization of the Company‘s products or product candidates described in the
Pricing Disclosure Package, Effective Prospectus and the Final Prospectus, any patent, trademark, copyright,
trade secret or other proprietary right of others, and the Company is unaware of any facts that would form a
basis for any such claim; (vi) to the Company‘s knowledge, there is no patent or patent application that contains
claims that cover or may cover any Intellectual Property described in the Pricing Disclosure Package, Effective
Prospectus and the Final Prospectus as being owned by or licensed to the Company or that is necessary for the
conduct of their businesses as currently or contemplated to be conducted or that interferes with the issued or
pending claims of any such Intellectual Property; (vii) there is no prior art or public or commercial activity of
which the Company is aware that may render any patent held by the Company invalid or any patent application
held by the Company unpatentable that has not been disclosed to the United States Patent and Trademark Office
(the ―PTO‖); and (viii) the Company has not committed any act or omitted to undertake any act the effect of
which commission or omission would render the Intellectual Property invalid or unenforceable in whole or in
part. To the Company‘s knowledge, none of the technology employed by the Company has been obtained or is
being used by the Company in violation of the rights of any person or third party.

                   (y)        The Company possesses such valid and current licenses, certificates, authorizations
or permits issued by the appropriate state, federal or foreign regulatory agencies or bodies (―Licenses‖)
necessary to conduct its business, except where the failure to have such Licenses would not result in a Material
Adverse Effect on the Company, and the Company has not received any notice of proceedings relating to the
revocation or modification of, or non-compliance with, any such License which, individually or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a Material Adverse Effect
on the Company. The Company is in compliance with the terms of the Licenses, except where the failure to so
comply would not result in a Material Adverse Effect on the Company. No registrations, filings, applications,
notices, transfers, consents, approvals, audits, qualifications, waivers or other actions of any kind is required by
virtue of the execution and delivery of this Agreement, or of the consummation of the transactions contemplated
hereby, by the Pricing Disclosure Package, Effective Prospectus or by the Final Prospectus (a) to avoid the loss
of any such License or any asset, property or right pursuant to the terms thereof, or the violation or breach of


                                                          9
any applicable law thereto or (b) to enable the Company to hold and enjoy the same after the Closing Date or
any Subsequent Closing Date, as the case may be, in the conduct of its business as conducted prior to the
Closing Date.

                  (z)        There are no business relationships or related-party transactions involving the
Company or, to the Company‘s knowledge, any other person required by the Securities Act or the Exchange Act
to be described in the Pricing Disclosure Package, Effective Prospectus or the Final Prospectus that have not
been described as required.

                    (aa)        (i) The Company is not in violation of any federal, state, local or foreign statute,
law, rule, regulation, ordinance, code, order, permit, policy or rule of common law or any judicial or
administrative order, consent, decree or judgment or other requirement relating to pollution or protection of
human health or the environment (including, without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including without limitation, laws and regulations relating to emissions,
discharges, releases or threatened releases of chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum and petroleum products (collectively, ―Materials of Environmental Concern‖),
or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or
handling of Materials of Environment Concern (collectively, ―Environmental Laws‖), which violation includes,
but is not limited to, noncompliance with any permits or other governmental authorizations required for the
operation of the business of the Company under applicable Environmental Laws, or noncompliance with the
terms and conditions thereof, nor has the Company received any written communication, whether from a
governmental authority, citizens group, employee or otherwise, that alleges that the Company is in violation of
any Environmental Law, except as would not reasonably be expected to result in a Material Adverse Effect on
the Company; (ii) the Company has all permits, authorizations and approvals required under any applicable
Environmental Laws and is in compliance with their requirements, except where the failure to have such
permits, authorizations and approvals would not result in a Material Adverse Effect on the Company; (iii) there
is no claim, action or cause of action filed with a court or governmental authority, no investigation with respect
to which the Company has received written notice, and no written notice by any person or entity alleging
potential liability for investigatory costs, cleanup costs, governmental responses costs, natural resources
damages, property damages, personal injuries, attorneys‘ fees or penalties arising out of, based on or resulting
from the presence, or release into the environment, of any Material of Environmental Concern at any location
owned, leased or operated by the Company now or in the past (collectively, ―Environmental Claims‖), pending
or, to the best of the Company‘s knowledge, threatened against the Company, any person or entity whose
liability for any Environmental Claim the Company has retained or assumed either contractually or by operation
of law, except as would not result in a Material Adverse Effect on the Company; (iv) to the best of the
Company‘s knowledge, there are no past, present or anticipated future actions, activities, circumstances,
conditions, events or incidents, including, without limitation, the release, emission, discharge, presence or
disposal of any Material of Environmental Concern, that reasonably could be expected to result in a violation of


                                                         10
any Environmental Law, require expenditures to be incurred pursuant to Environmental Law, or form the basis
of a potential Environmental Claim against the Company, or against any person or entity whose liability for any
Environmental Claim the Company has retained or assumed either contractually or by operation of law, except
as would not result in a Material Adverse Effect on the Company; and (v) the Company is not subject to any
pending or, to the Company‘s knowledge, threatened proceeding under an Environmental Law to which a
governmental authority is a party and which is reasonably likely to result in monetary sanctions.

                  (bb)       Except as disclosed in the Pricing Disclosure Package, the Effective Prospectus and
the Final Prospectus, no ―prohibited transaction‖ (as defined in Section 406 of the Employee Retirement Income
Security Act of 1974, as amended from time to time, including the regulations and published interpretations
thereunder (―ERISA‖), or Section 4975 of the Internal Revenue Code of 1986, as amended from time to time
(the ―Code‖)) or ―accumulated funding deficiency‖ (as defined in Section 302 of ERISA) or any of the
reportable events set forth in Section 4043(c) of ERISA (other than events with respect to which the 30 day
notice requirement under Section 4043 of ERISA has been waived) has occurred with respect to any employee
benefit plan of the Company which would result in a Material Adverse Effect on the Company, each such
employee benefit plan is in compliance with applicable law, including ERISA and the Code, except where such
noncompliance would not result in a Material Adverse Effect on the Company, the Company has not incurred
and does not expect to incur liability under Title IV of ERISA with respect to the termination of, or withdrawal
from, any pension plan; and each such pension plan maintained by the Company that is intended to be qualified
under Section 401(a) of the Code is so qualified and nothing has occurred, whether by action or by failure to
act, which would cause the loss of such qualification.

                  (cc)    There is no broker, finder or other party, except for the Underwriters, that is entitled
to receive from the Company any brokerage or finder‘s fee, commission or other similar payment as a result of
any transactions contemplated by this Agreement.

                  (dd)       The Company has not extended or maintained credit, arranged for the extension of
credit, or renewed any extension of credit, in the form of a personal loan, to or for any director or executive
officer (or equivalent thereof) of the Company at a time such transaction was prohibited by law.

         Section 2.       Purchase of the Securities by the Underwriters.
                   (a)      Subject to the terms and conditions and upon the basis of the representations,
warranties and agreements herein set forth, the Company agrees to issue and sell to the Underwriters, and each
of the Underwriters agrees, severally and not jointly, to purchase at a price of $_____ per ________, the number
of Firm Units set forth opposite such Underwriter‘s name in Schedule I hereto, subject to adjustment in
accordance with Section 8 of this Agreement. The Underwriters agree to offer the Firm Units to the public as set
forth in the Final Prospectus.


                                                         11
                   (b)       The Company hereby grants to the Underwriters an option to purchase from the
Company, solely for the purpose of covering over-allotments in connection with the distribution and sale of the
Firm Units, all or any portion of the Option Units for a period of 30 days from the date hereof at the purchase
price per Unit set forth in Section 2(a). Option Units shall be purchased from the Company, severally and not
jointly, for the accounts of the several Underwriters in proportion to the number of Firm Units set forth opposite
such Underwriter‘s name in Schedule I hereto, except that the respective purchase obligations of each
Underwriter shall be adjusted by the Representative so that no Underwriter shall be obligated to purchase
fractional Option Units. No Option Units shall be sold and delivered unless the Firm Units previously have
been, or simultaneously are, sold and delivered.

        Section 3.        Delivery of and Payment for Units.
                  Delivery of certificates for the Firm Units to be purchased by the Underwriters from the
Company and payments therefore shall be made at the offices of Capital Growth Financial, Inc. (or such other
place as mutually may be agreed upon), on the third full Business Day following the date hereof or, if the
pricing of the Firm Units occurs after 4:30 p.m., Florida time, on the fourth full Business Day thereafter, or at
such other date as shall be determined by the Representative and the Company (the ―First Closing Date‖).

                   The option to purchase Option Units granted in Section 2 of this Agreement may be exercised
during the term thereof by written notice to the Company from the Representative. Such notice shall set forth
the aggregate number of Option Units as to which the option is being exercised and the time and date, not
earlier than either the First Closing Date or the second Business Day after the date on which the option shall
have been exercised nor later than the fifth Business Day after the date of such exercise, as determined by the
Representative, when the Option Units are to be delivered (the ―Option Closing Date‖). Delivery and payment
for such Option Units is to be at the offices set forth above for delivery and payment of the Firm Units. The
First Closing Date and the Option Closing Date are herein individually referred to as the ―Closing Date‖ and
collectively referred to as the ―Closing Dates.‖

                   Delivery of certificates for the Units shall be made by or on behalf of the Company to the
Representative, for the respective accounts of the Underwriters, against payment by the Representative, for the
several accounts of the Underwriters, of the purchase price therefore by (i) Federal funds wire transfer; or (ii)
certified or official bank check payable in next day funds to the order of the Company. The certificates for the
Units shall be registered in such names and denominations as the Representative shall have requested at least
two full Business Days prior to the applicable Closing Date, and shall be made available for checking and
packaging at a location in [____________] as may be designated by the Representative at least one full
Business Day prior to such Closing Date. Time shall be of the essence and delivery at the time and place
specified in this Agreement is a further condition to the obligations of each Underwriter.


                                                         12
        Section 4.     Covenants.
                The Company covenants and agrees with each Underwriter that:

                  (a)       The Company shall use its best efforts to cause the Registration Statement to become
effective under the Securities Act and, if the procedure in Rule 430A of the Rules and Regulations is followed,
comply with the provisions of and make all requisite filings with the Commission pursuant to such Rule and to
notify the Representative promptly (in writing, if requested) of all such filings. The Company shall notify the
Representative promptly of any request by the Commission for any amendment of or supplement to the
Registration Statement or the Pricing Disclosure Package, Effective Prospectus or the Final Prospectus or for
additional information; the Company shall prepare and file with the Commission, promptly upon the
Representative‘s request, any amendments of or supplements to the Registration Statement or Pricing
Disclosure Package, Effective Prospectus or the Final Prospectus which, in the Representative‘s opinion, may
be necessary or advisable in connection with the distribution of the Units, provided that the preparation of such
amendments or supplements shall be at the Representative‘s expense if such a request is given nine months or
more after the effective date of the Registration Statement; and the Company may not file any amendment of or
supplement to the Registration Statement or the Pricing Disclosure Package, Effective Prospectus or the Final
Prospectus, which is not approved by the Representative after reasonable notice thereof, provided that such
approval may not be unreasonably withheld or delayed. The Company shall advise the Representative promptly
of the issuance by the Commission or any state or other regulatory body of any stop order or other order
suspending the effectiveness of the Registration Statement, suspending or preventing the use of any
Pre-Effective Prospectus, the Pricing Disclosure Package, or the Effective Prospectus or Final Prospectus or
suspending the qualification of the Units for offering or sale in any jurisdiction, or of the institution of any
proceedings for any such purpose; and the Company shall use its best efforts to prevent the issuance of any stop
order or other such order and, should a stop order or other such order be issued, to obtain as soon as possible the
lifting thereof.

                  (b)       The Company shall (i) not make any offer relating to the Units that would constitute
a ―free writing prospectus‖ (as defined in Rule 405 under the Securities Act) required to be filed by the
Company with the Commission under Rule 433 under the Securities Act; and (ii) not take any action that would
result in an Underwriter or the Company being required to file with the Commission pursuant to Rule 433(d)
under the Securities Act a free writing prospectus prepared by or on behalf of such Underwriter that such
Underwriter otherwise would not have been required to file thereunder.

                  (c)       The Company shall furnish to the Underwriters, from time to time and without
charge, ____ copies of the Registration Statement of which two shall be signed and shall include exhibits and all
amendments and supplements to any of such Registration Statement, in each case as soon as available and in
such quantities as the Representative may from time to time reasonably request.


                                                         13
                  (d)       Within the time during which a Final Prospectus relating to the Units is required to
be delivered under the Securities Act (or, in lieu thereof, the notice referred to in Rule 173(a) under the
Securities Act), the Company shall comply with all requirements imposed upon it by the Securities Act, as now
and hereafter amended, and by the Rules and Regulations, as from time to time in force, so far as is necessary to
permit the continuance of sales of or dealings in the Units as contemplated by the provisions hereof and the
Final Prospectus. If during such period any event occurs as a result of which the Final Prospectus, as then
amended or supplemented, would include an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances under which they were made, not
misleading, or if during such period it is necessary to amend the Registration Statement or supplement the Final
Prospectus to comply with the Securities Act, the Company shall promptly notify the Representative and shall
amend the Registration Statement or supplement the Final Prospectus (at the expense of the Company) so as to
correct such statement or omission or effect such compliance; provided, however , that the expense of the
preparation and delivery of any prospectus required for use nine months or more after the effective date of the
Registration Statement shall be borne by the Underwriters required to deliver such prospectus.

                   (e)       The Company shall take or cause to be taken all necessary action and furnish to
whomever the Representative may direct such information as may be required in qualifying the Units for sale
under the laws of such jurisdictions which the Representative shall designate and to continue such qualifications
in effect for as long as may be necessary for the distribution of the Units; except that in no event shall the
Company be obligated in connection therewith to qualify as a foreign corporation, to execute a general consent
for service of process, or to subject itself to taxation in respect of doing business in any jurisdiction in which it
is not otherwise so subject.

                 (f)      The Company shall engage and maintain, at its expense, a registrar and transfer
agent for the Units, Common Stock and Warrants.

                  (g)        As soon as practicable, but in no event not later than 15 months after the date of this
Agreement, the Company shall make generally available to its security holders and to the Representative an
earnings statement (which need not be audited) covering a period of at least the twelve-months ending
beginning after the date of this Agreement which shall satisfy the provisions of Section 11(a) of the Securities
Act and Rule 158 under the Securities Act Regulations.

                    (h)        The Company shall cause each officer and director of the Company and each holder
of the Company‘s convertible debt acquired in December 2005 and September 2005, to furnish to the
Representative, on or prior to the date of this Agreement, a letter or letters, in form and substance satisfactory to
counsel for the Underwriters, pursuant to which each such person shall agree not to offer for sale, contract to
sell, sell, distribute, grant any option, right or warrant to purchase, pledge, hypothecate or otherwise dispose of,
directly or indirectly, any shares of Common Stock or any securities convertible into, or exercisable or
exchangeable for, shares of Common Stock during the 12 months in the case of officers and directors; 90 days


                                                          14
in the case of holders who acquired convertible debentures in the December 2005 offering; and 180 days in the
case of holders who acquired debentures in the September 2005 offering in each case following the effective
date of the Registration Statement, except with the Representative‘s prior written consent.

                  (i)       The Company shall apply the net proceeds of the sale of the Units in the manner
specified in the Prospectus under the heading ―Use of Proceeds.‖

                  (j)        The Company will furnish to its security holders annual reports containing financial
statements audited by independent public accountants and quarterly reports containing financial statements and
financial information that may be unaudited. During the period of three years from the date hereof, the
Company will deliver to the Representative and, upon request, to each of the other Underwriters, copies of each
annual report of the Company and each other report furnished by the Company to its security holders and will
deliver to the Representative, as soon as they are available, copies of any other reports (financial or otherwise)
which the Company shall publish or otherwise make available to any of its security holders as such, and as soon
as they are available, copies of any reports and financial statements furnished to or filed with the Commission.

                 (k)      The Company shall pay or cause to be paid:
                          (i)         All expenses (including stock transfer taxes) incurred in connection with
                 the delivery to the several Underwriters of the Units;

                          (ii)        All fees and expenses (including, without limitation, fees and expenses of
                 the Company‘s accountants and counsel, but excluding fees and expenses of counsel for the
                 Underwriters) in connection with the preparation, printing, filing, delivery and shipping of the
                 Registration Statement (including the financial statements therein and all amendments and
                 exhibits thereto), each Pre-Effective Prospectus, the Effective Prospectus and the Final
                 Prospectus as amended or supplemented and the printing, delivery and shipping of this
                 Agreement and other underwriting documents, including Underwriters‘ Questionnaires,
                 Underwriters‘ Powers of Attorney, Blue Sky Memoranda, the Agreement Among
                 Underwriters and Selected Dealer Agreements;

                         (iii)      All filing fees and disbursements of counsel to the Underwriters incurred in
                 connection with the qualification of the Units for sale under state securities laws as provided in
                 Section ____ hereof;

                         (iv)        The filing fee of the National Association of Securities Dealers, Inc. (the
                 ―NASD‖) and any applicable expenses of counsel for the Underwriters in connection with a
                 review of the offering by the NASD;

                         (v)      Any applicable American Stock Exchange listing fees;

                                                        15
                         (vi)       The cost of printing certificates representing the Units, Shares, Warrants,
                  and Warrant Shares;

                          (vii)       The cost and charges of any transfer agent or registrar; and

                          (viii)     All other costs and expenses incident to the performance of its obligations
                  hereunder which are not otherwise provided for in this Section.

                   It is understood, however, that, except as provided in this Section, Section 7 and Section 10 of
this Agreement, the Underwriters shall pay all of their own costs and expenses, including the fees of their
counsel, stock transfer taxes on resale of any of the Units by them and any advertising expenses connected with
any offers they may make. If the sale of the Units provided for herein is not consummated by reason of acts of
the Company pursuant to Section 10(a) of this Agreement which prevent this Agreement from becoming
effective, or by reason of any failure, refusal or inability on the part of the Company to perform any agreement
on its part to be performed or because any other condition of the Underwriters‘ obligations hereunder is not
fulfilled, unless the failure to perform the agreement or fulfill the condition is due to the default or omission of
any Underwriter, the Company shall reimburse the several Underwriters for all reasonable out-of-pocket
disbursements (including fees and disbursements of counsel) incurred by the Underwriters in connection with
their investigation, preparing to market and marketing the Securities or in contemplation of performing their
obligations hereunder. The Company shall not in any event be liable to any of the Underwriters for loss of
anticipated profits from the transactions covered by this Agreement.

         Section 5.       Conditions of Underwriters‘ Obligations.
                  The respective obligations of the several Underwriters hereunder are subject to the accuracy, at
and as of the date hereof and each Closing Date (as if made at such Closing Date), of the representations and
warranties of the Company contained herein, to the performance by the Company of its obligations hereunder
and to the following additional conditions:

                   (a)       The Registration Statement and all post-effective amendments thereto shall have
become effective not later than ______ p.m., Florida time, on the date hereof, or, with the Representative‘s
consent, at a later time and date, not later, however, than _____ p.m., Florida time, on the first Business Day
following the date hereof, or at such later date and time as may be approved by a majority in interest of the
Underwriters; if the Company has elected to rely on Rule 462(b), the Rule 462(b) Registration Statement shall
have become effective not later than the earlier of (x) 10:00 p.m., Florida time, on the date hereof, or (y) at such
later date and time as may be approved by a majority in interest of the Underwriters; all filings required by Rule
424, Rule 430A and Rule 433 of the Rules and Regulations have been timely made; no stop order suspending
the effectiveness of the Registration Statement or any amendment or supplement thereto shall have been issued;
no proceedings for the issuance of such an order shall have been initiated or, to the knowledge of the Company,


                                                         16
threatened; and any request of the Commission for additional information (to be included in the Registration
Statement or the Final Prospectus or otherwise) shall have been disclosed to the Representative and complied
with to the Representative‘s satisfaction.

                  (b)        No Underwriter shall have advised the Company that (i) the Pricing Disclosure
Package, Effective Prospectus or Final Prospectus, or any supplement thereto, contains an untrue statement of
fact which, in the Representative‘s opinion, is material, or omits to state a fact which, in the Representative‘s
opinion, is material and is required to be stated therein or is necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading; or (ii) that the Registration Statement,
or any amendment thereto, contains an untrue statement of fact which, in the Representative‘s opinion, is
material, or omits to state a fact which, in the Representative‘s opinion is material and is required to be stated
therein or is necessary to make the statements therein, in light of the circumstances under which they were
made, not misleading.

                   (c)       On each Closing Date there shall have been furnished to the Representative the
opinion (addressed to the Underwriters) of Woodburn and Wedge LLP, Nevada counsel for the Company and
Andrews Kurth LLP special securities counsel for the Company, dated such Closing Date and in form and
substance satisfactory to counsel for the Underwriters which will be substantially in the form attached as
Schedule III-A, and Schedule III-B , respectively. In rendering their opinion as aforesaid, such counsel may rely
as to matters of fact upon certificates of officers of the Company and written communications from the
Commission, the NASD and state officials.

                 (d)      There shall have been furnished to the Representative a certificate of the Company,
dated such Closing Date and addressed to the Representative, signed by the President and by the Chief Financial
Officer of the Company to the effect that:

                           (i)        The representations and warranties of the Company in this Agreement are
                 true and correct, as if made at and as of such Closing Date, and the Company has complied
                 with all the agreements and satisfied all the conditions on its part to be performed or satisfied
                 at or prior to such Closing Date;

                          (ii)      No stop order suspending the effectiveness of the Registration Statement
                 has been issued, and no proceedings for that purpose have been initiated or are pending or, to
                 their knowledge, contemplated;

                         (iii)     Any and all filings required by Rule 424 and Rule 430A of the Rules and
                 Regulations have been timely made;

                        (iv)        The signers of said certificate have carefully examined the Registration
                 Statement, the Pricing Disclosure Package, the Effective Prospectus and the Final Prospectus,


                                                         17
                 and any amendments or supplements thereto, and such documents contain all statements and
                 information required to be included therein; the Registration Statement or any amendment
                 thereto does not include any untrue statement of a material fact or omit to state any material
                 fact required to be stated therein or necessary to make the statements therein, in light of the
                 circumstances under which they were made, not misleading; the Pricing Disclosure Package or
                 any supplements thereto did not as of the Applicable Time include any untrue statement of a
                 material fact or omit to state a material fact required to be stated therein or necessary to make
                 the statements therein, in the light of the circumstances under which they were made, not
                 misleading; and the Effective Prospectus and the Final Prospectus or any supplements thereto
                 do not include any untrue statement of a material fact or omit to state any material fact
                 required to be stated therein or necessary to make the statements therein, in the light of the
                 circumstances under which they were made, not misleading;

                          (v)        Since the effective date of the Registration Statement, there has occurred no
                 event required to be set forth in an amendment or supplement to the Registration Statement or
                 the Pricing Disclosure Package, the Effective Prospectus and the Final Prospectus which has
                 not been so set forth and Regulations that upon such filing would be deemed to be
                 incorporated by reference into the Pricing Disclosure Package, the Effective Prospectus and
                 the Final Prospectus that has not been so filed; and

                           (vi)      Since the effective date of the Registration Statement, neither the Company
                 nor any of its Subsidiaries shall have sustained any loss by strike, fire, flood, accident or other
                 calamity (whether or not insured), or shall have become a party to or the subject of any
                 litigation, which could have a Material Adverse Effect on the Company, whether or not arising
                 in the ordinary course of business, which loss, litigation or change, in the Representative‘s
                 judgment, shall render it inadvisable to proceed with the delivery of the Units.

                   (e)       On the date of this Agreement and on each Closing Date the Representative shall
have received a letter dated the date hereof or such Closing Date, as applicable, and addressed to the
Representative, in form and substance previously approved by the Representative, containing statements and
information of the type ordinarily included in accountant‘s ―comfort letters‖ to underwriters, confirming, among
other things, that they are an independent registered public accounting firm with respect to the Company and its
Subsidiaries within the meaning of the Securities Act and the Rules and Regulations, and stating, as of the date
of such letter (or, with respect to matters involving changes or developments since the respective dates as of
which specified financial information is given or incorporated in the Pricing Disclosure Package, the Effective
Prospectus and the Final Prospectus, as of a date not more than five days prior to the date of such letter), the
conclusions and findings of such firm with respect to the financial information and other matters covered by its
letter delivered


                                                         18
to the Representative concurrently with the execution of this Agreement, and confirming the conclusions and
findings set forth in such prior letter.

                   (f)       The Representative shall have been furnished such additional documents and
certificates as the Representative may reasonably request.

                (g)      The Units, Common Stock and Warrants shall have been duly authorized for listing
on the American Stock Exchange.

                (h)        The Company shall have executed and delivered to the Representative, its (i)
consulting agreement; and (ii) an option entitling the Representative to purchase an aggregate of 10% of the
number of Units sold in the public offering, not including any Units sold in any over-allotment (the
―Representatives‘ Option‖).

                    All such opinions, certificates, letters and documents shall be in compliance with the
provisions hereof only if they are satisfactory in form and substance to the Representative and to counsel for the
Underwriters. The Company shall furnish the Representative with such conformed copies of such opinions,
certificates, letters and other documents, as the Representative shall reasonably request. If any of the conditions
specified in this Section 5 shall not have been fulfilled when and as required by this Agreement, this Agreement
and all obligations of the Underwriters hereunder may be canceled at, or at any time prior to, each Closing Date,
by the Representative; provided, however , that any failure to satisfy any of the conditions to be satisfied as of
the Option Closing Date shall not affect the purchase and sale of the Firm Units as of the First Closing Date.
Any such cancellation shall be without liability of the Underwriters to the Company, except as provided in
Section 6 hereof. Notice of such cancellation shall be given to the Company in writing, or by telephone and
confirmed in writing.

         Section 6.      Qualified Independent Underwriter.
          The Company hereby confirms that at its request CGF shall, without additional compensation, act as
―qualified independent underwriter‖ (in such capacity, the ―QUI‖) within the meaning of Rule 2720 of the
conduct Rules of the NASD in connection with the offering of the Units.

         Section 7.         Indemnification and Contribution.
                   (a)       The Company shall indemnify and hold harmless each Underwriter against any loss,
claim, damage or liability, joint or several, as incurred, to which such Underwriter may become subject, under
the Securities Act or otherwise, insofar as such loss, claim, damage or liability (or action in respect thereof)
arises out of or is based upon (i) any untrue statement or alleged untrue statement of a material fact made by the
Company in Section 1 hereof; or (ii) any untrue statement or alleged untrue statement of a material fact
contained (A) in the Registration Statement, any Pre-Effective Prospectus, the Effective Prospectus, or the Final
Prospectus or any amendment or supplement thereto, or (B) in any blue sky application or other document
executed by the Company specifically for that purpose or based upon written information furnished by the


                                                         19
Company filed in any state or other jurisdiction in order to qualify any or all of the Units under the securities
laws thereof (any such application, documents or information being hereinafter called a ―Blue Sky
Application‖); or (ii) the omission or alleged omission to state in the Registration Statement or any amendment
thereto a material fact required to be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or the omission or alleged omission to state in any
Pre-Effective Prospectus, the Effective Prospectus, the Final Prospectus or any supplement thereto or in any
Blue Sky Application a material fact required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading; and shall reimburse each
Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection with
investigating or defending against or appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; except that the Company shall not be liable in any such case to the extent, but only
to the extent, that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with written
information furnished to the Company through the Representative by or on behalf of any Underwriter
specifically for use in the preparation of the Registration Statement, any Pre-Effective Prospectus, the Effective
Prospectus, the Final Prospectus or any amendment or supplement thereto, or any Blue Sky Application.

                   (b)        Each Underwriter severally, but not jointly, shall indemnify and hold harmless the
Company against any loss, claim, damage or liability, joint or several, as incurred, to which the Company may
become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage or liability (or action
in respect thereof) arises out of or is based upon (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in the Registration Statement any Pre-Effective Prospectus, the Effective Prospectus,
the Final Prospectus or any amendment or supplement thereto, or (B) in any Blue Sky Application, or (ii) the
omission or alleged omission to state in the Registration Statement or any amendment thereto a material fact
required to be stated therein or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or the omission or alleged omission to state in any Pre-Effective
Prospectus, the Effective Prospectus, Final Prospectus or any supplement thereto or in any Blue Sky
Application a material fact required to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; except that such indemnification shall be
available in each such case to the extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in conformity with written
information furnished to the Company through the Representative by or on behalf of such Underwriter
specifically for use in the preparation thereof, and shall reimburse any legal or other expenses reasonably
incurred by the Company in connection with investigating or defending against any such loss, claim, damage,
liability or action.

                  (c)       Promptly after receipt by an indemnified party under sub-section (a) or (b) above of
notice of any claim or the commencement of any action the indemnified party shall, if a claim in respect thereof


                                                         20
is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of
the claim or the commencement of that action; the failure to notify the indemnifying party shall not relieve it
from any liability which it may have to an indemnified party otherwise than under such subsection. If any such
claim or action shall be brought against an indemnified party, and it shall notify the indemnifying party thereof,
the indemnifying party shall be entitled to participate therein and, to the extent that it wishes, jointly with any
other similarly notified indemnifying party, to assume the defense thereof with counsel reasonably satisfactory
to the indemnified party. After notice from the indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying party shall not be liable to the indemnified party
under such subsection for any legal or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs of investigation.

                    (d)       If the indemnification provided for in this Section 7 is unavailable or insufficient to
hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the other from the offering of the
Units or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault
of the Company on the one hand and the Underwriters on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds from the offering of the Units
(before deducting expenses) received by the Company bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the cover page of the Final Prospectus.
The relative fault of the Company on the one hand and the Underwriters on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information supplied by the Company or the
Underwriters and the parties‘ relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue or alleged untrue statement or omission or alleged omission. The Company and the
Underwriters agree that it would not be just and equitable if contributions pursuant to this subsection (d) were to
be determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by
any other method of allocation which does not take into account the equitable considerations referred to in the
first sentence of this subsection (d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified party in connection with
investigating or defending against any action or claim which is the subject of this subsection (d).
Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any


                                                           21
amount in excess of the amount by which the total price at which the Units underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages that such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The
Underwriters‘ obligations in this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint. Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted against it in respect of which contribution
may be sought, it shall promptly give written notice of such service to the party or parties from whom
contribution may be sought, but the omission so to notify such party or parties of any such service shall not
relieve the party from whom contribution may be sought from any obligation it may have hereunder or
otherwise (except as specifically provided in subsection (c) hereof).

                  (e)        The obligations of the Company under Section 6 or Section 7 shall be in addition to
any liability which the Company may otherwise have, and shall extend, upon the same terms and conditions, to
each officer and director of each Underwriter and to each person, if any, who controls any Underwriter or the
QIU within the meaning of the Securities Act; and the obligations of the Underwriters under this Section 7 shall
be in addition to any liability that the respective Underwriters may otherwise have, and shall extend, upon the
same terms and conditions, to each director of the Company (including any person who, with his consent, is
named in the Registration Statement as about to become a director of the Company), to each officer of the
Company who has signed the Registration Statement and to each person, if any, who controls the Company
within the meaning of the Securities Act, in either case, whether or not such person is a party to any action or
proceeding.

                    (f)        Without limitation of and in addition to its obligations under the other paragraphs of
this Section 7, the Company agrees to indemnify and hold harmless the QIU, its partners, members, directors,
officers, affiliates and each person, if any, who controls the QIU within the meaning of Section 15 of the Act
from and against any and all losses, claims, damages or liabilities, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability or action relating to purchases and sales
of Units) to which the QIU, director, officer, employee or controlling person may become subject, under the Act
or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon, the QIU‘s
acting as such ―qualified independent underwriter‖ in connection with the offering contemplated by this
Agreement; and agrees to reimburse each such indemnified party promptly upon demand for any legal or other
expenses reasonably incurred by them in connection with investigating or defending or preparing to defend any
such loss, claim, damage, liability or action; provided, however, that the Company will not be liable in any such
case to the extent that it is determined in a final judgment by a court of competent jurisdiction that such loss,
claim, damage, liability or action resulted directly from the gross negligence or willful misconduct of the QIU.
The relative benefits received by the QIU with respect to the offering contemplated by this Agreement will, for


                                                          22
purposes of Section 7(d), be deemed to be equal to the compensation received by the QIU for acting in such
capacity. In addition, notwithstanding the provisions of Section 7(d), the QIU will not be required to contribute
any amount in excess of the compensation received by the QIU for acting in such capacity.

          Section 8.       Substitution of Underwriters.
                  If any Underwriter defaults in its obligation to purchase the number of Units which it has
agreed to purchase under this Agreement, the non-defaulting Underwriters shall be obligated to purchase (in the
respective proportions which the number of Units set forth opposite the name of each non-defaulting
Underwriter in Schedule I hereto bears to the total number of Units set forth opposite the names of all the
non-defaulting Underwriters in Schedule I hereto) the Units which the defaulting Underwriter agreed but failed
to purchase; except that the non-defaulting Underwriters shall not be obligated to purchase any of the Units if
the total number of Units which the defaulting Underwriter or Underwriters agreed but failed to purchase
exceeds 10% of the total number of Firm Units, and any non-defaulting Underwriter shall not be obligated to
purchase more than 110% of the number of Units set forth opposite its name in Schedule I hereto plus the total
number of Option Units, purchasable by it pursuant to the terms of Section 2. If the foregoing maximums are
exceeded, (i) the non-defaulting Underwriters, and any other underwriters satisfactory to the Representative
who so agree, shall have the right, but shall not be obligated, to purchase (in such proportions as may be agreed
upon among them) all the Units. If the non-defaulting Underwriters or the other underwriters satisfactory to the
Representative do not elect to purchase the Units which the defaulting Underwriter or Underwriters agreed but
failed to purchase, this Agreement shall terminate without liability on the part of any non-defaulting
Underwriter or the Company except for the payment of expenses to be borne by the Company and the
Underwriters as provided in Section (4)(k) and the indemnity and contribution agreements of the Company and
the Underwriters contained in Section 7 hereof.

                  Nothing contained herein shall relieve a defaulting Underwriter of any liability it may have for
damages caused by its default. If the other underwriters satisfactory to the Representative are obligated or agree
to purchase the Units of a defaulting Underwriter, either the Representative or the Company may postpone the
First Closing Date for up to five full Business Days in order to effect any changes that may be necessary in the
Registration Statement, the Pricing Disclosure Package, the Effective Prospectus or the Final Prospectus or in
any other document or agreement, and to file promptly any amendments or any supplements to the Registration
Statement, the Pricing Disclosure Package, the Effective Prospectus or the Final Prospectus which in the
Representative‘s opinion may thereby be made necessary.

          Section 9.        Effective Date and Termination.
                   (a)       This Agreement shall become effective at _____ a.m., Florida time, on the first full
Business Day following the earlier of (i) the date hereof, or (ii) the day on which the Representative releases the
initial public offering of the Firm Units for sale to the public. The Representative shall notify the Company


                                                         23
immediately after the Representative has taken any action that causes this Agreement to become effective. Until
this Agreement is effective, either the Company or the Representative may terminate this Agreement by giving
notice to the other party as hereinafter provided, except that the provisions of Section 7 shall at all times be
effective. For purposes of this Agreement, the release of the initial public offering of the Firm Units for sale to
the public shall be deemed to have been made when the Representative releases, by telegram or otherwise, firm
offers of the Firm Units to securities dealers or release for publication a newspaper advertisement relating to the
Firm Units, whichever occurs first.

                   (b)       Until the First Closing Date, this Agreement may be terminated by the
Representative by giving notice as hereinafter provided to the Company, if (i) the Company shall have failed,
refused or been unable, at or prior to the First Closing Date, to perform any agreement on its part to be
performed hereunder unless the failure to perform any agreement is due to the default or omission by any
Underwriter; (ii) any other condition of the obligations of the Underwriters hereunder is not fulfilled; (iii)
trading in securities generally on the New York Stock Exchange or the American Stock Exchange or the
over-the-counter market shall have been suspended or minimum or maximum prices shall have been established
on either of such exchanges or such market by the Commission or by such exchange or other regulatory body or
governmental authority having jurisdiction; (iv) trading or quotation in any of the Company‘s securities shall
have been suspended or limited by the Commission or by such exchange or other regulatory body or
governmental authority having jurisdiction; (v) a general banking moratorium shall have been declared by
Federal or state authorities; (vi) a material disruption in securities settlement, payment or clearance services in
the United States shall have occurred; (vii) there shall have been any downgrading or any notice of intended or
potential downgrading in the rating accorded any securities of the Company or its Subsidiaries by any
―nationally recognized statistical rating organization‖ as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act; (viii) there shall have been any material adverse change in general economic, political
or financial conditions or if the effect of international conditions on the financial markets in the United States
shall be such as, in the Representative‘s judgment, makes it inadvisable to proceed with the delivery of the
Units; or (ix) any attack on, outbreak or escalation of hostilities, declaration of war or act of terrorism involving
the United States or any other national or international calamity or emergency if, in the Representative‘s
judgment, the effect of any such attack, outbreak, escalation, declaration, act, calamity or emergency makes it
impractical or inadvisable to proceed with the completion of the public offering or the delivery of the Units.
Any termination of this Agreement pursuant to this Section 9 shall be without liability on the part of the
Company or any Underwriter, except as otherwise provided in Sections 4(l) and 6 hereof. Any notice referred to
above may be given at the address specified in Section 12 of this Agreement in writing or by telegraph or
telephone, and if by telegraph or telephone, shall be immediately confirmed in writing.

                  (c)       This Agreement may also be terminated as provided in Section 8 hereof.


                                                          24
         Section 10.       Right to Appoint an Observer
          For the period of two years from the Effective Date (as that term is defined in Section 9), upon notice
from the Representative to the Company, the Representative shall have the right to send a representative (who
need not be the same individual from meeting to meeting, provided that in each instance the Company is given
reasonable, advance notice of the representative attending any such meeting and such person is reasonably
acceptable to the Company) to observe each meeting of the Board of Directors of the Company; provided that
such representative shall sign a Regulation FD compliant confidentiality agreement which is reasonably
acceptable to the Representative and its counsel in connection with such representative‘s attendance at meetings
of the Board of Directors; and provided further that upon written notice to the Underwriters, the Company may
exclude the representative from meetings where, in the opinion of counsel for the Company, the representative‘s
presence may cause the loss of attorney-client privilege or if, in the opinion of the Company‘s Board of
Directors, it would be in the best interest of the Company to exclude the observer for such portion of the
meeting. The Company agrees to give the Representative written notice of each such meeting and to provide the
Representative with an agenda and minutes of the meeting no later than it gives such notice and provides such
items to the other directors.

        Section 11.       Survival of Indemnities, Contribution, Warranties and Representations.

                  The indemnity and contribution agreements contained in Section 6 and the representations,
warranties and agreements of the Company in Sections 1 and 4(a), (b), (f), (g), (h), (i), and (j), and the
obligations of the Company pursuant to this Section 11, shall survive the delivery of the Units to the
Underwriters hereunder and shall remain in full force and effect, regardless of any termination or cancellation of
this Agreement or any investigation made by or on behalf of any indemnified party.

         Section 12.      Notices.
                  Except as otherwise provided in this Agreement, (a) whenever notice is required by the
provisions of this Agreement to be given to the Company, such notice shall be in writing addressed and mailed
or delivered to the Company at 8121 Bee Caves Road, Austin, Texas 78746, Attention: Clark N. Wilson with a
copy sent to: Carmelo M. Gordian, Andrews Kurth LLP, 111 Congress Avenue, Suite 1700, Austin, Texas
78701; and (b) whenever notice is required by the provisions of this Agreement to be given to the
Representative or the several Underwriters, such notice shall be in writing addressed and mailed or delivered to
Capital Growth Financial, LLC, 1200 N. Federal Highway, Suite 400, Boca Raton, Florida 33432 with a copy
sent to Joel D. Mayersohn, Esq., Arnstein & Lehr LLP, 200 East Las Olas Boulevard, Suite 1700, Fort
Lauderdale, Florida 33301.

        Section 13.      Information Furnished by Underwriters.

                                                        25
                  [The statements set forth in the last paragraph on the cover page [refer to paragraph containing
stabilization language, if appropriate] and under the caption ―Underwriting‖ in any Pre-Effective Prospectus and
in the Effective Prospectus and the Final Prospectus, [except for the statements made in the paragraph under the
caption ―Underwriting‖ in the Effective Prospectus and the Final Prospectus relating to sales or dispositions by
the Company] constitute the only written information furnished by or on behalf of any Underwriter referred to
in paragraphs (b) and (d) of Section 1 and in paragraphs (a) and (b) of Section 7 of this Agreement.]

         Section 14.       Parties.
                  Parties. This Agreement is made solely for the benefit of the several Underwriters, the
Company, any officer, director or controlling person referred to in Section 7 of this Agreement and their
respective successors and assigns, and no other person shall acquire or have any right by virtue of this
Agreement. The term ―successors and assigns,‖ as used in this Agreement, shall not include any purchaser of
any of the Units from any of the Underwriters merely by reason of such purchase.

         Section 15.      No Fiduciary Relationship.
                  The Company acknowledges and agrees that each Underwriter in providing underwriting
services to the Company in connection with the offering of the Units, including in acting pursuant to the terms
of this Agreement, has acted and is acting as an independent contractor on an arm‘s length basis and not as a
fiduciary and the Company does not intend such Underwriter to act in any capacity other than as an independent
contractor, including as a fiduciary or in any other position of higher trust. The Company shall be responsible
for making its own independent investigation and appraisal of the transactions contemplated by this Agreement
and the Underwriters shall have no responsibility or liability with respect thereto.

        Section 16.     Definition of ―Business Day‖ and ―Subsidiary.‖
                 For purposes of this Agreement, (a) ―Business Day‖ means any day on which the American
Stock Exchange is open for trading; and (b) ―Subsidiary‖ has the meaning set forth in Rule 405 under the
Securities Act.

         Section 17.      Governing Law.
                 This Agreement shall be governed by and construed in accordance with the laws of the State of
Florida, without giving effect to the choice of law or conflict of laws principles thereof.

         Section 18.       Counterparts.
                  This Agreement may be signed in one or more counterparts, each of which shall constitute an
original and all of which together shall constitute one and the same agreement.


                                                        26
[SIGNATURE PAGE TO FOLLOW]




            27
         Please confirm, by signing and returning to us the counterparts of this Underwriting Agreement, that
the Representative is acting on behalf of itself and the several Underwriters and that the foregoing correctly sets
forth the agreement among the Company and the several Underwriters.

                                                     Very truly yours,

                                                     WILSON HOLDINGS, INC.

                                                     By:___________________________________

                                                     Print Name:____________________________

                                                     Title:_________________________________

Confirmed and accepted as of the date
first above mentioned:

CAPITAL GROWTH FINANCIAL, LLC
as Representative of the Several
Underwriters named in Schedule I hereto

By: _____________________________________

Print Name: ______________________________

Title:____________________________________




                                                         28
                                SCHEDULE I

              Underwriting Agreement dated ______________, 2007

                                             Number of
                                             Firm Units
Underwriter                               to be Purchased




Total:
                                                SCHEDULE II

                           Underwriting Agreement dated ______________, 2007

Information that is part of the Pricing Disclosure Package but not included in Schedule II.
                                               SCHEDULE III-A

                            Form of Opinion of Nevada Counsel for the Company

       Opinion of counsel for the Company to be delivered pursuant to Section 5(d) of the Underwriting
Agreement.

        References to the Final Prospectus in this Exhibit A include any supplements thereto at the Closing
Date.

        1.         The Company has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Nevada.

       2.        The Company has corporate power and authority to perform its obligations under the
Underwriting Agreement, the Warrant Agreement and the Representative Option.

         3.         The Company has corporate power and authority to own, or lease, as the case may be, and to
operate its properties and to conduct its business as described in the Effective Prospectus and the Final
Prospectus.

         4.        The authorized capital stock of the Company consists of [_________] shares of common
stock, par value $_____ per share, and [_________] shares of preferred stock, par value $_____ per share. The
authorized (including the Units, Shares, Warrants and Warrant Shares) and the issued and outstanding securities
of the Company conform to the descriptions thereof set forth in the Effective Prospectus and Final Prospectus.
All of the outstanding shares of common stock have been duly authorized and validly issued, are fully paid and
nonassessable.

         5.         No stockholder of the Company or any other person has any preemptive right, right of first
refusal or other similar right to subscribe for or purchase securities of the Company arising (i) by operation of
the charter or bylaws of the Company; (ii) Nevada General Corporation Law; or (iii) otherwise.

        6.         The Securities to be purchased by the Underwriters from the Company have been duly
authorized for issuance and sale and, when issued and delivered by the Company pursuant to the Underwriting
Agreement against payment of the consideration set forth therein, will be validly issued, fully paid and
nonassessable.

         7.        To such counsel‘s knowledge, the Company has reserved a number of its authorized, but
unissued shares of common stock, that permit the issuance of the Shares, Warrants, Warrant Shares, the
Representatives‘ Option and the Warrants issuable upon exercise of the Representative Option outstanding from
time to time.



                                                          1
                                                SCHEDULE III-B

                           Form of Opinion of Securities Counsel for the Company

       Opinion of counsel for the Company to be delivered pursuant to Section 5(d) of the Underwriting
Agreement.

         References to the Final Prospectus in this Exhibit A include any supplements thereto at the Closing
Date.

         1.         The Registration Statement has been declared effective by the Commission under the
Securities Act. To such counsel‘s knowledge, no stop order suspending the effectiveness of the Registration
Statement, if any, has been issued under the Securities Act and no proceedings for such purpose have been
instituted or are pending or are contemplated or threatened by the Commission.

         2.          The Registration Statement, Effective Prospectus and Final Prospectus and each amendment
or supplement to the Registration Statement, the Effective Prospectus and Final Prospectus, as of their
respective effective or issue dates (other than the financial statements and supporting schedules included therein
or in exhibits to or excluded from the Registration Statement, as to which no opinion need be rendered) comply
as to form in all material respects with the applicable requirements of the Securities Act.

         3.        To such counsel‘s knowledge, there are no legal or governmental actions, suits or
proceedings pending or threatened that are required to be disclosed in the Registration Statement, other than
those disclosed therein.

         4.       No consent, approval, authorization or other order of, or registration or filing with, any court,
regulatory body or other governmental authority or agency, is required for the Company‘s execution, delivery
and performance of the Underwriting Agreement, the Warrant Agreement or the Representative Option and
consummation of the transactions contemplated thereby and by the Effective Prospectus and the Final
Prospectus, except as required under the Securities Act, applicable state securities or blue sky laws and from the
NASD.

         5.         The execution and delivery of the Underwriting Agreement, the Warrant Agreement or the
Representatives‘ Option by the Company and the performance by the Company of its obligations thereunder
(other than performance by the Company of its obligations under the indemnification section of the
Underwriting Agreement, as to which no opinion need be rendered) (i) have been duly authorized by all
necessary corporate action on the part of the Company; (ii) will not result in any violation of the provisions of
the charter or by-laws of the Company; (iii) will not constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company pursuant
to any existing instrument; or (iv) will not result in any violation of any statute, law, rule, judgment, regulation,


                                                          1
order or decree applicable to the Company of any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over the Company or any of its respective properties.

        6.        The Company is not, and after receipt of payment for the Units and the application of the
proceeds thereof as contemplated under the caption ―Use of Proceeds‖ in the Final Prospectus will not be, an
―investment company‖ within the meaning of Investment Company Act.

         7.         The Company (A) is not in violation of (i) its charter or bylaws or (ii) any statute, law, rule,
judgment, regulation, order or decree applicable to the Company of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having jurisdiction over the Company or any of its
respective properties; or (B) except as disclosed in the Effective Prospectus and the Final Prospectus, is in
default in the performance or observance of any obligation, agreement, covenant or condition contained in any
material existing instrument, except with respect to this clause (B) only, for such defaults as would not result in
a Material Adverse Effect on the Company.

         8.        To such counsel‘s knowledge, the Company has reserved a number of its authorized, but
unissued shares of common stock, that permit the issuance of the Shares, Warrants, Warrant Shares, the
Representatives‘ Option and the Warrants issuable upon exercise of the Representative Option outstanding from
time to time.

          In addition to the matters set forth above, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company, representatives of the independent public
or certified public accountants for the Company at which the contents of the Registration Statement, the
Effective Prospectus and Final Prospectus, and any supplements or amendments thereto, and related matters
were discussed and, although such counsel is not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the Registration Statement, the Effective
Prospectus and Final Prospectus (other than as specified above), and any supplements or amendments thereto,
on the basis of the foregoing, nothing has come to their attention which would lead them to believe that either
(i) the Registration Statement or any amendments thereto, at the time the Registration Statement or such
amendments became effective, contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; (ii) the Effective Prospectus and Final Prospectus,
as of its date, as the case may be, contained an untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in the light of the circumstances under which they were
made, not misleading; or (iii) the Pricing Disclosure Package, when considered together with the statements
under the caption ―Description of Securities‖ in the Effective Prospectus and Final Prospectus, contained any
untrue statement of a material fact or omitted to state any fact necessary in order to make the statements therein,
in the light of circumstances under which they were made, not misleading.


                                                          2
                                              EXHIBIT 4.3



       FORM OF WARRANT AGREEMENT

                  BETWEEN

           WILSON HOLDINGS, INC.

                     AND

STANDARD REGISTRAR & TRANSFER COMPANY, INC.

          DATED AS OF _________, 2007
                                          WARRANT AGREEMENT

         This Agreement, dated as of April __, 2007, is between Wilson Holdings, Inc., a Nevada corporation
(the ― Company ‖) and Standard Registrar & Transfer Company, Inc., a Utah corporation (the ― Warrant Agent
‖).

                                                RECITALS

         The Company, at or about the time that it is entering into this Agreement, proposes to issue and sell to
public investors up to 5,750,000 Units (together with the additional units issuable as provided herein, the ―
Units ‖). Each Unit consists of one share of common stock, $0.001 par value, of the Company, and one
redeemable Warrant. Each Warrant is exercisable to purchase one share of Common Stock upon the terms and
conditions and subject to adjustment in certain circumstances, all as set forth in this Agreement.

         The Company proposes to issue to the Representative of the Underwriters in the public offering of the
Units referred to above warrants to purchase up to 575,000 additional Units.

        The Company wishes to retain the Warrant Agent to act on behalf of the Company, and the Warrant
Agent is willing so to act, in connection with the issuance, transfer, exchange and replacement of the certificates
evidencing the Warrants to be issued under this Agreement (the ― Warrant Certificates ‖) and the exercise of
the Warrants;

         The Company and the Warrant Agent wish to enter into this Agreement to set forth the terms and
conditions of the Warrants and the rights of the holders thereof (― Warrantholders ‖) and to set forth the
respective rights and obligations of the Company and the Warrant Agent. Each Warrantholder is an intended
beneficiary of this Agreement with respect to the rights of Warrantholders herein.

                                              AGREEMENT

         NOW, THEREFORE , in consideration of the premises and the mutual agreements herein set forth,
the parties hereto agree as follows:

         1.       Appointment of Warrant Agent . The Company appoints the Warrant Agent to act as agent
for the Company in accordance with the instructions in this Agreement and the Warrant Agent accepts such
appointment.

         2.      Date, Denomination and Execution of Warrant Certificates .
                 (a)       The Warrant Certificates (and the Form of Election to Purchase and the Form of
        Assignment to be printed on the reverse thereof) shall be in registered form only and shall be
        substantially of the tenor and purport recited in EXHIBIT A hereto, and may have such letters, numbers
        or other marks of identification or designation and such legends, summaries or endorsements printed,
        lithographed or engraved thereon as the Company may deem appropriate and as are not inconsistent
        with the provisions of this Agreement, or as may be required to comply with any law, or
        with any rule or regulation made pursuant thereto, or with any rule or regulation of any stock exchange
        on which the Common Stock or the Warrants may be listed or any automated quotation system, or to
        conform to usage. Each Warrant Certificate shall entitle the registered holder thereof, subject to the
        provisions of this Agreement and of the Warrant Certificate, to purchase, on or after _________, 2007
        and on or before the close of business on _________, 2012 (the ― Expiration Date ‖), one fully paid
        and non-assessable share of Common Stock for each Warrant evidenced by such Warrant Certificate
        for $6.00. The exercise price of the Warrants (the ―Exercise Price‖) is subject to adjustments as
        provided in Section 6 hereof. Each Warrant Certificate issued as a part of a Unit offered to the public as
        described in the recitals, above, shall be dated _______, 2007; each other Warrant Certificate shall be
        dated the date on which the Warrant Agent receives valid issuance instructions from the Company or a
        transferring holder of a Warrant Certificate or, if such instructions specify another date, such other date.

                (b)        For purposes of this Agreement, the term ―Close of Business‖ on any given date shall
        mean 5:00 p.m., eastern standard time, on such date; provided, however, that if such date is not a
        business day, it shall mean 5:00 p.m., eastern standard time, on the next succeeding business day. For
        purposes of this Agreement, the term ―Business Day‖ shall mean any day other than a Saturday,
        Sunday, or a day on which banking institutions in New York, New York or in the State in which the
        Warrant Agent maintains the principal office in which it conducts business related to the Warrants are
        authorized or obligated by law to be closed.

                 (c)      Each Warrant Certificate shall be executed on behalf of the Company by the
        Chairman of the Board, its Chief Executive Officer, its President or a Vice President, either manually
        or by facsimile signature printed thereon, and have affixed thereto the Company‘s seal or a facsimile
        thereof which shall be attested by the Secretary or an Assistant Secretary of the Company, either
        manually or by facsimile signature. Each Warrant certificate shall be manually countersigned by the
        Warrant Agent and shall not be valid for any purpose unless so countersigned. In case any officer of the
        Company who shall have signed any Warrant Certificate shall cease to be such officer of the Company
        before countersignature by the Warrant Agent and issue and delivery thereof by the Company, such
        Warrant Certificate, nevertheless, may be countersigned by the Warrant Agent, issued and delivered
        with the same force and effect as though the person who signed such Warrant Certificate had not
        ceased to be such officer of the Company.

         3.         Subsequent Issue of Warrant Certificates . Subsequent to their original issuance, no
Warrant Certificates shall be reissued except (i) Warrant Certificates issued upon transfer thereof in accordance
with Section 4 hereof, (ii) Warrant Certificates issued upon any combination, split-up or exchange of Warrant
Certificates pursuant to Section 4 hereof, (iii) Warrant Certificates issued in replacement of mutilated,
destroyed, lost or stolen Warrant Certificates pursuant to Section 5 hereof, (iv) Warrant Certificates issued upon
the partial exercise of Warrant Certificates pursuant to Section 7 hereof, and (v) Warrant Certificates issued to
reflect any adjustment or change in the Exercise Price or the number or kind of shares purchasable thereunder
pursuant to Section 22 hereof. The Warrant Agent is hereby irrevocably authorized to countersign and deliver,
in accordance with the provisions of said Sections 4, 5, 7 and 22, the new Warrant Certificates required for
purposes thereof, and the Company, whenever required by the Warrant Agent, will supply the Warrant Agent
with Warrant Certificates duly executed on behalf of the Company for such purposes.


                                                        2
        4.      Transfers and Exchanges of Warrant Certificates .
                 (a)       The Warrant Agent will keep or cause to be kept books for registration of ownership
        and transfer of the Warrant Certificates issued hereunder. Such registers shall show the names and
        addresses of the respective holders of the Warrant Certificates and the class and number of Warrants
        evidenced by each such Warrant Certificate.

                  (b)       The Warrant Agent shall, from time to time, register the transfer of any outstanding
        Warrants upon the books to be maintained by the Warrant Agent for that purpose, upon surrender of the
        Warrant Certificate evidencing such Warrants, with the Form of Assignment duly filled in and
        executed with such signature guaranteed by a banking institution or NASD member and such
        supporting documentation as the Warrant Agent or the Company may reasonably require, to the
        Warrant Agent at its stock transfer office in Draper, Utah at any time on or before the Expiration Date
        of such Warrant, and upon payment to the Warrant Agent for the account of the Company of an amount
        equal to any applicable transfer tax. Payment of the amount of such tax may be made in cash, or by
        certified or official bank check, payable in lawful money of the United States of America to the order
        of the Company.

                  (c)       Upon receipt of a Warrant Certificate, with the Form of Assignment duly filled in and
        executed, accompanied by payment of an amount equal to any applicable transfer tax, the Warrant
        Agent shall promptly cancel the surrendered Warrant Certificate and countersign and deliver to the
        transferee a new Warrant Certificate for the number of full Warrants of the same class transferred to
        such transferee; provided, however, that in case the registered holder of any Warrant Certificate shall
        elect to transfer fewer than all of the Warrants evidenced by such Warrant Certificate, the Warrant
        Agent in addition shall promptly countersign and deliver to such registered holder a new Warrant
        Certificate or Certificates for the number of full Warrants not so transferred.

                 (d)       Any Warrant Certificate or Certificates may be exchanged at the option of the holder
        thereof for another Warrant Certificate or Certificates of different denominations, of like tenor and
        representing in the aggregate the same class and number of Warrants, upon surrender of such Warrant
        Certificate or Certificates, with the Form of Assignment duly filled in and executed, to the Warrant
        Agent, at any time or from time to time after the close of business on the date hereof and prior to the
        close of business on the Expiration Date relating to such Warrant. The Warrant Agent shall promptly
        cancel the surrendered Warrant Certificate and deliver the new Warrant Certificate pursuant to the
        provisions of this Section.

         5.        Mutilated, Destroyed, Lost or Stolen Warrant Certificates . Upon receipt by the
Company and the Warrant Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of any Warrant Certificate, and in the case of loss, theft or destruction, of indemnity or security
reasonably


                                                        3
satisfactory to them, and reimbursement to them of all reasonable expenses incidental thereto, and, in the case
of mutilation, upon surrender and cancellation of the Warrant Certificate, the Warrant Agent shall countersign
and deliver a new Warrant Certificate of like tenor for the same class and number of Warrants.


        6.        Adjustments of Number and Kind of Shares Purchasable and Exercise Price . The
number and kind of securities or other property purchasable upon exercise of a Warrant shall be subject to
adjustment from time to time upon the occurrence, after the date hereof, of any of the following events:

                  (a)      In case the Company shall (1) pay a dividend in, or make a distribution of, shares of
        capital stock on its outstanding Common Stock, (2) subdivide its outstanding shares of Common Stock
        into a greater number of such shares or (3) combine its outstanding shares of Common Stock into a
        smaller number of such shares, the total number of shares of Common Stock purchasable upon the
        exercise of each Warrant outstanding immediately prior thereto shall be adjusted so that the holder of
        any Warrant Certificate thereafter surrendered for exercise shall be entitled to receive at the same
        aggregate Exercise Price the number of shares of capital stock (of one or more classes) which such
        holder would have owned or have been entitled to receive immediately following the happening of any
        of the events described above had such Warrant been exercised in full immediately prior to the record
        date with respect to such event. Any adjustment made pursuant to this Subsection shall, in the case of a
        stock dividend or distribution, become effective as of the record date therefor and, in the case of a
        subdivision or combination, be made as of the effective date thereof. If, as a result of an adjustment
        made pursuant to this Subsection, the holder of any Warrant Certificate thereafter surrendered for
        exercise shall become entitled to receive shares of two or more classes of capital stock of the Company,
        the Board of Directors of the Company (whose determination shall be conclusive and shall be
        evidenced by a Board resolution filed with the Warrant Agent) shall determine the allocation of the
        adjusted Exercise Price between or among shares of such classes of capital stock.

                  (b)       In the event of a capital reorganization or a reclassification of the Common Stock
        (except as provided in Subsection (a) above or Subsection (d) below), any Warrantholder, upon
        exercise of Warrants, shall be entitled to receive, in substitution for the Common Stock to which he
        would have become entitled upon exercise immediately prior to such reorganization or reclassification,
        the shares (of any class or classes) or other securities or property of the Company (or cash) that he
        would have been entitled to receive at the same aggregate Exercise Price upon such reorganization or
        reclassification if such Warrants had been exercised immediately prior to the record date with respect
        to such event; and in any such case, appropriate provision (as determined by the Board of Directors of
        the Company, whose determination shall be conclusive and shall be evidenced by a certified Board
        resolution filed with the Warrant Agent) shall be made for the application of this Section 6 with respect
        to the rights and interests thereafter of the Warrantholders (including but not limited to the allocation of
        the Exercise Price between or among shares of classes of capital stock), to the end that this Section 6
        (including the adjustments of the number of shares of Common Stock or other securities purchasable
        and the Exercise Price thereof) shall thereafter be reflected, as nearly as reasonably practicable, in all
        subsequent exercises of the Warrants for any shares or securities or other property (or cash) thereafter
        deliverable upon the exercise of the Warrants.


                                                         4
                  (c)        Whenever the number of shares of Common Stock or other securities purchasable
        upon exercise of a Warrant is adjusted as provided in this Section 6, the Company will promptly file
        with the Warrant Agent a certificate signed by a Chairman or co-Chairman of the Board, the Chief
        Executive, the President or a Vice President of the Company and by the Treasurer or an Assistant
        Treasurer or the Secretary or an Assistant Secretary of the Company setting forth the number and kind
        of securities or other property purchasable upon exercise of a Warrant, as so adjusted, stating that such
        adjustments in the number or kind of shares or other securities or property conform to the requirements
        of this Section 6, and setting forth a brief statement of the facts accounting for such adjustments.
        Promptly after receipt of such certificate, the Company, or the Warrant Agent at the Company‘s
        request, will deliver, by first-class, postage prepaid mail, a brief summary thereof (to be supplied by the
        Company) to the registered holders of the outstanding Warrant Certificates; provided, however, that
        failure to file or to give any notice required under this Subsection, or any defect therein, shall not affect
        the legality or validity of any such adjustments under this Section 6; and provided, further, that, where
        appropriate, such notice may be given in advance and included as part of the notice required to be
        given pursuant to Section 12 hereof.

                  (d)      In case of any consolidation of the Company with, or merger of the Company into,
        another corporation (other than a consolidation or merger which does not result in any reclassification
        or change of the outstanding Common Stock), or in case of any sale or conveyance to another
        corporation of the property of the Company as an entirety or substantially as an entirety, the
        corporation formed by such consolidation or merger or the corporation which shall have acquired such
        assets, as the case may be, shall execute and deliver to the Warrant Agent a supplemental warrant
        agreement providing that the holder of each Warrant then outstanding shall have the right thereafter
        (until the expiration of such Warrant) to receive, upon exercise of such Warrant, solely the kind and
        amount of shares of stock and other securities and property (or cash) receivable upon such
        consolidation, merger, sale or transfer by a holder of the number of shares of Common Stock of the
        Company for which such Warrant might have been exercised immediately prior to such consolidation,
        merger, sale or transfer. Such supplemental warrant agreement shall provide for adjustments which
        shall be as nearly equivalent as may be practicable to the adjustments provided in this Section. The
        above provision of this Subsection shall similarly apply to successive consolidations, mergers, sales or
        transfers.

         The Warrant Agent shall not be under any responsibility to determine the correctness of any provision
contained in any such supplemental warrant agreement relating to either the kind or amount of shares of stock
or securities or property (or cash) purchasable by holders of Warrant Certificates upon the exercise of their
Warrants after any such consolidation, merger, sale or transfer or of any adjustment to be made with respect
thereto, but subject to the provisions of Section 20 hereof, may accept as conclusive evidence of the correctness
of any such provisions, and shall be protected in relying upon, a certificate of a firm of independent certified
public accountants (who may be the accountants regularly employed by the Company) with respect thereto.


                                                         5
                 (e)      Irrespective of any adjustments in the number or kind of shares issuable upon
        exercise of Warrants, Warrant Certificates theretofore or thereafter issued may continue to express the
        same price and number and kind of shares as are stated in the similar Warrant Certificates initially
        issuable pursuant to this Warrant Agreement.

                 (f)      The Company may retain a firm of independent public accountants of recognized
        standing, which may be the firm regularly retained by the Company, selected by the Board of Directors
        of the Company or the Executive Committee of said Board, and not disapproved by the Warrant Agent,
        to make any computation required under this Section, and a certificate signed by such firm shall, in the
        absence of fraud or gross negligence, be conclusive evidence of the correctness of any computation
        made under this Section.

                 (g)       For the purpose of this Section, the term ―Common Stock‖ shall mean (i) the
        Common Stock or (ii) any other class of stock resulting from successive changes or reclassifications of
        such Common Stock consisting solely of changes in par value, or from par value to no par value, or
        from no par value to par value. In the event that at any time as a result of an adjustment made pursuant
        to this Section, the holder of any Warrant thereafter surrendered for exercise shall become entitled to
        receive any shares of capital stock of the Company other than shares of Common Stock, thereafter the
        number of such other shares so receivable upon exercise of any Warrant shall be subject to adjustment
        from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with
        respect to the Common Stock contained in this Section, and all other provisions of this Agreement,
        with respect to the Common Stock, shall apply on like terms to any such other shares.

                 (h)      The Company may, from time to time and to the extent permitted by law, reduce the
        Exercise Price of the Warrants by any amount for a period of not less than 20 days. If the Company so
        reduces the Exercise Price of such Warrants, it will give not less than 15 days‘ notice of such decrease,
        which notice may be in the form of a press release, and shall take such other steps as may be required
        under applicable law in connection with any offers or sales of securities at the reduced price.

         7.        Exercise of Warrants; Redemption of Warrants . Except with respect to Warrants that
have been redeemed as provided in this Section 7, the registered holder of any Warrant Certificate may exercise
the Warrants evidenced thereby, in whole at any time or in part from time to time at or prior to the close of
business, on the Expiration Date, subject to the provisions of Section 9, at which time the Warrant Certificates
shall be and become wholly void and of no value. Warrants may be exercised by their holders or redeemed by
the Company as follows:

                (a)     Exercise of Warrants shall be accomplished upon surrender of the Warrant Certificate
        evidencing such Warrants, with the Form of Election to Purchase on the reverse side thereof duly filled


                                                        6
in and executed, to the Warrant Agent at its stock transfer office in Draper, Utah, together with
payment to the Company of the Exercise Price (as of the date of such surrender) of the Warrants then
being exercised and an amount equal to any applicable transfer tax and, if requested by the Company,
any other taxes or governmental charges which the Company may be required by law to collect in
respect of such exercise. Payment of the Exercise Price and other amounts may be made by wire
transfer of good funds, or by certified or bank cashier‘s check, payable in lawful money of the United
States of America to the order of the Company. No adjustment shall be made for any cash dividends,
whether paid or declared, on any securities issuable upon exercise of a Warrant.

          (b)      Upon receipt of a Warrant Certificate, with the Form of Election to Purchase duly
filled in and executed, accompanied by payment of the Exercise Price of the Warrants being exercised
(and of an amount equal to any applicable taxes or government charges as aforesaid), the Warrant
Agent shall promptly request from the Transfer Agent with respect to the securities to be issued and
deliver to or upon the order of the registered holder of such Warrant Certificate, in such name or names
as such registered holder may designate, a certificate or certificates for the number of full shares of the
securities to be purchased, together with cash made available by the Company pursuant to Section 8
hereof in respect of any fraction of a share of such securities otherwise issuable upon such exercise. If
the Warrant is then exercisable to purchase property other than securities, the Warrant Agent shall take
appropriate steps to cause such property to be delivered to or upon the order of the registered holder of
such Warrant Certificate. In addition, if it is required by law and upon instruction by the Company, the
Warrant Agent will deliver to each Warrantholder a prospectus which complies with the provisions of
Section 10 of the Securities Act of 1933 and the Company agrees to supply Warrant Agent with
sufficient number of prospectuses to effectuate that purpose.

         (c)       In case the registered holder of any Warrant Certificate shall exercise fewer than all
of the Warrants evidenced by such Warrant Certificate, the Warrant Agent shall promptly countersign
and deliver to the registered holder of such Warrant Certificate, or to his duly authorized assigns, a new
Warrant Certificate or Certificates evidencing the number and class of Warrants that were not so
exercised.

         (d)       Each person in whose name any certificate for securities is issued upon the exercise
of Warrants shall for all purposes be deemed to have become the holder of record of the securities
represented thereby as of, and such certificate shall be dated, the date upon which the Warrant
Certificate was duly surrendered in proper form and payment of the Exercise Price (and of any
applicable taxes or other governmental charges) was made; provided, however, that if the date of such
surrender and payment is a date on which the stock transfer books of the Company are closed, such
person shall be deemed to have become the record holder of such shares as of, and the certificate for
such shares shall be dated, the next succeeding business day on which the stock transfer books of the
Company are open (whether before, on or after the Expiration Date relating to such Warrant) and the
Warrant Agent shall be under no duty to deliver the certificate for such shares until such date. The
Company covenants and agrees that it shall not cause its stock transfer books to be closed for a period
of more than 20 consecutive business days except upon consolidation, merger, sale of all or
substantially all of its assets, dissolution or liquidation or as otherwise provided by law.


                                                7
          (e)       The Warrants outstanding at the time of a redemption may be redeemed at the option
of the Company, in whole or in part on a pro-rata basis, by giving not less than 30 days prior notice as
provided in Section 7(g) below, which notice may not be given before, but may be given at any time
after, the later of _________, 2007 and the date on which closing price of the Common Stock on the
principal exchange or trading facility on which it is then traded has equaled or exceeded $12.00 per
share (as adjusted on each of thirty consecutive trading days ending on the tenth day prior to the date
notice is given. The price at which Warrants may be redeemed (the ― Redemption Price ‖) is $0.001
per Warrant (subject to appropriate adjustment to reflect stock dividends, stock splits, combinations,
recapitalizations or the like with respect to the Common Stock). On and after the redemption date the
holders of record of redeemed Warrants shall be entitled to payment of the Redemption Price upon
surrender of such redeemed Warrants to the Company at the office of the Warrant Agent designated for
that purpose.

         (f)       Notice of redemption of Warrants shall be given at least 30 days prior to the
redemption date (the ― Redemption Date ‖), by mailing, by registered or certified mail, return receipt
requested, a copy of such notice to the Warrant Agent and to all of the holders of record of Warrants at
their respective addresses appearing on the books or transfer records of the Company or such other
address designated in writing by the holder of record to the Warrant Agent not less than 40 days prior
to the redemption date.

          (g)     From and after the Redemption Date, all rights of the Warrantholders with respect to
the redeemed Warrants (except the right to receive the Redemption Price) shall terminate, but only if (i)
no later than one day prior to the redemption date the Company shall have irrevocably deposited with
the Warrant Agent as paying agent a sufficient amount to pay on the redemption date the Redemption
Price for all Warrants called for redemption and (ii) the notice of redemption shall have stated the name
and address of the Warrant Agent and the intention of the Company to deposit such amount with the
Warrant Agent no later than one day prior to the redemption date.

          (h)      On the Redemption Date, the Warrant Agent shall pay to the holders of record of
redeemed Warrants all monies received by the Warrant Agent for the redemption of Warrants to which
the holders of record of such redeemed Warrants who shall have surrendered their Warrants are
entitled. The Warrant Agent shall have no obligation to pay for the redemption of Warrants except to
the extent that funds for such payment have been provided to it by the Company.

         (i)       Any amounts deposited with the Warrant Agent that are not required for redemption
of Warrants may be withdrawn by the Company. Any amounts deposited with the Warrant Agent that
shall be unclaimed after one year after the redemption date shall be redelivered back to the Company,
and thereafter the holders of the Warrants called for redemption for which such funds were deposited
shall look solely to the Company for payment. The Company shall be entitled to the interest, if any, on
funds deposited with the Warrant Agent and the holders of redeemed Warrants shall have no


                                               8
        right to any such interest. At the instruction of the Company, the Warrant Agent shall deposit or invest
        any and all funds deposited with it by the Company in connection with any redemption in federally
        insured, interest bearing accounts with a financial institution or institutions designated by the Company
        but shall have no liability with respect to the performance of any such investments other than, in the
        case of funds deposited in accounts maintained by the Warrant Agent, the liability of the Warrant
        Agent to its depositors in such accounts, generally.

                  (j)      If the Company fails to make a sufficient deposit with the Warrant Agent as provided
        above, the holder of any Warrants called for redemption may at the option of the holder (i) by notice to
        the Company declare the notice of redemption a nullity as to such holder, or (ii) maintain an action
        against the Company for the Redemption Price. If the holder brings such an action, the Company will
        pay reasonable attorneys‘ fees of the holder. If the holder fails to bring an action against the Company
        for the Redemption Price within 60 days after the redemption date, the holder shall be deemed to have
        elected to declare the notice of redemption to be a nullity as to such holder and such notice shall be
        without any force or effect as to such holder. Except as otherwise specifically provided in this
        Paragraph 7(j), a notice of redemption, once mailed by the Company as provided in Paragraph 7(f)
        shall be irrevocable.

                  (k)      Notwithstanding anything to the contrary in this Section 7, the Company may not
        provide notice of any redemption pursuant to this Section 7 at any time at which the Warrants are not
        currently exercisable as a result of the application of Section 9. If, during the period between notice of
        redemption and the Redemption Date, the Warrants become not currently exercisable as a result of the
        application of Section 9, the Redemption Date shall be extended to be the tenth business day after such
        restriction on exercise lapses.

          8.        Fractional Interests . The Company shall not be required to issue any Warrant Certificate
evidencing a fraction of a Warrant or to issue fractions of shares of securities on the exercise of the Warrants. If
any fraction (calculated to the nearest one-hundredth) of a Warrant or a share of securities would, except for the
provisions of this Section, be issuable on the exercise of any Warrant, the Company shall, at its option, either
purchase such fraction for an amount in cash equal to the current value of such fraction computed on the basis
of the closing market price of a Warrant of the same class (as quoted on the principal exchange or trading
facility on which such class of Warrants is traded) on the trading day immediately preceding the day upon
which such Warrant Certificate was surrendered for exercise in accordance with Section 7 hereof or issue the
required fractional Warrant or share. By accepting a Warrant Certificate, the holder thereof expressly waives
any right to receive a Warrant Certificate evidencing any fraction of a Warrant or to receive any fractional share
of securities upon exercise of a Warrant, except as expressly provided in this Section 8.

         9.         Reservation of Equity Securities . The Company covenants that it will at all times reserve
and keep available, free from any pre-emptive rights, out of its authorized and unissued equity securities, solely
for the purpose of issue upon exercise of the Warrants, such number of shares of equity securities of the
Company as shall then be issuable upon the exercise of all outstanding Warrants (― Equity Securities ‖). The
Company covenants that all Equity Securities which shall be so issuable shall, upon such issue, be duly
authorized, validly issued, fully paid and non-assessable.


                                                         9
         The Company covenants that if any equity securities, required to be reserved for the purpose of issue
upon exercise of the Warrants hereunder, require registration with or approval of any governmental authority
under any federal or state law before such shares may be issued upon exercise of Warrants, the Company will
use all commercially reasonable efforts to cause such securities to be duly registered, or approved, as the case
may be, and, to the extent practicable, take all such action in anticipation of and prior to the exercise of the
Warrants, including, without limitation, filing any and all post-effective amendments to the Company‘s
Registration Statement on Form S-1 (Registration No. 333-140747) necessary to permit a public offering of the
securities underlying the Warrants at any and all times during the term of this Agreement, provided, however,
that in no event shall such securities be issued, and the Company is authorized to refuse to honor the exercise of
any Warrant, if such exercise would result in the opinion of the Company‘s Board of Directors, upon advice of
counsel, in the violation of any law; and provided further that, in the case of a Warrant exercisable solely for
securities listed on a securities exchange or for which there are at least three independent market makers, in lieu
of obtaining such registration or approval, the Company may elect to redeem Warrants submitted to the Warrant
Agent for exercise for a price equal to the difference between the aggregate low asked price, or closing price, as
the case may be, of the securities for which such Warrant is exercisable on the date of such submission and the
Exercise Price of such Warrants; in the event of such redemption, the Company will pay to the holder of such
Warrants the above-described redemption price in cash within 10 business days after receipt of notice from the
Warrant Agent that such Warrants have been submitted for exercise. If, at the Expiration Date, the Warrants are
not currently exercisable as a result of the provisions of this paragraph, the Expiration Date shall be extended to
a date that is 30 calendar days following notice to the holders of Warrants that the Warrants are again
exercisable and references to the Expiration Date herein shall thereafter refer to such extended Expiration Date.

         10.          Reduction of Conversion Price Below Par Value . Before taking any action that would
cause an adjustment pursuant to Section 6 hereof reducing the portion of the Exercise Price required to purchase
one share of capital stock below the then par value (if any) of a share of such capital stock, the Company will
use its best efforts to take any corporate action which, in the opinion of its counsel, may be necessary in order
that the Company may validly and legally issue fully paid and non-assessable shares of such capital stock.

         11.        Payment of Taxes . The Company covenants and agrees that it will pay when due and
payable any and all federal and state documentary stamp and other original issue taxes which may be payable in
respect of the original issuance of the Warrant Certificates, or any shares of Common Stock or other securities
upon the exercise of Warrants. The Company shall not, however, be required (a) to pay any tax which may be
payable in respect of any transfer involved in the transfer and delivery of Warrant Certificates or the issuance or
delivery of certificates for Common Stock or other securities in a name other than that of the registered holder
of the Warrant Certificate surrendered for purchase or (b) to issue or deliver any certificate for shares of
Common Stock or other securities upon the exercise of any Warrant Certificate until any such tax shall have
been paid, all such tax being payable by the holder of such Warrant Certificate at the time of surrender.


                                                        10
          12.        Notice of Certain Corporate Action . In case the Company after the date hereof shall
propose (a) to offer to the holders of Common Stock, generally, rights to subscribe to or purchase any additional
shares of any class of its capital stock, any evidences of its indebtedness or assets, or any other rights or options
or (b) to effect any reclassification of Common Stock (other than a reclassification involving merely the
subdivision or combination of outstanding shares of Common Stock) or any capital reorganization, or any
consolidation or merger to which the Company is a party and for which approval of any shareholders of the
Company is required, or any sale, transfer or other disposition of its property and assets substantially as an
entirety, or the liquidation, voluntary or involuntary dissolution or winding-up of the Company, then, in each
such case, the Company shall file with the Warrant Agent and the Company, or the Warrant Agent on its behalf,
shall mail (by first-class, postage (prepaid mail) to all registered holders of the Warrant Certificates notice of
such proposed action, which notice shall specify the date on which the books of the Company shall close or a
record be taken for such offer of rights or options, or the date on which such reclassification, reorganization,
consolidation, merger, sale, transfer, other disposition, liquidation, voluntary or involuntary dissolution or
winding-up shall take place or commence, as the case may be, and which shall also specify any record date for
determination of holders of Common Stock entitled to vote thereon or participate therein and shall set forth such
facts with respect thereto as shall be reasonably necessary to indicate any adjustments in the Exercise Price and
the number or kind of shares or other securities purchasable upon exercise of Warrants which will be required
as a result of such action. Such notice shall be filed and mailed in the case of any action covered by clause (a)
above, at least ten days prior to the record date for determining holders of the Common Stock for purposes of
such action or, if a record is not to be taken, the date as of which the holders of shares of Common Stock of
record are to be entitled to such offering; and, in the case of any action covered by clause (b) above, at least 20
days prior to the earlier of the date on which such reclassification, reorganization, consolidation, merger, sale,
transfer, other disposition, liquidation, voluntary or involuntary dissolution or winding-up is expected to
become effective and the date on which it is expected that holders of shares of Common Stock of record on such
date shall be entitled to exchange their shares for securities or other property deliverable upon such
reclassification, reorganization, consolidation, merger, sale, transfer, other disposition, liquidation, voluntary or
involuntary dissolution or winding-up.

         Failure to give any such notice or any defect therein shall not affect the legality or validity of any
transaction listed in this Section 12.

         13.      Disposition of Proceeds on Exercise of Warrant Certificates, Etc. The Warrant Agent
shall account promptly to the Company with respect to Warrants exercised and concurrently pay to the
Company all moneys received by the Warrant Agent for the purchase of securities or other property through the
exercise of such Warrants.

         The Warrant Agent shall keep copies of this Agreement available for inspection by Warrantholders
during normal business hours at its stock transfer office. Copies of this Agreement may be obtained upon
written request addressed to the Warrant Agent at its stock transfer office in Draper, Utah.

         14.       Warrantholder Not Deemed a Shareholder . No Warrantholder, as such, shall be entitled to
vote, receive dividends or be deemed the holder of Common Stock or any other


                                                         11
securities of the Company which may at any time be issuable on the exercise of the Warrants represented
thereby for any purpose whatever, nor shall anything contained herein or in any Warrant Certificate be
construed to confer upon any Warrantholder, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or
to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, change of par value or change of stock to no par value, consolidation, merger,
conveyance or otherwise), or to receive notice of meetings or other actions affecting shareholders (except as
provided in Section 12 hereof), or to receive dividend or subscription rights, or otherwise, until such Warrant
Certificate shall have been exercised in accordance with the provisions hereof and the receipt of the Exercise
Price and any other amounts payable upon such exercise by the Warrant Agent.

         15.         Right of Action . All rights of action in respect to this Agreement are vested in the
respective registered holders of the Warrant Certificates; and any registered holder of any Warrant Certificate,
without the consent of the Warrant Agent or of any other holder of a Warrant Certificate, may, in his own behalf
for his own benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company
suitable to enforce, or otherwise in respect of, his right to exercise the Warrants evidenced by such Warrant
Certificate, for the purchase of shares of the Common Stock in the manner provided in the Warrant Certificate
and in this Agreement.

        16.        Agreement of Holders of Warrant Certificates . Every holder of a Warrant Certificate by
accepting the same consents and agrees with the Company, the Warrant Agent and with every other holder of a
Warrant Certificate that:

                 (a)      the Warrant Certificates are transferable on the registry books of the Warrant Agent
         only upon the terms and conditions set forth in this Agreement; and

                   (b)      the Company and the Warrant Agent may deem and treat the person in whose name
         the Warrant Certificate is registered as the absolute owner of the Warrant (notwithstanding any notation
         of ownership or other writing thereon made by anyone other than the Company or the Warrant Agent)
         for all purposes whatever and neither the Company nor the Warrant Agent shall be affected by any
         notice to the contrary.

         17.         Cancellation of Warrant Certificates . In the event that the Company shall purchase or
otherwise acquire any Warrant Certificate or Certificates after the issuance thereof, such Warrant Certificate or
Certificates shall thereupon be delivered to the Warrant Agent and be canceled by it and retired. The Warrant
Agent shall also cancel any Warrant Certificate delivered to it for exercise, in whole or in part, or delivered to it
for transfer, split-up, combination or exchange. Warrant Certificates so canceled shall be delivered by the
Warrant Agent to the Company from time to time, or disposed of in accordance with the instructions of the
Company.

         18.       Concerning the Warrant Agent . The Company agrees to pay to the Warrant Agent from
time to time, on demand of the Warrant Agent, reasonable compensation for all services rendered by it
hereunder and also its reasonable expenses, including counsel fees, and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance of its duties hereunder. The


                                                         12
Company also agrees to indemnify the Warrant Agent for, and to hold it harmless against, any loss, liability or
expense, incurred without gross negligence, bad faith or willful misconduct on the part of the Warrant Agent,
arising out of or in connection with the acceptance and administration of this Agreement.

         19.        Merger or Consolidation or Change of Name of Warrant Agent . Any corporation into
which the Warrant Agent may be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Warrant Agent shall be a party, or any corporation succeeding to
the corporate trust business of the Warrant Agent, shall be the successor to the Warrant Agent hereunder
without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided
that such corporation would be eligible for appointment as a successor warrant agent under the provisions of
Section 21 hereof. In case at the time such successor to the Warrant Agent shall succeed to the agency created
by this Agreement, any of the Warrant Certificates shall have been countersigned but not delivered, any such
successor to the Warrant Agent may adopt the countersignature of the original Warrant Agent and deliver such
Warrant Certificates so countersigned; and in case at that time any of the Warrant Certificates shall not have
been countersigned, any successor to the Warrant Agent may countersign such Warrant Certificates either in the
name of the predecessor Warrant Agent or in the name of the successor Warrant Agent; and in all such cases
such Warrant Certificates shall have the full force provided in the Warrant Certificates and in this Agreement.

         In case at any time the name of the Warrant Agent shall be changed and at such time any of the
Warrant Certificates shall have been countersigned but not delivered, the Warrant Agent may adopt the
countersignature under its prior name and deliver Warrant Certificates so countersigned; and in case at that time
any of the Warrant Certificates shall not have been countersigned, the Warrant Agent may countersign such
Warrant Certificates either in its prior name or in its changed name; and in all such cases such Warrant
Certificates shall have the full force provided in the Warrant Certificates and in this Agreement.

         20.      Duties of Warrant Agent . The Warrant Agent undertakes the duties and obligations
imposed by this Agreement upon the following terms and conditions, by all of which the Company and the
holders of Warrant Certificates, by their acceptance thereof, shall be bound:

                 (a)      The Warrant Agent may consult with counsel satisfactory to it (who may be counsel
        for the Company), and the opinion of such counsel shall be full and complete authorization and
        protection to the Warrant Agent as to any action taken, suffered or omitted by it in good faith and in
        accordance with such opinion; provided, however, that the Warrant Agent shall have exercised
        reasonable care in the selection of such counsel. Fees and expenses of such counsel, to the extent
        reasonable, shall be paid by the Company.

                  (b)      Whenever in the performance of its duties under this Agreement, the Warrant Agent
        shall deem it necessary or desirable that any fact or matter be proved or established by the Company
        prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect
        thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by


                                                       13
a certificate signed by a Chairman or co-Chairman of the Board, the Chief Executive Officer, the
President or a Vice President or the Secretary of the Company and delivered to the Warrant Agent; and
such certificate shall be full authorization to the Warrant Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such certificate.

         (c)       The Warrant Agent shall be liable hereunder only for its own gross negligence, bad
faith or willful misconduct.

          (d)      The Warrant Agent shall not be liable for or by reason of any of the statements of fact
or recitals contained in this Agreement or in the Warrant Certificates (except its countersignature on the
Warrant Certificates and such statements or recitals as describe the Warrant Agent or action taken or to
be taken by it) or be required to verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.

         (e)        The Warrant Agent shall not be under any responsibility in respect of the validity of
this Agreement or the execution and delivery hereof (except the due execution hereof by the Warrant
Agent) or in respect of the validity or execution of any Warrant Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Warrant Certificate; nor shall it be responsible for the making of
any change in the number of shares of Common Stock for which a Warrant is exercisable required
under the provisions of Section 6 or responsible for the manner, method or amount of any such change
or the ascertaining of the existence of facts that would require any such adjustment or change (except
with respect to the exercise of Warrant Certificates after actual notice of any adjustment of the Exercise
Price); nor shall it by any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock to be issued pursuant to this Agreement or
any Warrant Certificate or as to whether any shares of Common Stock will, when issued, be validly
issued, fully paid and non-assessable.

         (f)       The Warrant Agent shall be under no obligation to institute any action, suit or legal
proceeding or take any other action likely to involve expense unless the Company or one or more
registered holders of Warrant Certificates shall furnish the Warrant Agent with reasonable security and
indemnity for any costs and expenses which may be incurred. All rights of action under this Agreement
or under any of the Warrants may be enforced by the Warrant Agent without the possession of any of
the Warrants or the production thereof at any trial or other proceeding relative thereto, and any such
action, suit or proceeding instituted by the Warrant Agent shall be brought in its name as Warrant
Agent, and any recovery of judgment shall be for the ratable benefit of the registered holders of the
Warrant Certificates, as their respective rights or interests may appear.

       (g)      The Warrant Agent and any shareholder, director, officer or employee of the Warrant
Agent may buy, sell or deal in any of the Warrants or other securities of the Company or become


                                               14
        pecuniarily interested in any transaction in which the Company may be interested, or contract with or
        lend money to or otherwise act as fully and freely as though it were not Warrant Agent under this
        Agreement. Nothing herein shall preclude the Warrant Agent from acting in any other capacity for the
        Company or for any other legal entity.

                  (h)      The Warrant Agent is hereby authorized and directed to accept instructions with
        respect to the performance of its duties hereunder from a Chairman or co-Chairman of the Board or
        President or a Vice President or the Secretary or the Controller of the Company, and to apply to such
        officers for advice or instructions in connection with the Warrant Agent‘s duties, and it shall not be
        liable for any action taken or suffered or omitted by it in good faith in accordance with instructions of
        any such officer.

                 (i)      The Warrant Agent will not be responsible for any failure of the Company to comply
        with any of the covenants contained in this Agreement or in the Warrant Certificates to be complied
        with by the Company.

                 (j)        The Warrant Agent may execute and exercise any of the rights or powers hereby
        vested in it or perform any duty hereunder either itself or by or through its attorneys, agents or
        employees and the Warrant Agent shall not be answerable or accountable for any act, default, neglect
        or misconduct of any such attorneys, agents or employees or for any loss to the Company resulting
        from such neglect or misconduct; provided, however, that reasonable care shall have been exercised in
        the selection and continued employment of such attorneys, agents and employees.

                 (k)      The Warrant Agent will not incur any liability or responsibility to the Company or to
        any holder of any Warrant Certificate for any action taken, or any failure to take action, in reliance on
        any notice, resolution, waiver, consent, order, certificate, or other paper, document or instrument
        reasonably believed by the Warrant Agent to be genuine and to have been signed, sent or presented by
        the proper party or parties.

                  (l)      The Warrant Agent will act hereunder solely as agent of the Company in a ministerial
        capacity, and its duties will be determined solely by the provisions hereof. The Warrant Agent will not
        be liable for anything which it may do or refrain from doing in connection with this Agreement except
        for its own gross negligence, bad faith or willful conduct.

          21.        Change of Warrant Agent . The Warrant Agent may resign and be discharged from its
duties under this Agreement upon 30 days‘ prior notice in writing mailed, by registered or certified mail, to the
Company. The Company may remove the Warrant Agent or any successor warrant agent upon 30 days‘ prior
notice in writing, mailed to the Warrant Agent or successor warrant agent, as the case may be, by registered or
certified mail. If the Warrant Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Warrant Agent and shall, within 15 days following such
appointment, give notice thereof in writing to each registered holder of the Warrant Certificates. If the Company
shall fail to make such appointment within a period of 15 days after giving notice of such removal or after it
has


                                                       15
been notified in writing of such resignation or incapacity by the resigning or incapacitated Warrant Agent, then
the Company agrees to perform the duties of the Warrant Agent hereunder until a successor Warrant Agent is
appointed. After appointment and execution of a copy of this Agreement in effect at that time, the successor
Warrant Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been
originally named as Warrant Agent without further act or deed; but the former Warrant Agent shall deliver and
transfer to the successor Warrant Agent, within a reasonable time, any property at the time held by it hereunder,
and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Failure to
give any notice provided for in this Section, however, or any defect therein shall not affect the legality or
validity of the resignation or removal of the Warrant Agent or the appointment of the successor warrant agent,
as the case may be.

        22.        Issuance of New Warrant Certificates . Notwithstanding any of the provisions of this
Agreement or the several Warrant Certificates to the contrary, the Company may, at its option, issue new
Warrant Certificates in such form as may be approved by its Board of Directors to reflect any adjustment or
change in the Exercise Price or the number or kind of shares purchasable under the several Warrant Certificates
made in accordance with the provisions of this Agreement.

         23.         Notices . Notice or demand pursuant to this Agreement to be given or made on the Company
by the Warrant Agent or by the registered holder of any Warrant Certificate shall be sufficiently given or made
if sent by first-class or registered mail, postage prepaid, addressed (until another address is filed in writing by
the Company with the Warrant Agent) as follows:

                 Wilson Holdings, Inc.
                 8121 Bee Caves Road
                 Austin, TX 78746
                 Attention: Chief Financial Officer

         Subject to the provisions of Section 21, any notice pursuant to this Agreement to be given or made by
the Company or by the holder of any Warrant Certificate to or on the Warrant Agent shall be sufficiently given
or made if sent by first-class or registered mail, postage prepaid, addressed (until another address is filed in
writing by the Warrant Agent with the Company) as follows:

                 Standard Registrar & Transfer Co., Inc.
                 12528 South 1840 East
                 Draper, Utah 84020

         Any notice or demand authorized to be given or made to the registered holder of any Warrant
Certificate under this Agreement shall be sufficiently given or made if sent by first-class or registered mail,
postage prepaid, to the last address of such holder as it shall appear on the registers maintained by the Warrant
Agent.

        24.       Modification of Agreement . The Warrant Agent may, without the consent or concurrence
of the Warrantholders, by supplemental agreement or otherwise, concur with the Company in making any
changes


                                                        16
or corrections in this Agreement that the Warrant Agent shall have been advised by counsel (who may be
counsel for the Company) are necessary or desirable to cure any ambiguity or to correct any defective or
inconsistent provision or clerical omission or mistake or manifest error herein contained, or to make any other
provisions in regard to matters or questions arising hereunder and which shall not be inconsistent with the
provisions of the Warrant Certificates and which shall not adversely affect the interests of the Warrantholders.
As of the date hereof, this Agreement contains the entire and only agreement, understanding, representation,
condition, warranty or covenant between the parties hereto with respect to the matters herein, supersedes any
and all other agreements between the parties hereto relating to such matters, and may be modified or amended
only by a written agreement signed by both parties hereto pursuant to the authority granted by the first sentence
of this Section.

        25.     Successors . All the covenants and provisions of this Agreement by or for the benefit of the
Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns
hereunder.

        26.       Nevada Contract . This Agreement and each Warrant Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of Nevada and for all purposes shall be construed in
accordance with the laws of said State.

         27.        Termination . This Agreement shall terminate as of the close of business on the Expiration
Date, or such earlier date upon which all Warrants shall have been exercised or redeemed, except that the
Warrant Agent shall account to the Company as to all Warrants outstanding and all cash held by it as of the
close of business on the Expiration Date.

         28.        Benefits of This Agreement . Nothing in this Agreement or in the Warrant Certificates shall
be construed to give to any person or corporation other than the Company, the Warrant Agent, and their
respective successors and assigns hereunder and the registered holders of the Warrant Certificates any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Warrant Agent, their respective successors and assigns hereunder and the registered
holders of the Warrant Certificates.

         29.        Descriptive Headings . The descriptive headings of the several Sections of this Agreement
are inserted for convenience only and shall not control or affect the meaning or construction of any of the
provisions hereof.

        30.        Counterparts . This Agreement may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute one and the same instrument.


      (REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS)



                                                       17
         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, all as of
the day and year first above written.


                                             WILSON HOLDINGS, INC .

                                             By:
                                             Name:    Clark N. Wilson
                                             Title:   President & Chief Executive Officer


                                             STANDARD REGISTRAR & TRANSFER CO, INC.

                                             By:
                                             Name:
                                             Title:




                          [SIGNATURE PAGE TO WARRANT AGREEMENT]
                                                                                                       EXHIBIT A

                        VOID AFTER 5 P.M. EASTERN TIME ON _________, 2012

                       CLASS A WARRANTS TO PURCHASE COMMON STOCK

Certificate number _______                                                                 ________ Warrants


                                              Wilson Holdings, Inc.

CUSIP __________

          THIS CERTIFIES THAT [NAME] or registered assigns, is the registered holder of the number of the
Class A Warrants (― Warrants ‖) set forth above. Each Warrant, unless and until redeemed by the Company as
provided in the Warrant Agreement, hereinafter more fully described (the ― Warrant Agreement ‖) entitles the
holder thereof to purchase from Wilson Holdings, Inc., a corporation incorporated under the laws of the State of
Nevada the (― Company ‖), subject to the terms and conditions set forth hereinafter and in the Warrant
Agreement, at any time on or after _________, 2007 and before the close of business on _________, 2012 (―
Expiration Date, as may be extended pursuant to the Warrant Agreement‖), one fully paid and non-assessable
share of Common Stock of the Company (― Common Stock ‖) upon presentation and surrender of this Warrant
Certificate, with the instructions for the registration and delivery of Common Stock filled in, at the stock
transfer office in New York, New York, of [], Warrant Agent of the Company (― Warrant Agent ‖) or of its
successor warrant agent or, if there be no successor warrant agent, at the corporate offices of the Company, and
upon payment of the Exercise Price (as defined in the Warrant Agreement) and any applicable taxes paid either
in cash, or by certified or official bank check, payable in lawful money of the United States of America to the
order of the Company. Each Warrant initially entitles the holder to purchase one share of Common Stock for
$6.00. The number and kind of securities or other property for which the Warrants are exercisable are subject to
adjustment in certain events, such as mergers, splits, stock dividends, splits and the like, to prevent dilution. The
Company may redeem (subject to the conditions set forth in the Warrant Agreement) any or all outstanding and
unexercised Warrants by giving not less than 30 days prior notice at any time after the later of _________, 2007
and the date on which closing price of the Common Stock on the principal exchange or trading facility on which
it is traded has equaled or exceeded $12.00 per share on each of thirty consecutive trading days. The
Redemption Price is $0.001 per Warrant. All Warrants not theretofore exercised will expire on the Expiration
Date.

        This Warrant Certificate is subject to all of the terms, provisions and conditions of the Warrant
Agreement, dated as of _______, 2007, between the Company and the Warrant Agent, to all of which terms,
provisions and conditions the registered holder of this Warrant Certificate consents by acceptance hereof.


                                                        A-1
        The Warrant Agreement is incorporated herein by reference and made a part hereof and reference is
made to the Warrant Agreement for a full description of the rights, limitations of rights, obligations, duties and
immunities of the Warrant Agent, the Company and the holders of the Warrant Certificates. Copies of the
Warrant Agreement are available for inspection at the stock transfer office of the Warrant Agent or may be
obtained upon written request addressed to the Company at Wilson Holdings, Inc., 8121 Bee Caves Road,
Austin, TX 78746, Attention: Chief Financial Officer.

         The Company shall not be required upon the exercise of the Warrants evidenced by this Warrant
Certificate to issue fractions of Warrants, Common Stock or other securities, but shall make adjustment therefor
in cash on the basis of the current market value of any fractional interest as provided in the Warrant Agreement.

         In certain cases, the sale of securities by the Company upon exercise of Warrants may violate the
securities laws of the United States, certain states thereof or other jurisdictions. The Company has agreed to use
all commercially reasonable efforts to cause a registration statement to continue to be effective during the term
of the Warrants with respect to such sales under the Securities Act of 1933, and to take such action under the
laws of various states as may be required to cause the sale of securities upon exercise to be lawful. However, the
Company will not be required to honor the exercise of Warrants if, in the opinion of the Board of Directors,
upon advice of counsel, the sale of securities upon such exercise would be unlawful. In certain cases, the
Company may, but is not required to, purchase Warrants submitted for exercise for a cash price equal to the
difference between the market price of the securities obtainable upon such exercise and the exercise price of
such Warrants. If the Warrants would otherwise expire while not exercisable as a result of any such
determination by the Board of Directors, their Expiration Date will be extended to a date 30 days after the
Warrants once again become exercisable.

         This Warrant Certificate, with or without other Certificates, upon surrender to the Warrant Agent, any
successor warrant agent or, in the absence of any successor warrant agent, at the corporate offices of the
Company, may be exchanged for another Warrant Certificate or Certificates evidencing in the aggregate the
same number of Warrants as the Warrant Certificate or Certificates so surrendered. If the Warrants evidenced
by this Warrant Certificate shall be exercised in part, the holder hereof shall be entitled to receive upon
surrender hereof another Warrant Certificate or Certificates evidencing the number of Warrants not so
exercised.

         No holder of this Warrant Certificate, as such, shall be entitled to vote, receive dividends or be deemed
the holder of Common Stock or any other securities of the Company which may at any time be issuable on the
exercise hereof for any purpose whatever, nor shall anything contained in the Warrant Agreement or herein be
construed to confer upon the holder of this Warrant Certificate, as such, any of the rights of a shareholder of the
Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any
meeting thereof or give or withhold consent to any corporate action (whether upon any matter submitted to
shareholders at any meeting thereof, or give or withhold consent to any merger, recapitalization, issuance of
stock, reclassification of stock, change of par value or change of stock to no par value, consolidation,
conveyance or otherwise) or to receive notice of meetings or other actions affecting shareholders (except as
provided in the Warrant Agreement) or to receive dividends or subscription rights or otherwise until the
Warrants evidenced by this Warrant Certificate shall have been exercised and the Common Stock purchasable
upon the exercise thereof shall have become deliverable as provided in the Warrant Agreement.


                                                       A-2
         If this Warrant Certificate shall be surrendered for exercise within any period during which the transfer
books for the Company‘s Common Stock or other class of stock purchasable upon the exercise of the Warrants
evidenced by this Warrant Certificate are closed for any purpose, the Company shall not be required to make
delivery of certificates for shares purchasable upon such transfer until the date of the reopening of said transfer
books.

        Every holder of this Warrant Certificate by accepting the same consents and agrees with the Company,
the Warrant Agent, and with every other holder of a Warrant Certificate that:

                 (a)     this Warrant Certificate is transferable on the registry books of the Warrant Agent
only upon the terms and conditions set forth in the Warrant Agreement, and

                  (b)       the Company and the Warrant Agent may deem and treat the person in whose name
this Warrant Certificate is registered as the absolute owner hereof (notwithstanding any notation of ownership
or other writing thereon made by anyone other than the Company or the Warrant Agent) for all purposes
whatsoever and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary. The
Company shall not be required to issue or deliver any certificate for shares of Common Stock or other securities
upon the exercise of Warrants evidenced by this Warrant Certificate until any tax which may be payable in
respect thereof by the holder of this Warrant Certificate pursuant to the Warrant Agreement shall have been
paid, such tax being payable by the holder of this Warrant Certificate at the time of surrender.

        This Warrant Certificate shall not be valid or obligatory for any purpose until it shall have been
countersigned by the Warrant Agent.

      (REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS)




                                                       A-3
       WITNESS the facsimile signatures of the proper officers of the Company and its corporate seal.


Dated: _______________, 2007


                                              WILSON HOLDINGS, INC .

                                              By:
                                              Name:    Clark N. Wilson
                                              Title:   President & Chief Executive Officer

                                           Attest:
                                           Secretary

                                           Countersigned:


                                             STANDARD REGISTRAR & TRANSFER CO, INC.
                                             , as Warrant Agent

                                             By:
                                             Name:
                                             Title:




                                                 Countersigned:

                                                 STANDARD REGISTRAR & TRANSFER CO, INC.



                                                 By:
                                                       Authorized Officer


                                                   A-4
                                                                 Exhibit 10.12


[LOGO OMITTED] CAPITAL GROWTH FINANCIAL
                           YOUR COMBINATION TO FINANCIAL SUCCESS


December 14, 2006

Wilson Holdings, Inc.
8121 Bee Caves Road
Austin, TX 78746

Attn: Clark N. Wilson, CEO

Re: $35 million Pubic Offering of Shares of Common Stock

Gentlemen:

This will confirm the understanding and agreement (the "Agreement") between Wilson Holdings, Inc., its successors, subsidiaries or assigns
(collectively the "Company") and Capital Growth Financial, LLC (the "Underwriter") with respect to a proposed public offering (the
"Offering") by the Company of approximately $35 million of shares of the Company's Common Stock (the "Shares") at a public offering price
("Public Offering Price") that represents a small discount to the market price per share of the Company's Common Stock (the "Common
Stock") prior to the effective date of the public offering.

On the basis of our discussions and the preliminary information submitted by the Company, the Underwriter hereby confirms in principle its
interest in underwriting the proposed public offering of shares of the Company's Common Stock on a firm commitment basis in accordance
with the terms set forth in this Letter of Intent.

The Company hereby engages the Underwriter, and the Underwriter accepts such engagement, as the Company's financial advisor and
investment banker in connection with the management of the public offering of the Shares on a firm commitment basis through the Underwriter
on the terms and conditions set forth below.

1. A registration statement ("Registration Statement") as prescribed under the Securities Act of 1933, as amended (the "Act"), together with
exhibits, including the related Prospectus, will be prepared by the Company and filed with the United States Securities and Exchange
Commission (the "Commission") at a time to be agreed by the Company and the Underwriter. All consolidated financial statements contained
in the Registration Statement or Prospectus, as amended from time to time, will be in a form and will be prepared and reported on (to the extent
required by the Commission's rules) by an accounting firm reasonably acceptable to the Underwriter. Based on the information provided to the
underwriter, the Company's current accounting firm (i.e. Helin, Danovan, Trubee & Wilkinson, LLP) is acceptable to the Underwriter.

The form of the Registration Statement or any amendment to the Registration Statement will be submitted to the Underwriter and to the
Underwriter's counsel for review and approval. The content of any oral comments and copies of all comment letters and all other
correspondence with the Commission will promptly be supplied to the Underwriter and its counsel.
Such Registration Statement and the terms and conditions of the Offering shall conform with all federal regulatory requirements and
comparable public offerings.

2. The Company proposes to employ the Underwriter for the purpose of underwriting the Offering of the Shares on a firm commitment basis
and the Underwriter will act as principal in purchasing the Shares from the Company under a firm commitment.

For a period of 60 days from the effective date, the Company shall grant the Underwriter an over-allotment option for up to 15% of the Shares
sold in the Offering at the offering price, less the Underwriter's discount.

The Underwriter, at its sole discretion, may form a syndicate to sell the Shares including other underwriters and selling group members, who
are acceptable to the Company.

3. A bona fide public offering of the Shares will commence within three business days of the effective date of the Registration Statement. The
Underwriter, subject to the provisions of the Underwriting Agreement, will pay for the Shares not later than three (3) business days after the
effective date of the Registration Statement.

4. It is understood that, during the period of the Offering and for six
(6) months from the date of the definitive Prospectus used in the Offering, the Company will not sell or otherwise dispose of any securities
without prior written consent of the Underwriter, such consent not to be unreasonably withheld. Notwithstanding the foregoing, the Company
may issue shares in connection with a bona fide acquisition or pursuant to the Company's stock option or other similar compensation plan or
upon the exercise of warrants outstanding prior to its effective date.

5. It is understood that the proposed Underwriting Agreement will provide for reciprocal customary Indemnification between the Company and
the Underwriter as to certain liabilities, including liabilities under the Act.

6. In connection with the Underwriter's due diligence investigation of the Company prior to the effective date, all documents, financial reports,
news releases, if any, and other information relating to the Company's affairs will be made available to the Underwriter and one copy of any
such documents will be furnished to the Underwriter's counsel. Included in such documents, which may be copies and delivered as soon as
possible, are (i) all articles of incorporation and amendments, (ii) bylaws and amendments, (iii) minutes of all of the Company's Incorporators',
directors' and shareholders' meetings, (iv) all financial statements, (v) correct copies of all lease agreements,
(vi) correct copies of any material contracts and agreements to which the Company is a party, and (vii) such other documents as shall be
reasonably requested by the Underwriter's counsel.

7. It is understood that the officers, directors and principal shareholders of the Company will each complete, sign and return to the Underwriter,
a customary questionnaire in the form presented.

8. It is understood that the Company and the Underwriter will each advise the other party promptly and confirm in writing the receipt of any
threat of or the initiation of any steps or procedures which would impair or prevent the right to offer any of the Company's securities or the
issuance of any "suspension orders" or other prohibitions by the Commission or any other regulatory authority preventing or impairing
Offering.
9. The Underwriting Agreement, Agreement Among Underwriters, if applicable, Selected Dealers Agreement and Underwriter's Warrant shall
be prepared by counsel for the Underwriter (subject to negotiation with the Company), and such counsel shall make all required filings with the
National Association of Securities Dealers (NASD). In this regard, the Company shall supply to counsel for the Underwriter complete copies of
the Registration Statement, including the Preliminary Prospectus and all exhibits, for filing with the NASD in such quantities as counsel to the
underwriter may reasonably require at the Company's expense. The text of the Prospectus, the Registration Statement, and all other documents
filed with the Commission pursuant to the requirements of the Act and the Rules and Regulations thereunder, shall conform to the requirements
of such Act and Rules and Regulations in all material respects and shall be in form and content satisfactory to counsel for the Underwriter. All
corporate proceeding undertaken by the Company and other legal matters which relate to the public offering and other related transactions shall
be satisfactory in all material respects to counsel for the Underwriter.

In the event it is required, it is understood and agreed that the Company and the Underwriter shall use their reasonable best efforts to qualify
(blue sky) the sale of the Shares in the states as may be selected by the Underwriter, provided that the Company shall not be required in
connection therewith to qualify to do business or to file a general consent to service of process in any state or subject itself to taxation in any
such state. Immediately prior to the effective date of the Registration Statement, counsel for the Underwriter shall advise counsel for the
Company, in writing, of all states wherein the offering has been registered for sale, cancelled, withdrawn or denied, the date of such events(s)
and the number of Shares registered. The Company shall be responsible for all state registration filing fees, disbursements and reasonable and
actual legal fees of Underwriter's counsel in connection with such filings as well as a memorandum with respect to secondary trading and such
fees shall be paid as incurred.

The Company shall bear all costs and expenses incident to the issuance, offer, sale and delivery of the Shares, including all expenses and fees
incident to the filing of the Registration Statement with the Commission, the costs for the qualification of the Shares under state securities laws,
fees of accountants for the Company, costs of preparing, printing and mailing as many copies of the Registration Statement, and related
exhibits as the Underwriter may deem necessary, including all amendments and supplements to the Registration Statement, all preliminary and
final prospectuses, the preliminary and final Blue Sky memorandum, the certificates for the Shares and the Underwriter's Warrants (defined
below), and all other documents and instruments required in connection with the proposed public offering and the cost of tombstone
advertisements.

The Company shall also bear, as incurred, the reasonable, actual costs of (i) a background investigation of the CEO, COO and CFO of the
Company, and (ii) due diligence (road show) meetings for syndicate members and others.

10. It is understood that the Company shall reimburse the Underwriter on a non-accountable basis for expenses in the amount of 2% of the
gross proceeds of the public offering (inclusive of Shares sold pursuant to the Underwriter's over-allotment option) (the "Offering Expense
Fee"), which sum shall not include: reasonable and actual fees of the Underwriter's counsel; fees of the Company's counsel; state registration
fees; NASD filing fees; Standard & Poor's listing fee; printing, mailing and all other expenses customarily paid by the issuer in a public
offering. A non-refundable sum of $50,000
which will be credited against the Offering Expense Fee, will be paid to the Underwriter by the Company upon execution of this letter
agreement on behalf of the Company.

11. It is understood and agreed between the Company and the Underwriter that the proposed public offering is subject to termination by the
Underwriter, in its sole discretion, if between the date of this letter and the effective date, there has been a material adverse change in the
company's financial or business condition, or, prospects or, at the date of the proposed offering, market conditions have become adverse so as
to no not justify the Offering.

12. The Underwriting Agreement will provide that the Underwriter shall purchase the Shares at a discount equal to 8.5% of the public offering
price of the Shares.

13. At the closing of the sale of the Shares being offered, the company will sell to the Underwriter a warrant (the "Underwriter's Warrant"), for
$100, entitling the Underwriter to purchase an aggregate of 8.5% of the number of Shares sold in the offering at a price equal to 120% of the
public offering price. The Underwriter's Warrants shall be non-exercisable and non-transferable (other than a transfer to affiliates of the
Underwriter or members of the selling group) for a period of 6 months following the date of the definitive Prospectus. The Underwriter's
warrants shall terminate on the fifth anniversary of the closing of the sale of the shares.

The Underwriter's Warrant shall contain anti-dilution provisions for stock splits, stock dividends, recapitalizations, stock combinations and the
like and shall be non redeemable.

The Company and the Underwriter agree that the Underwriter may designate that the Underwriter's Warrants be issued in varying amounts
directly to its officers, directors, shareholders, employees, and other proper persons and not to the Underwriter; however, such designation will
only be made by the Underwriter if it determines and represents to the company that such issuance would not violate the interpretation of the
Board of Governors of the NASD relating to the review of corporate financing arrangements and would not require registration of the
Underwriter's Warrants or underlying securities.

During the four and one-half year period commencing six months from the effective date of the Registration Statement, the Company will use
its reasonable best efforts to assist the holders of the Underwriter's Warrants and the underlying securities to sell the Underwriter's Warrants
and the underlying securities which comprise the Underwriter's Warrants when and if requested by the Underwriter. These reasonable best
efforts shall include the preparation and filing of one registration statement during such four and one-half year period at the request of the
holders of at least 50% of such securities and maintaining the effectiveness thereof for at least twelve (12) months at the company's sole
expense (excluding Underwriting discounts and commissions), including reasonable Blue Sky fees and expenses; provided, however, that the
Company shall have no obligation to prepare and file a registration statement if, within twenty (20) days after it receives a request therefore as
set forth above, the Company agrees to purchase the Underwriter's Warrants and/or the underlying Stock from the requesting holders thereof at
a price, in the case of the Underwriter's Warrants, equal to the difference between the exercise price of the warrants and the current market
price of the Company's Common Stock and in the case of the underlying Common Stock at the current market price of the Company's Common
Stock; and
provided further, that the Company may defer or suspend if (i) such registration statement would have to include disclosure of a material fact or
plan that the Company believes would have a material adverse effect on any proposal or plan by the Company to engage in any acquisition,
merger or other significant transaction, or (ii) the Company has filed a registration statement relating to any of the Company's securities and the
Company believes that the filing of the registration statement relating to the Shares of Common Stock issuable upon exercise of the
Underwriter's Warrant would materially adversely affect the offering by the Company or the market for the Company's securities after such an
offering. The current market price of the Company's Common Stock shall mean the average of the closing bid and ask prices for the Company's
Common Stock during the five business day period preceding such a request.

The Company agrees that for a period starting at the beginning of the second year and concluding at the end of the fifth year after the effective
date of the Registration Statement, the Company will notify all holders of the Underwriter's Warrants and underlying securities whose
securities may not be sold under Commission Rule 144(K) or otherwise sold under Rule 144 within any 3 month period of the Company's
intention to effect any public offering of the Company's securities (whether by the Company or by any security holder of the Company) and, if
requested by the Underwriter (subject to customary cutback provisions), include any underlying securities in such offering at the Company's
sole cost and expense ("Piggyback Registration Rights").

Any holders of securities to be included in a registration statement in connection with exercising demand or piggy-back registration rights will
deliver to the Company a customary Selling Stockholder questionnaire and provide customary indemnification.

14. The Company and the Underwriter represent to each other that no person will receive a fee or payment as a finder or as a consultant in
connection with the transactions contemplated herein and each will indemnify the other party with respect to any claim, for a finder's or
consultant's fee in connection herewith.

15. It is understood that this letter is merely a statement of intent and, while the parties hereto agree in principle to the contents here of and they
propose to proceed promptly and in good faith to work out the arrangement with respect to the Offering, any binding legal obligations between
the parties hereto shall be only as set forth in a duly negotiated and executed Underwriting Agreement.

If the public offering contemplated by this Letter of Intent does not proceed for any reason, the provisions of this Letter of Intent shall be null
and void except that the Company shall pay the Underwriter and the Underwriter's counsel all actual, reasonable and accountable expenses and
legal fees incurred to the point of cancellation (not to exceed $50,000) and offset against any allocations received by the Underwriter or
Underwriter's counsel at the point of cancellation; provided, however, that in no event shall Underwriter be required to return the
non-refundable amount set forth in Paragraph 10 provided further, however such expenses and fees shall not be payable by the Company if the
public offering does not proceed due to the inability of the Underwriter to obtain clearance from the NASD as to the terms of the underwriting
agreement.

16. The Company will engage CGF as a non-exclusive consultant and advisor for a period of two years from the effective date of the
Registration
Statement at a fee of $5,000 per month with the aggregate of such compensation ($120,000) payable at the closing of the public offering.

17. For a period of two years following the effective date of the Registration Statement, the Company agrees to consult the Underwriter with
respect to any future offerings of the Company's securities.

18. The Company agrees that, for a period of two (2) years following the effective date, the Company, at its sole expense, shall contract with
the Company's transfer agent and DTC to provide the Underwriter with copies of transfer sheets on a daily basis and DTC weekly securities
listings.

19. The underwriting agreement shall provide that the Underwriter shall have the right to designate Alan Jacobs, Michael Jacobs or another
mutually acceptable representative of the Underwriter to attend Board of Directors' meetings as a non-voting observer for a period of two
(2) years after the effective date of the Registration Statement, provided such designee is reasonably acceptable to the Company, signs a
confidentiality agreement. Such observer may be excluded from any meetings of the Board of Directors, or portion thereof, where deemed
necessary by Company counsel to protect attorney-client privilege. Attendance at such meetings shall be at the expense of the Company.

20. If the Company elects not proceed with the offering for any reason at a time when the Underwriter is ready, willing and able to proceed,
and subsequently engages in any public offering, private placement, merger or other similar transaction within twelve (12) months following
the Company's election not to proceed, then the Underwriter shall have the right to receive an Investment Banking fee from the Company in
connection therewith equal to two percent (2%) of the consideration paid or received in any such transaction.

21. The Underwriter's intention as expressed in this Agreement is subject to the following general conditions:

a. The Company represents and warrants to the Underwriter that, other than payments to Tejas Securities Group, (i) during the prior twelve
months, it has not paid any monies or other compensation or issued any securities to any member of the NASD. No holder of the Company's
securities has any right (which will not be waived) to "piggyback" its securities in the offering.

b. Continued process by the Company, satisfactory to Underwriter, in meeting its internal forecasts.

c. Satisfactory completion of its due diligence review. There will have been no material adverse change in the business or financial condition of
the Company or any material adverse change in the overall capital market.

d. All relevant terms, conditions and circumstances relating to the proposed public offering will be reasonably satisfactory to Underwriter and
its counsel.

e. The underwriting agreement will contain typical representations and covenants of the Company. Including reciprocal covenants of indemnity
and will provide for satisfactory opinions of counsel to the Company and Underwriter.

f. The Company will provide typical "comfort letters" from its independent certified accountants with respect to the unaudited financial
statements and other financial information and other data contained in the Registration Statement as specified in the
underwriting agreement and with regard to the period from the date of the audited financial statements to a few days prior to both the offering
date and the closing date(s).

g. All transactions between the parties in the Agreement shall be governed by, and construed and enforced in accordance with the laws of the
State of New York.

Please confirm that this letter correctly sets forth our understanding by signing and returning a copy to us along with payment of the expense
advance referred to in paragraph 10 above.
                            Very truly yours,                                       ACCEPTED AND AGREED:
                            CAPITAL GROWTH FINANCIAL, LLC                           WILSON HOLDINGS, INC.
                            By /s/ Alan L. Jacobs                                   By /s/ Clark N. Wilson
                               ------------------                                      -------------------
                               Alan L. Jacobs, Chairman & CEO                          Clark N. Wilson, CEO
                                                                                                       Exhibit 10.13

                                    AMENDMENT TO LETTER OF INTENT

         This letter agreement shall serve as an amendment to the letter of intent dated December 14, 2006 (the
"Letter of Intent") between Wilson Holdings, Inc. (the ―Company‖) and Capital Growth Financial, LLC (the
―Underwriter‖).

         In consideration of the promises and the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the
Underwriter hereby agree as follows:

         1)        All defined terms not otherwise defined herein shall have the meanings ascribed to them in
the Letter of Intent.

          2)       The reference to the public offering of "Shares" is hereby amended to reflect a public offering
of units consisting of one share of common stock and one Class A redeemable five year warrant to purchase one
share of common stock (the "Units").

         3)       Section 2, paragraph 2 of the Letter of Intent is hereby amended to reflect that the
over-allotment period shall be for a period of 30 days from the effective date.

        4)        Section 10 of the Letter of Intent is hereby amended to reflect that the Company shall
reimburse the Underwriter on a non-accountable basis for expenses in the amount of 1.75% of the gross
proceeds of the public offering, not including any Units sold in any over-allotment.

          5)      Section 12 of the Letter of Intent is hereby amended to reflect that the underwriting discount
shall be 8% of the public offering price of the Units.

           6)       The first sentence of Section 13 of the Letter of Intent is hereby amended and restated as
follows:

                  "At the closing of the sale of the Units being offered, the Company will sell to the Underwriter
           an option (the "Representatives' Option") for $100, entitling the Underwriter to purchase an aggregate
           of 10% of the number of Units sold in the public offering, not including any Units sold in any
           over-allotment. "The option is exercisable at an exercise price equal to 125% of the public offering
           price of the Units, and the warrants, included in the Units, are exercisable at an exercise price equal to
           125% of the exercise price of the warrants in the Units offered to the public.

           7)       Section 15, paragraph 2 of the Letter of Intent is hereby amended and restated as follows:

                 "If the public offering of the Units contemplated by this Letter of Intent does not proceed for any
                 reason, then the provisions of this Letter of Intent shall be null and void except that (i) the
                 Company shall reimburse the Underwriter reasonable out of pocket expenses offset by any
                 advances received by the Underwriter; and (ii) the provisions of paragraphs 2, 3 and 4 of Section
                 9 and Section 20 shall remain in full force and effect."
         8)        All of the remaining terms and conditions of the Letter of Intent, except as modified hereby,
shall remain in full force and effect.

         The parties have executed this first amendment to the Letter of Intent this ________________, 2007.

                                                 CAPITAL GROWTH FINANCIAL, LLC


                                                 By:
                                                         Alan L. Jacobs
                                                         Chairman and Chief Executive Officer



                                                 WILSON HOLDINGS, INC.


                                                 By:
                                                         Print Name:
                                                         Title:
                                                                                               EXHIBIT 23.1

            CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

          We consent to the use in this Registration Statement on Form S-1 of our report dated February 12,
2007, with respect to the financial statements of Wilson Holdings, Inc. as of December 31, 2006 and 2005, and
for the years ended December 31, 2006, 2005 and 2004, and to the reference to our firm under the caption
"Experts" in the prospectus.

/s/ PMB Helin Donovan, LLP


Austin, Texas
April 10 , 2007
                                                                                                             EXHIBIT 99.1

Complete Appraisal Report-Summary Format       Wilson Family Communities holdings; Williamson, Travis & Hays Counties



                                                GENERAL DATA


INTENDED USE OF THE APPRAISAL:

The purpose of this appraisal is to estimate the current market value of the subject parcels. The intended use of
the appraisal is to establish the underlying land value for investment purposes.

PROPERTY RIGHTS APPRAISED:

The property rights appraised is the fee simple title to the subject properties. The appraisal assumes the property
to be free and clear of all liens; having merchantable title and under competent management. Business interests
and/or goodwill, engineering, trade fixtures and equipment, and mineral rights are excluded from this valuation.

Some of the of the parcels are owned in fee by Wilson Family Communities and others are held under option
contracts with the fee owners. The appraisal considers the value of fee title under the assumption that a buyer at
market value would execute on the options and own all of the holdings outright.

INTENDED USER:

The intended user is Wilson Family Communities, Inc., and/or its designees. It is understood that the report is
being used in connection with an offering to potential investors. The appraiser consents to the use of the report
in its entirety for these purposes but assumes no third party liability.

EFFECTIVE DATE:

Valuation estimates are current, as of March 10, 2007.

DATE OF REPORT:

The date of the report is March 12, 2007.

DEFINITIONS:

Definition of Market Value

The following current definition of market value is excerpted from FIRREA 12 CFR Part 34: ―The most
probable price which a property should bring in a competitive and open market under all conditions requisite to
fair sale, the buyer and seller acting prudently and knowledgeably, and assuming the price is not affected by
undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of
title from seller to buyer under conditions whereby:
    1. buyer and seller are typically motivated;
    2. both parties are well informed or well advised, and acting in what they consider their best interests;

                                                                                                                        1
 Complete Appraisal Report-Summary Format        Wilson Family Communities holdings; Williamson, Travis & Hays Counties



  3. a reasonable time is allowed for exposure in the open market;
  4. payment is made in terms of cash in United States dollars or in terms of financial arrangements
     comparable thereto; the price represents the normal consideration for the property sold unaffected by
     special or creative financing or sales concessions granted by anyone associated with the sale.‖

Parcel

The term parcel as used herein means any contiguous tract of land in the same ownership, used for the same
purpose, whether such tract consists of one or more plotted lots or a fractional part thereof.

Fee Simple Estate

Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the
governmental powers of taxation, eminent domain, police power and escheat.

Easement

An interest in real property that conveys use, but not ownership, of a portion of an owner‘s property.

SCOPE OF THE INVESTIGATION

Field inspections and interviews were conducted during the months of January and February 2007. The value
conclusions set forth in this report are based on the appraiser‘s inspections of the subject property, environs and
market data and on consideration of property detail information obtained from the owner, Williamson, Travis,
and Hays Counties, and from review of reference materials and interviews with planners, engineers, brokers and
others knowledgeable in the market. A highest and best use analysis was completed and a search for and
analysis of relevant market data was incorporated into the valuation process.

Report format: This is a complete appraisal report in summary format, consistent with Standard 2-2 of
USPAP. Photographs, aerials, maps, drawings, tables and notes are retained in file.

The GENERAL DATA section contains background data relative to the valuation assignment.

The SUBJECT PROPERTY section contains descriptive detail pertaining to the subject parcel, and a highest
and best use analysis.

The VALUATION section contains the approaches to value, summary and analysis of the market data and the
value reconciliation and conclusion.

The ADDENDA section contains a copy of the appraiser‘s qualifications.


                                                                                                                          2
 Complete Appraisal Report-Summary Format       Wilson Family Communities holdings; Williamson, Travis & Hays Counties



RELEVANT MARKET AREA

The subject parcels are predominantly single-family residential sites located within the Austin MSA. All of the
sites are located inside a 20-mile radius from the central business district of the city of Austin. Although the
parcels are located north, east and south of Austin, they share a common element; location within the peripheral
ring of residential development. Each of the sites lies in areas that have converted from rural residential to
urban/suburban residential within the past few years. The outward expansion of the urban ring results from no
fewer than five major factors: a) population and employment growth in the Austin MSA, b) the scarcity of large
undeveloped acreage tracts in the existing urban area, c) construction of major transportation corridors that
―open‖ new areas for urbanization (130/45, 183, Parmer extension, 45 extension), d) price sensitivity that drives
demand for lower priced land, and e) in-migration due to the relative under valuation of residential finished
product in the Austin MSA.

MARKET CONDITIONS

Regional Market Conditions- Economic conditions in the regional market area (Austin MSA) are improving,
with the economy emerging from the downturn and slowdowns that affected nearly all market segments
beginning in 2001. During the period 1990 to 2000 the Austin population grew at a strong rate of 4.1% per year.
The rate of growth dropped to 2.0% in 2001/2002 and has increased slowly but steadily since that time. The rate
of growth in 2005 was 2.4%. The forecast through 2010 is for growth to continue at approximately 2.4% per
year. The following chart was excerpted from a monograph by Angelou Economics.




Employment growth in the area is experiencing strong improvement. A March 5, 2006 article in the Austin
American Statesman says, “After four years in the doldrums, the Central Texas job market roared back to life
in 2005. Employment growth last year was almost twice as strong as previously thought, rising 4.5 percent,
according to estimates by the Federal Reserve Bank of Dallas. That’s more than double the state average of
about 2.1 percent, and far ahead of San Antonio, Dallas and Houston. It’s the strongest growth since the
1998-2000 high-tech boom, when jobs in the region were growing at about 6 percent a year.”
Wages in 2005 increased by 7% according to the article. Unemployment dropped to 3.9% in December 2005 in
the Austin MSA, the lowest rate in five years, according to the Texas Workforce Commission. In a January 27,
2007 article in the Austin American Statesman, local economist Angelos Angelou stated, "Austin is on a
growth
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 Complete Appraisal Report-Summary Format        Wilson Family Communities holdings; Williamson, Travis & Hays Counties




track that will mirror the job gains of last year. Last year was the first year that we actually expanded the base
beyond the previous peak of 2001.”
The residential sector in Austin remains strong. There were a total of nearly 17,000 new home starts in the
region in 2006, a central Texas record. According to Mark Sprague of Austin based Residential Strategies,
―Austin did not experience the massive run-ups in house prices three years ago that affected so many markets.
As a result, Austin‘s relative affordability and stability have served it well during the past few months. The
Austin market is obviously going contrary to the national market.‖ Closings also set records in 2006, with the
result that standing inventories are actually in a state of undersupply.
The Real Estate Center estimates the Austin area has enough existing homes on the market to last just 3.3
months at the current rate of sales. Housing prices are growing about twice as fast as wages according to Brian
Kelsey, assistant director for the Capital Are Council of Government‘s Center for Regional Development.

Local Market Conditions- The subject parcels are located in three sub-markets. Georgetown Village is located
in the Georgetown/Leander sub-market. The Bohl‘s and New Sweden tracts are located in the east Austin
sub-market. The Elm Grove and Rutherford tracts are located in the south Austin sub-market. All three of these
sub-markets are experiencing positive growth.

Georgetown Village is an existing community that is located in a rapidly urbanizing area. Five years ago,
Georgetown Village was located in an area characterized as rural/agricultural. Today, the area has transitioned
to a major suburban population center. Public works and infrastructure projects are facilitating this transition.
Evidence of the northern expansion of urban density is seen in several major public works projects. SH 195 is
being improved into a four lane highway providing access from I-35 to the subject property. The SH 130
project, reportedly the largest public works project in Texas history, will provide access from the southeast to
I-35 near the SH 195 intersection. The 183 toll-road project is bringing intensification of development north of
Cedar Park up to Leander. The Parmer Road improvement project will provide major arterial improvements
running north and northeast from Round Rock/Cedar Park up to SH 195 in the immediate vicinity of the subject
property. Major expansion of the Del Webb-Sun City development, the adjoining Somerset Hills project, the
Pinnacle Development project and several others are evidence of the strength of the Georgetown Village
sub-market.

The Bohl‘s and New Sweden tracts directly benefit from by the SH 130 project. According to Frank Egan,
president of Eastbourne Investments, ―For so long, Austin has been growing to the north. But now with the road
improvements and the proximity to downtown, this whole area (east of I-35) is becoming very desirable from
the commute side and the affordability side.‖

The Elm Grove and Rutherford projects are in a high demand area that is experiencing strong growth.
According to Elton Rude, director of the Austin market for Houston based Metrostudy Corp., ―The southern
Travis County sub market is one of the hottest in Central Texas for new home construction. The sub market is
the lone area in the Austin region where housing starts – lots where builders have poured foundation slabs –
outnumber open lots waiting for construction.‖ The supply of developable acreage is constrained by the fact that
much of the area lies within the Edwards Aquifer recharge zone. Rude states, ―The areas proximity to the

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 Complete Appraisal Report-Summary Format        Wilson Family Communities holdings; Williamson, Travis & Hays Counties



Edwards Aquifer means many homebuilders can‘t build as densely as they might otherwise. Environmental
regulation, combined with a public desire to live southwest of Austin, means builders fight over a relatively
small number of tracts. There is a real shortage of those properties down there. As a result, competition is strong
for those tracts‖ , according to Rude.



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 Complete Appraisal Report-Summary Format         Wilson Family Communities holdings; Williamson, Travis & Hays Counties



                              SUBJECT PROPERTY – GEORGETOWN VILLAGE


FEE OWNERSHIP:

Royce Faulkner

PROPERTY HISTORY:

Wilson Family Communities acquired the subject property from the fee owner under an option contract in
August 2005. The option contract requires that WFC close on no fewer than 30 acres per year through 2017. As
of December 31, 2006, WFC had acquired fee title to approximately 52 acres and 25 residential lots. The option
agreement gives WFC control of the tract under favorable terms. The take down price per acre escalates from
approximately $13,000 per acre in 2007 to $17,000 per acre in 2017.

The fee owner has owned the property for over three years preceding the effective date of the appraisal.

PROPERTY LOCATION:

The subject property is located east and west of Shell Ranch Road north of RM 2338 and south of SH 195, in
the City of Georgetown sphere of influence in Williamson County, Texas.

LEGAL DESCRIPTION:

A full legal description is included in the Title Report, a copy of which is retained in file. The legal description
is incorporated herein by reference in its entirety.

LAND USE DESIGNATION:

The subject property is located outside of the City limits of the City of Georgetown. There is no
General/Comprehensive plan or zoning designation for the subject property. The County regulates development
in the subject area through the administration of various public works and public health and safety ordinances.

ASSESSOR’S DATA:

There are numerous parcel numbers for the subject property. These parcel numbers are included in the Title
Report for the subject property, a copy of which is retained in file.

PHYSICAL DESCRIPTION

Size                         665 ± acres


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 Complete Appraisal Report-Summary Format         Wilson Family Communities holdings; Williamson, Travis & Hays Counties



Shape Irregular.

Topography        Level to sloping along the frontage with steep areas primarily in the westerly interior portions
of the site.

Access/Frontage      Significant frontage on Shell Ranch Road and on the improved interior streets in the
existing developed areas of Georgetown Village.

Utilities   Sewer, water, electrical and solid waste disposal is provided by the City of Georgetown, telephone
by Verizon, cable by Cox Communications, and gas by Atmos Energy.

Easements/Reservations          Review of the title reports covering the subject property do not reveal any
exceptions to title that negatively affect the marketability, use or value of the subject property.

Biology     The appraiser was not provided with a biological assessment of the subject property. The
entitlement history for the developed portion of Georgetown Village is indicative of a low probability of
sensitive species impacts. Such impacts, if any, could be mitigated on a cost to cure basis.

Flood Hazard       The subject property lies entirely outside the 100 year floodplain.

Geology       A geological assessment on the subject property was prepared by ACI Consulting. The site is
suitable for the intended residential development according to the report

Toxics/Contamination       The appraiser was advised by the project engineer that there are no
toxics/contamination issues that impact the site.

Improvements       Subject property improvements include on and offsite infrastructure improvements,
including some of the interior streets. Utilities are improved to the perimeter and through portions of the site.
The subject property is described as fully entitled, partially finished master planned residential land.

PRESENT USE AND OCCUPANCY:

The subject property is vacant land located in a master planned subdivision with partial infrastructure
improvements including streets, power, water and sewer, and is suitable and available for development to its
highest and best use.

HIGHEST AND BEST USE-BEFORE CONDTION:

The highest and best use of land ―as-though-vacant‖, and property as improved, must meet four criteria. The
highest and best use must be 1) physically possible; 2) legally permissible; 3) financially feasible; and 4)
maximally productive. The subject property is vacant land. The appraisal considers only the highest and best
use as-though-vacant.


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 Complete Appraisal Report-Summary Format        Wilson Family Communities holdings; Williamson, Travis & Hays Counties



Physical Possibility:

The subject property is level to sloping land. The subject has excellent access and frontage. The subject property
is physically suitable for all legally permissible and economically feasible alternative uses.

Legal Permissibility:

The subject property is fully entitled and portions are final platted as a medium density residential subdivision.
The master plan includes a significant commercial component. The approved plan is representative of the
maximum intensity legally permissible use for the site

Economic Feasibility-Maximal Yield :

The approved master plan is consistent with the maximally productive use of the site.

Highest and best use – Conclusion:

The highest and best use for the subject property is ―as-is‖, for residential development to maximum intensity
with a commercial component.




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 Complete Appraisal Report-Summary Format         Wilson Family Communities holdings; Williamson, Travis & Hays Counties



                                      SUBJECT PROPERTY – NEW SWEDEN

FEE OWNERSHIP:

Wilson Family Communities, Inc., a Delaware corporation

PROPERTY HISTORY:

The subject property comprises ten separate tracts that were assembled and acquired by Wilson Family
Communities, Inc., in October of 2006. WFC acquired the subject property for $8,485,680.

The previous titleholders owned the tracts for in excess of three years prior to the effective date of this
appraisal.

PROPERTY LOCATION:

The subject property is located east of FM 973, north of New Sweden Church Road and south of New Sweden
Gin Road (Brita Olson Road).

LEGAL DESCRIPTION:

A full metes and bounds legal description is included in the Title Report, a copy of which is retained in file. The
legal description is incorporated herein by reference in its entirety.

LAND USE DESIGNATION:

The subject property is located in unincorporated Travis County. There is no zoning designation for the tract.
The County regulates development in the subject area through the administration of various public works and
public health and safety ordinances. The subject property is part of the New Sweden master planned
community, and has approximately 1,700 residential lots, a school site, amenity center, 28.3 acres of
commercial land and parks/greenbelt. There are two Municipal Utility Districts (MUD‘s) for the property that
will finance the installation and operation of water and wastewater infrastructure.

ASSESSOR’S DATA:

There are numerous parcel numbers for the subject property. These parcel numbers are included in the Title
Report for the subject property, a copy of which is retained in file.

PHYSICAL DESCRIPTION

Size                        534 ± acres

Shape                      Irregular.


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 Complete Appraisal Report-Summary Format        Wilson Family Communities holdings; Williamson, Travis & Hays Counties



Topography            Level to sloping

Access/Frontage    Approximately 1,800 feet on FM 973, 3,600 feet on New Sweden Road, 500 feet on New
Sweden Gin Road and 900 feet on Axell Road.

Utilities   Power lines run through the property and power is extended to the perimeter of the site. Water and
wastewater is being provided by two approved MUD‘s. Oncor provides electrical, phone is by SBC, and gas by
HBH Systems (propane).

Easements/Reservations          Review of the title reports covering the subject property do not reveal any
exceptions to title that negatively affect the marketability, use or value of the subject property.

Flood Hazard       A portion of the subject property lies within FEMA Zone ‗A‘, the 100 year floodplain. These
areas have requirements for base floor elevations that will require project design consideration. The flood plain
area does not preclude development consistent with the master plan.

Jurisdictional Wetlands       A wetland delineation was conducted by Escarpment Environmental. The report
concluded that an ephemeral stream may be considered jurisdictional and regulated by the ACOE. The report
concludes that avoidance of this area is possible and that avoidance would obviate the need for Corps
permitting. The report also states that incidental impacts may be addressed through a Nationwide Permit.

Biology      The appraiser was provided with a biological assessment for the subject property conducted by
Escarpment Environmental, dated April 16 2006. The report concluded that there were no endangered species
issues affecting the site.

Geology     A geological assessment on the subject property was prepared by Raba-Kistner-Brytest
Consultants, Inc. The site is suitable for the intended residential development according to the report

Toxics/Contamination       The appraiser was advised by the project engineer that there are no
toxics/contamination issues that impact the site.

Improvements        Historic structures related to the farming operation do not contribute to value and demolition
costs are nominal and are absorbed in the site grading costs. The subject property is appraised as unimproved
land in raw condition.

PRESENT USE AND OCCUPANCY:

The subject property is vacant land located in a master planned subdivision that is suitable and available for
development to its highest and best use.

HIGHEST AND BEST USE-BEFORE CONDTION:

The highest and best use of land ―as-though-vacant‖, and property as improved, must meet four criteria. The
highest and best use must be 1) physically possible; 2) legally permissible; 3) financially feasible; and 4)
maximally productive. The subject property is vacant land. The appraisal considers only the highest and best
use as-though-vacant.

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 Complete Appraisal Report-Summary Format       Wilson Family Communities holdings; Williamson, Travis & Hays Counties



Physical Possibility:

The subject property is level to sloping land. The subject has excellent access and frontage. The subject property
is physically suitable for all legally permissible and economically feasible alternative uses.

Legal Permissibility:

The subject property has an approved master plan for a mixed-use community. The master plan includes a
significant commercial component. The approved plan is representative of the maximum intensity legally
permissible use for the site

Economic Feasibility-Maximal Yield :

The approved master plan is consistent with the maximally productive use of the site.

Highest and best use – Conclusion:

The highest and best use for the subject property is ―as-is‖, for residential development to maximum intensity
with a commercial component.




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 Complete Appraisal Report-Summary Format         Wilson Family Communities holdings; Williamson, Travis & Hays Counties



                                     SUBJECT PROPERTY – BOHLS TRACT

FEE OWNERSHIP:

Stephen Frederick Bohls, William Brian Bohls, Hon M. Bohls, Paul L. Bohls, Miriam R. Bohls and Frederick
W. Bohls, as to tract 1;
Stephen Frederick Bohls and William Brian Bohls, tract 2;
Paul A. and Laura Moebus, as to tract 3;
KB3, LC, as to tract 4.

PROPERTY HISTORY:

The subject property is comprised of four separate tracts that were assembled and acquired by Wilson Family
Communities, Inc., in January 2006 under an option contract that requires WFC to purchase the property for
approximately $7,349,972 on April 9, 2007.

The fee titleholders have owned the tracts for in excess of three years prior to the effective date of this appraisal.

PROPERTY LOCATION:

The subject property is located east and west of FM 973, north of New Sweden Gin Road (Brita Olson Road),
and south of Cameron Road/Hamann Lane.

LEGAL DESCRIPTION:

A full metes and bounds legal description is included in the Title Report, a copy of which is retained in file. The
legal description is incorporated herein by reference in its entirety.

LAND USE DESIGNATION:

The subject property is located in unincorporated Travis County. There is no zoning designation for the tract.
The County regulates development in the subject area through the administration of various public works and
public health and safety ordinances. The subject property is part of the New Sweden master planned
community, and has approximately 1,600 residential lots, a school site, amenity center, 23.49 acres of
commercial land and parks/greenbelt. There are two Municipal Utility Districts (MUD‘s) for the property that
will finance the installation and operation of water and wastewater infrastructure.

ASSESSOR’S DATA:

There are numerous parcel numbers for the subject property. These parcel numbers are included in the Title
Report for the subject property, a copy of which is retained in file.


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 Complete Appraisal Report-Summary Format          Wilson Family Communities holdings; Williamson, Travis & Hays Counties



PHYSICAL DESCRIPTION

Size                            428 ± acres

Shape                           Irregular.

Topography                      Level to sloping

Access/Frontage    Approximately 1,800 feet on FM 973, 3,600 feet on New Sweden Road, 500 feet on New
Sweden Gin Road and 900 feet on Axell Road.

Utilities    Power lines run through the property and power is extended to the perimeter of the site. Water and
wastewater is being provided by two approved MUD‘s. Electrical is provided by Oncor, phone by SBC, and gas
by HBH Systems (propane).

Easements/Reservations          Review of the title reports covering the subject property do not reveal any
exceptions to title that negatively affect the marketability, use or value of the subject property.

Biology       The appraiser was provided with a biological assessment for the subject property conducted by
Escarpment Environmental, dated April 8, 2006. According to the report ―It is Escarpment‘s opinion that the
subject site does not exhibit habitat characteristics for any threatened or endangered species.

Flood Hazard         The subject property lies entirely outside of FEMA Zone ‗A‘, the 100 year floodplain.

Geology     A geological assessment on the subject property was prepared by Raba-Kistner-Brytest
Consultants, Inc. The site is suitable for the intended residential development according to the report

Jurisdictional Wetlands      A wetland delineation was conducted by Escarpment Environmental. The report
concluded that the approximately 1,000 feet of an ephemeral stream might be considered jurisdictional and
regulated by the ACOE. The report concludes that avoidance of this area is possible and that avoidance would
obviate the need for Corps permitting. The report also states that incidental impacts may be addressed through a
Nationwide Permit.

Toxics/Contamination       The appraiser was advised by the project engineer that there are no
toxics/contamination issues that impact the site.

Improvements Historic structures related to the farming operation do not contribute to value and demolition
costs are nominal and are absorbed in the site grading costs. The subject property is appraised as unimproved
land in raw condition.

PRESENT USE AND OCCUPANCY:

The subject property is vacant land located in a master planned subdivision that is suitable and available for
development to its highest and best use.

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 Complete Appraisal Report-Summary Format       Wilson Family Communities holdings; Williamson, Travis & Hays Counties



HIGHEST AND BEST USE-BEFORE CONDTION:

The highest and best use of land ―as-though-vacant‖, and property as improved, must meet four criteria. The
highest and best use must be 1) physically possible; 2) legally permissible; 3) financially feasible; and 4)
maximally productive. The subject property is vacant land. The appraisal considers only the highest and best
use as-though-vacant.

Physical Possibility:

The subject property is level to sloping land. The subject has excellent access and frontage. The subject property
is physically suitable for all legally permissible and economically feasible alternative uses.

Legal Permissibility:

The subject property has an approved master plan for a mixed-use community. The master plan includes a
significant commercial component. The approved plan is representative of the maximum intensity legally
permissible use for the site

Economic Feasibility-Maximal Yield :

The approved master plan is consistent with the maximally productive use of the site.

Highest and best use – Conclusion:

The highest and best use for the subject property is ―as-is‖, for residential development to maximum intensity
with a commercial component.




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 Complete Appraisal Report-Summary Format         Wilson Family Communities holdings; Williamson, Travis & Hays Counties



                                       SUBJECT PROPERTY – ELM GROVE

FEE OWNERSHIP:

Wilson Family Communities, Inc., a Delaware corporation as to a portion and GCWS-06 LTD., a Texas limited
partnership, as to the remainder

PROPERTY HISTORY:

Wilson Family Communities acquired fee title to a portion of the subject property in December 2006, according
to the terms of an option contract. The option contract set the total purchase price for the tract at $3,900,000.

The fee owner of the remainder of the land has owned the property for over three years preceding the effective
date of the appraisal.

PROPERTY LOCATION:

The subject property is located south of FM 967 and west of FM 1626 in the City of Buda, in northeast Hays
County, Texas.

LEGAL DESCRIPTION:

A full legal description is included in the Title Report, a copy of which is retained in file. The legal description
is incorporated herein by reference in its entirety.

LAND USE DESIGNATION:

The subject property is located in the City of Buda in Hays County, Texas. A portion of the subject property is
zoned C2/R2 (arterial commercial office/arterial retail) and the balance is zoned MR, medium density
residential.

ASSESSOR’S DATA:

There are numerous parcel numbers for the subject property. These parcel numbers are included in the Title
Report for the subject property, a copy of which is retained in file.

PHYSICAL DESCRIPTION

Size                     91 ± acres

Shape                    Irregular.

Topography               Level to sloping


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 Complete Appraisal Report-Summary Format         Wilson Family Communities holdings; Williamson, Travis & Hays Counties



Access/Frontage        The subject property has access off of FM 1626 via Garlic Creek Road, a 70‘ dedicated
street.

Utilities    Water is provided by LCRA, sewer and solid waste disposal is provided by the City of Buda,
electric by Pedernales Electric, phone by SBC, gas by Entex Gas and cable by Time Warner.

Easements/Reservations          Review of the title reports covering the subject property do not reveal any
exceptions to title that negatively affect the marketability, use or value of the subject property.

Biology      The appraiser was not provided with a biological assessment of the subject property. The master
plan design is includes avoidance and minimization of impacts to the Garlic Creek watershed that runs to the
north of the subject property. Significant set asides for Garlic Creek and for open space/greenbelts are indicative
of planning that adequately considers site location within the Edwards aquifer recharge and transition zones.
Existing and new development on surrounding properties within earlier phases of the Garlic Creek West master
plan indicate that environmental issues have been satisfactorily addressed.

Flood Hazard       The subject property abuts Garlic Creek and a small portion of the site lies within the 100
year flood plain. Most of these areas are platted as drainage easement lots and will not be improved for
residential use. The project is designed within the restrictions imposed by the flood plain designation.

Geology       A geological assessment on the subject property was prepared by Fugro Consultants, LP. The site is
suitable for the intended residential development according to the report

Toxics/Contamination       The appraiser was advised by the project engineer that there are no
toxics/contamination issues that impact the site.

Improvements         Subject property improvements include on and offsite infrastructure improvements,
including interior streets. Utilities are improved throughout the site. The subject property is described as fully
entitled, finished residential lots. Home construction is scheduled to commence in mid-2007.

PRESENT USE AND OCCUPANCY:

The subject property consists of finished residential lots, available for single-family residential construction.

HIGHEST AND BEST USE-BEFORE CONDTION:

The highest and best use of land ―as-though-vacant‖, and property as improved, must meet four criteria. The
highest and best use must be 1) physically possible; 2) legally permissible; 3) financially feasible; and 4)
maximally productive. The subject property is vacant land. The appraisal considers only the highest and best
use as-though-vacant.



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 Complete Appraisal Report-Summary Format         Wilson Family Communities holdings; Williamson, Travis & Hays Counties



Physical Possibility:

The subject property is level to sloping land. The subject has excellent access and frontage and is an improved
residential subdivision. The subject property is physically suitable for residential development.

Legal Permissibility:

The subject property is fully entitled, final platted, finished lots. This plat is representative of the maximum
intensity legally permissible use for the site.

Economic Feasibility-Maximal Yield :

The approved final plat is consistent with the maximally productive use of the site.

Highest and best use – Conclusion:

The highest and best use for the subject property is ―as-is‖, for residential development to maximum intensity.




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 Complete Appraisal Report-Summary Format         Wilson Family Communities holdings; Williamson, Travis & Hays Counties



                                 SUBJECT PROPERTY – RUTHERFORD WEST

FEE OWNERSHIP:

Wilson Family Communities, Inc., a Delaware corporation.

PROPERTY HISTORY:

Wilson Family Communities acquired fee title to the subject property in December 2006, according to the terms
of an option contract. The option contract set the total purchase price for the tract at $9,225,559.

The previous owner held the property for over three years preceding the effective date of the appraisal.

PROPERTY LOCATION:

The subject property is located north of FM 967 approximately 2 miles east of FM 1826, in north Hays County,
Texas.

LEGAL DESCRIPTION:

A full legal description is included in the Title Report, a copy of which is retained in file. The legal description
is incorporated herein by reference in its entirety.

LAND USE DESIGNATION:

The subject property is located in unincorporated Hays County. There is no General/Comprehensive plan or
zoning designation for the subject property. The County regulates development in the subject area through the
administration of various public works and public health and safety ordinances. The subject property is located
in the sphere of influence of the city of Dripping Springs. Major developers in the immediate area have obtained
agreements with the city of Dripping Springs and will be annexed into the city limits.

Hays County allows for subdivision of larger acreage tracts into 10-acre and larger lots with minimal
requirements. The county does require that each new parcel has frontage on a public road or that private access
roads are built to County standards.

Subdivision to higher density is generally dependent on the adequacy of interior roads, the source of water and
method of wastewater treatment. Any development that includes lots under 10 acres in size must go through the
subdivision process. The minimum lot size for lots serviced by well and septic is two acres. The minimum lot
size for lots with public water and septic is one acre. Subdivisions with lots under one acre require both public
water and sewer.


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 Complete Appraisal Report-Summary Format        Wilson Family Communities holdings; Williamson, Travis & Hays Counties



ASSESSOR’S DATA:

The subject property includes all or portions of parcels R14152 and R16377.

PHYSICAL DESCRIPTION

Size                    697 ± acres

Shape                   Irregular.

Topography              Level to sloping

Access/Frontage         The subject property has access off of FM 1626 via Garlic Creek Road, a 70‘ dedicated
street.

Utilities   Water is provided by LCRA, sewer is by on-site septic, electric by Pedernales Electric, phone by
Verizon, and cable by Time Warner.

Easements/Reservations          Review of the title reports covering the subject property do not reveal any
exceptions to title that negatively affect the marketability, use or value of the subject property.

Biology      The appraiser was not provided with a biological assessment of the subject property. The appraiser
did review detailed biological studies on the 3,000 acre tract adjoining the subject property to the east. The
subject property is impacted by location with the Edwards Aquifer recharge zone and by the potential presence
of sensitive species, including the Golden Cheeked Warbler and the Black Capped Vireo. Development
planning and design must carefully consider these issues.

Flood Hazard       The subject property lies outside of FEMA Zone ‗A‘ (100 year floodplain).

Jurisdictional Wetlands      The appraiser was not provided with a wetland delineation for the subject
property. An ephemeral stream running through the property does not appear to fall into the jurisdictional
category. A delineation should be conducted. If there are jurisdictional wetlands, the project should be designed
to avoid, minimize, and/or mitigate the impacts.

Geology       A geological assessment on the subject property was prepared by ACI Consulting. The site is
suitable for the intended residential development according to the report

Toxics/Contamination       The appraiser was advised by the project engineer that there are no
toxics/contamination issues that impact the site.

Improvements       A 12‖ water line has recently been constructed to the subject property. WFC is a partner in
consortium that constructed the water line. Some interior roads have been improved. The subject property is
otherwise vacant land.



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 Complete Appraisal Report-Summary Format          Wilson Family Communities holdings; Williamson, Travis & Hays Counties



PRESENT USE AND OCCUPANCY:

The subject property consists of vacant land is partially finished condition. The property is being platted as a
conservation development, with 292 lots on 697 acres, with 409 acres to be dedicated for conservation purposes.

HIGHEST AND BEST USE-BEFORE CONDTION:

The highest and best use of land ―as-though-vacant‖, and property as improved, must meet four criteria. The
highest and best use must be 1) physically possible; 2) legally permissible; 3) financially feasible; and 4)
maximally productive. The subject property is vacant land. The appraisal considers only the highest and best
use as-though-vacant.

Physical Possibility:

The subject property is level to sloping land. The subject has excellent access and frontage. The subject property
is physically suitable for rural residential development.

Legal Permissibility:

The subject property is suitable and available fully entitled, final platted, finished lots. This plat is representative
of the maximum intensity legally permissible use for the site.

Economic Feasibility-Maximal Yield :

The approved final plat is consistent with the maximally productive use of the site.

Highest and best use – Conclusion:

The highest and best use for the subject property is ―as-is‖, for residential development to maximum intensity.




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 Complete Appraisal Report-Summary Format         Wilson Family Communities holdings; Williamson, Travis & Hays Counties



                                                   VALUATION


THE VALUATION PROCESS AND APPROACH

The fundamental purpose of an appraisal is to estimate value. Basic to the concept of value is the principle of
substitution, the rationale that when property is replaceable, its value tends to be set by the cost of acquisition of
an equally desirable substitute property or income stream.

Each of the traditional approaches to value...Direct Comparison, Income Capitalization and Replacement
Cost...utilizes the principle of substitution in an appropriate manner, drawing upon the experience of the
marketplace in different ways. Critical to the application of the three approaches in the valuation process is the
highest and best use analysis. The considered use, based upon such analysis, then determines the relevance of
each approach.

The Direct Comparison Approach is applicable in the market value estimate of both improved properties and
vacant land. It is a method of estimating market value based upon recent sales of comparable properties. Since
no two properties are ever identical, sales data are then adjusted for elements of comparison including interest
conveyed, conditions of sale, cash equivalency, market conditions, location, physical characteristics and income
characteristics. The Direct Comparison Approach reflects the actual activity of buyers and sellers in the current
marketplace. This approach has application in the appraisal assignment in estimating the value of the subject
parcels consistent with the highest and best conclusion.

The Replacement Cost Approach involves an estimate of the replacement cost new of an improved property,
inclusive of entrepreneurial profit. From this estimate is deducted accrued depreciation. To the depreciated
building cost is added the value of the land. The Replacement Cost Approach is most useful in the valuation of
new or nearly new improvements. The subject parcels are unimproved. The Replacement Cost Approach is not
applicable to the assignment.

The Income Approach is based on the premise that investment properties are normally valued in proportion to
their ability to produce income. The reliability of the Income Approach is directly related to the quality, quantity
and durability of the income stream, and requires specific projections regarding risk factors, holding period,
product cost, product pricing, and changes in the economy. The subject parcels do not presently produce an
income stream. The Income Approach is sometimes used in the valuation of residential development land
through the application of the Subdivision Development Methodology. This approach involves projecting
income from the sale of lots over time, deduction of direct and indirect expenses, and discounting of the income
stream at an appropriate rate to arrive at net present value. The subject parcels are appraised for bulk sale in
as-is condition. The Income Approach is not applicable to the assignment.

VALUATION OVERVIEW:

The subject sites are all large residential subdivisions with entitlements in various finished condition. The sites
are individually appraised. The five sites are not appraised for sale as a holding of five properties to a
single buyer. Each of the sites is appraised for sale in as-is condition. They are not appraised based on the retail
sale of finished lots to merchant builders.

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 Complete Appraisal Report-Summary Format         Wilson Family Communities holdings; Williamson, Travis & Hays Counties



The holdings are briefly described as follows:

        Name                     County          Acres      No. Lots Entitlements                Commercial
                                                                                                 Component
        Georgetown               Williamson      580        2,024        Yes                     Yes
        Village
        Manor-Bohls Tract        Travis          420        1,873        Yes                     Yes
        Manor-New                Travis          530        1,341        Yes                     Yes
        Sweden
        Elm Grove                Hays            91         320          Yes                     No
        Rutherford West          Hays            612        298          Yes                     No


Scope of the Market Data Search:

A thorough search for comparable sales was conducted. The search included interviews with owners, brokers
and developers active in the retail market, and review of data from Costar/Comps, Inc.; ABOR/MLS, Texas
Listing Service, Loopnet and original research using the Travis, Williamson, and Hays County grantor/grantee
indexes.

The primary search filters were for recent, large (over 100 acres) tracts of residential/mixed use land with
entitlements and/or the bulk sale of finished/semi-finished lots. The nature of the major subdivision
development market is characterized by buyers that tie property up for extended periods of time and do not
close until due diligence is complete and contingencies regarding entitlements and/or infrastructure are fulfilled.
Because of this, the most recent closings reflect deals that may have been struck well before. In many cases, the
sale price was agreed to one to two years or more prior to the actual closing. Because of this, the appraiser
carefully considered recent option contracts as more clearly indicating current market value. Another
characteristic of the major subdivision market is that the buyers consider the details of the option/take down
process as proprietary. Confirmation of exact sale prices is sometimes difficult or impossible. It is not unusual
for buyer and seller to enter into firm confidentiality agreements. Each of the sales used were confirmed with
more than one source even though some of the confirmations did not include information directly from the
principals.

The market data search yielded five sales that are used as primary market value indicators.

Primary Market Data Items:

The five primary items range in closing date from May 2006 to September 2006. Item 1 is a pending contract as
of the effective date of this appraisal. The sales range in size from 91 acres to 810 acres. The non-adjusted sales
prices per acre range from $30,000 to $97,000.

Market Data Item No. 1 is the pending sale of a 450-acre portion of a 750-acre mixed use development
acquired by Centex Homes for the construction of approximately 1,400 homes. The site was purchased in raw,
unentitled condition but closing was contingent on approval of the development plan. The project will incur
significant offsite improvement costs for the construction of collector roads. Market Data Item No. 1 sold for
a non-adjusted unit price of $97,000 per acre.

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 Complete Appraisal Report-Summary Format         Wilson Family Communities holdings; Williamson, Travis & Hays Counties



Market Data Item No. 2 is the September 2006 sale of 468 acres of raw land located south of Hamilton Pool
Road in west Travis County. The seller received preliminary approval in 2004 for a subdivision of 460 lots,
with a maximum impervious cover of 15%. The sale was contingent on obtaining LCRA water; an approved
MUD and a draft permit with TECQ for waste disposal. Market Data Item No. 2 sold for a non-adjusted unit
price of $32,000 psf.

Market Data Item No. 3 is the 2006 sale of 91.17 acres of raw, unentitled land located north of CR 2243 in the
City of Leander, Williamson County, Texas. The Sale is one of nine large acreage acquisitions that have
occurred due to the assemblage of parcels for the 1,900 acre Water Oak at San Gabriel project that will inclue
4,000 homes, 1,500 multi-family units, 100 acres of commercial and 650 acres of open space/conservation land.
This is a resale of the site. The first sale was in February of 2006 for $20,000 per acre, indicating appreciation at
the rate of 8.3% per month; 100% per year. Market Data Item No. 3 sold for a non-adjusted unit price of
$30,000 psf .

Market Data Item No. 4 is the June 2006 of 111 acres of semi-finished residential land located just west of
I-35 and south of W. Slaughter Lane in the South Park Meadows mixed-use development. The site is the
residential component of the master plan that includes 1.6 million sq. ft. of retail, 330 homes (subject), and
multi-family residences. Walmart and Target anchor the retail project. Market Data Item No. 4 sold for a
non-adjusted unit price of $92,000 psf.

Market Data Item No. 5 is the May 2006 sale of 810 acres of raw, unentitled land located north of Hwy 29 and
west of the Cimarron Hills community in the Georgetown vicinity of Williamson County. The site was
purchased by an Arizona developer for development of 2,000 single-family homes and 40 acres of commercial.
The project is located along the intended route of the Parmer North extension. The sale was contingent on
obtaining an agreement with the City of Georgetown to provide water. Market Data Item No. 5 sold for a
non-adjusted unit price of $30.864.

The sales are summarized on the table on the following page.

DIRECT COMPARISON APPROACH:

The Direct Comparison approach to value is based on the selection, verification and analysis of comparable
sales. A critical first step in the valuation is the determination of the appropriate unit equivalent.

Unit equivalent - The subject sites are all large residential subdivisions with full entitlements in various finished
condition. The sites are individually appraised. The five sites are not appraised for sale as a holding of five
properties to a single buyer. Each of the sites is appraised for bulk sale in as-is condition. They are not
appraised based on the retail sale of finished lots to merchant builders.

The appropriate unit equivalent for this appraisal is price per acre and not price per lot. Per lot unit equivalents
may be useable, but price per acre of land allows for comparison on a consistent basis.

Basis for Adjustments - Sequential adjustments are made for interest conveyed, financing (cash equivalency),
conditions of sale, and market conditions.

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 Complete Appraisal Report-Summary Format        Wilson Family Communities holdings; Williamson, Travis & Hays Counties



Interest Conveyed : Adjustments are made where there are differences in interest conveyed.

Conditions of Sale : Conditions of sale adjustments are made where there are distress or other non-arms length
characteristics to the sale.

Financing: Adjustments are made for financing where the terms of the sale are not cash or cash equivalent.

Market Conditions : The market conditions adjustment reflects appreciation over time. Prior to 2005,
residential land prices in the Austin MSA increased at a modest pace as the regional market emerged from the
economic downturn caused in part by slowdowns in the technology sector. Beginning in 2005, the rate of
appreciation increased as a result of several factors. The Austin market has a positive profile in the context of
the national real estate market . Where many markets are arguably overvalued, Austin is undervalued. In a
recent survey of over 300 U.S. metropolitan areas, the Austin market was shown to be 7% undervalued. Austin
ranked 280 th in the ranking of 300 cities and was one of only 55 cities shown to be undervalued. Investment
dollars are flowing from the overvalued markets into Austin. This trend is expected to continue and is one factor
that is contributing to steeper appreciation rates. Economic fundamentals in the region are positive. Job and
population growth and low unemployment establish a strong foundation for continued economic growth.
Decreasing supply of residential land suitable for master planned development is a factor that is driving up
demand. Transition to residential use is a significant factor affecting prices in the subject sub-market. The
subject properties are all in areas that have transitioned from agricultural to residential use. This change in use
has caused a step up in prices not connected to economic externalities.

The market conditions adjustment reflects appreciation over time. The most accurate way to determine an
appreciation factor is to analyze the sale and resale of the same parcel. The primary market data yielded one sale
and resale of the same parcel. Item 3 sold in February of 2006 for a unit price of $20,000 per acre and re-sold in
August of 2006 for $30,000. This pairing indicates appreciation at the rate of 8.33% per month relating to 100%
per year. Just east of Sun City and south of SH 195 in the vicinity of the Georgetown Village holding, the 160
acre Richmond tract sold in March 2006 for $12,500 per acre and re-sold in March 2007 for $26,000. This
paired sale underscores the steep appreciation indicated by Item 3. In west Travis County, several near paired
sales have occurred over the past two-three years, with prices increasing from roughly $10,000 (Sweetwater)
per acre to over $30,000 (Hudson/Item 2, Cypress Tract, Heffington tract).

This steep appreciation is not viewed as a linear trend but rather as a step up in floor values resulting from a
combination of the four factors outlined above. The influx of investor dollars that perceive the Austin market as
undervalued has had a strong affect on land values. Residential land values are a function of achievable price for
finished product. The median price of a home in Austin remains in the undervalued category. This fact alone
indicates that the Austin market can sustain an increase in home values without risking overvaluation. The
increase in achievable price for finished product directly impacts the achievable price per acre for residential
land.

Once values have stepped up to the new floor levels, it can be expected that appreciation will follow a normal
path. Overall, the Austin market has improved steadily since emerging from the recession of 2001/2002.
Median home prices in the Austin MSA between March 2006 and March 2007 increased 20%. This trend is
represents a market based increase in value apart from the factors that have driven residential subdivision land
prices

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    Complete Appraisal Report-Summary Format        Wilson Family Communities holdings; Williamson, Travis & Hays Counties



up so steeply. The time adjustment factor used for land prices over and above the rise in floor values is
estimated at 1.5% per month; 18% per year, for the period January 2006 to present.

Elements of comparison - ‗Elements of comparison are the characteristics of properties and transactions that
help explain the variance of prices paid for real estate. The appraiser determines the elements of comparison for
a given appraisal through market research and supports those conclusions with market data. When properly
identified, the elements of comparison describe the factors that are associated with prices paid for competing
properties.‘ 1

The pertinent elements of comparison in this appraisal are:

•                    Size
•                    Location
•                    Level of entitlement
•                    Level of finish
•                    Municipal Utility District Receivables

Size- The primary market data items fall into a size range that does not follow the typical inverse relationship
between size and price. Developers drive the market for residential subdivision land and have a need for large
tracts. Parcels several hundred acres in size may be as/more desirable than smaller parcels. The two highest
prices per acre ($97,000 and $92,000) among the primary market data items are for sites that are 450 and 111
acres in size. Both sites are located in high traffic areas, have regional commercial components, and are
targeting the move up market and yet the price per acre is nearly the same. The data does not support a size
adjustment for sites in the size range for the subject properties and the market data.

Location- Relevant locational attributes include quality of schools; safety and security; commute times,
proximity to services; and natural amenities. The subject parcels have similar locational characteristics even
though they lie to the north, east and south of the Austin center. Each of the subject parcels are located in what
can be described as the peripheral growth ring. This ring is in the process of transitioning to core residential.
Superior quality schools serve all of the sites. Georgetown Village has the ―Exemplary Rated‖ Village
Elementary School. New Sweden and Bohls are incorporated into the Plugerville ISD, comparatively superior
to the school district serving competing subdivisions in the Manor area. The ―Exemplary Rated‖ Elm Grove
Elementary serves Elm Grove and Rutherford West. Each of the sites is located in quiet, low crime
neighborhoods. Each of the subject parcels lies along the path of major new transportation corridors and have
relatively short commute times to major employment centers. Georgetown Village has Hwy 130, SH 195, and
the Parmer Lane north extension. The Villages of New Sweden and Bohls tract lie along the Hwy 130 corridor.
Elm Grove lies along I-35 and will benefit from the SH 45 extension, as will Rutherford West.

Finished product price can be used as a guide for location adjustments. If the same finished product is sold for
different prices and all other things remain equal (amenities, commute time, etc) the difference can be attributed
to location.

_________________________
1
  The Appraisal of Real Estate, Twelfth Edition, pg 426

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 Complete Appraisal Report-Summary Format         Wilson Family Communities holdings; Williamson, Travis & Hays Counties



There is not sufficient data to support an empirical adjustment factor for location. Finished product pricing for
similar product is used as a gauge for the application of qualitative, plus/minus locational adjustments.

Level of Entitlement- Level of entitlement is a significant factor in the value of residential subdivision land.
This is especially true where obtaining entitlements can be made difficult by environmental issues, as is the case
in the Austin area. The value added by achieving full entitlement status is disproportionately higher than the
incremental cost of entitlement. The removal of risk that comes with entitlement is critical to large developers.
The search for data did not yield a paired sale of a single parcel before and after entitlement. The primary
market data items included three sales of entitled land and two sales of unentitled land. The two unentitled sites
sold for $30,000 and $30,684 per acre. The three entitled sites sold for $97,000, $92,000 and $32,000 per acre.
The $32,000 per acre site is the most remote of the data items and lies outside the development ring for the
subject parcels. Its location is considered the most significant reason for the difference in per acre price. The
two sales that best lend themselves to pairing for entitlement are items 1 and 3. Item 1 closed contingent on
entitlement and lies at the northwest corner of FM 620 and Parmer Ln. near the intersection of FM 620 and SH
183. Item 3 is located approximately 2 miles east of SH 183 and approximately 6 miles north of item 1. Item 1
is in a superior location and is a pending sale. Attributing ½ of the price differential to location and time still
leaves a significant adjustment for entitlement, roughly indicating an entitled value for item 3 of around $60,000
per acre. There is not sufficient data to support this factor on an empirical basis. Development potential
adjustments are made on a qualitative, plus/minus basis using the limited data as a guide.

Level of finish- The degree to which the entitled lots in a subdivision are finished is a significant factor in the
price paid for residential subdivision tracts. The subject parcels include unfinished lots (New Sweden, Bohls,
portion of Georgetown Village), partially finished lots (Rutherford West), and fully finished lots (portions of
Georgetown Village and Elm Grove). The existing finishing costs for each of the projects is considered in the
adjustment process, with the finishing expense adjustment expressed in dollars per acre. The finishing cost
adjustment (assuming comparison to an unfinished site) for the projects is shown in the table below:

                        Project                                          Finishing expenses
                        Georgetown Village                               $ 5,000 per acre
                        New Sweden                                       $ 1,000 per acre
                        Bohls                                            $ 500 per acre
                        Elm Grove                                        $20,000 per acre
                        Rutherford West                                  $ 3,000 per acre


Municipal Utility District (MUD) Reimbursements- The establishment of a MUD is a means of financing
infrastructure costs that allows a developer to recover most of the costs of over time as homes in the subdivision
are sold. The MUD receivables represent an income stream that has a net present value to the buyer of the site.
Repayment is low risk, akin to a bond, with the security being a lien on the homes. The net present value of the
MUD receivable calls for a lump sum adjustment to the pertinent parcels.

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 Complete Appraisal Report-Summary Format         Wilson Family Communities holdings; Williamson, Travis & Hays Counties


The estimation of the net present value requires the discounting of the MUD receivable at an appropriate rate.
The selected discount rate of 20% is consistent with rates for major land banking and acquisition/development
activities. The term of the repayment is tied to the projected absorption period for the project.

The lump sum adjustments for the subject parcels are shown in the following table:

                     Project                              MUD amount                          MUD NPV
                     New Sweden                           $21,000,000                         $6,000,000
                     Bohls                                $25,000,000                         $7,000,000
                     Rutherford West                      $ 4,000,000                         $2,400,000


Exposure Time- Reasonable exposure times for large residential subdivision tracts range from approximately 6
to 18 months.

APPLICATION

The first step in applying the market data to the appraisal problem is to consider the value of the subject
property in relation to the non-adjusted values of the comparable market data. This process provides a
preliminary opinion of value that is unadulterated by the subjectivity inherent in the adjustment process. This
step in the valuation involves a process of ‗logical bracketing‘. The subject property is analyzed in relation to its
position in the spectrum of the data using the simplest tools. Greatest weight is given to the items that are most
comparable to the subject property. The subject property is bracketed between the items that are closest to but
inferior and superior to the subject property. An opinion of value based on this bracketing serves as a beginning
point in the estimate of value.

The market data items range in non-adjusted price per acre from $30,000 to $97,000. The low end of the range
involves unentitled raw land. The high end of the range involves an entitled site in a desirable urban in-fill
location.

The subject parcels before adjustment are bracketed by the non-adjusted items as follows:

Georgetown Village


                                                SUBJECT
         I                I              I         |                            I                I
     $30,000          $30,864        $32,000                               $92,000            $97,000
     Parker           Pinnacle       Hudson                                Lennar             Centex
     (Item 3)         (Item 5)       (Item 2)                              (Item 4)           (Item 1)

Georgetown Village is a fully entitled master planned community with several phases fully finished and built
out. Georgetown Village is clearly superior to Items 2, 3 and 5 and clearly inferior to Items 1 and 4.


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 Complete Appraisal Report-Summary Format         Wilson Family Communities holdings; Williamson, Travis & Hays Counties



Villages of New Sweden

                                        SUBJECT
          I                I             I |                                     I              I
      $30,000         $30,864        $32,000                              $92,000            $97,000
      Parker          Pinnacle       Hudson                               Lennar             Centex
       (Item 3)        (Item 5)      (Item 2)                             (Item 4)           (Item 1)

The Villages of New Sweden is a fully entitled master planned community in raw condition. New Sweden is
clearly superior to Items 3 and 5 and somewhat superior to Item 2. New Sweden is clearly inferior to Items 1
and 4

Bohls Tract

                                        SUBJECT
         I                I             I    |                                 I                 I
     $30,000         $30,864        $32,000                              $92,000             $97,000
     Parker          Pinnacle       Hudson                               Lennar              Centex
     (Item 3)         (Item 5)      (Item 2)                             (Item 4)            (Item 1)

The Bohls Tract is a fully entitled master planned community in raw condition. The Bohls tract is clearly
superior to Items 3 and 5 and somewhat superior to Item 2. The Bohls Tract is clearly inferior to Items 1 and 4.

Elm Grove

                                               SUBJECT
     I      I         I                            |                                           I      I
     $30,000         $30,864        $32,000                               $92,000            $97,000
      Parker         Pinnacle       Hudson                                Lennar             Centex
       (Item 3)       (Item 5)      (Item 2)                              (Item 4)           (Item 1)

Elm Grove is a fully entitled subdivision in finished condition. Elm Grove is clearly superior to Items 2, 3 and 5
and similar to but somewhat inferior to items 1 and 4.

Rutherford West

                                                SUBJECT
         I               I             I            |                           I               I
     $30,000         $30,864       $32,000                                $92,000            $97,000
      Parker         Pinnacle      Hudson                                 Lennar             Centex
     (Item 3)         (Item 5)     (Item 2)                              (Item 4)           (Item 1)

Rutherford West is a fully entitled subdivision in semi-finished condition. Rutherford West is clearly superior to
Items 2, 3 and 5 and inferior to items 1 and 4.

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Complete Appraisal Report-Summary Format                Wilson Family Communities holdings; Williamson, Travis & Hays Counties


The second step in the valuation is to make necessary adjustments to the value of the subject parcels based on
comparison to the market data items. Cumulative adjustments are made based on interest conveyed, financing,
conditions of sale and market conditions. Sequential adjustments are made based on the relevant differences
using the guidelines discussed above. The direction and relative magnitude of the adjustments is shown in the
tables below.


                                                    Georgetown Village - Adjustments
                        Sequential Adjustments                                                   Cumulative Adjustments
 Item No.     Int. con.      Fin.     Cond. Sale      Mkt. Cond.     Size     Loc.     Entlmts      Finish         MUD           Net Adj.
      1             nil        nil         nil             nil         nil      ---        nil            +         n/a             ---
      2             nil        nil         nil             +           nil       +         nil            +          -               +
      3             nil        nil         nil             +           nil      nil        +              +         n/a              +
      4             nil        nil         nil             +           nil      ---        nil            +         n/a             ---
      5             nil        nil         nil             +           nil      nil        +              +         n/a              +



                                                   Villages of New Sweden - Adjustments
                        Sequential Adjustments                                                   Cumulative Adjustments
 Item No.     Int. con.      Fin.     Cond. Sale      Mkt. Cond.     Size     Loc.     Entlmts      Finish           MUD         Net Adj.
      1             nil        nil         nil             nil         nil      ---        nil             nil          +           ---
      2             nil        nil         nil             +           nil      nil        nil             nil         nil           +
      3             nil        nil         nil             +           nil      nil        +               nil          +            +
      4             nil        nil         nil             +           nil      ---        nil             --           +           ---
      5             nil        nil         nil             +           nil      nil        +               nil          +            +


                                                        Bohls Tract - Adjustments
                        Sequential Adjustments                                                   Cumulative Adjustments
 Item No.     Int. con.      Fin.     Cond. Sale      Mkt. Cond.     Size     Loc.     Entlmts      Finish           MUD         Net Adj.
      1             nil        nil         nil             nil         nil      ---        nil             nil          +           ---
      2             nil        nil         nil             +           nil      nil        nil             nil         nil           +
      3             nil        nil         nil             +           nil      nil        +               nil          +            +
      4             nil        nil         nil             +           nil      ---        nil             --           +           ---
      5             nil        nil         nil             +           nil      nil        +               nil          +            +


                                                         Elm Grove - Adjustments
                        Sequential Adjustments                                                   Cumulative Adjustments
 Item No.     Int. con.      Fin.     Cond. Sale      Mkt. Cond.     Size     Loc.     Entlmts      Finish         MUD           Net Adj.
      1             nil        nil         nil             nil         nil      --         nil            +         n/a               -
      2             nil        nil         nil             +           nil      nil        nil            +          -               +
      3             nil        nil         nil             +           nil      nil        +              +         n/a              +
      4             nil        nil         nil             +           nil      --         nil            +         n/a               -
      5             nil        nil         nil             +           nil      nil        +              +         n/a              +



                                                      Rutherford West - Adjustments
                        Sequential Adjustments                                                   Cumulative Adjustments
 Item No.     Int. con.      Fin.     Cond. Sale      Mkt. Cond.     Size     Loc.     Entlmts      Finish         MUD           Net Adj.
      1             nil        nil         nil             nil         nil      ---        nil           nil         +               ---
      2             nil        nil         nil             +           nil      nil        nil           nil        nil              +
      3             nil        nil         nil             +           nil      nil        +             nil         +               +
      4             nil        nil         nil             +           nil      ---        nil           nil         +               ---
      5             nil        nil         nil             +           nil      nil        +             nil         +               +




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 Complete Appraisal Report-Summary Format         Wilson Family Communities holdings; Williamson, Travis & Hays Counties



RECONCILATION AND FINAL VALUE CONCLUSION

The residential market in the Austin MSA is strong. Austin remains an undervalued residential market. The
cities in Texas with the highest percentage under valuation include Odessa and Midland. Austin arguably has
the optimum combination of desirability and under valuation. This observation is confirmed by investment
dollars flowing into Austin from over valued markets.

The market for large acreage tracts suitable for major residential development projects is highly competitive.
Major developers are intent on acquiring land within the Austin MSA for future development. The supply of
suitable sites within reasonable driving distance of major employment centers is decreasing rapidly. Prices for
in-fill sites in existing urbanized areas have recently increased to unprecedented highs. These high land prices
will force finished product pricing up in the in-fill areas. Developers are increasingly looking to the periphery of
the Austin MSA for sites that can be acquired at lower prices, allowing them to compete for the target market at
or slightly above the upward trending median home price.

Inside this periphery, the data strongly suggests that a new floor value for residential acreage sites has been set
at or near the $30,000 per acre mark. The data indicates that in-fill sites with good demographics will sell for
$90,000 or more. It is expected that these prices/values will increase at typical rates of appreciation over the
short term.

The $30,000 to $90,000 per acre bracketing is a broad range, but one is that is well supported and reliable. Four
of the market data items fall nearer to the low end of the bracket. One of the items approaches the upper end of
the bracket.

The adjusted per acre values for the subject parcels are as follows:

 Project                                          Adj. value per acre
 Georgetown Village                               $ 44,000
 Manor-Bohls Tract                                $ 39,000
 Manor-New Sweden                                 $ 35,000
 Elm Grove                                        $ 80,000
 Rutherford West                                  $ 44,000


Based on this investigation, data, and analysis the market value of the fee simple interest in the subject
parcels as of March 10, 2007, is estimated as follows:

 Project                                          Market Value
 Georgetown Village                               $29,000,000
 Manor-Bohls Tract                                $16,800,000
 Manor-New Sweden                                 $18,600,000
 Elm Grove                                        $ 7,300,000
 Rutherford West                                  $30,600,000


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 Complete Appraisal Report-Summary Format      Wilson Family Communities holdings; Williamson, Travis & Hays Counties




FINAL VALUE CONCLUSION-

WILSON FAMILY COMMUNITIES, INC., HOLDINGS IN THE GREATER AUSTIN AREA:

The market value of the fee simple interest in the five Wilson Family Communities, Inc., holdings as of March
10, 2007, is estimated to be:

                                                $102,300,000

               ONE HUNDRED TWO MILLION THREE HUNDRED THOUSAND DOLLARS




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