UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended March 31, 2009

[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from _______________________ to _______________________ .

Commission file number 000-30601

WHY USA FINANCIAL GROUP, INC.

(Exact name of registrant as specified in its charter)


Nevada		87-0390603
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2801 S. Wayzata Boulevard, Suite 100, Minneapolis, MN (Address of principal executive offices)		55405 (Zip Code)
		55405 (Zip Code)

(612) 767-5037

(Registrants telephone number, including area code)

N/A

(Former name, former address, and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [_] No [X]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [_] No [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer [_]	Accelerated filer [_]	Non-accelerated filer [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [_] No [X]

Shares outstanding of the Registrant’s common stock:

Class	Shares Outstanding at May 13, 2009
Common Stock, $.001 par value	108,866,522

WHY USA FINANCIAL GROUP, INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2009

INDEX


PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets as of March 31, 2009 (unaudited) and December 31, 2008	3

	Condensed Consolidated Statements of Operations for the three months ended March 31, 2009, 2008 and 2007 (unaudited)	4

	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2009, 2008 and 2007 (unaudited)	5

	Notes to Condensed Consolidated Financial Statements (unaudited)	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	24

Item 4.	Controls and Procedures	24

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	24

Item 1A.	Risk Factors	25

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25

Item 3.	Defaults Upon Senior Securities	25

Item 4.	Submission of Matters to a Vote of Security Holders	25

Item 5.	Other Information	25

Item 6.	Exhibits	25

	Signature	25

	Exhibit 31.1

	Exhibit 31.2

	Exhibit 32.1

	Exhibit 32.2

PART I. Financial Information

ITEM 1.

Financial Statements

WHY USA FINANCIAL GROUP, INC.

Condensed Consolidated Balance Sheets as of

	March 31, 2009 (unaudited)			December 31, 2008 (audited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	29,323		$	52,921
Accounts receivables, net of allowance for doubtful accounts		23,541			18,771
Prepaid assets and other assets		12,917			22,823
Total current assets		65,781			94,515

PROPERTY AND EQUIPMENT—Net		468,838			479,223
GOODWILL		729,028			729,028
RESTRICTED CASH		50,000			50,000
TOTAL	$	1,313,647		$	1,352,766

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES:
Warehouse and bank lines	$	98,117		$	97,570
Current portion of obligation under capital leases		2,392			2,392
Current portion of notes payable and convertible debentures		657,262			544,767
Current portion of mortgage notes payable		36,816			36,112
Bank overdraft		-			2,066
Accounts payable		569,945			499,649
Accrued expense and other liabilities		1,047,975			975,890

Total current liabilities		2,412,507			2,158,446

MORTGAGE NOTES PAYABLE		799,548			809,672
NOTES PAYABLE AND CONVERTIBLE DEBENTURES		950,200			950,200
OBLIGATIONS UNDER CAPITAL LEASES		184			736

Total Liabilities		4,162,439			3,919,054

COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY (DEFICIT):
Common stock, $.001 par value, 250,000,000 shares authorized;
108,866,522 and 108,268,022 shares issued and outstanding for 2009 and 2008, respectively		108,867			108,269
Additional paid in capital		10,036,499			10,005,408
Preferred Stock, $.01 par value, 50,000,000 shares authorized; 40,000 shares issued and outstanding for 2009 and 2008, respectively		400			400
Accumulated deficit		(12,994,558	)		(12,680,365	)
Total stockholders’ equity (deficit)		(2,848,792	)		(2,566,288	)

TOTAL	$	1,313,647		$	1,352,766

See accompanying notes to condensed consolidated financial statements.

WHY USA FINANCIAL GROUP, INC.

Condensed Consolidated Statements of Operations for the Three Months Ended

(Unaudited)

	March 31, 2009			March 31, 2008			March 31, 2007
	(unaudited)			(unaudited)			(unaudited)

NET REVENUES	$	239,643		$	367,846		$	701,595

COST OF REVENUES, excluding depreciation and amortization expense		135,666			203,828			443,523

Gross margin		103,977			164,018			258,072

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		349,435			445,965			432,683

LOSS ON DISPOSAL OF FIXED ASSETS		1,873			-			-

DEPRECIATION AND AMORTIZATION EXPENSE		8,512			10,899			12,190

OPERATING INCOME (LOSS)		(255,843	)		(292,846	)		(186,801	)

OTHER (EXPENSE) INCOME:
Interest expense		(56,750	)		(37,117	)		(46,857	)
Interest income		-			19			3
Other income		-			9,774			105,757

Total other (expense) income		(56,750	)		(27,324	)		58,903

LOSS BEFORE TAXES		(312,593	)		(320,170	)		(127,898	)

Income tax expense		(1,600	)		(1,600	)		(1,600	)

NET LOSS	$	(314,193	)	$	(321,770	)	$	(129,498	)

BASIC AND DILUTED LOSS PER SHARE:
Net loss	$	(0.00	)	$	(0.00	)	$	(0.00	)
WEIGHTED AVERAGE SHARES USED :
Basic and Diluted		108,766,772			108,992,160			92,319,434

See accompanying notes to condensed consolidated financial statements.

WHY USA FINANCIAL GROUP, INC.

Condensed Consolidated Statements of Cash Flows for the Three Months Ended

(Unaudited)

	March 31, 2009			March 31, 2008			March 31, 2007
	(unaudited)			(unaudited)			(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss from continuing operations	$	(314,193	)	$	(321,770	)	$	(129,498	)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		8,512			10,899			12,190
Provision for (benefit from) doubtful accounts		13,600			36,707			(11,577	)
Loss on disposal of fixed assets		1,873			-			-
Effect of changes in operating assets and liabilities:
Trade receivables		(18,371	)		(24,469	)		26,854
Prepaid expenses and other current assets		9,906			17,930			1,266
Accounts payable		76,986			39,699			9,991
Accrued expenses		72,085			52,189			50,696
Other		-			18,418			11,579

Net cash used in operating activities		(149,602	)		(170,397	)		(28,499	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		-			-			(4,001	)

Net cash used in investing activities		-			-			(4,001	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds/(repayments) on revolving credit facility		547			(406	)		202
Repayments of mortgages payable		(9,420	)		(63,013	)		(3,579	)
Proceeds from notes payable and convertible debentures		137,495			175,000			162,500
Bank overdraft		(2,066	)		16,441			-
Repayment of obligations under capital leases		(552	)		(1,538	)		(1,574	)

Net cash provided by financing activities		126,004			126,484			157,549

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(23,598	)		(43,913	)		125,049

CASH AND CASH EQUIVALENTS—Beginning of period		52,921			46,176			14,267

CASH AND CASH EQUIVALENTS—End of period	$	29,323		$	2,263		$	139,316

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for taxes	$	-		$	1,600		$	-
Cash paid for interest	$	22,192		$	13,706		$	24,505

Common stock issued pursuant to conversion of debentures, principal and interest	$	31,689		$	-		$	-

See accompanying notes to condensed consolidated financial statements.

WHY USA FINANCIAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 – BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND SIGNIFICANT ACCOUNTS

Financial Statement Preparation

The unaudited consolidated financial statements have been prepared by WHY USA Financial Group, Inc. according to the rules and regulations of the Securities and Exchange Commission (SEC) and, therefore, certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been omitted.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements for the periods presented reflect all adjustments, which are normal and recurring, necessary to fairly state the financial position, results of operations and cash flows. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2008 filed with the SEC on March 31, 2009.

Principles of Consolidation and Basis of Accounting

The condensed consolidated financial statements include the accounts of WHY USA Financial Group, Inc. and its wholly-owned subsidiaries (the Company). All significant intercompany accounts and transactions have been eliminated in consolidation.

The Company’s policy is to use the accrual method of accounting and to prepare and present the consolidated financial statements in accordance with accounting principles generally accepted in the United States.

Business Activity and Organization

The condensed consolidated financial statements of the Company include the parent company, WHY USA Financial Group, Inc., which was incorporated as a Utah corporation in 1980 and reorganized as a Nevada corporation in 1983, Northwest Financial Ltd. (Northwest), acquired in 1999, incorporated as a Minnesota corporation, WHY USA North America, Inc. (NA) acquired in 1999, incorporated as a Wisconsin corporation, and TCS Mortgage, Inc. and its wholly-owned subsidiaries (TCS). TCS includes the parent company, TCS Mortgage, Inc. (acquired in 2003 by WHY USA Financial Group, Inc. and incorporated as a California corporation), TCS Realty, Inc. (Realty) formed in 2004 as a California corporation, and Discover Mortgage Corporation (Discover) acquired through a capital contribution from WHY USA Financial Group, Inc. and incorporated as a Minnesota corporation.

The Company through its subsidiary TCS, is currently a mortgage broker only and prior to year ending December 31, 2006, TCS was a mortgage banker with its own line of credit; the Company through Realty is a full service realtor operating in the Southern California market; the Company through Discover provides mortgage broker services in the state of Minnesota; and the Company through its subsidiary NA provides franchised real estate operations to franchisees located in 14 states, these services center around the WHY USA –“America’s Real Estate Alternative”® - $990 program.

Estimates

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

Cash Equivalents and Concentration of Risk

The Company maintains checking, money market and savings accounts at financial institutions located in California and Minnesota. Accounts at each bank are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 (FDIC temporary increase through December 31, 2009). As of March 31, 2009 the Company did not have any uninsured cash balances. The Company has not experienced losses in such accounts and management believes it places its cash on deposit with financial institutions which are financially stable.

As of March 31, 2009 and December 31, 2008, the Company held $50,000 in restricted cash classified as a non-current asset held to maturity. The restricted cash secures a letter of credit held with a financial institution. The certificate of deposit matures on May 5, 2012 and is held with an FDIC insured financial institution.

Instruments and Fair Value Measurement

The Company adopted SFAS 157, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. The Company adopted this standard partially in 2008 for financial assets and liabilities measured at fair value on a recurring basis due to the deferral period provided by FSP 157-2, Effective Date of SFAS 157. Subsequently, the Company adopted the standard for non-financial assets and liabilities measured at fair value on a nonrecurring basis in the current year. The framework requires for the valuation of assets and liabilities subject to fair value measurements using a three tiered approach.

The statement requires fair value measurement be classified and disclosed in one of the following three categories:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability;

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported by little or no market activity).

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table represents the financial instruments measured at fair value on a recurring basis on the consolidated financial statements of the Company subject to SFAS 157 and the valuation approach applied to each class of the financial instruments:

				Fair Value Measurements at Reporting Date Using (unaudited)
				Quoted Prices in
	Balance at			Active Markets			Significant Other			Significant
	March 31,			for Identical Assets			Observable Inputs			Unobservable Inputs
Description	2009			(Level 1)			(Level 2)			(Level 3)
Bank time deposits		$	50,000		$	50,000		$	-		$	-
Assets-derivative			-			-			-			-

Total assets		$	50,000		$	50,000		$	-		$	-

Liabilities-derivative		$	-		$	-		$	-		$	-

Total liabilities		$	-		$	-		$	-		$	-

At March 31, 2009, the carrying value of the financial instruments measured and classified within Level 1 are based on quoted prices and marked to market. As of March 31, 2009 there are no unrealized gains or losses required to be recorded as related to these investments.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

The non-financial assets and liabilities are recognized at fair value subsequent to initial recognition when they are deemed to be other-than-temporarily impaired. There were no non-financial assets and liabilities measured at fair value on a nonrecurring basis for the three months ended March 31, 2009.

Accounts and Notes Receivable, Allowances and Fair Market Value

In accordance with Financial Accounting Standard No. 107, the Company's receivables and notes represent credit risks associated with real estate transactions originating with its franchisees. The Company extends credit as a result of its franchise agreements with its franchisees. The franchisee's ability to repay is generally predicated upon their ability to earn income from their real estate transactions. Franchisees are generally paid a commission on real estate transactions and must then remit a portion of that income to the Company. The Company has an allowance for doubtful accounts of $75,270 at March 31, 2009. Bad debts totaled $13,600 and $36,707 for the three month periods ended March 31, 2009 and 2008, respectively.

Segment Information

The Company operates in two segments: Real Estate Franchise (REF) and Mortgage Brokerage (MB). The Company has no intersegment revenues that are material to the overall consolidated financial statements. The Company does not currently segregate assets by segment as a majority of the Company’s total assets are shared or considered non-segment assets which are segregated as “corporate.” The Company has determined that it is not useful to assign its shared assets to individual segments. Based on the aggregation criteria of Statement of Financial Accounting Standards No. 131, “Disclosures about Segments of an Enterprise and Related Information,” (SFAS 131) the Company’s service offerings in the MB segment share similar economic characteristics, but are different from the economic characteristics of the service offerings of our REF segment. As a result of using the aggregation guidelines under SFAS 131, there is no logical subgrouping of service offerings within either the MB or REF segments.

No material changes have occurred since year end requiring additional disclosure on an interim basis. Please refer to our annual report filed on Form 10-K with the SEC, March 31, 2009 for further information relative to our segments.

Financial Instruments

The carrying amounts of financial instruments such as cash, accounts receivable, prepaid and other current assets, accounts payable, accrued expenses and other current liabilities, bank lines, mortgage notes payable, promissory notes and debentures payable and capital leases approximate the related fair values due to the short-term maturities of these instruments.

Brokered Loan Fees

Loan fees include brokered loan fees. Brokered loan fees represent fees received by TCS and Discover for placing a loan with a lender, whereby no further obligation exists. The loan fee is recognized at the time the borrower and lender sign final loan documents and the loan is funded.

Property and Equipment Capitalization Policies

Property and equipment is stated at cost and depreciated over the estimated useful lives of the assets using the straight-line method. Amortization of leasehold improvements is computed on the straight-line method over the shorter of the lease term or the estimated useful lives of the assets. Maintenance and repairs are charged to operations as incurred. When assets are sold, or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in operating expense.

Impairment of Goodwill

Goodwill represents the excess purchase price of net tangible and intangible assets acquired in business combinations over their estimated fair value. Goodwill is allocated to the Company’s segments based on the nature of the product line of the acquired entity. In accordance with Statement of Financial Accounting Standards No. 141, “Business Combinations” (SFAS 141) and Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets” (SFAS 142), goodwill is tested for impairment on an annual basis and earlier if there is an indicator of impairment. Furthermore, SFAS 142 requires purchased intangible assets other than goodwill to be amortized over their useful lives unless these lives are determined to be indefinite.

The Company performs its goodwill impairment tests annually during the fourth quarter of its fiscal year and earlier if an event or circumstance indicates that impairment has occurred. During the years ended December 31, 2008 and 2007, we determined that it was necessary to evaluate goodwill for impairment between annual tests, in accordance with SFAS 142. The evaluation between annual testing dates was due to the deteriorating conditions in certain housing markets and the significant reduction in loans being funded during those years. The process of evaluating goodwill for impairment involves the determination of the fair value of our reporting units. Inherent in such fair value determinations are certain judgments and estimates relating to future cash flows, including our interpretation of current economic indicators and market valuations, and assumptions about our strategic plans with regard to our operations. Due to the uncertainties associated with such estimates, actual results could differ from such estimates. Goodwill associated with our reporting unit is determined by that fair value of the building owned by the reporting unit. We estimate the fair value of the building by obtaining an appraisal each year which occurs during the winter months (which corresponded to our refinancing in 2007). This appraisal provides management with a realistic fair value during a period which activities for like-kind property sales are at its lowest. In addition the Company utilized a combination of valuation methods including a discounted cash flow analysis and the guideline companies’ method to estimate the fair value of the reporting unit. Based on this analysis, the Company determined that impairment did exist, and as a result, an impairment charge was recorded during the year which coincided with the 4th quarter of 2007 and 2008, respectively.

Goodwill is attributable to the acquisition of Discover. The Company, in connection with the acquisition of Discover, recorded goodwill of $1,016,570. The Company did not record any impairment losses for the three month periods ended March 31, 2009 and 2008, respectively, to reflect goodwill impairment on the acquisition of Discover.

As of March 31, 2009, goodwill associated with the Discover acquisition is recorded at $729,028.

Accrued Expense and Other Liabilities

Accrued expenses and other liabilities consist of the following:

	March 31, 2009 (unaudited)		December 31, 2008 (audited)
Accrued compensation - officer	$	753,750	$	710,000
Accrued compensation - other - and taxes		91,063		93,269
Accrued interest		203,162		172,621
	$	1,047,975	$	975,890

Revenue Recognition

Revenue from loan originations are recognized at the time the mortgage loan closes or is funded. The majority of revenue receivables are collected within five business days. Real estate transaction fees are recognized at the closing of a real estate transaction by a franchisee. The Company does not service a loan portfolio and sells all of the loans it originates.

In accordance with Financial Accounting Standard No. 45, the Company defers recognition of new franchise sales until the commencement of operations by the new franchisee. The new franchisee opens his/her real estate sales office in his/her “protected” territory and receives training and marketing support, real estate documents and other sales aids from the Company. These activities generally occur within one month of the purchase of the franchise. All costs, services and conditions related to new franchise sales have been incurred or performed prior to the recognition of income from new franchise sales.

Accounting for Share-Based Compensation

The Company accounts for share based compensation using Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (SFAS 123R) using the modified-prospective-transition method. Under this method, share-based compensation cost is measured at the grant date based on the estimated fair value of the award and is recognized as expense over the employee’s requisite service period for all share-based awards granted, modified or cancelled as of January 1, 2006.

Prior to January 1, 2006, the Company accounted for its share-based awards under the recognition and measurement principles of APB 25 and its related interpretations and adopted the disclosure only provision of SFAS 123. Accordingly, no compensation cost was recognized for the employee stock option plan or employee stock purchase plan under the fair value recognition provisions of SFAS 123.

Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

Effective January 1, 2008, the Company adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN48). FIN48 prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a return. The adoption of this interpretation did not have a material impact on our financial statements.

Earnings per Share

Basic income (loss) per share excludes dilution and is computed by dividing income (loss) by the weighted average number of common shares outstanding during the reported periods. Diluted income (loss) per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised.

Diluted income (loss) per share reflects the potential dilution that could occur from the following items:

●

Convertible debentures where the effect of those securities are dilutive;

●

Dilutive stock options; and

●

Dilutive common stock warrants.

As the Company has incurred losses, it has excluded shares related to convertible debentures, stock options or warrants from its calculation of diluted net loss per share, as the effect of their inclusion would be anti-dilutive.

Going Concern and Management’s Plan

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate the continuation of the Company as a going concern and assume realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred losses from operations since inception. Management anticipates incurring additional losses in 2009. Further, the Company may incur additional losses thereafter, depending on its ability to generate revenues from the offering of its varied services, or to enter into any or a sufficient number of joint ventures. The Company’s revenue to date has been steadily decreasing, even with the acquisition of TCS in 2003. There is no assurance that the Company can successfully rebuild its revenue base in 2009 and into 2010 to the scale that it will need to provide positive cash flow from operations. The Company’s service offerings along with the new FHA qualifying loan limits seem to be receiving market acceptance as the Company’s anticipated or projected revenue projects seem to be increasing after hitting bottom during the 4th quarter of 2008, measured by its “pipeline” tool. There is no assurance that the Company can improve upon its service offerings and projected revenue to reach positive cash flow let alone breakeven.

Since inception through March 31, 2009, the Company had an accumulated deficit of $12,994,558. Management of the Company believes that recent funding from the use of convertible debentures and the issuance of common stock in satisfaction of certain debt obligations will allow us to continue operations and execute our business plan.

Management believes the Company can raise adequate capital to keep the Company functioning through March 31, 2010. Management believes sufficient funding can be secured through the use of its convertible debentures, as well as offerings of preferred and common stock through private placements to institutional and other finance sources. However, no assurance can be given that the Company can obtain additional working capital, or if obtained, that such funding will not cause substantial dilution to shareholders of the Company. If the Company is unable to raise additional funds, it may be forced to change or delay its contemplated expansion and business plan.

These condensed consolidated financial statements do not require any additional adjustments relating to the recoverability of recorded asset amounts that might be necessary as a result of the above uncertainty.

NOTE 2 – BUSINESS SEGMENTS

The Company has two reportable segments: real estate franchise (REF) and mortgage origination/brokering (MB). The Company operations are conducted regionally within the United States; Upper Midwestern states as well as the Southwest (which includes Southern California and Nevada).

The Company does not have intersegment revenues that are material to the condensed consolidated financial statements. In addition, the Company does not segregate all assets by segment as a majority of the Company’s total assets are shared or considered non-segment assets. As a result, the Company has determined it is not useful, nor appropriate, to assign its shared assets to individual segments.

The Company’s accounting policies for both of its segments are the same as those described in the summary of significant accounting policies and significant accounts. Management evaluates segment performance based on segment profit or loss before income taxes and non-recurring gains and losses. Transfers between segments, if occurring, are valued at market.

The table below reports segment financial information. Our segment entitled “Other” includes assets and operations not specifically associated with the other defined segments, including corporate assets and investments. We measure the performance of our segments based on total net revenues less costs of revenues and general and administrative expenses, a measure we define as net operating income (loss) (NOI). We believe that NOI is an important supplemental measure of operating performance for our segments because it provides a measure of the core operations that is unaffected by depreciation, amortization, financing and other non-core expenses; this measure is particularly useful in our opinion in evaluating the performance of segments, as well as individual subsidiaries.

	Real Estate			Mortgage
	Franchise			Brokerage			Other			Total
For three month period ending March 31, 2009 (unaudited)
Revenues	$	27,571		$	212,072		$	-		$	239,643
Cost of revenues		-			135,666			-			135,666
General and administrative expenses		39,140			201,058			109,237			349,435
Net operating loss	$	(11,569	)	$	(124,652	)	$	(109,237	)	$	(245,458	)

Additions(dispositions) to segmented assets	$	(3,563	)	$	(35,592	)	$	36		$	(39,119	)

Segment assets at March 31, 2009	$	20,005		$	1,293,498		$	144		$	1,313,647

For three month period ending March 31, 2008 (unaudited)
Revenues	$	37,428		$	330,418		$	-		$	367,846
Cost of revenues		14,698			189,130			-			203,828
General and administrative expenses		60,929			257,305			127,731			445,965
Net operating loss	$	(38,199	)	$	(116,017	)	$	(127,731	)	$	(281,947	)

The following table reconciles our NOI for reportable segments to income from continuing operations as reported on our condensed consolidated statement of operations:

	March 31, 2009 (unaudited)			March 31, 2008 (unaudited)
NET OPERATING LOSS FROM SEGMENTS	$	(245,458	)	$	(281,947	)
LOSS ON DISPOSAL OF FIXED ASSETS		1,873			-
DEPRECIATION AND AMORTIZATION EXPENSE		8,512			10,899
OPERATING LOSS		(255,843	)		(292,846	)
Interest expense		(56,750	)		(37,117	)
Interest income		-			19
Other income		-			9,774
LOSS BEFORE TAXES	$	(312,593	)	$	(320,170	)

NOTE 3 - BANK LINE OF CREDIT

The Company through its Discover operations has a line of credit with a financial institution to meet short-term working capital requirements. Under this credit facility the Company has $100,000 of unsecured revolving line credit which bears interest payable monthly at prime plus 3.75% per annum. There are no parent guarantees or covenants associated with this facility.

NOTE 4 – MORTGAGE NOTES PAYABLE

Mortgage notes payable consist of the following at March 31, 2009 and December 31, 2008, respectively:

	March 31, 2009 (unaudited)		December 31, 2008 (audited)
Mortgage Payable - financial institution (secured by property), monthly installments of principal and interest of $8,294 including interest at 7.75% per annum with all unpaid principal due May 2010, collateralized by a building	$	836,364	$	845,784
Less current maturities		36,816		36,112
Long term portion of mortgage notes payable	$	799,548	$	809,672

Refinance of Discover Building and Land

During the year ended December 31, 2008 the Company refinanced its property located in Minneapolis, Minnesota. The prior mortgage note payable was set to mature in February 2009. The Company through another financial institution entered into a new mortgage note payable to refinance its mortgage. The new mortgage note matures in May 2010 and is collateralized by the building and land. The new mortgage note is personally guaranteed as well by a director of the Company in the event of default.

NOTE 5 – NOTES PAYABLE AND CONVERTIBLE DEBENTURES

Notes payable and convertible debentures consist of the following at March 31, 2009 and December 31, 2008, respectively:

	March 31, 2009		December 31, 2008
	(unaudited)		(audited)
Convertible Debentures - TCS acquisition, 21 members, principal and interest due and payable November 2006, monthly payments of interest in arrears at 7.5% per annum. Certain payment restrictions apply and the debentures are convertible into common stock of the Company at a price of $0.20 per share	$	300,000	$	300,000

Note Payable - individual, principal and interest due and payable December 2008, interest at 5.03% per annum and the note is unsecured.		72,767		72,767

Note Payable - individual, principal and interest due and payable December 2008, interest at 16% per annum and the note is unsecured.		7,000		7,000

Note Payable - individual, principal and interest due and payable December 2008, interest at 8% per annum and the note is unsecured.		5,000		5,000

Note Payable - related party (individual) principal and interest due and payable December 2009, interest at 8% per annum and the note is unsecured.		37,495		-

Note Payable - individual principal and interest due and payable April 2009, interest at 10% per annum and the note is unsecured. The note is convertible into the Company’s convertible debenture instrument yielding 7% interest and terms. Note contains a feature to extend for a ½ point		100,000		-

Convertible Debentures - 2005 investment by five investors, principal and interest due and payable 36 months from the date of investment, monthly payments of interest in arrears at 7.0% per annum. The debentures are convertible into common stock of the Company based on a discount to market of 7% of the 30-day trailing average price of the Company's common stock		75,000		100,000

Convertible Debentures - 2006 investment by four investors, principal and interest due and payable 36 months from the date of investment, monthly payments of interest in arrears at 7.0% per annum. The debentures are convertible into common stock of the Company based on a discount to market of 7% of the 30-day trailing average price of the Company's common stock.		60,000		60,000

Convertible Debentures - 2007/2008 investment by one investor, principal and interest due and payable 36 months from the date of investment, monthly payments of interest in arrears at 7.0% per annum. The debentures are convertible into common stock of the Company based on a discount to market of 7% of the 30-day trailing average price of the Company's common stock		950,200		950,200

Total notes payable and convertible debentures		1,607,462		1,494,967

Less current maturities		657,262		544,767

Long term portion of notes payable and convertible debentures	$	950,200	$	950,200

Convertible Debentures 2003

As of March 31, 2009 the Company was in default with respect to its $300,000 in convertible debentures (the 2003 Debentures). The 2003 Debentures were due and payable May 30, 2007. The 2003 Debentures bear interest at a rate of 7.5% per annum payable in arrears by one month. Interest payments may be deferred until maturity, based on a formula provided that the Company is showing a net loss or negative earnings before interest, taxes, depreciation and amortization (EBITDA). The Company has the right to pay principal and accrued interest through common stock of the Company provided that the average closing price of the Company's common stock exceeds $0.20 for ten consecutive trading days prior to the date of payment. The 10 holders of the 2003 Debentures have the option to convert into shares of common stock at anytime subject to 30 days prior notice to the Company. The 2003 Debentures are convertible at $0.20 per common share at any time by the holder.

Convertible Debentures 2005, 2006, 2007, 2008

As of March 31, 2009 the Company had outstanding $1,085,200 in convertible debentures (the Post-2003 Debentures). The Post-2003 Debentures are due and payable three years from the date of the original issuance. The Post-2003 Debentures bear interest at a rate of 7.0% per annum payable monthly. The 10 holders of the Post-2003 Debentures have the option to convert into shares of common stock upon written notice to the Company. The debentures are convertible into common stock at a price equal to 93% of the average 30 day closing price of the Company’s publicly traded common stock prior to notice of conversion.

During the three month period ended March 31, 2009 we issued a total of 598,500 shares of common stock to a holder of a convertible debenture, in the amount of $25,000, of the Company, as conversion of the debenture and accrued interest.

NOTE 6 – COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company leases office space for its subsidiaries in two markets, San Diego and Las Vegas. The Company’s corporate and REF operations occupy space in its Minneapolis building. TCS’s San Diego and Las Vegas operations lease office space under operating leases that both expire in 2010.

Lease Income

The Company leases a portion of its Minneapolis commercial property to various tenants, which require them to pay a monthly base rent. Most tenants are on month-to-month agreements with the Company. Currently one long term lease tenant occupies space in this building with the remainder being occupied by Discover and short term tenants.

Executive Employment Agreements

The Company has an executive employment agreement with its chief executive officer which provides for cash compensation of $100,000 per annum as well as equity compensation of $75,000 per annum. As of March 31, 2009 the Company has included in accrued expense approximately $754,000 in compensation due to its executive officer. As part of the Company’s agreement with the executive officer the Company will issue shares of common stock based on a pre-determined formula for past due compensation and enter into a new employment agreement with the executive officer. As part of the Company’s efforts to conserve cash and control expenditures during its cost-cutting plan the executive officer had deferred payment of his compensation during the past four years.

Litigation

The Company is subject to other potential liabilities under government regulations and various claims and legal actions that may be asserted. Matters may arise in the ordinary course and conduct of the Company’s business, as well as through its acquisitions. Claim estimates that are probable and can be reasonably estimated are reflected as liabilities of the Company. The ultimate resolution of these matters is subject to many uncertainties. It is reasonably possible that matters, which may be asserted, could ultimately be decided unfavorably for the Company. Although the amount of liability at March 31, 2009, currently cannot be ascertained, the Company believes that any resulting liability should not materially affect the Company’s consolidated financial statements.

NOTE 7 - PROPERTY AND EQUIPMENT

The Company's property and equipment by significant category consist of the following at March 31, 2009 and December 31, 2008, respectively:

	March 31, 2009			December 31, 2008
	(unaudited)			(audited)
Furniture and equipment	$	150,028		$	162,424
Building and improvements		468,716			468,716
Land		100,000			100,000
Total property and equipment		718,744			731,140
Less accumulated depreciation		(249,906	)		(251,917	)

	$	468,838		$	479,223

NOTE 8 - RELATED PARTY TRANSACTIONS

During the three month period ended March 31, 2009, the Company entered into several short-term arrangements with a current director of the Company for working capital funds. For the three month period ended March 31, 2009 funds received under these short-term arrangements totaled $37,945 which is included in notes payable and convertible debentures.

NOTE 9 - INCOME TAXES

In June 2006, the FASB issued Interpretation No. 48 (FIN 48), “Accounting for Uncertainty in Income Taxes,” an interpretation of SFAS 109, “Accounting for Income Taxes.” FIN 48 clarifies the accounting for uncertain tax positions. FIN 48 prescribes a comprehensive model for how companies should recognize, measure, present and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under FIN 48, tax benefits shall initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions shall initially and subsequently be measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with the tax authority, assuming full knowledge of the position and all relevant facts. FIN 48 also revises disclosure requirements to include an annual tabular rollforward of unrecognized tax benefits. The provisions of this interpretation are required to be adopted for fiscal periods beginning after December 15, 2006. The Company adopted this provision beginning January 1, 2007. Net impact due to the adoption of FIN 48 was no decrease to retained earnings.

Prior to their acquisitions, Discover Mortgage was taxed as a Sub S Corporation, and TCS Mortgage, Inc. was party to a tax sharing agreement with its former parent. The Company pays minimum franchise taxes of $800 per year for each California corporate entity that does business as part of the consolidated entity.

At March 31, 2009, the Company had $8.4 million and $4.8 million of federal and state net operating losses (NOL) carry forwards, respectively. It is more likely than not that the Company will not fully realize certain federal or states’ NOL’s. The federal and state NOL carry forwards begin to expire in 2019 and 2014, respectively.

The realization of any future income tax benefits from the utilization of net operating losses may be severely limited. Federal and state tax laws contain complicated change of control provisions (generally when a more than 50 percent ownership change occurs within a three-year period), which, if triggered, could limit or eliminate the use of the Company's net operating loss carry-forwards.

ITEM 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of financial condition and results of operations should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements and Notes thereto included elsewhere in this report and the Consolidated Financial Statements and Notes thereto included in our annual report on Form 10-K.

OVERVIEW

We are in the business of providing real estate and mortgage financial services primarily for transactions involving sales, purchases or financing of residential properties. Our business is conducted through three wholly-owned subsidiaries, Discover Mortgage Corporation and TCS Mortgage, Inc. which operate in the mortgage brokerage and mortgage banking business; and WHY USA North America Inc. which operates in the real estate franchise business. Our primary mission is to develop and provide professional residential real estate and mortgage banking services and support both to our network of franchise real estate brokers and their customers and to new home, resale home and refinancing mortgage borrowers dealing directly with our mortgage lending offices.

We conduct our business through two principal segments:

Ø	Real Estate Franchise (REF). The Company’s REF operations are conducted regionally within the United States; Upper Midwestern states as well as several other states with limited franchise areas.

Ø	Mortgage Broker and Originations (MB). The Company’s MB operations are conducted regionally within the United States; Upper Midwestern states as well as the Southwest (which includes Southern California and Nevada).

The Company has incurred significant losses, and as of March 31, 2009 had an accumulated deficit of approximately $13.0 million. The Company intends to expend considerable financial and management resources on sales and marketing, development of additional financial service offerings, strategic acquisitions and alliances, and expanded operations to support larger-scale business operations. Accordingly, the Company may continue incurring losses incident to future growth. There can be no assurance that the Company's revenues will increase to the levels necessary to achieve profitability or generate enough cash from operations in the future.

The Company's prospects must also be considered in light of the risks, difficulties, and expenses frequently encountered by companies in their early stage of development, particularly companies in rapidly changing markets such as ours. To address these risks, the Company must, among other things, maintain existing, and develop new relationships with mortgage lenders, real estate brokers and franchisees, and potential residential customers in the general public; implement and successfully execute its business and marketing strategy; continue to develop and upgrade transaction-processing systems; provide quality customer service; respond to competitive developments; and attract, retain and motivate qualified personnel. There can be no assurance the Company will be successful in addressing such risks, and the failure to do so would harm the Company's business, financial condition, and results of operations. The Company's current and future expense levels are based on its planned operations and estimates of future revenues. Revenue and operating results generally depend upon the volume and timing of mortgages originated and real estate closings completed, which are rather difficult to forecast. The Company may be unable to adjust spending in a timely manner to compensate for any unexpected revenue shortfalls. Any significant shortfall of revenue would have an immediate adverse effect on the Company's business. In view of the changing nature of both the financial services industry and the overall national economy, the Company is unable to accurately forecast its revenue. Accordingly, we believe that period-to-period comparisons of our operating results are not very meaningful and should not be relied upon as an indication of future performance.

The Company's material sources of revenue in order of priority are from: (1) mortgage origination and related mortgage lending fees, (2) WHY USA franchise fees/royalties received from our franchisees based on their ongoing business, (3) new franchise sales, and (4) real estate sales commissions.

RESULTS OF OPERATIONS

Comparison of the Three Month Periods Ended March 31, 2009 and 2008

Revenues

Net revenues decreased $128,203 or 35% for the three months ended March 31, 2009 compared to the three months ended March 31, 2008. The decrease was a result of the significant softening of the mortgage and real estate industry. Summer 2008 was a time of great turmoil for the financial services industry. WHY USA was not in the business of sub-prime single-family residential mortgages, so the Company was not exposed to the disruption in the market. However, the general market continues to experience a ripple effect that business both in mortgage and real estate transactions have almost ceased to exist. It is important to note that the Company continued to maintain the highest underwriting standards in its loan portfolio, regardless of the loan type, a decision that is part of its core business philosophy. By maintaining historically excellent credit standards, the Company was able to focus on providing high levels of customer service and expanding its product offerings in spite of these difficult market conditions.

Over the prior two years it was readily apparent that the sub-prime mortgage market continues to be strained which in turn affected the overall financial services industry. As a mortgage broker, WHY USA and its business practices did not have any specific exposure to the sub-prime market, no liability to purchase defaulted loans. As a result, management believes that even though the sub-prime market has ceased to exist, the negative impact from the sub-prime market fallout continues to affect future revenues. Given that we continue to work on stabilizing ourselves in a weakened sub-prime market, revenues continued to decrease for 2008 (even into Q1 2009), even though we are experiencing a growing demand and need for FHA insured loans. The purpose of the FHA insured program is to allow non- Fannie Mae and Freddie Mac approved borrowers’ access to non sub-prime loan programs. Therefore we are experiencing an increase of the “Government” sponsored loan programs that allow more flexible lending criteria, picking up much of the slack in the traditional “sub-prime” loans.

Cost of Revenues

Cost of revenues decreased $68,162 or 33% for the three months ended March 31, 2009 compared to the three months ended March 31, 2008. Cost of revenues dropped at a slightly lower rate compared to our decrease in net revenues for the three month period. Costs of revenue which consists primarily of direct costs associated with our products and services, as well were affected by the sub-prime and financial services market weakening. Commission expense and direct costs continue to remain fairly constant as a percentage with slight cost savings due to a competitive environment. Cost of revenues as a percentage of net revenues increased to 57% for the three months ended March 31, 2009 compared to 55% for the three months ended March 31, 2008. Gross margin as a percentage of net revenues decreased to 43% for the three months ended March 31, 2009 compared to 45% for the three months ended March 31, 2008.

Operating Expenses

Selling, General and Administrative. For the three months ended March 31, 2009, selling, general and administrative expenses decreased by $94,657 or 21% compared to the three months ended March 31, 2008. The decrease for the three months ended March 31, 2009 resulted from a decrease in professional services for the Company’s year end audits as well as continuing cost savings initiatives which include staffing and salary reductions along with reductions in employee benefits, professional services, occupancy costs, and other expenses.

We continue to pursue programs and initiatives to improve our efficiency in the general and administrative area. These programs focus in the areas of process improvement and automation relative to our mortgage and non-franchise real estate business and its support as well as support services needed for our holding company. We expect that over time these actions will result in additional declines in our general and administrative expenses as a percent of revenues.

Loss/Gain on Disposal of Assets. Loss on disposal of fixed assets for the three months ended was $1,873, compared to none for the three months ended March 31, 2008, which for the three month period ended in 2009 represents the excess of cost basis over the proceeds received from the sale or disposal of the fixed or intangible assets used in its operations.

Depreciation and Amortization. Depreciation and amortization for the three months ended March 31, 2009 decreased $2,387 or 22% compared to the three months ended March 31, 2008. Depreciation and amortization expense for the three months ended March 31, 2009 was $8,512.

Other Income (Expense)

Interest Expense. Interest expense was $56,750 for the three months ended March 31, 2009 compared to $37,117 for the three months ended March 31, 2008. The primary reason for the $19,633 increase in interest expense was an overall increase in borrowings from a related party and third party.

Other Income (Expense), Net. Other income (expense), net, for the three months ended March 31, 2009 and the three months ended March 31, 2008 was $0 and $9,774, respectively. For three months ended March 31, 2008 the Company received reimbursements from non-mortgage/real estate business which are non-recurring in nature.

Comparison of the Three Month Periods Ended March 31, 2008 and 2007

Revenues

Net revenues decreased $333,749 or 48% for the three months ended March 31, 2008 compared to the three months ended March 31, 2007. The decrease was a result of the continued significant softening of the mortgage and real estate industry. Summer 2007 was a time of great turmoil for the financial services industry. WHY USA was not in the business of sub-prime single-family residential mortgages, so the Company was not exposed to the disruption in the market. However, the general market experienced a ripple effect that business both in mortgage and real estate transactions almost ceased to exist. It is important to note that the Company continued to maintain the highest underwriting standards in its loan portfolio, regardless of the loan type, a decision that is part of its core business philosophy. By maintaining historically excellent credit standards, the Company was able to focus on providing high levels of customer service and expanding its product offerings in spite of these difficult market conditions.

Cost of Revenues

Cost of revenues decreased $239,695 or 54% for the three months ended March 31, 2008 compared to the three months ended March 31, 2007. Cost of revenues dropped at a higher rate compared to the decrease in net revenues for the three month period. Costs of revenue which consists of primarily direct costs associated with our products and services, was as well affected by the sub-prime and financial services market weakening. Commission expense and direct costs continue to remain constant as a percentage with slight cost savings due to a competitive environment. Cost of revenues as a percentage of net revenues decreased to 55% for the three months ended March 31, 2008 compared to 63% for the three months ended March 31, 2007. Gross margin increased to 45% for the three months ended March 31, 2008 compared to 37% for the three months ended March 31, 2007.

Operating Expenses

Selling, General and Administrative. For the three months ended March 31, 2008, selling, general and administrative expenses increased by $13,282 or 3% compared to the three months ended March 31, 2007. The increase for the three months ended March 31, 2008 resulted from approximately $60,000 in accounting and professional services incurred in preparing for our audit and annual report on Form 10-KSB offset by the continuing cost savings initiatives which include staffing and salary reductions along with reductions in employee benefits, professional services, occupancy costs, and other expenses.

Depreciation and Amortization. Depreciation and amortization for the three months ended March 31, 2008 decreased $1,291 or 11% compared to the three months ended March 31, 2007. Depreciation and amortization expense for the three months ended March 31, 2008 was $10,899.

Other Income (Expense)

Interest Expense. Interest expense was $37,117 for the three months ended March 31, 2008 compared to $46,857 for the three months ended March 31, 2007. The primary reason for the $9,740 reduction in interest expense was the conversion of several convertible debentures retired in late 2007.

Other Income (Expense), Net. Other income (expense), net, for the three months ended March 31, 2008 and the three months ended March 31, 2007 was $9,774 and $105,757, respectively. For three months ended March 31, 2007 the Company received payment on a liquidating distribution from policy holder ownership interest. This distribution payment was a one-time event for the Company.

LIQUIDITY AND CAPITAL RESOURCES

Operating Activities. Operating activities used net cash of $149,602 during the three month period ended March 31, 2009 primarily from a net loss of $314,193 offset by non-cash charges of $23,985. Changes in operating assets and liabilities provided a net increase of $140,606 in cash during the period. Within non-cash charges, the primary driver was bad debt expense of approximately $13,600. The primary drivers of cash savings from changes in operating assets and liabilities was an increase in accounts payable and accrued expenses of approximately $149,000 which was partially offset by a increase in trade receivables of approximately $18,000.

As a result of working capital improvement and cost reduction programs, we expect to utilize our working capital more effectively in the future resulting in our ability to reinvest in activities that will increase the Company’s presence in the marketplace. Our working capital factors, such as accounts receivable collection and payables, are seasonal and, on an interim basis during the year, may require an influx of short-term working capital.

Investing Activities. Net cash used in investing activities for the three month period ended March 31, 2009 was none.

Financing Activities. Net cash provided by financing activities totaled $126,004 for the three month period ended March 31, 2009 which includes payments on existing debt of approximately $9,000. For the three month period ended March 31, 2009 we received approximately $137,000 in proceeds from various short-term note obligations entered into by a director and a shareholder of the Company. The Company for the three month period ended March 31, 2009 paid down its bank overdraft from year end of $2,066.

We continue to seek acquisition opportunities that support our Real Estate Franchise and Mortgage Brokerage platforms. While we cannot predict the timing or size of any future acquisitions, or if any will occur at all, a significant amount of our cash and/or stock may be used to acquire companies, assets or technologies. We could also choose to fund any acquisitions, at least partly, with new debt or stock.

As of March 31, 2009, we had cash and cash equivalents of approximately $29,000. Our working capital deficit was $2,296,726 as of March 31, 2009. This includes along with $569,945 of accounts payable outstanding, bank line of credit of $98,117, short term debt and lease obligations of $696,470, as well as accrued expense and other of $1,047,975. Cash used in operations primarily comes from our service offerings with non-recurring expenses funded through the issuance of convertible debentures.

We expect that our current cash and cash equivalents, short-term and long-term investments, short-term borrowings and/or the raising of additional capital, along with funds from operations and interest income earned thereon will be sufficient to fund our current operations through at least the third quarter of 2009. Our future capital requirements and the adequacy of our available funds will depend on many factors, including future business acquisitions, our ability to establish collaborative business arrangements, the cost involved in preparing, filing, prosecuting, maintaining and enforcing business claims and competing technological and market developments.

RECENT ACCOUNTING PRONOUNCEMENTS

In December 2007, the FASB revised Statement No. 141 (FAS 141R), “Business Combinations,” which establishes principles and requirements for how the acquirer in a business combination (i) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed and any noncontrolling interest in the acquiree, (ii) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase and (iii) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. FAS 141R will be effective for the Company’s fiscal 2009 beginning January 1, 2009. The Company is in the process of determining the effects, if any, the adoption of FAS 141R will have on its consolidated financial statements.

FASB Statement No. 157 (FAS 157), “Fair Value Measurements,” issued in September 2006, defines fair value, establishes a framework for measuring fair value and expands disclosures about assets and liabilities measured at fair value in the financial statements. In February 2008, the FASB issued FASB Staff Position 157-2 (FSP 157-2) which allows for the delay of the effective date of FAS 157 for one year for all nonfinancial assets and liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company adopted FAS 157 for financial assets and liabilities effective September 29, 2008 but elected a partial deferral under the provision of FSP 157-2 related to nonfinancial assets and liabilities that are measured at fair value on a nonrecurring basis, including goodwill, wireless licenses, other intangible and long-lived assets, guarantees and asset retirement obligations. The Company is in the process of determining the effects, if any, FAS 157’s application to such nonfinancial assets and liabilities will have on its consolidated financial statements.

In April 2009, the FASB issued FASB Staff Position FAS 115-2 and FAS 124-2 (FSP 115-2 and 124-2), “Recognition and Presentation of Other-Than-Temporary Impairments,” which amends the existing guidance on determining whether an impairment is other-than-temporary for investments in debt securities. In addition, the FASB issued FASB Staff Position FAS 157-4 (FSP 157-4), “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly,” which provides additional guidance on determining the fair value of financial assets in an inactive market or when a distressed transaction is present. FSP 115-2 and 124-2 and FSP 157-4 will be effective for the Company’s third quarter of fiscal 2009, as the Company has not elected to early adopt either FSP. The Company is in the process of determining the effects, if any, the adoption of both FSPs will have on its consolidated financial statements.

CRITICAL ACCOUNTING POLICIES

Application of Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate these estimates, including those related to the allowance for doubtful accounts, goodwill, intangible assets, stock-based compensation income taxes, commitments and accrued liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We consider accounting policies relating to the following areas to be both those most important to the portrayal of our financial condition and those that require the most subjective judgment:

	●		revenue recognition;
	●		accounting for goodwill and other intangible assets;
	●		accounting for franchise costs;
	●		accounting for stock-based compensation; and
	●		accounting for acquisition charges

Forward-looking Statements

Any statements in this Quarterly Report on Form 10-Q about our expectations, beliefs, plans, objectives, prospects, financial condition, assumptions or future events or performance are not historical facts and are “forward-looking statements” as that term is defined under the Federal Securities Laws. These statements are often, but not always, made through the use of words or phrases such as “believe,” “anticipate,” “should,” “intend,” “plan,” “will”, “expects”, “estimates,” “projects,” “positioned,” “strategy,” “outlook,” and similar words. You should read statements that contain these types of words carefully. Such forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause actual results to differ materially from what is expressed or implied in such forward-looking statements. There may be events in the future that we are not able to predict accurately or over which we have no control. Potential risks and uncertainties include, but are not limited to, those discussed below under “Risk Factors” and elsewhere in this Quarterly Report as well as other risks and uncertainties detailed in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 31, 2009. We do not undertake any obligation to release publicly any revisions to such forward-looking statements to reflect events or uncertainties after the date hereof or to reflect the occurrence of unanticipated events.

Business

WHY USA Financial Group, Inc. (the Company), is a Nevada corporation. Prior to acquiring our real estate franchise subsidiary and our Minneapolis mortgage brokerage business in December 1999, the Company was an inactive public company under the name Triam Ltd., Inc. with no assets, which had not been engaged in active operations for many years. Our principal offices are located in Minneapolis, Minnesota. Our website is http://www.whyusa.com. Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q/Form 10-QSB, Current Reports on Form 8-K and any amendments thereto are made available without charge from our website or may be obtained from the United States Securities and Exchange Commission website – http://www.sec.gov.

Financial Information - Segments and Geographic Areas

We focus our business on two principal business segments, Real Estate Franchise (REF) and Mortgage Brokerage (MB). Financial information regarding these segments is included within the notes to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

The Company has limited geographic concentrations within its business segments. Our REF business segment currently operates in several Midwestern states, with offices elsewhere in the continental United States. Our MB business segment currently operates in California, Nevada, Minnesota and Wisconsin.

Description of Our Business

Overview

WHY USA Financial Group, Inc. (the Company), a Nevada corporation, is engaged in the business of providing real estate and mortgage financial services primarily for transactions involving the sale, purchase or financing of residential properties. Our business is primarily conducted through three wholly-owned subsidiaries: Discover Mortgage Corporation and TCS Mortgage, Inc. both operate in the mortgage brokerage and mortgage banking business; and WHY USA North America Inc., which operates in the real estate franchise business. Our primary mission is to develop and provide professional residential real estate and mortgage brokerage services and support, both to our network of franchise real estate brokers and their customers and to new home, resale home and refinancing mortgage borrowers dealing directly with our mortgage lending offices.

The Company was incorporated in Utah in 1980 and in 1983 was duly reorganized as a Nevada corporation. Prior to acquiring our real estate franchise subsidiary and our initial mortgage business in December 1999, the Company was an inactive public company under a former name with no assets, which had not been engaged in active operations for many years.

The Company acquired both its real estate business, WHY USA North America, Inc. and its first mortgage business, Northwest Financial Ltd., through a reorganization and merger which occurred in 1999. Incident to this merger, the former shareholders of these two companies acquired a majority interest in the outstanding common stock of the Company. This was a reverse merger for financial statement and operational purposes, and NA and Northwest became wholly-owned subsidiaries. Northwest transferred 100% of its operations to Discover during 2002.

Acquisition Strategy and Transactions

Since our reorganization in 1999, a principal element of our business strategy has been to expand our business through acquisitions of established operations in our industry. The primary goal of our newfound acquisition strategy is to establish a national presence in our industry over the coming years, which we believe will provide economies of scale for our operations due to an increase in revenue base through acquisitions. Moreover, we believe more favorable terms will be achieved from financial institutions that provide mortgage funding as our lending transactions increase through size.

Target Markets

We divide our target customer base into principally two categories:

●

Mortgagers; and

●

Real estate buyers and sellers.

While we do not believe that any single customer or small group of customers is material to our business as a whole or to either of our product segments (described below), more than 50% of our customers in our target markets are located in the Southern California region of the United States.

Service Offerings

The Company’s principal service offerings are outlined below.

WHY USA Real Estate Franchise Program

Through our WHY USA franchise system we offer independent real estate brokers and agents a unique proprietary real estate management and marketing program. Our WHY USA national franchise system, which is registered in 41 states, was developed in the 1980's by an Arizona company. Its operations were moved to Wisconsin in the 1990's and we acquired this franchise program in 1999. This business is owned and operated under a wholly owned subsidiary, WHY USA North America, Inc. a Wisconsin corporation. Our WHY USA franchise operations are headquartered in Minneapolis.

The WHY USA franchise is available to qualified licensed real estate brokers and their agents, who must enter into a WHY USA Franchise Agreement in order to conduct business under the WHY USA name and proprietary operational system. WHY USA provides a unique, confidential plan for operating a real estate office, consisting of a number of successful listing, selling, marketing and management techniques developed over the years and supported by training programs, copyrighted marketing methods, and educational materials.

The initial franchise fee for a WHY USA real estate office is $9,990 for a designated territory. Franchisees also pay ongoing transaction fees of $100 per transaction or 6% of commission revenues; whichever is the lower of, providing they must pay at least a monthly minimum of $400. Transactions are defined as any closing or rental as a listing or selling agent, any referral or advance fees received from a client, and any consulting, assistance or materials purchase fees related to leasing or selling a property. The estimated initial investment to commence business as a WHY USA franchisee is approximately $50,000 including the initial franchise fee. We provide substantial initial and ongoing support to our franchisees including, assistance with locating an office, provision of a confidential comprehensive Operations Manual, a training seminar for new franchisees, training and promotional videos and brochures, sample marketing materials, continuing advisory assistance regarding operations, supplemental marketing and advertising materials, and advice regarding Internet access capabilities and procedures.

The basic WHY USA method for listing real property offers the selling owner an alternative, whereby they can sell their home with full service from their WHY USA broker for a fee of just $990. Sell the property to a friend, relative or acquaintance without paying commissions in excess of $990. This proprietary system is designed to create listing opportunities for our franchise brokers as well as offer the listing seller a true alternative to the traditional real estate commission structure.

We currently have 30 WHY USA franchise owners, with WHY USA offices in 14 states. A majority of these offices are located in Minnesota and several nearby Midwestern states, with the rest spread across the country. We currently do not have a material presence in Eastern and Southern states, although our future marketing plan includes directing substantial efforts toward expansion.

Mortgage Brokerage Services - Overview

We acquired TCS Mortgage, Inc., as a wholly owned subsidiary, in December 2003. In 2004 we contributed another wholly owned subsidiary, Discover Mortgage, under the TCS umbrella. TCS is a full service mortgage broker, specializing in residential mortgage finance. TCS was formed in January 1984, and has established a reputation for providing fair and equitable home loans to its clients and a high quality volume of mortgage product for its correspondent lenders. TCS has grown since its inception, averaging revenues of more than $3.6 million over the past five years. Over the past twenty-five years, TCS has originated more than 7,000 mortgage transactions, in excess of $3.0 billion in funded loan volume.

While TCS specializes in loans that meet Freddie Mac or Fannie Mae underwriting criteria, it also provides Federal Housing Administration, Veteran’s Administration, non-conforming mortgage product, and home equity products for individuals across a wide range of incomes and credit risks. TCS has established relationships with many correspondents and wholesale lenders across the United States, and has the ability to conduct operations in California, Nevada, Minnesota, and Wisconsin, with fully staffed offices in San Diego, Las Vegas, and Minneapolis, as well as satellite origination offices.

In this highly competitive marketplace, TCS’s growth and success reflects a number of essential factors: a skilled and professional client-oriented sales team, an effective lending criterion with dependable high quality mortgage product, repeat business from a large client base, as well as their referrals. With a broad spectrum of products to offer its clients, TCS has been able to develop solid relationships with homebuyers, realtors, homebuilders, financial planners, accountants, and insurance agents; all of which provide TCS with loan applicants.

As an established mortgage broker, our objective is to continue to build a nationwide broker infrastructure to further its mortgage business distribution channel. TCS continues to focus on borrowers who meet conforming underwriting guidelines. Our business principles are focused on originating loans based upon the borrower’s credit worthiness and ability to repay the loan, as well as the adequacy of the real estate collateral, while providing a high degree of service to our clients. We believe that this business approach will continue to contribute to our growth.

TCS’s focus is to continue to generate organic growth within its existing markets of; California, Nevada, Minnesota, and Wisconsin, where TCS is currently licensed, through the recruitment of additional professional mortgage personnel. In addition, we may seek expansion through acquisitions, mergers, or strategic alliances in other market areas as the opportunity may arise. The Company, nor TCS, has identified any merger or acquisition targets at this time. States where property appreciation is constant or shows signs of growth will be targeted.

Market Overview

The residential mortgage industry has grown significantly over the past 10 years, with loan originations totaling over $2.8 trillion in 2004. The Mortgage Bankers Association reported total originations in 2006 of $2.50 trillion, $2.28 trillion for 2007, and estimates $1.86 trillion for 2008 and $1.67 trillion for 2009, indicating a steady decline from its highs early 2004/2005.

Large banks and mortgage lenders like Wells Fargo, Bank of America/Countrywide, and Washington Mutual/Chase fund the majority of mortgage loans originated. Currently TCS delivers loan product to many industry leaders such as these, under agreements and contractual relationships. However, the industry is in a state of flux and TCS must continue to obtain and retain these relationships in a difficult environment.

One of the factors of recent growth in the mortgage industry was the impact of sub-prime and Alt-A lenders. The majority of sub-prime loans are Adjustable Rate Mortgages (ARMs). Unlike a traditional Fixed Rate Mortgage, where the interest and monthly payments remain fixed for the term of the loan, with an ARM, the interest rate is fixed only for a specific term, after which it will periodically (annually or monthly) adjust up or down as a function of some market index. Inasmuch as an ARM transfers part of the interest rate risk from the lender to the borrower, less “qualified” borrowers are more easily able to secure loans. Generally not long-term instruments, ARMs essentially serve as a “bridge” loan for individuals to purchase a home, establish or improve their credit and then secure a traditional mortgage at a more attractive rate. These loans are then pooled into mortgage backed securities; credit enhanced, rated, and then sold as financial instruments to a wide range of investors. This portion of the market is currently in a state of contraction.

Recently many lenders that specialized in this type of sub-prime product have gone out of business. Most loan products have been discontinued due to the current credit crunch and this has had a negative effect on the industry as a whole. The current trend is towards fixed rate, “A” paper product, which requires greater documentation and “equity” in the property from the borrower. Currently there are a number of governmental proposals that would further restrict and regulate the Mortgage Industry. Also, there are a number of proposals that would in fact assist the borrowers and provide additional product such as new FHA guidelines, further capacity at Freddie Mac and Fannie Mae, and new capacity at the rating agencies.

TCS generated more than 200 mortgages and gross fee income of $1.0 million in 2008 from over $65 million in loans funding. This is largely attributable to the diversification of mortgage products, a professional sales force, excellent lender relationships, and strong attention to customer service. While many of our competitors have exited the market place we have maintained our staff and facilities and are actively recruiting highly skilled talent that is available in the market place.

Current Business Model – Mortgage Broker

Today, TCS operates strictly as a mortgage broker, securing loans on behalf of its correspondent and wholesale lenders. The primary function of TCS is to originate mortgage loans and broker those loans to approved lenders. We offer conventional, FHA, VA, conforming and non-conforming mortgage products for individuals across a wide range of incomes and credit risks. We do not make underwriting decisions; underwriting decisions are ultimately the decision of the funding lenders.

TCS maintains stringent guidelines with regard to the mortgages it originates. All candidates, whether identified through direct solicitation by the sales team or an individual contacting the company through the website, are required to provide a completed residential loan application, W-2's and/or tax returns for the previous two (2) years, and recent bank, stock and retirement account statements. Applicants may be required to provide additional documents or verifications based upon their particular history – i.e., have they ever filed for bankruptcy.

With every completed application package, TCS’s primary objective is to ensure that the borrower has the capacity to carry the anticipated payment schedule. For each of its loan products, TCS has specific qualification parameters, as designated by each lender, and it will review the applicant’s credit history, asset portfolio, employment history, and property values. Each situation is unique and evaluated on a case by case basis, with the resulting loan specifically for that individual.

Competition

The major competition for TCS comes from the following, but is not limited to; large national lending institutions, local banks, credit unions, mortgage bankers, and other privately owned mortgage companies which provide a variety of products. There is substantial competition on both the national and local level and TCS originates only a small portion of all loans originated in the areas in which it is licensed.

TCS is licensed with HUD as a Supervised Loan Correspondent. As such, we compete with all HUD approved lenders in the areas we originate mortgage loans. TCS is required to maintain a minimum adjusted net worth which was $113,000 ($63,000 for the main office plus $25,000 for each of its two HUD branch offices) at December 31, 2008. Although the Company may be out of compliance with this requirement for the quarter ended March 31, 2009, management believes that the annual renewal requirement will be met by or prior to December 31, 2009. Maintaining a license with HUD allows TCS to originate FHA loans that it would not otherwise be able to originate. Approximately thirteen percent of our business is currently derived from HUD/FHA loans; we expect this percentage to grow dramatically with the improvements suggested by the government-controlled agency. It has become difficult for smaller competitors to maintain these requirements.

For the year ended December 31, 2008 the Company through its wholly-owned subsidiary TCS fell below the minimum adjusted net worth requirements as a Supervised Loan Correspondent. The Company submitted with its required Lender Assessment an action plan to correct the deficiency to its minimum adjusted net worth and requested that HUD maintain its licensure as a Supervised Loan Correspondent. As of the date of this report the Company has yet to receive a response in regards to its proposed action plan. The Company cannot be certain these steps nor the request of HUD will be successful in maintaining the licensing or prevent the withdrawal of the licensing.

ITEM 3.

Quantitative and Qualitative Disclosures about Market Risk

Not required for smaller reporting companies.

ITEM 4.

Controls and Procedures

We maintain a system of disclosure controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the U.S. Securities Exchange Act of 1934, as amended (Exchange Act), is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms. These controls and procedures are also designed to ensure that such information is accumulated and communicated to the Company’s management, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), as appropriate to allow timely decisions regarding required disclosure. Internal controls are procedures designed to provide reasonable assurance that: transactions are properly authorized; assets are safeguarded against unauthorized or improper use; and transactions are properly recorded and reported, to permit the preparation of our financial statements in conformity with generally accepted accounting principles.

A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple errors or mistakes. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with its policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. We continuously evaluate our internal controls and make changes to improve them as necessary. Our intent is to maintain our disclosure controls as dynamic systems that change as conditions warrant.

An evaluation was carried out, under the supervision of and with the participation of our management, including our CEO and CFO, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a–15(e) and 15d–15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon the controls evaluation, our CEO and CFO have concluded that, as of the end of the period covered by this Form 10-Q, the Company’s disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended March 31, 2009 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1.

Legal Proceedings

ITEM 1A.

Risk Factors

There are no material changes from risk factors disclosed in our Form 10-K for the year ended December 31, 2008, as filed on March 31, 2009.

ITEM 2.

Unregistered Sales of Equity Securities and Use of Proceeds

During the three months ended March 31, 2009 the Company made the following issuances and sales of securities in reliance upon the exemption provided by Section 4(2) of the Securities Act of 1933, as amended, Rule 506 of Regulation D hereunder.

During the three month period ended March 31, 2009 we issued a total of 598,500 shares of common stock to a holder of convertible debentures in the amount of $25,000 of the Company as conversion of the debentures and accrued interest. The Company valued the shares at a price of approximately $0.053 per share which was determined to be fair market value. We relied on Section 4(2) of the Securities Act.

ITEM 3.

Defaults Upon Senior Securities

None.

ITEM 4.			Submission of Matters to a Vote of Security Holders
	a)	None.
	b)	None.
	c)	None.
	d)	None.


ITEM 5.	Other Information

None.

ITEM 6.

Exhibits and Reports on Form 8-K

Exhibits: For a list of exhibits filed with this report, refer to the Index to Exhibits.

SIGNATURES

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


SIGNATURE	TITLE	DATE

/s/ JAMES B. KYLSTAD James B. Kylstad	Chairman and Chief Executive Officer and Director (Principal Executive Officer)	May 15, 2009


/s/ KENNETH J. YONIKA Kenneth J. Yonika	Chief Financial Officer (Principal Financial Officer)	May 15, 2009

INDEX TO EXHIBITS

EXHIBIT NUMBER		DESCRIPTION OF DOCUMENT
2.1		Reorganization between the Black Butte Petroleum, Inc. and Triam Ltd., dated March 23, 1983 (1)
2.2		Acquisition Agreement between Triam Ltd. and Northwest Financial Ltd., dated December 16, 1999 (1)
2.3		Acquisition Agreement Addendum, dated December 20, 1999 (1)
2.4		Stock Purchase Agreement dated September 24, 1999 between Northwest Financial Group, Inc., WHY USA NA, and its selling shareholders (1)
2.5		Addendum to Stock Purchase Agreement, dated December 30, 1999 including Assignment to Donald Riesterer (1)
2.6		Share Exchange Agreement – Cashline transaction, dated February 8, 2001 (3)
2.7		Business Combination Agreement to acquire Discover Mortgage Corp. effective January 1, 2002 (2)
3.1.1		Articles of Triam Ltd., dated January 6, 1983 (1)
3.1.2		Amendment to Articles of Incorporation, March 4, 1983 (1)
3.1.3		Amendment to Articles of Incorporation, filed March 29, 1983 (1)
3.1.4		Articles of Merger, filed on May 9, 1999 (1)
3.1.5		Amendment to Articles of Incorporation, Jan. 10, 2000 (1)
3.2		Bylaws (1)
10.2		Stock Option Plan (2)
10.3		Sample Option Agreement (4)
10.4		Assignment and Assumption Agreement between Northwest Investment Trust and the Company Re: Cashline (4)
10.5		Assignment and Assumption Agreement between Northwest Investment Trust and the Company Re: Alliance West (4)
10.6		Franchise Purchase Agreement, dated June 30, 2001 (4)

(1) Filed with the Company's initial Filing on Form 10-SB on May 10, 2000.

(2) Filed with the Company's Form 10-SB/A No. 1 on August 28, 2000.

(3) Filed with the Company's Report on 8-K dated February 21, 2002.

(4) Filed with the Company's Annual Report on 10-KSB on April 16, 2001.


EXHIBIT NUMBER		DESCRIPTION OF DOCUMENT

31.1		Certification of Chief Executive Officer
31.2		Certification of Chief Financial Officer
32.1		Certification of Chief Executive Officer
32.2		Certification of Chief Financial Officer

WHY USA FINANCIAL GROUP INC 10-Q