Edgar Filing: COMMERCE DEVELOPMENT CORP LTD

U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-KSB

[X]	ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For Fiscal Year Ended: December 31, 2005

[ ]	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___ to ____

Commission File Number 333-104647

COMMERCE DEVELOPMENT CORPORATION, LTD.

(NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)

Maryland		33-0843696
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

10900 Wilshire Boulevard, Suite 500, Los Angeles, California 90024		90024
(Address of principal executive offices)		(Zip Code)

Issuer's telephone number: (310) 208-1182

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

Title of each class		Name of each exchange on which registered
Not applicable		None

Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. [ ]

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ]

Check if there is no disclosure of delinquent filings response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [ ]

Check whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [ X ]

The issuer's revenues for the fiscal year ended December 31, 2005: $36,000.

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of a specified date within the past 60 days: $9,831,352

Number of shares outstanding as of March 22, 2006: 98,285,596 shares.

Documents Incorporated By Reference: None

Transitional Small Business Disclosure Format: Yes [ ] No [ X ]

TABLE OF CONTENTS

	PART I	2
Item 1.	Description of Business	2
Item 2.	Description of Property	3
Item 3.	Legal Proceedings	3
Item 4.	Submission of Matters to a Vote of Security Holders	3

	PART II	4
Item 5.	Market for Common Equity and Related Stockholder Matters	4
Item 6.	Management's Discussion and Analysis or Plan of Operation	4
Item 7.	Financial Statements	F-1
Item 8.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	8
Item 8A.	Controls and Procedures	8
Item 8B.	Other Information	9

	PART III	9
Item 9.	Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of the Exchange Act	9
Item 10.	Executive Compensation	10
Item 11.	Security Ownership of Certain Beneficial Owners and Management	11
Item 12.	Certain Relationships and Related Transactions	12
Item 13.	Exhibits and Reports on Form 8-K	12
Item 14.	Principal Accountant Fees and Services	13

PART I

ITEM 1. DESCRIPTION OF BUSINESS

This Report contains forward-looking statements. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the Company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. Forward-looking statements usually contain the words "estimate," "anticipate," "believe," "expect," or similar expressions, and are subject to numerous known and unknown risks and uncertainties. In evaluating such statements, prospective investors should carefully review various risks and uncertainties identified in this Report, including the matters set forth in the Company's other SEC filings. These risks and uncertainties could cause the Company's actual results to differ materially from those indicated in the forward-looking statements. The Company undertakes no obligation to update or publicly announce revisions to any forward-looking statements to reflect future events or developments.

Strategic Business Planning

The purpose of Strategic Business Planning is to help businesses and associations improve their prospects for success by enabling them to better target the applications of their scarce resources: time, effort, and money; in other words, accomplishing more with the resources they have.

In general, Strategic Business Planning is a methodical process for: identifying the essential core description of the endeavor; identifying and documenting underlying assumptions about the elements of operating business environment that directly impact a business operation, but over which the business may have no substantive influence; selecting, prioritizing, and documenting the principal goals that a business or association wants to achieve; selecting, prioritizing, and documenting the strategies that a business expects to use in achieving each goal; and developing detailed integrated action plans that will be used both as a basis to allocate resources to business needs, and also to assess movement your business goals. Our activities will encompass management, financial, organizational, and developmental processes, with the idea of enabling our small business clients to maximize their growth and profitability.

We have created a four-phase process designed to generate small business growth. Under Phase One, we will meet with the management of the client and assess the needs and scope of the proposed engagement. Thereafter, we will: review financials and forecasts, and analyze business strategy, plans, and goals; appraise organizational needs; evaluate assets, intellectual property, and good will; and compile a matrix of company strengths and weaknesses and compare against the client's competition.

Under Phase Two, we will outline a plan of action with the client's senior management, and reach agreement on milestones and timeframe. Thereafter, we will: determine optimum vehicle(s) for growth; assemble team members for execution of plans; and deploy resources in the form of technology, consultants, and partners.

Under Phase Three, we will establish reporting and accountability procedures, and monitor progress weekly with written feedback. Thereafter, we will have bi-weekly meetings with senior management for detailed review and to adjust programs as needed.

Under Phase Four, we will provide measurement analysis for key aspects of the programs, create reporting structures for ongoing monitoring of success/impact, and generate detailed programs report for senior management review.

Our goal is to offer assistance to pre-initial public offering companies seeking to develop their businesses to the point where a realistic exit strategy of merger, acquisition or an initial public offering can be achieved.

Marketing

We will focus the marketing of our services to private small businesses with yearly revenues between $3,000,000 and $50,000,000. Through a series of seminars, we plan to develop a network within the financial industry from which we hope to derive the significant majority of our referrals. In addition to this ongoing networking strategy, we intend to create recognition by visiting underwriters, attorneys, accounting firms, and by providing presentations about our services. Furthermore, certain members of our management team will attend venture capital seminars to further market our services.

History

We were incorporated as a Maryland corporation on May 13, 1998, as a wholly owned subsidiary of The Majestic Companies, Ltd., a publicly-held company, with the name of Majestic Financial, Ltd. On March 31, 2002, The Majestic Companies, Ltd. sold 17,500,000 shares, or 87.5 percent, of our stock to Alexander & Wade, Inc. On April 29, 2002, we changed our name to Commerce Development Corporation, Ltd. In September 2002, 87.5 percent of our stock was acquired by Mercer Group, Inc. (“Mercer”), a California corporation specializing in business development.

ITEM 2. DESCRIPTION OF PROPERTY

We do not own or lease any property. We previously leased approximately 150 square feet of office space in San Diego, California for an annual rental of approximately $14,544. The lease was on an oral, month-to-month basis. In 2005, we terminated the lease, and are no longer leasing office space for the Company.

ITEM 3. LEGAL PROCEEDINGS

We are not a party to any pending material legal proceedings and are not aware of any threatened or contemplated proceeding by any governmental authority against our company.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Company did not submit any matters to a vote of security holders during this reporting period.

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

Our common shares are currently quoted on the OTC Bulletin Board under the symbol "CDPC.OB" There is no established active public trading market for our securities and a regular trading market may not develop, or if developed, may not be sustained. A shareholder in all likelihood, therefore, will not be able to resell his or her securities should he or she desire to do so when eligible for public resales. Furthermore, it is unlikely that a lending institution will accept our securities as pledged collateral for loans unless a regular trading market develops. We have no plans, proposals, arrangements, or understandings with any person with regard to the development of a trading market in any of our securities.

Options, Warrants, Convertible Securities

There are no options, warrants, or convertible securities outstanding.

Holders

As of March 21, 2006, we had 75 shareholders of record of our common stock.

Dividends

We have not declared any cash dividends on our common stock since our inception and do not anticipate paying such dividends in the foreseeable future. We plan to retain any future earnings for use in our business. Any decisions as to future payments of dividends will depend on our earnings and financial position and such other facts, as the Board of Directors deems relevant.

Securities Authorized for Issuance Under Equity Incentive Plans

None.

Recent Sales of Unregistered Securities

None.

ITEM 6. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Statements included in this management's discussion and analysis of financial condition and results of operations, and in future filings by the company with the securities and exchange commission, in the company's press releases and in oral statements made with the approval of an authorized executive officer which are not historical or current facts are "forward-looking statements" and are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. You are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The following important factors, among others, in some cases have affected and in the future could affect the company's actual results and could cause the company's actual financial performance to differ materially from that expressed in any forward-looking statement: (i) the extremely competitive conditions that currently exist in the market for companies similar to the company and (ii) lack or resources to maintain the company's good standing status and requisite filings with the securities and exchange commission. The foregoing list should not be construed as exhaustive and the company disclaims any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. The following discussion should be read in conjunction with our financial statements and their explanatory notes included as part of this prospectus.

Overview

We were incorporated as a Maryland corporation on May 13, 1998 as a wholly-owned subsidiary of The Majestic Companies, Ltd., a publicly-held company, with the name of Majestic Financial, Ltd.

On April 29, 2002, we changed our name to Commerce Development Corporation, Ltd. to reflect the change in the Company's planned operations.

We are currently focusing on developing a strategic business planning business. The purpose of strategic business planning is to help businesses and associations improve their prospects for success by enabling them to better target the applications of their scarce resources: time, effort, and money; in other words, accomplishing more with the resources they have.

Plan of Operations

We are a development stage company. As shown in the financial statements during the years ended December 31, 2005 and 2004, the Company incurred net losses of $211 and $21,362, respectively. For the period from inception through December 31, 2005, the Company has accumulated losses of $560,492.

As of December 31, 2005, we had cash on hand of approximately $1,604. This amount will not be sufficient to satisfy our operating requirements through the next 12 months. Further, to satisfy our operating requirements through December 31, 2005, we estimate that we will need an additional $680,000. If we do not secure this additional debt or equity financing, we will be unable to develop our business plan. We currently have no clients and have no commitment for additional debt or equity financing. We have no plan in place that will eliminate this risk. If we do not raise this entire amount, we may cease our attempts to implement our business plan.

We intend to raise additional funds from an offering of our stock in the future. We have not taken any steps to effect this offering. The offering may not occur, or if it occurs, may not generate the required funding. We may also consider securing debt financing. We may not generate operating cash flow or raise other equity or debt financing sufficient to fund this amount. If we don't raise or generate these funds, the implementation of our short-term business plan will be delayed or eliminated.

Our ability to continue as a going concern is dependent on our ability to raise funds to implement our planned development; however we may not be able to raise sufficient funds to do so. Our independent auditors have indicated that there is substantial doubt about our ability to continue as a going concern over the next twelve months. Our poor financial condition could inhibit our ability to achieve our business plan. Because we are currently operating at a substantial loss with no operating history and very limited revenues, an investor cannot determine if we will ever become profitable.

The effect of inflation on our revenue and operating results was not significant. Our operations are located primarily in North America and there are no seasonal aspects that would have a material effect on the Company's financial condition or results of operations.

Our independent certified public accountants have stated in their report dated March 28, 2006 included herein, that we have had difficulty in generating sufficient cash flow to meet its obligations, and that we are dependent upon management's ability to develop profitable operations. These factors among others may raise substantial doubt about our ability to continue as a going concern.

Subsequent Events

On January 9, 2006, the Registrant entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with RP Capital, LLC, a California limited liability company (“RP Capital”), and six accredited investors (collectively, the “Buyers”) pursuant to which the Registrant issued 72,001,735 shares of the Company’s common stock (the “Common Stock”) in consideration for $82,833 in cash.

By way of the Securities Purchase Agreement, RP Capital acquired a controlling interest in the Registrant through the acquisition of 9,400,350 shares (the “Shares”) of the Registrant’s Common Stock directly from Andrew E. Mercer, the Registrant’s former President, Chief Executive Officer and Director, and his related entities, shareholders Andrew E. Mercer & Patricia A. Kattus-Mercer, Trustee, and The Mercer Group, Inc., and 41,141,792 shares of Common Stock pursuant to the Securities Purchase Agreement which represented the acquisition of an aggregate of 50,542,142 shares of Common Stock or approximately 51.4% of the total outstanding Common Stock.

Recent Accounting Pronouncements

In January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities.” Interpretation 46 changes the criteria by which one company includes another entity in its consolidated financial statements. Previously, the criteria were based on control through voting interest. Interpretation 46 requires a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity's activities or entitled to receive a majority of the entity's residual returns or both. A company that consolidates a variable interest entity is called the primary beneficiary of that entity. The consolidation requirements of Interpretation 46 apply immediately to variable interest entities created after January 31, 2003. The consolidation requirements apply to older entities in the first fiscal year or interim period beginning after June 15, 2003. Certain of the disclosure requirements apply in all financial statements issued after January 31, 2003, regardless of when the variable interest entity was established. The adoption of FASB interpretation no. 46 will not have a material impact on the Company's results of operations or financial position.

In April 2003, the FASB issued Statement of Financial Accounting Standards (SFAS) No. 149, AMENDMENT OF STATEMENT 133 ON DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES. SFAS 149 amends SFAS No. 133 to provide clarification on the financial accounting and reporting of derivative instruments and hedging activities and requires that contracts with similar characteristics be accounted for on a comparable basis. The provisions of SFAS 149 are effective for contracts entered into or modified after June 30, 2003, and for hedging relationships designated after June 30, 2003. The adoption of SFAS 149 will not have a material impact on the Company's results of operations or financial position.

In May 2003, the FASB issued SFAS No. 150, ACCOUNTING FOR CERTAIN FINANCIAL INSTRUMENTS WITH CHARACTERISTICS OF BOTH LIABILITIES AND EQUITY. SFAS 150 establishes standards on the classification and measurement of certain financial instruments with characteristics of both liabilities and equity. The provisions of SFAS 150 are effective for financial instruments entered into or modified after May 31, 2003 and to all other instruments that exist as of the beginning of the first interim financial reporting period beginning after June 15, 2003. The adoption of SFAS 150 will not have a material impact on the Company's results of operations or financial position.

In December 2003, the FASB issued SFAS No. 132 (revised), EMPLOYERS' DISCLOSURES ABOUT PENSIONS AND OTHER POSTRETIREMENT BENEFITS - AN AMENDMENT OF FASB STATEMENTS NO. 87, 88, AND 106. This statement retains the disclosure requirements contained in FASB statement no. 132, Employers' Disclosures about Pensions and Other Postretirement Benefits, which it replaces. It requires additional disclosures to those in the original statement 132 about the assets, obligations, cash flows, and net periodic benefit cost of defined benefit pension plans and other defined benefit postretirement plans. The required information should be provided separately for pension plans and for other postretirement benefit plans. The revision applies for the first fiscal or annual interim period ending after December 15, 2003 for domestic pension plans and June 15, 2004 for foreign pension plans and requires certain new disclosures related to such plans. The adoption of this statement will not have a material impact on the Company's results of operations or financial positions.

Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors.

ITEM 7. FINANCIAL STATEMENTS

Index to Financial Statements

	Page No.

Independent Auditor’s Report	F-2

Condensed Comparative Consolidated Balance Sheet at December 31, 2005 and 2004	F-3

Condensed Consolidated Statements of Losses	F-4

Consolidated Statements of Deficiency in Stockholders' Equity For The Period May 13, 1998 (Date of Inception) Through December 31, 2005	F-5

Condensed Consolidated Statement of Cash Flows	F-6

Notes to Consolidated Financial Statements	F-7

INDEPENDENT AUDITOR’S REPORT

Lawrence Scharfman & Co., CPA P.C.

Certified Public Accountants

18 E. SUNRISE HIGHWAY, #203	9608 HONEY BELL CIRCLE
FREEPORT, NY 11520	BOYNTON BEACH, FL 33437
TELEPHONE: (516) 771-5900	TELEPHONE: (561) 733-0296
FACSIMILE: (516) 771-2598	FACSIMILE: (561) 740-0613

Commerce Development Corp., LTD

8316 Claremont Mesa Blvd. #106

San Diego, CA 92111

The Board of Directors and Stockholders

We have audited the accompanying balance sheets of Commerce Development Corp., LTD as of December 31, 2005 and 2004 and the related statements of operations, stockholders equity (deficit) & cash flows for the twelve months ended December 31, 2005 and 2004 and for the period May 31, 1998 (Date of Inception) to December 31, 2005. These statements are the responsibility of Company’s Management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audit in accordance with 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 misstatements. An audit include 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 audit provides a reasonable basis for our opinion.

The company has had difficulty in generating sufficient cash flow to meet its obligations, and is dependent on management's ability to develop profitable operations. These factors, among others may raise substantial doubt about their ability to continue as a going concern.

In our opinion, the financial statements referred to above present fairly, in all material respects the financial position of Commerce Development Corp. LTD. As of December 31, 2005 and 2004 & the related statements of operations, stockholders equity (deficit) and cash flows for the twelve months ended December 31, 2005 and 2004 and for the period May 31, 1998 (Date of Inception) to December 31, 2005 in conformity with generally accepted accounting principles.

/S/ Lawrence Scharfman

Lawrence Scharfman CPA

Boynton Beach, FL

March 28, 2006

F-2

COMMERCE DEVELOPMENT CORPORATION, LTD.

(A DEVELOPMENT STAGE COMPANY)

CONDENSED COMPARATIVE CONSOLIDATED BALANCE SHEET

		December 31, 2005			December 31, 2004

ASSETS
Current Assets:
Cash and Cash Equivalents	$	1,604		$	867
Total Current Assets		1,604			867

Property, Plant and Equipment		6,550			6,550
Less: Accumulated Depreciation		3,431			2,495
		3,119			4,055

	$	4,723		$	4,922

LIABILITIES AND (DEFICIENCY IN) STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable and Accrued Liabilities	$	36,321		$	36,321
Shareholder Advances		26,512			26,500
Total Current Liabilities		62,833			62,821

Commitments and Contingencies		-			-

Common Stock, Par Value $0.001: 300,000,000 shares authorized; 21,365,500 shares issued and outstanding at December 31, 2005 and December 31, 2004, respectively		21,366			21,366
Additional-Paid-In Capital		481,017			481,017
Common Stock Subscription		-			-
Accumulated Deficit		(560,492	)		(560,281	)
Total (Deficiency in) Stockholders' Equity		(58,110	)		(57,899	)

	$	4,723		$	4,922

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

F-3

COMMERCE DEVELOPMENT CORPORATION, LTD.

(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED STATEMENTS OF LOSSES

		For the Twelve Months Ended December 31,		For the Twelve Months Ended December 31,			For the Period May 13, 1998 (Date of Inception) to December 31,
		2005		2004			2005
Revenue:
Consulting Fees		36,000		-			36,000

Cost of Sales		16,248		-			16,248

Gross Profit		19,752		-			19,752

Operating Expenses:
General and Administrative Expenses		19,027		20,426			626,848
Depreciation and Amortization		936		936			27,428
Total Operating Expenses		19,963		21,362			654,276

Other Income (Expenses)	$	-		-			74,032

Income Tax Expense		-		-			-

Net Income/( Loss)	$	(211	)	(21,362	)		(560,492	)


Income/(Loss) Per Common Share	$	(0.00	)	(0.00	)	$	(0.05	)
(Basic and Assuming Dilution)

Weighted Average Common
Shares Outstanding		21,365,500		21,311,448			10,412,964

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

F-4

COMMERCE DEVELOPMENT CORPORATION, LTD.

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF DEFICIENCY IN STOCKHOLDERS' EQUITY

FOR THE PERIOD MAY 13, 1998 (DATE OF INCEPTION) THROUGH DECEMBER 31, 2005

	Common Shares		Stock Amount		Additional Paid-In Capital		Stock Subscription Payable			Deficit Accumulated During Development Stage			Total
Shares issued at date of inception (May 13,1998) to parent company	2,000,000	$	2,000	$	-	$	-		$	-		$	2,000
Net income (loss)	-		-		-		-			(35,202	)		(35,202	)
Net transfer with Majestc	-		-		35,432		-			-			35,432
Balance at December 31, 1998	2,000,000	$	2,000	$	35,432	$	-		$	(35,202	)	$	2,230
Net income (loss)	-		-		-		-			(70,727	)		(70,727	)
Net transfer with Majestc	-		-		33,266		-			-			33,266
Balance at December 31, 1999	2,000,000	$	2,000	$	68,698	$	-		$	(105,929	)	$	(35,231	)
Net income (loss)	-		-		-		-			(178,138	)		(178,138	)
Net transfer with Majestc	-		-		56,056		-			-			56,056
Balance at December 31, 2000	2,000,000	$	2,000	$	124,754	$	-		$	(284,067	)	$	(157,313	)
Net income (loss)	-		-		-		-			2,711			2,711
Net transfer with Majestc	-		-		37,287		-			-			37,287
Balance at December 31, 2001	2,000,000	$	2,000	$	162,041	$	-		$	(281,356	)	$	(117,315	)
Shares issued to consultants in May 2002 in exchange for services rendered at $0.06 per share	715,000		715		42,185		-			-			42,900
Shares issued to employees and consultants in September 2002 in exchange for services rendered at $0.06 per share	17,300,000		17,300		86,500		-			-			103,800
Shares issued in September 2002 in connection with acquisition of USM Financial Solutions, Inc., valued at $0.006 per share	800,000		800		4,000		-			-			4,800
Common stock subscription	-		-		-		87,250			-			87,250
Net income (loss)	-		-		-		-			(126,043	)		(126,043	)
Net transfer with Majestc	-		-		6,591		-			-			6,591
Balance at December 31, 2002	20,815,000	$	20,815	$	301,317	$	87,250		$	(407,399	)	$	1,983
Shares issued to sophisticated investors in February 2003 for cash at $0.50 per share	176,000		176		87,824		-			-			88,000
Common stock issued in February 2003 at $0.50 per share for common stock subscription proceeds received in December 2002	174,500		175		87,075		(87,250	)		-			-
Net Income (loss)	-		-		-		-			(131,520	)		(131,520	)
Balance at December 31, 2003	21,165,500	$	21,166	$	476,216	$	-		$	(538,919	)	$	(41,537	)
Common Stock issued for services rendered at $0.025 SH in Apr 2004	200,000	$	200	$	4,801	$	-		$	-		$	5,001
Net Income (loss)	-		-		-		-			(21,362	)		(21,362	)
Balance at December 31, 2004	21,365,500		21,366		481,017		-			(560,281	)		(57,899	)
Net Income (loss)	-		-		-		-			(211	)		(211	)
Balance at December 31, 2005	21,365,500		21,366		481,017		-			(560,492	)		(58,110	)

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

F-5

COMMERCE DEVELOPMENT CORPORATION, LTD.

(A DEVELOPMENT STAGE COMPANY)

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

		For The Twelve Months Ended December 31,
		2005			2004			For the Period May 13, 1998 (Date of Inception) through December 31, 2005
Cash flows from operating activities:
Net income (loss) for the period	$	(211	)	$	(21,362	)	$	(560,492	)
Adjustments to reconcile net loss
to net cash provided by (used in) operating activities:
Common stock issued in exchange for services rendered		-			5,000			151,700
Adjustment for common stock issued to Majestic, in connection with stock splits in March and August 2002								2,000
Adjustments for expenses previously paid by Majestic on the Company’s behalf		-			-			168,632
Common stock issued in connection with acquisition of USM Financial		-			-			4,800
Extingushment of debt to Majestic		-			-			(107,419	)
Depreciation and amortization		936			936			27,427
Loss from disposal of assets		-			-			212,089
Increase (decrease) in:
Cash disbursed in excess of available fund		-			-			-
Accounts payable and accrued liabilities		-			3,323			36,319
Net cash provided by (used in) operating activities		725			(12,103	)		(64,943	)

Cash flows from investing activities:
Acquisition of property, plant, and equipment		-			-			(242,634	)

Cash flows from financing activities:
Proceeds from sale of common stock and stcok subscription, net of costs		-			-			175,250
Proceeds from common stock subscription		-						-
Proceeds from (repayment to) shareholders loans		12			11,000			26,512
Due to related parties, net		-			-			107,419
Net cash provided by financing activities		12			11,000			309,181

Net increase (decrease) in cash and equivalents		737			(1,103	)		1,604
Cash and cash equivalents at beginning of period		867			1,970			-
Cash and cash equivalents at end of period	$	1,604		$	867		$	1,604

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for taxes	$	-		$	-		$	-
Cash paid during the period for interest		-			-			-
Adjustment for common stock issued to Majestic, in connection with stock splits in March and August 2002		-			-			2,000
Common stock issued for services rendered		-			5,000			151,700
Acquisition:
Assets acquired, net		-			-			-
Acquisition costs		-			-			4,800
Liabilities assumed, net		-			-			-
Common stock issued		-			-			(4,800	)
Net cash paid for acquisition	$	-		$	-		$	-

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

F-6

COMMERCE DEVELOPMENT CORPORATION, LTD.

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2005 and 2004

NOTE A — SUMMARY OF ACCOUNTING POLICIES

A summary of the significant accounting policies applied in the preparation of the accompanying consolidated financial statements follows.

Business and Basis of Presentation

Commerce Development Corporation, Ltd. (the “Company”), formerly Majestic Financial, Ltd., was incorporated under the laws of the state of Maryland in May 1998. From inception to March 31, 2002, the Company was a wholly-owned subsidiary of The Majestic Companies, Ltd. (“Majestic”, the “Parent”). In March 2002, Majestic’s Board of Directors approved a plan to spin-off the Company to an entity controlled by Majestic’s former Chief Executive Officer and to Majestic’s stockholders (see Note B). The financial statements of the Company as of March 2002 are presented on a carved-out basis, and derived from the historical financial statements of Majestic, and are not indicative of the financial position, results of operations or net cash flows that would have existed had the Company been a separate stand-alone entity during the periods presented or of future results. Summarized results of the allocation of expenses are further described in Note B.

In the past the Company was engaged in the limited origination and servicing of new modular building leases. This activity is conducted primarily in the state of California. All of the leases which the Company entered into were accounted for as operating leases. The Company ceased entering into new leases in 2000 and the accompanying consolidated financial statements reflect as other income, the revenues recognized from the final leasing transactions.

On September 24, 2002, the Company acquired USM Financial Solutions, Inc. (“USM Financial”), a wholly owned subsidiary of U.S. Microbics, Inc., through a Stock Exchange Agreement (“Agreement”). Pursuant to the Agreement, USM Financial became a wholly-owned subsidiary of the Company (Note C). The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, USM Financial Solutions, Inc. All significant intercompany balances and transactions have been eliminated in consolidation.

The Company is a development stage company, as defined by Statement of Financial Accounting Standards No. 7 (“SFAS 7”) and is in the business of providing business management and capital acquisition solutions. To date, the Company has generated no significant operating revenues, and has incurred expenses and has sustained losses. Consequently, its operations are subject to all risks inherent in the establishment of a new business enterprise. For the period from inception through December 31, 2005, the Company has accumulated losses of $560,492.

Revenue Recognition

The Company followed a policy of recognizing revenue from leasing modular buildings for leases entered into before year 2000. The Company will follow a policy of recognizing revenue in the period the services are provided or when products are delivered to customers.

Advertising

The Company follows the policy of charging the costs of advertising to expenses as incurred. The Company incurred no advertising costs for the fiscal years ended December 31, 2005 and 2004, respectively.

F-7

COMMERCE DEVELOPMENT CORPORATION, LTD.

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2005 and 2004

NOTE A — SUMMARY OF ACCOUNTING POLICIES (continued)

Cash Equivalents

For purposes of the Statements of Cash Flows, the Company considers all highly liquid debt instruments purchased with a maturity date of three months or less to be cash equivalents.

Property and Equipment

For financial statement purposes, property and equipment are depreciated using the straight-line method over their estimated useful lives (seven years for furniture, fixtures and equipment). The straight-line method of depreciation is also used for tax purposes.

Income Taxes

Income taxes are provided based on the liability method for financial reporting purposes in accordance with the provisions of Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes.” Under this method deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be removed or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.

Earnings Per Share

The Company has adopted Statement of Financial Accounting Standards No. 128, “Earnings Per Share,” specifying the computation, presentation and disclosure requirements of earnings per share information. Basic earnings per share has been calculated based upon the weighted average number of common shares outstanding. Stock options and warrants have been excluded as common stock equivalents in the diluted earnings per share because they are either antidilutive, or their effect is not material.

Impairment of Long-Lived Assets

The Company has adopted Statement of Financial Accounting Standards No. 144 (“SFAS 144”). The Statement requires that long-lived assets and certain identifiable intangibles held and used by the Company be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses, or a forecasted inability to achieve break-even operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undercounted cash flows. Should an impairment in value be indicated, the carrying value of intangible assets will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultimate disposition of the asset. SFAS No. 144 also requires assets to be disposed of be reported at the lower of the carrying amount or the fair value less costs to sell.

Use of Estimates

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

F-8

COMMERCE DEVELOPMENT CORPORATION, LTD.

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2005 and 2004

NOTE A — SUMMARY OF ACCOUNTING POLICIES (continued)

Research and Development

The Company accounts for research and development costs in accordance with the Financial Accounting Standards Board’s Statement of Financial Accounting Standards No. 2 (“SFAS 2”), “Accounting for Research and Development Costs. Under SFAS 2, all research and development costs must be charged to expense as incurred. Accordingly, internal research and development costs are expensed as incurred. Third-party research and developments costs are expensed when the contracted work has been performed or as milestone results have been achieved. Company-sponsored research and development costs related to both present and future products are expensed in the period incurred. The Company incurred no research and product development costs for the years ended December 31, 2005 and 2004.

Concentrations of Credit Risk

Financial instruments and related items which potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and trade receivables. The Company places its cash and temporary cash investments with credit quality institutions. At times, such investments may be in excess of the FDIC insurance limit. The Company’s customers are concentrated primarily in the state of California and it periodically reviews its trade receivables in determining its allowance for doubtful accounts.

Stock Based Compensation

In December 2002, the FASB issued SFAS No. 148, “Accounting for Stock-Based Compensation-Transition and Disclosure-an amendment of SFAS 123.” This statement amends SFAS No. 123, “Accounting for Stock-Based Compensation,” to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, this statement amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The Company has chosen to continue to account for stock-based compensation using the intrinsic value method prescribed in APB Opinion No. 25 and related interpretations. Accordingly, compensation expense for stock options is measured as the excess, if any, of the fair market value of the Company’s stock at the date of the grant over the exercise price of the related option. The Company has adopted the annual disclosure provisions of SFAS No. 148 in its financial reports for the fiscal years ended December 31, 2005 and 2004 and will adopt the interim disclosure provisions for its financial reports for the subsequent periods. The Company does not have any awards of stock-based employee compensation issued and outstanding at December 31, 2005.

Liquidity

As shown in the accompanying financial statements, the Company incurred a net loss of ($211) for the year ended December 31, 2005, and $21,362 loss for the year ended December 31, 2004 respectively. For the period from inception through December 31, 2005, the Company has accumulated losses of $560,492. As of December 31, 2005, the Company’s current liabilities exceeded its current assets by $61,229. Consequently, its operations are subject to all risks inherent in the establishment of a new business enterprise.

F-9

COMMERCE DEVELOPMENT CORPORATION, LTD.

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2005 and 2004

NOTE A — SUMMARY OF ACCOUNTING POLICIES (continued)

Comprehensive Income

Statement of Financial Accounting Standards No. 130 (“SFAS 130”), “Reporting Comprehensive Income,” establishes standards for reporting and displaying of comprehensive income, its components and accumulated balances. Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, SFAS 130 requires that all items that are required to be recognized under current accounting standards as components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. The Company does not have any items of comprehensive income in any of the periods presented.

Segment Information

Statement of Financial Accounting Standards No. 131, “Disclosures about Segments of an Enterprise and Related Information” (“SFAS 131”) establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information for those segments to be presented in interim financial reports issued to stockholders. SFAS 131 also establishes standards for related disclosures about products and services and geographic areas. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions how to allocate resources and assess performance. The information disclosed herein materially represents all of the financial information related to the Company’s principal operating segment.

Reclassifications

Certain reclassifications have been made in prior year’s financial statements to conform to classifications used in the current year.

New Accounting Pronouncements

In January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities.” Interpretation 46 changes the criteria by which one company includes another entity in its consolidated financial statements. Previously, the criteria were based on control through voting interest. Interpretation 46 requires a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity’s activities or entitled to receive a majority of the entity’s residual returns or both. A company that consolidates a variable interest entity is called the primary beneficiary of that entity. The consolidation requirements of Interpretation 46 apply immediately to variable interest entities created after January 31, 2003. The consolidation requirements apply to older entities in the first fiscal year or interim period beginning after June 15, 2003. Certain of the disclosure requirements apply in all financial statements issued after January 31, 2003, regardless of when the variable interest entity was established. The adoption of FASB interpretation no. 46 will not have a material impact on the Company’s results of operations or financial position.

F-10

COMMERCE DEVELOPMENT CORPORATION, LTD.

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2005 and 2004

NOTE A — SUMMARY OF ACCOUNTING POLICIES (continued)

New Accounting Pronouncements (Continued)

In December 2003, the FASB issued SFAS No. 132 (revised), EMPLOYERS’ DISCLOSURES ABOUT PENSIONS AND OTHER POSTRETIREMENT BENEFITS — AN AMENDMENT OF FASB STATEMENTS NO. 87, 88, AND 106. This statement retains the disclosure requirements contained in FASB statement no. 132, Employers’ Disclosures about Pensions and Other Postretirement Benefits, which it replaces. It requires additional disclosures to those in the original statement 132 about the assets, obligations, cash flows, and net periodic benefit cost of defined benefit pension plans and other defined benefit postretirement plans. The required information should be provided separately for pension plans and for other postretirement benefit plans. The revision applies for the first fiscal or annual interim period ending after December 15, 2003 for domestic pension plans and June 15, 2004 for foreign pension plans and requires certain new disclosures related to such plans. The adoption of this statement will not have a material impact on the Company’s results of operations or financial positions.

NOTE B - SPIN-OFF TRANSACTIONS

On March 31, 2002, the Company’s parent, The Majestic Companies, Ltd. (the “Majestic” or “Parent”), entered into a Stock Purchase Agreement (“Agreement”) to spin-off the Company to Alexander & Wade, Inc. (the “A&W”), an entity controlled by Majestic’s former Chief Executive Officer and to Majestic’s stockholders.

Pursuant to the Agreement, the Company authorized a stock split of 20,000,000-for-1, which increased the solely one share outstanding to 20,000,000 shares. A&W agreed to purchase 17,500,000 shares of the Company’s common stock, and the remaining 2,500,000 shares held by Majestic would be distributed as a dividend to the shareholders of record of Majestic as of April 30, 2002. After the closing of the Agreement, Majestic received $10,000 from A&W, and other good and valuable consideration. A&W assumed total liabilities for any and all outstanding obligations of the Company in existence at the time of closing, and also assumed $110,490 of Majestic’s debt owed to its former Chief Executive Officer.

F-11

COMMERCE DEVELOPMENT CORPORATION, LTD.

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2005 and 2004

NOTE B - SPIN-OFF TRANSACTIONS (Continued)

Certain information in the Company’s financial statements relating to the results of operations and financial condition was derived from the historical financial statements of Majestic, which have been prepared in accordance with accounting principles generally accepted in the United States of America. Various allocation methodologies were employed to allocate the expenses incurred by Majestic on the Company’s behalf. Allocations of these expenses include advertising, officer salaries, accounting and legal fees, rent, and other general office expenses. Management believes that these allocation methodologies are reasonable. The expenses allocated are not necessarily indicative of the expenses that would have been incurred if the Company had been a separate, independent public entity and had managed these functions. The Company may incur additional general administrative expenses, and other costs as a result of operating independently of Majestic.

The accompanying financial statements include expenses incurred by Majestic on behalf of the Company, summarized results of the allocation expenses are as follows:

		2005		2004		2002		For the Period May 13, 1998 (Date of Inception) through December 31, 2005
Net transfer from Majestic	$	0.00	$	0.00	$	162,041	$	0
beginning of the period
Net transactions with Majestic:
Advertising				--		511
Accounting and legal fees				--		2,375
Rent				--		1,500
Officer salaries				--		717
Office expenses				--		1,488
--						6,591
Net transfer from Majestic -
end of the period	$	0.00	$	0.00	$	168,632	$	0

NOTE C - BUSINESS COMBINATION

On September 24, 2002, the Company acquired USM Financial Solutions, Inc. (“USM Financial”), a wholly owned subsidiary of U.S. Microbics, Inc. (“US Microbics”), through a Stock Exchange Agreement (“Agreement”). Pursuant to the Agreement, the Company issued to US Microbics and US Microbics’s majority-owned subsidiary, USM Capital Group, Inc. (“USM Capital”), a total of 800,000 shares of common stock of the Company.

USM Financial has no assets and liabilities and has no business activities as of December 31, 2002. The excess of the aggregate purchase price over the fair market value of net assets acquired was recorded as acquisition costs and expensed in the period incurred. The acquisition is being accounted for as a purchase in accordance with APB 16 and, accordingly, the operating results of the acquired company have been included in the Company’s financial statements since the date of acquisition.

F-12

COMMERCE DEVELOPMENT CORPORATION, LTD.

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2005 and 2004

NOTE C - BUSINESS COMBINATION (Continued)

The following summarizes the acquisition of USM Financial:

Issuance of 800,000 shares of common stock	$	(4,800	)
Assets acquired		--
Liabilities assumed		--
Acquisition costs	$	4,800

NOTE D — CAPITAL STOCK

The Company was authorized to issue 10,000,000 shares of common stock with a par value of $.01 per share. In March 2002, the Company’s Board of Directors approved an increase in the Company’s authorized common stock to 300,000,000 shares and changed the par value from $.01 to $.001 per share.

In May 1998, the Company issued one share of common stock at par to its parent company, The Majestic Company, Ltd. (“Majestic”). In March 2002, pursuant to a Stock Purchase Agreement (“Agreement”) to spin-off the Company (see Note B), the Company authorized a stock split of 20,000,000-for-1, which increased the solely one share outstanding to 20,000,000 shares. A&W purchased 17,500,000 shares of the Company’s common stock from Majestic, and the remaining 2,500,000 shares held by the Majestic would be distributed as a dividend to the shareholders of record of Majestic as of April 30, 2002.

On August 31, 2002, the Company effected a one one-for-ten reverse stock split of its authorized and outstanding shares of common stock. All references in the financial statements and notes to financial statements, numbers of shares and share amounts have been retroactively restated to reflect the reverse split. The Company has 21,165,500 and 20,815,000 shares of common stock issued and outstanding as of December 31, 2003 and 2002, respectively.

On September 24, 2002, the Company issued a total of 800,000 shares of common stock to US Microbics, Inc. and USM Capital Group, Inc. pursuant to a Stock Exchange Agreement (Note C). The shares were valued at $0.006 per share, which approximated the fair value of the Company’s common stock during the period.

During the year ended December 31, 2002, the Company issued an aggregate of 18,015,000 shares of common stock to consultants and employees for $146,700 of services rendered. The shares issued to the consultants and employees were based upon the value of the services received, which did not differ materially from the value of the stock issued.

In December 2002, the Company received $87,250 proceeds of common stock subscription from sophisticated investors at $0.50 per share. In February 2003, the Company issued an aggregate of 174,500 shares of common stock to the sophisticated investors for common stock previously subscribed.

In February 2003, the Company issued additional 176,000 shares of common stock at $0.50 per share to sophisticated investors and received proceeds of $88,000, net of costs and fees.

In April 2004, 200,000 common shares were issued for services rendered which were valued at $5,001.

F-13

COMMERCE DEVELOPMENT CORPORATION, LTD.

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2005 and 2004

NOTE E — RELATED PARTY TRANSACTIONS

During the period May 13, 1998 through March 31, 2002 (the “spin-off date), Majestic advanced funds to the Company for working capital purposes. The amount due to Majestic was $107,419 at March 31, 2002. No formal repayment terms or arrangements existed. In June 2002, the Company was legally released from its obligation to Majestic. The Company recognized $107,419 of other income in connection with the extinguishment of the debt. Corporate general and administrative expenses incurred by Majestic on behalf of the Company as of March 31, 2002 (the “spin-off”) are summarized in Note B.

Significant shareholders of the Company have advanced funds to the Company for working capital purposes. The amount of the advances at December 31, 2005 and 2004 was $26,512 and $26,500, respectively. No formal repayment terms or arrangements exist.

NOTE F — INCOME TAXES

The Company has adopted Financial Accounting Standard No. 109 which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statement or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Temporary differences between taxable income reported for financial reporting purposes and income tax purposes are insignificant.

As of December 31, 2001, the Company’s results from operations were included in the consolidated income tax returns of Majestic and as a result, the Company does not have a material net operating loss carryforward for federal income tax purposes. The Company’s aggregate net operating loss during 2005 was approximately ($211) which expires through 2023, subject to limitations of Section 382 of the Internal Revenue Code, as amended. The deferred tax asset related to the carryforward is approximately $16,411. Due to significant changes in the Company’s ownership, the Company’s future use of its existing net operating losses may be limited. Accordingly, the Company has provided a valuation reserve against the full amount of the net operating loss benefit.

Components of deferred tax assets as of December 31, 2005 are as follows:

Non Current:

Net operating loss carryforward	$	(16,411	)
Valuation allowance		(16,411	)
Net deferred tax asset	$	--

NOTE G — LOSSES PER COMMON SHARE

The following table presents the computation of basic and diluted earning (loss) per share:

		2005			2004			For the period from May 13, 1998 (date of inception) through Dec. 31, 2005
Net income (loss) available for common shareholders	$	(211	)	$	(21,362	)	$	(560,492	)
Basic and fully diluted loss per share	$	(0.00	)	$	(0.00	)	$	(0.05	)
Weighted average common shares outstanding		21,365,500			21,311,448			10,412,964

F-14

COMMERCE DEVELOPMENT CORPORATION, LTD.

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2005 and 2004

NOTE H — COMMITMENTS AND CONTINGENCIES

Lease Agreement

The Company leases office space under operating leases in San Diego, California for its corporate use. Commitments for minimum rentals under non-cancelable leases at December 31, 2003 are monthly payments of $812 through June 30, 2004. Rent expense charged to operations was $9,744 for the year ended December 31, 2005.

Litigation

The Company is subject to legal proceedings and claims, which arise in the ordinary course of its business. Although occasional adverse decisions or settlements may occur, the Company believes that the final disposition of such matters should not have a material adverse effect on its financial position, results of operations or liquidity.

NOTE I — GOING CONCERN MATTERS

The accompanying statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the financial statements during the years ended December 31, 2005 and 2004, the Company incurred net losses of ($211) and ($21,362), respectively. For the period from inception through December 31, 2005, the Company has accumulated losses of $560,492. These factors among others may indicate that the Company will be unable to continue as a going concern for a reasonable period of time.

The Company’s existence is dependent upon management’s ability to develop profitable operations and resolve its liquidity problems. Management anticipates the Company will attain profitable status and improve its liquidity through the continued developing, marketing and selling of its products and additional equity investment in the Company. The accompanying financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern.

In order to improve the Company’s liquidity, the Company is actively pursing additional equity financing through discussions with investment bankers and private investors. There can be no assurance the Company will be successful in its effort to secure additional equity financing.

If operations and cash flows continue to improve through these efforts, management believes that the Company can continue to operate. However, no assurance can be given that management’s actions will result in profitable operations or the resolution of its liquidity problems.

SUBSEQUENT EVENTS

F-15

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

On April 4, 2005 the Registrant notified its prior independent auditors, Russell Bedford Stefanou Mirchandani LLP, Certified Public Accountants (“RBSM”) that their engagement was being terminated and that Lawrence Scharfman CPA, P.A., Boynton Beach, FL had been retained as the new independent auditors. RBSM had served as the independent auditors of the Registrant since prior to December 31, 2003.

RBSM's reports on the on the Registrant's financial statements as of and for the years ended, December 31, 2003 and 2002, and the period May 13, 1998 (date of inception) though December 31, 2003 did not contain an adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles; however, the audit reports for the years ended December 31, 2003 and 2002, and the period May 13, 1998 (date of inception) though December 31, 2003 contained an explanatory paragraph regarding the substantial doubt about the Company's ability to continue as a going concern. The decision to change its certifying accountant was approved by the Company's Board of Directors.

During the years ended December 31, 2003 and 2002 and the period May 13, 1998 (date of inception) through December 31, 2003, and the subsequent interim period through April 4, 2005 the Company has not had any disagreements with RBSM on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure RBSM did not advise the Registrant with regard to any of the following: that internal controls necessary to develop reliable financial statements did not exist except as noted below; or that the scope of the audit should be expanded significantly, or information has come to the accountant's attention that the accountant has concluded will, or if further investigated might, materially impact the fairness or reliability of a previously issued audit report or the underlying financial statements, or the financial statements issued or to be issued covering the fiscal periods subsequent to the date of the most recent audited financial statements, and the issue was not resolved to the accountant's satisfaction prior to its resignation or dismissal except as noted below.

RBSM furnished the Registrant with a letter addressed to the United States Securities and Exchange Commission stating that it agrees with the above statements.

ITEM 8A. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures. Regulations under the Securities Exchange Act of 1934 require public companies to maintain "disclosure controls and procedures," which are defined to mean a company's controls and other procedures that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms. Our Chief Executive Officer ("CEO"), President, and Chief Financial Officer ("CFO") carried out an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on those evaluations, as of the Evaluation Date, our CEO, President, and CFO believe:

(i) that our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports we file under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and that such information is accumulated and communicated to our management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure; and

(ii) that our disclosure controls and procedures are effective.

(b) Changes in Internal Controls. There were no significant changes in our internal controls or, to our knowledge, in other factors that could significantly affect our internal controls subsequent to the evaluation date.

ITEM 8B. OTHER INFORMATION

The Company had no information that it was required to, and did not, disclose in a report on Form 8-K during the fourth quarter of the year covered by this Form 10-KSB.

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

The Board of Directors elects our executive officers annually. A majority vote of the directors who are in office is required to fill vacancies. Each director shall be elected for the term of one year, and until his successor is elected and qualified, or until his earlier resignation, death, or removal. Our Bylaws provide that the Board of Directors shall be composed of not less than the minimum number required by Section 2-402 of the Maryland General Corporation Law, which is one, but not more than fifteen members. Our directors and executive officers as of March 21, 2006 are as follows:

Name	Age	Position
Silas Phillips	34	Chairman, President, Chief Executive Officer, Acting Chief Financial Officer, and Secretary

Silas Phillips. Mr. Phillips, age 34, has been the Registrant’s President, Chief Executive Officer, Acting Chief Financial Officer, Secretary and Director since January 9, 2006. Mr. Phillips is also currently the President and Chief Executive Officer of Internet Media Group, Inc., a company he formed and has owned since March 1999. Internet Media Group, Inc. provides E-Commerce, Business Development and Project Management consulting services, and develops outsourcing relationships with outbound telemarketing organizations. Mr. Phillips’ business experience includes the creation and development of fully automated and robust backend lead generation systems comprised of Client, Vendor and Reporting modules including full A/P, A/C and Invoicing. Mr. Phillips has developed numerous websites ranging from lead generating sites to large, commercial sites with full responsibility for lead generation, web development and affiliate management, and he also has experience in developing strategic partnerships with leading e-commerce design, lead generation, and telecom providers. Mr. Phillips has also developed Internet affiliate and interactive brand marketing programs and he has managed an affiliate marketing program with over 50 volume producers generating in excess of $100,000 per month. Mr. Phillips also has experience in re-engineering E-Commerce business processes and work flows to maximize use of software applications and tools, and in conducting analysis of E-Commerce software systems used for automated web fulfillment and online credit card processing. Mr. Phillips has also provided extensive consultation services as a Senior Management Consultant in connection with the sale and reorganization of an Internet pharmacy company, in which the focus of his efforts included strategic planning and management of all aspects for future sale of the company and the company’s IPO. Mr. Phillips also has expertise in conducting market research and competitive analysis.

Family Relationships

There are no family relationships among our officers or directors.

Legal Proceedings

We are unaware of any directors or executive officers who have, during the past five years:

(a) Had any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

(b) Been convicted in a criminal proceeding or subject to a pending criminal proceeding;

(c) Been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities, futures, commodities or banking activities; and

(d) Been found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

Audit Committee

We do not currently have a separately designated Audit Committee. Our entire Board of Directors functions as the Company's Audit Committee. No individual on our Board of Directors possesses all of the attributes of an audit committee financial expert and no one on our Board of Directors is deemed to be an audit committee financial expert. In forming our Board of Directors, we sought out individuals who would be able to guide our operations based on their business experience, both past and present, or their education. Our business model is not complex and our accounting issues are straightforward. We rely on the assistance of others, such as our accountant, to help us with the preparation of our financial information. We recognize that having a person who possesses all of the attributes of an audit committee financial expert would be a valuable addition to our Board of Directors, however, we are not, at this time, able to compensate such a person therefore, we may find it difficult to attract such a candidate.

ITEM 10. EXECUTIVE COMPENSATION

Summary of Compensation

The following table sets forth summary information concerning the compensation received for services rendered to us during the last three completed fiscal years by our former CEO.

SUMMARY COMPENSATION TABLE

		Annual Compensation			Long - Term Compensation
						Awards
Name and Principal Position	Fiscal Year	Salary ($)	Bonus ($)	Other Annual Compensation ($)	Restricted Stock Award(s) ($)	Securities Underlying Options/SARs (#)	LTIP Payouts ($)	Payouts All Other Compensation ($)
Andrew Mercer	2005	$0	—	—	—	—	—	—
CEO	2004	$0	—	—	—	—	—	—
	2003	$0	—	—	—	—	—	—

No other annual compensation (including a bonus or other form of compensation) or long-term compensation, including restricted stock awards, securities underlying options, LTIP payouts, or other form of compensation, was paid to Mr. Mercer during these periods.

Compensation of Directors

Members of our Board of Directors do not receive cash compensation for their services as Directors, although some Directors are reimbursed for reasonable expenses incurred in attending Board or committee meetings.

Employment Contracts

None.

Options/SAR Grants in Last Fiscal Year

None.

Long-Term Incentive Plan Awards

None.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following tables set forth certain information regarding ownership of the common stock as of March 21, 2006 by (1) each person who is known by the company to own beneficially more than 5% of the any classes of outstanding Stock, and (2) each director of the company, each of the Chief Executive Officers and the four most highly compensated executive officers who earned in excess of $100,000 for all services in all capacities, and all directors and executive officers of the company as a group.

The number and percentage of shares beneficially owned is determined in accordance with Rule 13d-3 and 13d-5 of the Exchange Act, and the information is not necessarily indicative of beneficial ownership for any other purpose. We believe that each individual or entity named has sole investment and voting power with respect to the securities indicated as beneficially owned by them, subject to community property laws, where applicable, except where otherwise noted. Unless otherwise stated, the address of each person is Commerce Development Corporation, Ltd., c/o Richardson & Patel LLP, 10900 Wilshire Boulevard, Suite 500, Los Angeles, California 90024.

Security Ownership of Certain Beneficial Owners

Title of Class	Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership	Percent of Class
Common	RP Capital LLC	50,542,142	51.4%
Common	Mark Y. Abdou	12,639,958	12.8%
Common	Silas Phillips	7,299,228	7.4%
Common	Addison Adams	6,315,556	6.4%
Common	Luan K. Phan	6,315,556	6.4%

Security Ownership of Management

Title of Class	Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership	Percent of Class
Common	Silas Phillips	7,299,228	7.4%
Common	All officers and directors as a group	7,299,228	7.4%

____________

The above tables in this section are based upon information derived from our stock records. Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, it believes that each of the shareholders named in this table has sole or shared voting and investment power with respect to the shares indicated as beneficially owned. Except as set forth above, applicable percentages are based upon 98,285,596 shares of common stock outstanding as of March 21, 2006.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Transactions Involving Officers, Directors, and Security Holders

On January 9, 2006, RP Capital acquired a controlling interest in the Registrant through the acquisition of 9,400,350 shares of the Registrant’s Common Stock directly from Andrew E. Mercer, the Registrant’s former President, Chief Executive Officer and Director, and his related entities, shareholders Andrew E. Mercer & Patricia A. Kattus-Mercer, Trustee, and The Mercer Group, Inc., and 41,141,792 shares of Common Stock pursuant to the Securities Purchase Agreement which represented the acquisition of an aggregate of 50,542,142 shares of Common Stock or approximately 51.4% of the total outstanding Common Stock.

The source of funds used as consideration was from cash on hand. No part of the consideration used to acquire control of the Registrant was from a loan. The total cash consideration used by RP Capital to acquire control of the Registrant (by acquiring the Securities and the stock from the Registrant’s stockholders as described herein) was $200,000. There are no arrangements between the parties that may result in a change of control of the Registrant.

ITEM 13. EXHIBITS

Exhibit No.	Identification of Exhibit

1.1(1)	Placement Agreement between Commerce Development Corporation, Ltd. and Mariner Investment Group, dated February 12, 2003
2.1(1)	Stock Purchase Agreement between Alexander & Wade, Inc. and The Mercer Group, Inc., dated September 1, 2002
2.2(1)	USM Financial Solutions, Inc. Capital Stock Exchange Agreement between Commerce Development Corporation, Ltd., U.S. Microbics, Inc., and USM Capital Group, Inc., dated September 24, 2002
2.3(1)	Stock Purchase Agreement between U.S. Microbics, Inc. and USM Capital Group, Inc., dated January 27, 2003
2.4(1)	Stock Purchase Agreement between Alexander & Wade, Inc. and The Mercer Group, Inc. dated August 2, 2002
3.1(1)	Articles of Incorporation of Majestic Financial, Ltd., filed May 13, 1998
3.2(1)	Articles of Amendment and Restatement of Majestic Financial, Ltd., filed March 12, 2002
3.3(1)	Articles of Amendment of Majestic Financial, Ltd. changing the name of the corporation to Commerce Development Corporation, Ltd., filed April 3, 2002
3.4(1)	Bylaws of Majestic Financial, Ltd., adopted May 14, 1998
3.5(1)	Amended Bylaws of Commerce Development Corporation, Ltd., adopted February 3, 2003
3.6(1)	Charter of the Audit Committee of the Board of Directors of Commerce Development Corporation, Ltd., adopted February 3, 2003
3.7(1)	Charter of the Compensation Committee of the Board of Directors of Commerce Development Corporation, Ltd., adopted February 3, 2003
3.8(1)	Resolution to Change Resident Agent
3.9(1)	Articles of Exchange dated September 24, 2002

3.10(1)	State of Nevada Certificate of Existence
4.1(1)	Form of Common Stock Certificate
4.2(1)	Form of Preferred Stock Certificate
10.1(1)	Subscription Agreement
10.2(1)	USM Capital Group, Inc. Independent Client Service Agreement, dated September 16, 2002
10.3(2)	Securities Purchase Agreement with RP Capital, LLC and six accredited investors
21(1)	Subsidiaries of the registrant
23.1	Consent of Independent Certified Public Accountants
31.1	Certification Pursuant To Section 302 Of The Sarbanes-Oxley Act Of 2002
31.2	Certification Pursuant To Section 302 Of The Sarbanes-Oxley Act Of 2002
32.1	Certification Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 Of The Sarbanes-Oxley Act Of 2002
32.2	Certification Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 Of The Sarbanes-Oxley Act Of 2002

(1) Previously filed with Form SB-2 on April 21, 2003.

(2) Previously filed with Form 8-K on January 13, 2006.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table sets forth fees billed to us by our auditors during the fiscal years ended December 31, 2005 and December 31, 2004 for: (i) services rendered for the audit of our annual financial statements and the review of our quarterly financial statements, (ii) services by our auditor that are reasonably related to the performance of the audit or review of our financial statements and that are not reported as Audit Fees, (iii) services rendered in connection with tax compliance, tax advice and tax planning, and (iv) all other fees for services rendered.

			December 31, 2005		December 31, 2004

(i)	Audit Fees	$	7,500	$	5,000
(ii)	Audit Related Fees		--		--
(iii)	Tax Fees		--		--
(iv)	All Other Fees		--		--
	Total fees	$	7,500	$	5,000

Audit Fees. Consists of fees billed for professional services rendered for the audit of the Company's consolidated financial statements and review of the interim consolidated financial statements included in quarterly reports and services that are normally provided by Lawrence Scharfman CPA, P.C., in connection with statutory and regulatory filings or engagements.

Audit-Related Fees. Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company's consolidated financial statements and are not reported under "Audit Fees." There were no Audit-Related services provided in fiscal 2005 or 2004.

Tax Fees. Consists of fees billed for professional services for tax compliance, tax advice and tax planning. There were no tax fees in fiscal 2005 or 2004.

All Other Fees. Consist of fees for products and services other than the services reported above. There were no management consulting services provided in fiscal years 2005 or 2004.

Pre-Approval Policies and Procedures. The Company currently does not have a designated Audit Committee, and accordingly, the Company's Board of Directors' policy is to pre-approve all audit and permissible non-audit services provided by the independent auditors. These services may include audit services, audit-related services, and tax services and other services. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The independent auditors and management are required to periodically report to the Company's Board of Directors regarding the extent of services provided by the independent auditors in accordance with this pre-approval, and the fees for the services performed to date. The Board of Directors may also pre-approve particular services on a case-by-case basis.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the Undersigned, thereunto duly authorized.

Commerce Development Corporation, Ltd.

(a Maryland corporation)

Dated: April 7, 2006 /s/ Silas Phillips

By: Silas Phillips

President and Chief Executive Officer

(principal executive officer)

Dated: April 7, 2006 /s/ Silas Phillips

By: Silas Phillips

Chief Financial Officer

(principal financial and accounting officer)

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

Name	Position	Date

/S/ Silas Phillips	Director	April 7, 2006
Silas Phillips