UNITED
        STATES
 SECURITIES
        AND EXCHANGE COMMISSION
 WASHINGTON,
        D.C. 20549
   to
 FORM
        10-QSB
 
 (Mark
        One)
 
 x
              
              QUARTERLY
                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE
                  ACT OF 1934
 For
            the
            quarterly period ended: June 30, 2005
    o
                  
                  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: 0-31039
 
 C&D
        PRODUCTION INC.
 
 (Exact
        name of small business issuer as specified in its charter)
  Nevada
              
              88-0438869(State
                  or other jurisdiction or incorporation or
                  organization)
              
              (I.R.S.
                  Employer Identification
                  No)
  8F,
        No.
        268 Kwang-Fu South Road,  Taipei,  Taiwan  ROC
 
 (Address
        of principal executive offices)  (Zip Code)
 
 011-886-2-2705-9051
 
 (Issuer's
        telephone number)
  N/A
 
 (Former
        name, former address and former fiscal year, if
        changed since last report)
 
 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 issuer was required to file such reports), and (2)
        has
 been
        subject to such filing requirements for the past 90 days. Yes xNo o
  Indicate
            by check mark whether the registrant is a shell company (as defined in
            Rule
            12b-2 of the Exchange Act).  Yes o No x
 The
        number of shares outstanding of the issuer's Common Stock, $0.001 par value,
        as
        of the close of business on August 22, 2005 was 30,001,000.
 
 Transitional
        Small Business Disclosure Format (Check One): Yes o  No x
  
  C&D
        PRODUCTION INC. AND SUBSIDIARIES
 PART
                    I  -
                FINANCIAL
                    STATEMENTS
                1Item
                    1.
                Consolidated
                    Financial Statements
                1Item
                    2.
                Management's
                    Discussion and Analysis of Financial Condition and Results of
                    Operations
                12Item
                    3.
                Controls
                    and Procedures
                16PART
                    II -
                OTHER
                    INFORMATION
                17Item
                    1.
                Legal
                    Proceedings
                17Item
                    2.
                Unregistered
                    Sales of Equity Securities and Use of Proceeds
                17Item
                    3.
                Defaults
                    Upon Senior Securities
                17Item
                    4.
                Submission
                    of Matters to a Vote of Security Holders
                17Item
                    5.
                Other
                    Information
                17Item
                    6.
                Exhibits
                17
  i
  PART
        I -
        FINANCIAL STATEMENTS
 
 Item
        1.
        Consolidated Financial Statements
 
 C&D
        PRODUCTION, INC. AND SUBSIDIARIES
 
 CONSOLIDATED
        STATEMENTS OF FINANCIAL POSITION
 
 ASSETSJune
                    30, 2005
                  (Unaudited)
                
                December
                    31, 2004Current
                    AssetsCash
                    and cash equivalents
                
                $
                805,177
                
                $
                282,988Accounts
                    receivable, net
                
                
                477,111
                
                
                220,354Other
                    receivables
                
                
                0
                
                
                2,562,954Prepaid
                    expenses
                
                
                2,737,534
                
                
                1,331,343Total
                    Current Assets
                
                
                4,019,822
                
                
                4,397,639Fixed
                    Assets, net
                
                
                318,602
                
                
                350,741Total
                    Fixed Assets
                
                
                318,602
                
                
                350,741Other
                    AssetsDeposits
                
                
                6,143
                
                
                5,986Production
                    in progress
                
                
                2,360,730
                
                
                707,129Intangible
                    assets, net
                
                
                545,777
                
                
                588,560Total
                    Other Assets
                
                
                2,912,650
                
                
                1,301,675Total
                    Assets
                
                $
                7,251,074
                
                $
                6,050,055LIABILITIES
                    AND STOCKHOLDERS' EQUITYCurrent
                    LiabilitiesAccounts
                    payable and accrued expenses
                
                $
                1,064,008
                
                $
                1,332,882Loan
                    payable
                
                
                95,460
                
                
                0Due
                    to related party
                
                
                840,193
                
                
                12,292Short
                    term note payable
                
                
                627,700
                
                
                563,040Total
                    Current Liabilities
                
                
                2,627,361
                
                
                1,908,214Stockholders'
                    EquityCommon
                    stock $.001 par value,100,000,000shares
                    authorized, 30,000,000 issued and outstanding
                
                
                30,000
                
                
                30,000Additional
                    paid in capital
                
                
                4,932,698
                
                
                4,932,698Cumulative
                    foreign-exchange translation adjustment
                
                
                290,563
                
                
                203,693Retained
                    earnings (deficit)
                
                
                (629,548
                )
                
                (1,024,550
                )Total
                    Stockholders' Equity
                
                
                4,623,713
                
                
                4,141,841Total
                    Liabilities and Stockholders' Equity
                
                $
                7,251,074
                
                $
                6,050,055
  See
          accompanying notes to financial statements
  1
  C&D
          PRODUCTION, INC. AND SUBSIDIARIES
 
 CONSOLIDATED
          STATEMENTS OF OPERATIONS
 (Unaudited)
 Three
                    Months
                    Ended
                
                Six
                    Months EndedJune
                    30,
                
                June
                    30,
                
                June
                    30,
                
                June
                    30,2005
                
                2004
                
                2005
                
                2004Sales,
                    net
                
                $
                671,634
                
                $
                668,529
                
                $
                1,253,598
                
                $
                1,407,413Cost
                    of sales
                
                
                610,950
                
                
                826,952
                
                
                1,075,009
                
                
                1,455,726Gross
                    profit
                
                
                60,684
                
                
                (158,423
                )
                
                178,589
                
                
                (48,313
                )General
                    and administrative expenses
                
                
                355,288
                
                
                507,965
                
                
                629,064
                
                
                725,759Income
                    (loss) from operations
                
                
                (294,604
                )
                
                (666,388
                )
                
                (450,475
                )
                
                (774,072
                )Other
                    (Income) ExpenseInterest
                    income
                
                
                (3,184
                )
                
                (2
                )
                
                (3,184
                )
                
                (3
                )Other
                    income
                
                
                (869,797
                )
                
                (29,907
                )
                
                (871,227
                )
                
                (29,907
                )Miscellaneous
                    expense
                
                
                (18
                )
                
                0
                
                
                0
                
                
                0Interest
                    expense
                
                
                12,667
                
                
                1,259
                
                
                28,934
                
                
                5,841Total
                    Other (Income) Expense
                
                
                (860,332
                )
                
                (28,650
                )
                
                (845,477
                )
                
                (24,069
                )Income
                    (loss) before income taxes
                
                
                565,728
                
                
                (637,738
                )
                
                395,002
                
                
                (750,003
                )Provision
                    for income taxes
                
                
                0
                
                
                0
                
                
                0
                
                
                0Income
                    (loss)
                
                $
                565,728
                
                
                ($637,738
                )
                $
                395,002
                
                
                ($750,003
                )Net
                    income (loss) per share (basic and diluted)Basic
                
                $
                0.019
                
                
                ($
                    0.026
                )
                $
                0.013
                
                
                ($
                    0.030
                )Diluted
                
                $
                0.019
                
                
                ($
                    0.026
                )
                $
                0.013
                
                
                ($
                    0.030
                )Weighted
                    average number of sharesBasic
                
                
                30,000,000
                
                
                25,000,000
                
                
                30,000,000
                
                
                25,000,000Diluted
                
                
                30,000,000
                
                
                25,000,000
                
                
                30,000,000
                
                
                25,000,000
  See
        accompanying notes to financial statements.


2




C&D
        PRODUCTION, INC. AND SUBSIDIARIES
 
 CONSOLIDATED
        STATEMENTS OF CASH FLOWS
 (Unaudited)




Six
                  Months EndedJune
                  30
              
              June
                  302005
              
              2004CASH
                  FLOWS FROM OPERATING ACTIVITIESNet
                  Income (loss)
              
              $
              395,002
              
              $
              750,003Adjustments
                  to reconcile net loss to net cash used in operating
                  activities:Depreciation
              
              
              39,741
              
              
              37,586Amortization
              
              
              42,783
              
              
              59,692Bad
                  Debt
              
              
              20,308
              
              
              0Translation
                  adjustment
              
              
              67,306
              
              
              (3,113
              )Decrease
                  (Increase) in receivables
              
              
              (256,757
              )
              
              (86,839
              )Decrease
                  (Increase) in other receivables
              
              
              2,562,954
              
              
              0Decrease
                  (Increase) in prepaid expenses
              
              
              (1,406,191
              )
              
              265,457Decrease
                  (Increase) in production in progress
              
              
              (1,653,601
              )
              
              (330,463
              )(Decrease)
                  Increase in accounts payable and accrued expenses
              
              
              (268,874
              )
              
              (82,537
              )(Decrease)
                  Increase in deferred revenue
              
              
              0
              
              
              (323,063
              )Total
                  Adjustments
              
              
              (852,331
              )
              
              (463,280
              )Net
                  cash used in operation
              
              
              (457,329
              )
              
              (1,213,283
              )CASH
                  FLOWS FROM INVESTING ACTIVITIESPurchase
                  of furniture and equipment
              
              
              (7,603
              )
              
              (16,698
              )Net
                  cash (used in) investing activities
              
              
              (7,603
              )
              
              (16,698
              )CASH
                  FLOWS FROM FINANCING ACTIVITIESPayment
                  on current portion debt
              
              
              (250,240
              )
              
              (322,770
              )Proceeds
                  from issuance of loans
              
              
              314,900
              
              
              592,672Proceeds
                  from loan payable
              
              
              94,560
              
              
              351,713Loan
                  from related party
              
              
              827,901
              
              
              126,155Sale
                  of common stock
              
              
              0
              
              
              738,359Net
                  cash provided by (used in) financing activities
              
              
              987,121
              
              
              1,486,129Net
                  change in cash and cash equivalents
              
              
              522,189
              
              
              256,148Cash
                  and cash equivalents at beginning of year
              
              
              282,988
              
              
              922,421Cash
                  and cash equivalents at end of period
              
              $
              805,177
              
              $
              1,178,569Supplemental
                  cash flows disclosures:Interest
                  payments
              
              $
              28,934
              
              $
              4,729


See
        accompanying notes to financial statements


3




C&D
        PRODUCTION, INC. AND SUBSIDIARIES
 
 CONSOLIDATED
        STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
  June
                    30, 2005(Unaudited)
                
                December
                    31, 2004Common
                    stock, number of shares outstandingBalance
                    at beginning of period
                
                
                30,000,000
                
                
                23,047,500Stock
                    issued
                
                
                0
                
                
                6,952,500Balance
                    at end of period
                
                
                30,000,000
                
                
                30,000,000Common
                    stock, par value $.001Balance
                    at beginning of period
                
                $
                30,000
                
                $
                23,048Common
                    stock issued
                
                
                0
                
                
                6,952Balance
                    at end of period
                
                
                30,000
                
                
                30,000Additional
                    paid in capitalBalance
                    at beginning of period
                
                
                4,932,698
                
                
                2,356,779Issuance
                    of stock
                
                
                0
                
                
                2,575,919Balance
                    at end of period
                
                
                4,932,698
                
                
                4,932,698Cumulative
                    foreign-exchange translation adjustmentBalance
                    at beginning of period
                
                
                203,693
                
                
                (25,286
                )Foreign
                    currency translation
                
                
                86,870
                
                
                228,979Balance
                    at end of period
                
                
                290,563
                
                
                203,693Retained
                    (deficits)Balance
                    at beginning of period
                
                
                (1,024,550
                )
                
                (140,218
                )Net
                    income (loss)
                
                
                395,002
                
                
                (884,332
                )Balance
                    at end of period
                
                
                (629,548
                )
                
                (1,024,550
                )Total
                    stockholders' equity at end of period $
                
                $
                4,623,713
                
                $
                4,141,841


See
      accompanying notes to financial
      statements


4
 
 C&D
        PRODUCTION, INC. AND SUBSIDIARIES
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 JUNE
        30,
        2005 AND 2004
 
 NOTE
        1 -
        NATURE OF OPERATIONS
 
 C&D
        Production, Inc., formerly Huile' Oil & Gas, Inc., was incorporated on October
        24, 1997 under the laws of the State of Nevada. C&D Production Group, Inc.
        was
        incorporated on May 23, 2003 under the laws of the British Virgin Islands.
        C&D Production International was incorporated on November 6, 1998 under the
        law
        of the Peoples Republic of China. Boom Business Group, Inc. was incorporated
        on January 5, 2005 under the laws of Samoa, but currently has no business
        operations. C&D Production, Inc. owns 100% of the outstanding stock of C&D
        Production Group, Inc. C&D Production Group, Inc. owns 100% of the capital stock
        of
        both C&D Production International and Boom Business Group, Inc. Collectively
        the four corporations are referred to herein as the "Company".
 
 On
        September 4, 2003, C&D Production Group, Inc. became a wholly owned subsidiary
        of C&D Production, Inc. through an Exchange Agreement, whereby C&D Production,
        Inc. acquired all of the issued and outstanding capital stock of C&D Production
        Group, Inc. in exchange for 13,828,500 shares of C&D Production,
        Inc.
 
 The
        Company is a full-service advertising and creative film production agency using
        ideas and technology to extend concepts across multiple mediums.
  The
        Company operates in an industry characterized by significant competition
        and rapid
        technological changes. They will need additional investments and funding in
        order
        to complete the development and improvements necessary for growth and planned
        operations.
  NOTE
        2 -
        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Unaudited
        Interim Financial Information - The accompanying financial statements have
        been
        prepared by C&D Production, Inc., pursuant to the rules and regulations
        of the Securities and Exchange Commission (the "SEC") including Form 10-QSB
        and Item 310 of regulation S-B, and U.S. generally accepted accounting principles
        for interim financial reporting. These financial statements are unaudited
        and, in the opinion of management, include all adjustments consisting of
        normal
        recurring adjustments and accruals) necessary for a fair presentation of
        the
        statement of financial position, operations, and cash flows for the periods
        presented. Operating results for the six months ended June 0, 2005 are not
        necessarily indicative of the results that may be expected for the year ending
        December 31, 2005, or any future period, due to seasonal and other factors.
        Certain information and footnote disclosures normally included in financial
        statements prepared in accordance with generally accepted accounting policies
        have been omitted in accordance with the rules and regulations of the SEC.
        These financial statements should be read in conjunction with the audited financial
        statements and accompanying notes included in the Company's Annual Report
        for the year ended December 31, 2004.
  5
 
 C&D
        PRODUCTION, INC. AND SUBSIDIARIES
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 JUNE
        30,
        2005 AND 2004
 
 NOTE
        2 -
        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Basis
        of
        Consolidation - The consolidated financial statements for 2005 include the
        accounts of C&D Production, Inc. and its wholly owned subsidiaries, C&D Production
        Group, Inc., C&D Production International and Boom Business Group, Inc.
        All
        references herein to the Company are included in the consolidated results.
        All significant intercompany accounts and transactions have been eliminated
        upon consolidation.
  Financial
        Statement Presentation - Certain changes to the 2004 financial statements
        have been made to conform to the 2005 financial statement
        format.


Revenue
        Recognition - Revenue from production of advertising is recognized upon completion
        of the project, and is recorded net of discounts and allowances.
 
 The
        Company will recognize film revenue from the distribution of Featured Films and
        related products when earned and reasonably estimable in accordance with Statement
        of Position 00-2 "Accounting by Producers or Distributors of Films" (SOP
        00-2).
 
 Cash
        and
        Cash Equivalents - Cash equivalents are stated at cost. Cash equivalents
        are highly liquid investments readily convertible into cash with an original
        maturity of three months or less and consist of time deposits with commercial
        banks.
 
 Allowance
        for Doubtful Accounts - The Company establishes an allowance for doubtful
        accounts on a case-by-case basis when it believes the required payment of
        specific amounts owed is unlikely to occur after a review of historical collection
        experience, subsequent collections and management's evaluation of existing
        economic conditions.
 
 Fixed
        Assets - Property and equipment are stated at cost less accumulated depreciation.
        Expenditures for major additions and improvements are capitalized and
        minor
        replacements, maintenance and repairs are charged to expense as incurred.
        Whenever an asset is retired or disposed of, its cost and accumulated depreciation
        or amortization is removed from the respective accounts and the resulting
        gain or loss is credited or charged to income.
 
 Depreciation
        is computed using the straight-line and declining-balance methods over
        the
        following estimated useful lives:
  Furniture and Fixtures
              5 - 8 yearsAutomobile
              5 yearsOffice Equipment
              3 - 8 yearsBuildings and Improvements
              30 years
  6
  C&D
        PRODUCTION, INC. AND SUBSIDIARIES
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 JUNE
        30,
        2005 AND 2004
 
 NOTE
        2 -
        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 
 Intangible
        Assets - Effective July 2002, the Company adopted Statement of Financial
        Accounting Standard ("SFAS") No. 142, "Goodwill and Other Intangible Assets."
        The adoption of SFAS No. 142 required an initial impairment assessment involving
        a comparison of the fair value of trademarks, patents and other intangible
        assets to current carrying value. No impairment loss was
        recognized.
 
 Trademarks
        and other intangible assets determined to have indefinite useful lives
        are
        not amortized. We test such trademarks and other intangible assets with
        indefinite useful lives for impairment annually, or more frequently if events
        or
        circumstances indicate that an asset might be impaired. Trademarks and other
        intangible assets determined to have definite lives are amortized over their
        useful lives or the life of the trademark and other intangible asset, whichever
        is less.
 
 Advertising
        - Advertising costs are expensed in the year incurred.
 
 Estimates
        - The preparation of financial statements in conformity with U.S. generally
        accepted accounting principles requires management to make certain estimates
        and assumptions that affect the reported amounts of assets and liabilities
        and disclosure of contingent assets and liabilities at the date of the
        financial statements and the reported amounts of revenues and expenses during
        the reporting period. Actual results could differ from those estimates. Significant
        estimates include collectibility of accounts receivable, accounts payable,
        sales returns and recoverability of long-term assets.
 
 Concentration
        of Credit Risk - Financial instruments, which subject the Company to
        credit
        risk, consist primarily of cash equivalents and trade accounts receivable
        arising from its normal business activities. Concentration of credit risk
        with
        respect to trade accounts receivable is primarily from related parties located
        in Asia. The Company actively evaluates the creditworthiness of the customers
        with which it conducts business through credit approvals, credit limits
        and monitoring procedures.
 
 Impairment
        of Long-Lived Assets - On January 1, 2002 the Company adopted SFAS 144
        "Accounting for the Impairment or Disposal of Long-Lived Assets". The Company
        evaluates long-lived assets for impairment whenever events or changes in
        c ircumstances
        indicate that the carrying value of an asset may not be recoverable.
        If the estimated future cash flows (undiscounted and without interest
        charges) from the use of an asset is less than the carrying value, write-down
        would be recorded to reduce the related asset to its estimated fair value.
        There have been no such impairments to date.
  7
  C&D
        PRODUCTION, INC. AND SUBSIDIARIES
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 JUNE
        30,
        2005 AND 2004
 
 NOTE
        2 -
        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Earnings
        Per Share - Earnings per share are based on the weighted-average number of
        shares
        of common stock and common stock equivalents outstanding during each period.
        Earnings per share are computed using the treasury stock method. Options to
        purchase common shares are considered to be outstanding for all periods presented
        but are not calculated as part of the earnings per share.
 
 Income
        Taxes - Income taxes have been provided based upon the tax laws and rates in
        the
        countries in which operations are conducted and income is earned. The income
        tax rates imposed by the taxing authorities vary. Taxable  income may vary from
        pre-tax income for financial accounting purposes. There is no expected relationship
        between the provision for income taxes and income before income taxes
        because the countries have different taxation rules, which vary not only to
        nominal rates but also in terms of available deductions, credits and other benefits.
        Deferred tax assets and liabilities are recognized for the anticipated future
        tax effects of temporary differences between the financial statement basis
        and
        the tax basis of the Company's assets and liabilities using the applicable
        tax rates in effect at year end as prescribed by SFAS 109 "Accounting for
        Income Taxes".
 
 Exchange
        Gain (Loss) - As of June 30, 2005 and 2004, the transactions of C&D Production,
        Inc. - Taiwan denominated in foreign currency is recorded in New Taiwan
        dollars at the rates of exchange in effect when the transactions occur. Exchange
        gains and losses are recognized for the different foreign exchange rates
        applied when the foreign currency assets and liabilities are
        settled.
 Translation
        Adjustments - As of June 30, 2005 and 2004, the accounts of C&D Production,
        Inc. - Taiwan were maintained, and its financial statements were expressed,
        in New Taiwan Dollars (NTD). Such financial statements were translated
        into U.S. Dollars (USD) in accordance with Statement of Financial Accounts
        Standards ("SFAS") No. 52, "Foreign Currency Translation", with NTD as the
        functional currency. According to the Statement, all assets and liabilities were
        translated at the current exchange rate, stockholder's equity are translated
        at the historical rates and income statement items are translated at the
        weighted-average exchange rate for the period. The resulting translation adjustments
        are reported under other comprehensive income in accordance with SFAS
        No.
        130, "Reporting Comprehensive Income".
 
 As
        of
        June 30, 2005 and 2004 the exchange rates between NTD and the USD was NTD$1=USD$0.03182
        and NTD$1=USD$0.02963, respectively. The weighted-average rate of
        exchange between NTD and USD was NTD$1 = USD$0.03186 and NTD$1=USD$0.02995, respectively.
        Total translation adjustment recognized as of June 30, 2005 and 2004
        is
        $290,563 and ($27,679), respectively.
  8
  C&D
        PRODUCTION, INC. AND SUBSIDIARIES
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 JUNE
        30,
        2005 AND 2004
 
 NOTE
        3 -
        CONCENTRATION
 
 The
        Company had five major customer during the six months ended June 30, 2005. Sales
        to
        these customers were approximately $1,175,329. Of the five customers, one
        customer comprised 93.7% of the total sales during the six months ended June 30,
        2005.
        Included in accounts receivable is approximately $474,002 from this customer
        as of June 30, 2005.
 
 NOTE
        4 -
        CASH
 
 The
        Company maintains its cash balances at various banks in Taiwan and Hong Kong.
        All
        balances are insured by the Central Deposit Insurance Corporation (CDIC).
        As of June 30, 2005, there were no uninsured portions of the balances held
        at
        the banks.
 
 NOTE
        5 -
        FIXED ASSETS
 
 Fixed
        assets consist of the following:
 June
                      30, 2005
                  
                  December
                      31, 2004Land
                  
                  $
                  52,670
                  
                  $
                  52,670Building
                  
                  
                  55,898
                  
                  
                  55,898Office
                      equipment
                  
                  
                  472,886
                  
                  
                  465,283Automobile
                  
                  
                  161,282
                  
                  
                  161,282742,736
                  
                  
                  735,133Accumulated
                      depreciation
                  
                  
                  (424,133
                  )
                  
                  (384,392
                  )$
                  318,603
                  
                  $
                  350,741
 NOTE
        6 -
        INTANGIBLE ASSETS
 
 A
        summary
        is as follows:
  June
                    30, 2005
                
                December
                    31, 2004Patents
                    and Trademark costs
                
                $
                1,182,093
                
                $
                1,182,093Less
                    accumulated amortization
                
                
                (636,316
                )
                
                (593,533
                )$
                545,777
                
                $
                588,560
  9
  C&D
        PRODUCTION, INC. AND SUBSIDIARIES
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 JUNE
        30,
        2005 AND 2004
 
 NOTE
        7 -
        COMPENSATED ABSENCES
 
 Employees
        can earn annual vacation leave at the rate of seven (7) days per year or
        the
        first three years. Upon completion of the third year of employment,
        e mployees
        earn annual vacation leave at the rate of ten (10) days per year for years
        four and five. Upon completion of the fifth year of employment, employees earn
        annual vacation leave at the rate of fourteen (14) days per year for years six
        through ten. Upon completion of the tenth year of employment, employees earn one
        (1)
        additional day for each additional year, until it reaches thirty (30) days
        per
        year. At termination, employees are paid for any accumulated annual vacation
        leave. As of June 30, 2005 and 2004 vacation liability exists in the amount
        of
        $8,766 and $10,112, respectively.
 
 NOTE
        8 -
        RELATED PARTY TRANSACTIONS
 
 Throughout
        the history of the Company, certain members of the Board of dir ectors,
        and general management have made loans to the Company to cover operating
        expenses or operating deficiencies.
 
 As
        of
        June 30, 2005, the Company has a non interest-bearing loan from Chin-Ping Chou,
        one
        of the Company's Directors, in the amount of $12,292.
 
 As
        of
        June 30, 2005, the Company has a non interest-bearing loan from Michael Chou,
        one
        of the Company's Directors and its Chief Executive Officer, in the amount
        of
        $827,901.
 
 NOTE
        9 -
        COMMITMENTS AND CONTINGENCIES
 
 Operating
        Leases
 
 The
        Company leases three office facilities under operating leases that terminate on
        various dates. Rental expense for these leases consisted of $28,341 for the six
        months ended June 30, 2005. The Company has future minimum lease obligations of
        $8,411
        for 2005.
  10
  C&D
        PRODUCTION, INC. AND SUBSIDIARIES
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 JUNE
        30,
        2005 AND 2004
 
 NOTE
        10 -
        DEBT
 
 At
        June
        30, 2005 and December 31, 2004, the Company had notes payable outstanding
        in the aggregate amount of $627,700 and $563,040, respectively. Payable
        as follows:
  Payable
          as follows:
  June
                    30, 2005
                
                
                
                December
                      31, 2004Unsecured
                    notes payable to a bank in
                
                
                
                Unsecured
                    notes payable to aTaiwan,
                    Interest at 5.69% per annum,
                
                
                
                bank
                    in Taiwan, Interest at 5.53%due
                    by November 10, 2005
                
                $
                187,680
                
                per
                  annum, due by April 11, 2005
                
                $
                187,680Unsecured
                    notes payable to a bank in
                
                
                
                
                Unsecured
                    notes payable to aTaiwan,
                    Interest at 5.69% per annum,
                
                
                
                
                bank
                    in Taiwan, Interest atdue
                    by November 19, 2005
                
                
                78,200
                
                5.53%
                    per annum, due by April 11, 2005
                
                
                62,560Unsecured
                    notes payable to a bank in
                
                
                
                
                Unsecured
                    notes payable to aTaiwan,
                    Interest at 5.69% per annum, due
                
                
                
                
                bank
                    in Taiwan, Interest atby
                    December 21, 2005
                
                
                31,280
                
                5.53%
                    per annum, due by May 10, 2005
                
                
                187,680Unsecured
                    notes payable to a bank in
                
                
                
                
                Unsecured
                    notes payable to aTaiwan,
                    Interest at 5.69% per annum, due
                
                
                
                
                bank
                      in Taiwan, Interest at 5.53%by
                    December 30, 2005
                
                
                15,640
                
                per
                      annum, due May 19, 2005
                
                
                78,200Unsecured
                    notes payable to a bank in
                
                
                
                
                Unsecured
                    notes payable to aTaiwan,
                    Interest at 5.69% per annum, due
                
                
                
                
                bank
                    in Taiwan, Interest atby
                    January 6, 2006
                
                
                62,980
                
                5.53%
                    per annum, due by June 21, 2005
                
                
                31,280Unsecured
                    notes payable to a bank in
                
                
                
                
                Unsecured
                    notes payable to aTaiwan,
                    Interest at 5.69% per annum,
                
                
                
                
                bank
                    in Taiwan, Interest at 5.53%due
                    by March 29, 2005
                
                
                251,920
                
                per
                    annum, due by June 30, 2005
                
                
                15,640Total
                
                $
                627,700
                
                Total
                
                $
                563,040
  11


C&D
        PRODUCTION, INC. AND SUBSIDIARIES
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 JUNE
        30,
        2005 AND 2004
 
 NOTE
        11 -
        GOING CONCERN
 
 The
        Company has suffered recurring losses from operations, cash deficiencies
        and the
        ability to meets it's maturing obligations without selling operating assets or
        restructuring debts. These issues may raise substantial concern about its ability
        to continue as a going concern.
 
 Management
        has prepared the following statement in order to address these and other
        concerns:
 
 The
        Company has applied for a low interest government loan up for to approximately
        $3,000,000. The Company currently is engaged in discussions with a company
        in Mainland China to establish a shopping channel. The plans are to start
        broadcast as early as October 1, 2005. The Company is currently renegotiating
        its, notes payable and accounts payable to further reduce its current
        liabilities and improve its cash flow.
  12
 
 Item
        2.
        Management's Discussion and Analysis of Financial Condition and Results of
        Operations
 
 The
        following discussion of the financial condition and results of operations should
        be
        read in conjunction with the consolidated financial statements and related
        notes thereto and in conjunction with the Management's Discussion and Analysis
        set forth in the Company's Annual Report on Form 10-KSB for the year ended
        December 31, 2004.
 
 The
        following discussion contains certain forward-looking statements that involve
        risk and uncertainties. Our actual results could differ materially from those
        discussed herein. Factors that could cause or contribute to such differences
        include, but are not limited to, risks and uncertainties related to the
        need
        for additional funds, global economic conditions, particularly in Asia, and
        decreasing advertising budgets of companies in general.
 
 General
 
 On
        September 4, 2003, C&D Production Inc. (the "Company") acquired all of the issued
        and outstanding capital stock of C&D Production Group, Inc. ("C&D Group"),
        which holds all of the issued and outstanding capital stock of C&D Production
        International (the "Acquisition"). The Acquisition was accounted for using
        the
        purchase method of accounting. C&D Group was founded in 1998 and is currently
        one of the largest professional advertisement production companies in Taiwan.
        The Company primarily produces and distributes commercial advertisements for
        large-scale multinational companies such as Ford, Honda, Toyota, Mazda, Jaguar,
        Wrigley's, 7-11 Convenience Stores, Republic of China, Mild Seven Times, Sony,
        Ericsson, Gillette, Makoto Bank, China Airlines, Yamaha and the Government of
        Thailand. The Company also offers a broad range of services including video and
        film
        production, motion graphic design, 3-D computer design and animation. The
        Company also plans to aggressively expand its business to the Mainland Chinese
        Market.
 
 Critical
        Accounting Policies and Estimates
  This
        discussion and analysis of our financial condition and results of operations
        are based on our financial statements that have been prepared under accounting
        principles generally accepted in the United States of America. The preparation
        of financial statements in conformity with accounting principles generally
        accepted in the United States of America requires our management to make
        estimates and assumptions that affect the reported amounts of assets and liabilities
        and the disclosure of contingent assets and liabilities at the date of
        the
        financial statements and the reported amounts of revenue and expenses during
        the reporting period. Actual results could materially differ from those estimates.
        We have disclosed all significant accounting policies in Note 2 to the
        consolidated financial statements included in this Form 10-QSB. The consolidated
        financial statements and the related notes thereto should be read in
        conjunction with the following discussion of our critical accounting
        policy:
 
 Revenue
        recognition
 
 Revenue
        from production of advertising is recognized upon completion of the project,
        and is recorded net of discounts and allowances.
 
 Results
        of Operations
 
 THREE
        MONTHS ENDED JUNE 30, 2005 AND JUNE 30, 2004
 
 NET
        SALES. Net sales for the Company for the three months ended June 30, 2005 were
        $671,634 compared to $668,529 for the three months ended June 30, 2004. The slight
        increase in net sales for the three months ended June 30, 2005 was due to a
        slight
        increasing in demand for film productions
 
 COST
        OF
        SALES. Cost of sales for the three months ended June 30, 2005 was $610,950,
        or 90.9% of net sales, as compared to $826,952, or 123.7% of net sales,
        during the three months ended June 30, 2004. The decrease in cost of sales
        as
        a percentage of net sales for the three months ended June 30, 2005 was due
        to
        higher gross margins associated with film projects completed during the three
        months ended June 30, 2005. expensive
          labor.
  13
  GENERAL
        AND ADMINISTRATIVE EXPENSES. General and administrative expenses were $355,288
        or 52.9% of net sales, for the three months ended June 30, 2005, as compared
        to $507,965, or 76.0% of net sales, for the three months ended June 30, 2004.
        The
        decrease in general and administrative expenses was caused by a decrease
        in sales person's marketing expenses marketing
          expenses, salaries and other miscellaneous expenses.
  INCOME
        (LOSS) FROM OPERATIONS. Income (loss) from operations for the three months
        ended June 30, 2005 was ($294,604), compared to income (loss) from operations
        for the three months ended June 30, 2004 of ($666,388). The decrease in
        loss
        was due to the decrease in cost of sales and general and administrative expenses.
  OTHER
        (INCOME) EXPENSE. Total other (income) expense was ($860,332) for the three
        months ended June 30, 2005, as compared to ($28,650) for the three months ended
        June 30, 2004. The increase in other income was due to the increase in other
        income for the bad debt loss, which was recognized last year and recovered during
        this quarter. level
          of
          borrowings for the three months period ended June 30, 2004 as compared
          t o
          the
          higher level of borrowings for the three months ended June 30,
          2005.
 
 INCOME
        (LOSS). Net income (loss) for the three months ended June 30, 2005 was $565,728
        compared to net income (loss) of ($637,738) for the three months ended June
        30,
        2004. The decrease in net loss was due to the reasons primarily described
        above. domestic
          market for commercial film production, the Company is pursuing business opportunities
          outside Taiwan, including establishing a shopping channel in mainland
          China. However, the establishment of the shopping channel remains in the
          preliminary stages of development.
  FOR
        SIX
        MONTHS ENDED JUNE 30, 2005 AND JUNE 30, 2004
 NET
          SALES. Net sales for the Company for the six months ended June 30, 2005
          were
          $1,253,598 compared to $1,407,413 for the six months ended June 30, 2004.
          The
          decrease in sales for the six months ended June 30, 2005 was due to the
  COST
          OF
          SALES. Cost of sales for the six months ended June 30, 2005 was $1,075,009
          or
          85.7% of net sales, as compared to $1,455,726, or 103.4% of net sales,
          during
          the six months ended June 30, 2004. The decrease in cost of sales was due
          to the
          decrease in sales. Cost of sales did not decrease in exact proportion to
          sales
          due to various fixed costs associated with higher gross margins associated
          with
          film projects completed during the three months ended June 30, 2005.
  GENERAL
          AND ADMINISTRATIVE EXPENSES. General and administrative expenses were $629,064
          or 50.1% of net sales, for the six months ended June 30, 2005, as compared
          to
          $725,759, or 51.6% of net sales, for the six months ended June 30, 2004.
          The
          decrease in general and administrative expenses was due to a decrease in
          sales
          person's marketing expenses
  INCOME
          (LOSS) FROM OPERATIONS. Income (loss) from operations for the six months
          ended
          June 30, 2005 was ($450,475) compared to income (loss) from operations
          for the
          six months ended June 30, 2004 of ($774,072). The decrease in income (loss)
          from
          operations was due to the reasons primarily described above. This change
          was the
          result of the decreasing of fixed costs of sales and general and administrative
          expenses.
  OTHER
          (INCOME) EXPENSE. Total other (income) expense was ($845,477) for the six
          months
          ended June 30, 2005, as compared to ($24,069) for the six months ended
          June 30,
          2004. The increase was due to the increase in other income for the bad
          debt
          loss, which was recognized last year and recovered during the second quarter.
  INCOME
          (LOSS). Net income (loss) for the six months ended June 30, 2005 was $395,002
          compared to net income (loss) of ($750,003) for the six months ended June
          30,
          2004. The increase in income (loss) was due to the reasons primarily described
          above.
  Liquidity
          and Capital Resources
  Cash
          and
          cash equivalents were $805,177 at June 30, 2005 and $282,988 at December
          31,
          2004. The Company's total current assets were $4,019,822 at June 30, 2005,
          as
          compared to $4,397,639 at December 31, 2004. The Company's total current
          liabilities were $2,627,361 at June 30, 2005, as compared to $1,908,214
          at
          December 31, 2004. Working capital at June 30, 2005 was $1,392,461 and
          $2,489,425 at December 31, 2004. During the three months ended June 30,
          2005,
          net cash used in operations was ($457,329), as compared to net cash used
          in
          operations of ($1,213,283) during the same period in 2004. The decrease
          in net
          cash used in operations resulted from an increase in net income and the
          cash
          provided by other receivables. Net cash provided by financing activities
          was
          $987,121, which consisted of the issuance of loans and the increase of
          amounts
          due to a related party, as compared with net cash provided by financing
          activities of $1,486,129 during the six months ended June 30, 2004. Net
          change
          in cash and cash equivalents was $522,189 and $256,148 for the second quarter
          of
          2005 and 2004, respectively.
  14
  The
          Company has applied for a low interest government loan up for to approximately
          $3,000,000. The Company currently is engaged in discussions with a company
          in
          Mainland China to establish a shopping channel. The plans are to start
          broadcast
          as early as October 1, 2005. The Company is currently renegotiating its,
          notes
          payable and accounts payable to further reduce its current liabilities
          and
          improve its cash flow.
  Total
          capital expenditures during six three months ended June 30, 2005 and 2004 were
          ($7,603) and ($16,698), respectively.
  The
          Company's operations and short term financing currently meets the cash
          needs of
          the Company. However, if the Company decides to invest in another company
          to
          produce films in the overseas markets, the Company will have to raise additional
          funds. The Company believes it will be able to generate revenues from production
          fees and raise capital through private placement offerings of its equity
          securities to provide the necessary cash flow to meet anticipated working
          capital requirements. The Company's daily operations are, from time to
          time,
          supported by advances from the Company's officers. However, the Company's
          actual
          working capital needs for the long and short term will depend upon numerous
          factors, including the Company's operating results, competition, and the
          availability of credit facilities, none of which can be predicted with
          certainty. Future expansion of the Company will be limited by the availability
          of financing products and raising capital.
  Forward-Looking
          Statements
  Certain
          statements in this Quarterly Report on Form 10-QSB, under the section
          "Management's Discussion and Analysis of Financial Condition and Results
          of
          Operations," and elsewhere relate to future events and expectations and
          as such
          constitute "forward-looking statements" within the meaning of the Private
          Securities Litigation Reform Act of 1995. The words "believes," "anticipates,"
          "plans," "expects," and similar expressions are intended to identify
          forward-looking statements. Such forward-looking statements involve known
          and
          unknown risks, uncertainties, and other factors which may cause the actual
          results, performance or achievements of us to be materially different from
          any
          future results, performance or achievements expressed or implied by such
          forward-looking statements and to vary significantly from reporting period
          to
          reporting period. These forward-looking statements were based on various
          factors
          and were derived utilizing numerous important assumptions and other factors
          that
          could cause actual results to differ materially from those in the
          forward-looking statements, including, but not limited to: uncertainty
          as to our
          future profitability and our ability to develop and implement operational
          and
          financial systems to manage rapidly growing operations, competition in
          our
          existing and potential future business, and other factors. Other factors
          and
          assumptions not identified above were also involved in the derivation of
          these
          forward-looking statements, and the failure of such other assumptions to
          be
          realized, as well as other factors, may also cause actual results to differ
          materially from those projected. We assume no obligation to update these
          forward- looking statements to reflect actual results, changes in assumptions
          or
          changes in other factors affecting such forward-looking statements.
   15
  Item
          3.
          Controls and Procedures
  Controls
          and Procedures
  Disclosure
          controls and procedures are designed to ensure that information required
          to be
          disclosed in the reports filed or submitted under the Exchange Act is recorded,
          processed, summarized and reported, within the time periods specified in
          the
          SEC's rules and forms. Disclosure controls and procedures include, without
          limitation, controls and procedures designed to ensure that information
          required
          to be disclosed in the reports filed under the Exchange Act is accumulated
          and
          communicated to management, including the Chief Executive Officer and Chief
          Financial Officer, as appropriate, to allow timely decisions regarding
          required
          disclosure. We carried out an evaluation as of June 30, 2005, under the
          supervision and with the participation of our management, including our
          Chief
          Executive Officer and Chief Financial Officer, of the effectiveness of
          the
          design and operation of our disclosure controls and procedures. Based upon
          and
          as of the date of that evaluation, the Chief Executive Officer and Chief
          Financial Officer concluded that our disclosure controls and procedures
          are
          effective.
  During
            the quarter ended June 30, 2005, there has been no change in internal
            controls
            over financial reporting that has materially affected, or is reasonably
            likely
            to materially affect, the small business issuer's internal control over
            financial reporting.
 
 16
  PART
        II -
        OTHER INFORMATION
 
 Item
        1.
        Legal Proceedings
 
 None.
 
 Item
        2.
        Unregistered Sales of Equity Securities and Use of Proceeds
 
 None.
 
 Item
        3.
        Defaults Upon Senior Securities
 
 None.
 
 Item
        4.
        Submission of Matters to a Vote of Security Holders
 
 None.
 
 Item
        5.
        Other Information
 
 None.
 
 Item
        6.
        Exhibits
 Exhibit
                    Number
                  Description31.1
                  Certification
                      of the Chief Executive Officer pursuant
                      to Rule 13a-14(a)/15d-14(a) of the Securities
                      Exchange Act of 1934, as adopted pursuant
                      to Section 302 of the Sarbanes-Oxley Act of
                      2002.31.2
                  Certification
                      of the Chief Financial Officer pursuant
                      to Rule 13a-14(a)/15d-14(a) of the Securities
                      Exchange Act of 1934, as adopted pursuant
                      to Section 302 of the Sarbanes-Oxley Act of
                      2002.32
                  Certifications
                      of the Chief Executive Officer and Chief
                      Financial Officer pursuant to 18 U.S.C Section
                      1350, as adopted pursuant to Section 906 of
                      the Sarbanes-Oxley Act of 2002.
 17
 SIGNATURES
  In
        accordance with the requirements of the Securities Exchange Act of 1934,
        the
        registrant has duly caused this report to be signed on its behalf by the
        undersigned, thereunto duly authorized.
  C&D
                  PRODUCTION INCDated: January
                  27, 2006
                By:
                /s/ Michael
                  ChouMichael
                  ChouChairman
                    of the Board, Chief
                  Executive
                    Officer and Secretary
                  (Principal
                    Executive Officer)
 Dated: January
                  27, 2006
                By:
                /s/ Chien-Te
                  ChouChien-Te
                  ChouCief
                    Financial Officer and
                  Administrative
                    and Financial Manager
                  (Principal
                    Financial Officer)
  18
 
 EXHIBIT
        INDEX
 Exhibit
                    Number
                  Description31.1
                  Certification
                      of the Chief Executive Officer pursuant
                      to Rule 13a-14(a)/15d-14(a) of the Securities
                      Exchange Act of 1934, as adopted pursuant
                      to Section 302 of the Sarbanes-Oxley Act of
                      2002.31.2
                  Certification
                      of the Chief Financial Officer pursuant
                      to Rule 13a-14(a)/15d-14(a) of the Securities
                      Exchange Act of 1934, as adopted pursuant
                      to Section 302 of the Sarbanes-Oxley Act of
                      2002.32
                  Certifications
                      of the Chief Executive Officer and Chief
                      Financial Officer pursuant to 18 U.S.C Section
                      1350, as adopted pursuant to Section 906 of
                      the Sarbanes-Oxley Act of 2002.
 19