U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-KSB



ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF

THE SECURITIES EXCHANGE ACT OF 1934



For the Year Ended December 31, 2004

Commission File No. 33-90696



ANDEAN DEVELOPMENT CORPORATION

(Name of Small Business Issuer in Its Charter)



FLORIDA                                                    65-0420146

(State of Other Jurisdiction of                       (I.R.S. Employer

Incorporation or Organization)                      Identification No.)



9175 Mainwaring Road, Sidney, BC V8L 1J9

(Address of Principal Executive Offices)                 (Zip Code)



(250) 656 - 8860

(Issuer's Telephone Number, Including Area Code)



Securities registered under Section 12(b) of the Exchange Act: None



Securities registered under Section 12(g) of the Exchange Act:



COMMON STOCK, $.0001 PAR VALUE

(Title of Class)



REDEEMABLE COMMON STOCK PURCHASE WARRANTS

(Title of Class)

Check whether the issuer (1) has 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 [X]  No [ ]



Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of issuer'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. [X]



State issuer's revenues for its most recent fiscal year: $0.00.



State the aggregate market value of the voting stock held by non-affiliates of the registrant on May 14, 2004, computed by reference to the price at which the stock was sold on that date: $95,921.



APPLICABLE ONLY TO CORPORATE REGISTRANTS



State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date.



2,820,100 shares of Common Stock, $.0001 par value, as of December 31, 2003.



Transitional Small Business Disclosure Format (check one)

Yes [ ] No [X]



DOCUMENTS INCORPORATED BY REFERENCE



None





































































ANDEAN DEVELOPMENT CORPORATION

Report on Form 10KSB

For the Fiscal Year Ended December 31, 2003



TABLE OF CONTENTS



PAGE



PART I



|Item 1.       Description of the Business...................................................................
1                       
|-------------------------------------------------------------------------------------------------------------------------------------
|Item 2.       Description of the Property.........................................................................     11            
|Item 3.       Legal Proceedings........................................................................................    11        
|Item 4.       Submission of Matters to Vote of Security Holders...................................     12                            
|                                                                                                                                     
|PART II                                                                                                                              
|                                                                                                                                     
|Item 5.       Market for Common Equity and Related Stockholder Matters...................    13                                      
|Item 6.       Management's Discussion and Analysis......................................................    14                       
|Item 7.       Financial Statements....................................................................................    18         
|Item 8.       Changes in and Disagreements with Accountants on Accounting and                                                        
|Financial Disclosure.....................................................................................    18                      
|                                                                                                                                     
|PART III                                                                                                                             
|                                                                                                                                     
|Item 9.       Directors, Executive Officers, Promoters and Control Persons.................     19                                   
|Item 10.      Executive Compensation...........................................................................     21               
|Item 11.      Security Ownership of Certain Beneficial Owners and Management......      23                                           
|Item 12.      Certain Relationships and Related Transactions......................................      24                           
|                                                                                                                                     
|PART IV                                                                                                                              
|                                                                                                                                     
|Item 13.      Exhibits and Reports on Form 8-K...........................................................     26                     
|                                                                                                                                     
|Signatures    ...................................................................................................................  28

















PART I



ITEM 1. DESCRIPTION OF BUSINESS



BUSINESS



GENERAL



Andean Development Corporation ("ADC" or the "Company") was incorporated in Florida on October 19, 1994 and was a holding company for Errazuriz y Asociados Ingenieros S.A. ("AE&A"), and E&A Ingesis S.A. ("INA"), both Chilean corporations located in Santiago, Chile. On May 5, 2003, the Company entered into a Stock Purchase Agreement (the Agreement) whereby the Company would permit the transfer of 1,450,000 common shares from the former Chief Executive Officer (CEO) for a purchase price of $75,000. The agreement further provided that, at closing, the former CEO would acquire all of the operating assets and assume primarily all of the liabilities of the Companys business, with exception of certain Assumed Liabilities in the amount of $57,000, as defined. In addition, the agreement provided that such assignment and assumption shall be effective and dated as of March 31, 2003.



History of the Business



AE&A provided engineering and project management services for water and energy related private and public works and provides technical assistance for both turnkey and non-turnkey major works, mainly related to the development and construction of energy, water and sewage treatment projects in Chile. INA acts as the agent in the sale of major electrical and mechanical equipment. See "Core Business."





INA was also developing, in a joint venture with genteAndina S.A.,  a Chilean company specializing in education (genteAndina S.A),a communication network and related software for (i) rural area remote education, and (ii) post graduate professional education "at home" for Union leaders and key employees in Chile, which, if successful, could be adopted and developed in other countries in South America.





On August 31, 2001, the Company extended the expiration date of its Redeemable Common Stock Purchase Warrants (the "Warrants") from November 13, 2001 to November 13, 2003. The Company originally issued the Warrants in connection with a stock offering on Registration Statement Form SB-2 (SEC File No. 333-90696) which was declared effective by the Securities and Exchange Commission on November 13, 1996.  No further extensions were approved.



The Company was also the majority owner (83.6%) of a non-operating subsidiary, Consonni USA, Inc. (Consonni USA), the assets of which consist of cash and notes receivables. On December 31, 2002, the Company exchanged its holdings in Consonni USA for the assets and liabilities of Consonni USA, such assets consisting of the balance of a promissory note payable in the principal outstanding amount of $552,000 with six remaining payments of approximately ninety two thousand U.S. dollars (U.S. $92,000) payable June 30 and January 31 of each year. The business conditions in Spain, the location of those entities, the non-payment by those entities of the sums owing to date, and the failure of those entities to generate any revenues that would allow them to satisfy their obligations to the Company make it unlikely, in managements opinion, that the Company will be able to collect on those debts. The Company does not have the funds to pursue any legal action to collect such sums outstanding.



The costs associated with the ongoing operations of the Company made it exceedingly difficult to achieve profitability in the business, which resulted in continuing losses. As a result those ongoing operating losses and expenses, the Company had a significant working capital deficit, negative stockholder's equity, and almost no remaining cash. The sums owed to the Company from third parties, particularly the payments on the balance of a promissory note payable assumed in the sale of the interests of Consonni USA, are in arrears and their collection, as discussed above, is in doubt.  In fiscal 2002, the Company experienced a net loss of ($1,691,307), an increase of $1,286,952 over the loss of ($404,355) in 2001. In the first quarter of fiscal 2003, the Company experienced a net loss before taxes of $31,623.  The Company did not generate any revenues in fiscal 2003.  As a consequence, in 2003, the majority shareholder, CEO and Director, Pedro Pablo Errazuriz, determined, with the unanimous support of the Companys Board of Directors that the shareholders of the Company would be better served from the acquisition of another business with the ultimate goal of establishing a more liquid public market for its common stock.  In order to facilitate such a transaction the Companys Board of Directors determined that the capitalization structure of the Company should be simplified and the Company should divest itself of its assets and liabilities.  On May 5, 2003, the Company entered into a Stock Purchase Agreement (the Agreement) whereby the Company would permit the transfer of 1,450,000 common shares from the former Chief Executive Officer (CEO) for a purchase price of $75,000. The agreement further provided that, at closing, the former CEO would acquire all of the operating assets and assume primarily all of the liabilities of the Companys business, with exception of certain Assumed Liabilities in the amount of $57,000, as defined. In addition, the agreement provides that such assignment and assumption shall be effective and dated as of March 31, 2003.



EMPLOYEES



As of December 31, 2004, the Company did not employ any full-time employees.



ITEM 2. DESCRIPTION OF PROPERTY



The Company owns no real estate and its office is supplied at no charge by its consultants.



ITEM 3. LEGAL PROCEEDINGS



The Company is not a party to any pending legal proceeding, the resolution of which the management of the Company believes would have a material adverse effect on the Company's results of operations or financial condition, nor to any other pending legal proceedings other than ordinary, routine litigation incidental to its business.



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



None.











PART II



ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS



Following the Company's initial public offering of its common stock, par value $.0001 ("Common Stock"), and redeemable common stock purchase warrants ("Warrants") on October 29, 1996, the Company's Common Stock and Warrants were traded principally on the National Association of Security Dealers Automatic Quotation - Small Cap Market System under the symbols "ADCC" and "ADCCW", respectively. On March 15, 2000, the NASDQ Listing Qualifications Panel delisted the Company's securities from the NASDAQ SmallCap Market. The securities were then listed on the over-the-counter Bulletin Board until May 15, 2000. On May 15, 2000, the securities were delisted from the over-the-counter Bulletin Board and the securities were traded on the "pink sheets." On July 3, 2003, the securities were relisted on the over-the-counter Bulletin Board under the symbol "ADCC".



ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS



GENERAL



Management's Discussion and Analysis contains various "forward looking statements" within the meaning of the Securities Act of 1933, as amended, the Securities and Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act 1995. Such statements consist of any statement other than a recitation of historical fact and can be identified by the use of forward-looking terminology such as "may", "expect", "anticipate", "estimate" or "continue" or the negative thereof or other variations thereon or comparable terminology.



The Company cautions that these statements are further qualified by important factors that could cause actual results to differ materially from those contained in the forward-looking statements, that these forward-looking statements are necessarily speculative, and there are certain risks and uncertainties that could cause actual events or results to differ materially from those referred to in such forward-looking statements.

The Company does not have a policy of updating or revising forward-looking statements and thus it should not be assumed that silence by management of the Company over time means that actual events are bearing out as estimated in such forward-looking statements.



Results of Operations (2004 compared to 2003)



Gross Revenues, Costs of Operations and Gross Profit



During the fiscal year ended December 31, 2004 the registrant recorded no revenues, no costs of operations and no profits.  This duplicates the results recorded for the year ended December 31, 2003.



Liquidity and Capital Resources



The Company has financed its operations and other working capital requirements principally from non-recorded advances from the principal shareholder.



Current Assets



Cash. As of December 31, 2004, the Company had in $0.00 cash compared to $ 0.00 as of December 31, 2003.



Total Current Assets. As of December 31, 2004, the Company had $0.00 in total assets as compared to $0.00 as of December 31, 2003.



Liabilities



Current liabilities. Current liabilities decreased from $57,000 at December 31, 2004 and $57,000  as at December 31, 2004.



The registrants liabilities of $57,000 were totally paid out in January, 2005.





ITEM 7. FINANCIAL STATEMENTS





CONSOLIDATED FINANCIAL STATEMENTS



For the year ended December 31, 2003 and 2002





CONTENTS









|                                                   | Page  
|-------------------------------------------------- | ------
|                                                   |       
|Report of Independent Certified Public Accountants | F-2   
|                                                   |       
|Balance Sheet                                      | F-3   
|                                                   |       
|Statements of Operations                           | F-4   
|                                                   |       
|Statements of Changes in Shareholders' Deficit     | F-5   
|                                                   |       
|Statements of Cash Flows                           | F-6   
|                                                   |       
|Notes to Financial Statements                      | F-7-14











Andean Development Corporation

1224 Washington Avenue

Miami Beach, FL 93229





Report of Independent Registered Public Accounting Firm





We have audited the accompanying consolidated balance sheet of Andean Development Corporation and Subsidiaries as of December 31, 2004 and the related consolidated statements of operations, changes in stockholders equity and cash flows for the year then ended.  These financial statements are the responsibility of the Companys management.  Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of Andean Development Corporation and Subsidiaries as of December 31, 2003 were audited by other auditors whose report thereon dated April 29, 2004 expressed an unqualified opinion of those statements.



We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used, significant estimates made by management and evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.



In our opinion, these consolidated financial statements present fairly, in all material aspects, the financial position of Andean Development Corporation and Subsidiaries as of December 31, 2004 and the results of its operations and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.



The accompanying financial statements have been prepared assuming the Company will continue as a going concern.  The Company will need additional working capital for its planned activity, which raises substantial doubt about its ability to continue as a going concern.  Managements plans in regard to these matters are described in the notes to the financial statements.  These financial statements do not include any adjustment that might result from the outcome of this uncertainty.





Madsen & Associates CPAs, Inc.

April 12, 2005

Salt Lake City, Utah







|ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES                
|---------------------------------------------------------------
|                                                               
|CONSOLIDATED BALANCE SHEET                                     
|                                                               
|DECEMBER 31, 2004                                              
|                                                               
|                                                               
|ASSETS                                                         
|Current Assets:                                                
|Cash                                                           
|Total Current Assets                                           
|                                                               
|LIABILITIES & SHAREHOLDERS' DEFICIENCY                         
|                                                               
|Current Liabilities:                                           
|Accounts payable and accrued expenses                          
|Total Current Liabilities                                      
|                                                               
|Stockholders' Deficiency:                                      
|Preferred Stock, $.0001 par value; authorized 5,000,000 shares;
|no preferred shares issued and outstanding                     
|Common Stock, $.0001 par value; authorized 20,000,000 shares;  
|3,820,100 shares issued and outstanding                        
|Additional Paid-In Capital                                     
|Accumulated Deficit                                            
|Total Shareholders' Deficiency                                 
|                                                               
|Total Liabilities and Shareholders' Deficiency                 
|                                                               
|                                                               
|                                                               









|ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES |                    |  |                   
|----------------------------------------------- | ------------------ |  | ------------------
|                                                |                    |  |                   
|CONSOLIDATED STATEMENTS OF OPERATIONS           |                    |  |                   
|YEARS ENDED DECEMBER 31, 2004 AND 2003          |                    |  |                   
|                                                |                    |  |                   
|                                                |                    |  |                   
|                                                | 2004               |  | 2003              
|                                                |                    |  |                   
|Revenues                                        | $                - |  | $                -
|Total Revenue                                   | -                  |  | -                 
|Expenses:                                       |                    |  |                   
|Selling and administrative expenses             | 1,000              |  | -                 
|                                                |                    |  |                   
|Total operating Expenses                        | 1,000              |  | -                 
|                                                |                    |  |                   
|                                                |                    |  |                   
|Other Income (expense)                          |                    |  |                   
|Loss on disposition of assets and liabilities   | -                  |  | (555,600)         
|                                                |                    |  |                   
|Loss from continuing operations                 |                    |  |                   
|before provision for income taxes               | -                  |  | (555,600)         
|Provision for income taxes                      | -                  |  | -                 
|                                                |                    |  |                   
|Net Loss                                        | (1,000)            |  | (555,600)         
|                                                |                    |  |                   
|Loss per common share:                          |                    |  |                   
|Net loss from continuing operations             | (.00)              |  | (0.20)            
|                                                |                    |  |                   
|Weighted average common shares                  |                    |  |                   
|outstanding- basic and diluted                  | 2,903,433          |  | 2,820,100         
|                                                |                    |  |                   
|                                                |                    |  |                   











|                               |        |                  |                  | ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES   
|------------------------------ | ------ | ---------------- | ---------------- | --------------------------------------------------
|                               |        |                  |                  | CONSOLIDATED STATEMENT OF SHAREHOLDERS' DEFICIENCY
|                               |        |                  |                  |                                                   
|                               |        |                  |                  | FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003    
|                               |        |                  |                  |                                                   
|                               |        | Preferred Stock  | Common Stock     |                                                   
|                               |        | 5,000,000 shares |                  | 20,000,000 shares                                 
|                               |        | authorized       |                  |                                                   
|                               |        |                  |                  |                                                   
|                               | Shares |                  | Par Value        |                                                   
|                               | Issued |                  | $.0001 per share | Issued                                            
|                               |        |                  |                  |                                                   
|                               |        |                  |                  |                                                   
|                               | -      |                  | -                |                                                   
|                               |        |                  |                  |                                                   
|                               | -      |                  | -                |                                                   
|                               |        |                  |                  |                                                   
|                               |        |                  |                  |                                                   
|                               | -      |                  | -                |                                                   
|                               |        |                  |                  |                                                   
|Balance at                     |        |                  |                  |                                                   
|December 31, 2002              | -      |                  | -                |                                                   
|                               |        |                  |                  |                                                   
|Restatement of                 |        |                  |                  |                                                   
|accumulated deficit            |        |                  |                  |                                                   
|subject to quasi               |        |                  |                  |                                                   
|reorganization                 | -      |                  | -                |                                                   
|                               |        |                  |                  |                                                   
|Net loss                       | -      |                  | -                |                                                   
|                               |        |                  |                  |                                                   
|Balance at                     |        |                  |                  |                                                   
|December 31, 2003              | -      |                  | -                |                                                   
|                               |        |                  |                  |                                                   
|Issuance of common stock       |        |                  |                  |                                                   
|for services at .001 per share | -      |                  | -                |                                                   
|                               |        |                  |                  |                                                   
|Net loss                       | -      |                  | -                |                                                   
|                               |        |                  |                  |                                                   
|Balance at                     |        |                  |                  |                                                   
|December 31, 2004              | -      |                  | -                |                                                   
|                               |        |                  |                  |                                                   









|ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIES       |                 |  |               
|----------------------------------------------------- | --------------- |  | --------------
|                                                      |                 |  |               
|Consolidated Statements of Cash Flows                 |                 |  |               
|Years ended December 31, 2004 and 2003                |                 |  |               
|                                                      |                 |  |               
|                                                      | 2004            |  | 2003          
|Cash Flows used in Operating Activities:              |                 |  |               
|Net Loss                                              | $       (1,000) |  | $    (555,600)
|                                                      |                 |  |               
|Adjustments to reconcile net loss to net cash used in |                 |  |               
|operating activities                                  |                 |  |               
|                                                      | -               |  | -             
|Common stock issued for services                      | 1,000           |  | -             
|                                                      | -               |  | -             
|                                                      | -               |  | -             
|Disposition of assets and liabilities                 | -               |  | 555,600       
|                                                      |                 |  |               
|Changes in assets and liabilities:                    |                 |  |               
|Accounts receivable                                   | -               |  | 49,693        
|Notes receivable                                      | -               |  | 231,846       
|Other current assets                                  | -               |  | (192,790)     
|                                                      | -               |  | -             
|Accounts payable and accrued expenses                 | -               |  | (57,800)      
|Increase (decrease) in staff severence indemnities    | -               |  | (32,018)      
|NET CASH USED IN OPERATING ACTIVITIES                 | -               |  | (1,069)       
|                                                      |                 |  |               
|                                                      |                 |  |               
|                                                      | -               |  | -             









ANDEAN DEVELOPMENT CORPORATION

AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Years Ended December 31, 2004 and 2003



NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Business



Andean Development Corporation, a Florida corporation (the Company) was engaged in the business of providing engineering and project management services for energy and private works projects and sells, as agent, major electrical and mechanical equipment.  The Company also advises and assists large private utilities and government agencies in obtaining land easements from private owners for installation of electrical lines, sewer plant infrastructure, piping and roads. The costs associated with the ongoing operations of the Company made it exceedingly difficult to achieve profitability in the business, which resulted in continuing losses.  As a result of those ongoing operating losses and expenses, the Company had a significant working capital deficit, negative stockholders equity, and depleted available cash to fund operations.  The Company was unable to raise required capital to continue its business in its current form and commenced plans to divest all of its operations and sell substantially all of its assets.  On May 5, 2003, the Company entered into a stock purchase agreement (further described in Note 2) whereby the former Chief Executive Officer of the Company (CEO) would acquire all of the operating assets and assume primarily all of the liabilities of the Companys engineering and project management services business in exchange for the sale of 1,450,000 common shares. As a result of the consummation of this agreement, the Company currently has no assets or material liabilities.



Principles of Consolidation



The consolidated financial statements include the accounts of Andean Development Corporation, Inc. and its wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated from these consolidated financial statements.



Use of Estimates



Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period to prepare these consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. Actual results could differ from those estimates and assumptions.





Functional Currency



The Company operated its lines of business principally in Chile, Peru, Argentina and Spain. The consolidated financial statements have been translated in accordance with the provisions set forth in Statement of Financial Accounting Standards No. 52, "foreign currency translation" from Chilean pesos and Spanish pesetas (the functional currencies) into U.S. dollars (the reporting currency).  The exchange rate used at December 31, 2003 and for assets and liabilities was 695.89 and 656.20 Chilean pesos to U.S 2002. $1.00, respectively.   Shareholders' equity and components are translated at historical rates.  The weighted average exchange rates used during the years ended December 31, 2002 and 2001, respectively, for results of operations were 671.14 and 643.09 Chilean pesos to U.S. $1.00, respectively, and 185.85 and 179.86 Spanish pesetas to U.S. $1.00, respectively.  The effects of exchange rate changes are reflected as a separate component of shareholders' equity.



Revenue Recognition



The Company earned revenue principally from commissions associated with the sale of equipment and from fees for the performance of engineering services and providing technical assistance in the development of specialized projects.  Revenues for fees associated with services are recognized when performed and are based on standard billing rates. The Company earns commissions on the sale of equipment.  For turnkey jobs, commissions are earned when the contracts are signed and Orders to Proceed" are issued.  In some instances, due to the significant time the Company is required to wait for   payment, commissions that the Company initially believed it had earned are changed.  Due to the Company's inability to determine the amount of commissions, the Company, commencing in 1999, recognizes commissions only when they are received.  This change in policy is not deemed to have a material impact on the Company's consolidated financial statements.



The Company earned no revenues from its educational and software development activities in 2004 and 2003.





Concentrations of Credit Risk



A significant portion of the Company's sales have been to several large customers and, as such, the Company is directly affected by the well-being of those customers.  However, the credit risk associated with trade receivables is minimal due to the significant size of the Companys customers and the Company's ongoing efforts to monitor the credit worthiness of its customers.





Fair Values of Financial Instruments



The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties.  The fair value of cash, short-term investments, accounts receivable, notes receivable, accounts payable and notes payable approximate the carrying amounts at December 31, 2004 and 2003.





Property and Equipment



Property and equipment are recorded at cost. Depreciation is provided for over the estimated useful lives of the respective assets using the straight-line method for financial reporting purposes and the accelerated method for income tax purposes. Amortization of the leasehold improvements is provided for on the straight-line method over the term of the lease. Maintenance, repairs, and minor renewals are charged to expense as incurred while expenditures that materially increase values, change capacities, or extend useful lives are capitalized.



Income taxes



The Company uses the liability method of accounting for income taxes.  Under the liability method deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax bases of the assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.  An allowance against deferred tax assets is recorded, when it is more than likely than not, that such benefits will not be realized.  Any expected income tax benefit has been fully offset by a valuation reserve because the future use to the tax benefit is doubtful.



Recent Accounting Pronouncements



The Company does not expect that the adoption of other recent accounting pronouncements will have a material impact its financial statements.



Basic and Dilutive Net Income (Loss) Per Share



Basic net income (loss) per share amounts are computed based on the weighted average number of shares actually outstanding.  Diluted net income (loss) per share amounts are computed using the weighted average number of common shares and common equivalent shares outstanding as if shares had been issued on the exercise of any common share rights unless the exercise becomes anitdilutive and then only the basic per share amounts are shown in the report.



NOTE 2  STOCK PURCHASE AGREEMENT



In 2003, the Company was unable to raise the required capital to continue its business in its present form and commenced plans to divest all of its operations and sell substantially all of its assets.  On May 5, 2003, the Company entered into a Stock Purchase Agreement (the Agreement) whereby the Company would purchase 1,450,000 common shares from the former Chief Executive Officer (CEO) for a purchase price of $75,000 to be paid on by a related party on behalf of the Company. The agreement further provided that, at closing the former CEO would acquire all of the operating assets and assume primarily all of the liabilities of the Companys business, with exception of certain Assumed Liabilities in the amount of $57,000, as defined. In addition, the agreement provides that such assignment and assumption shall be effective and dated as of March 31, 2003.





NOTE 3  SHAREHOLDERS EQUITY



Quasi-Reorganization



Effective March 31, 2003, the Company had disposed of all of its operating assets. Accordingly, the Company has changed its business strategy and focus. The Board of Directors elected to restate the balance sheet asquasi-reorganization.  In quasi-reorganization, the deficit in retained earnings is eliminated by charging paid-in capital.  In effect, this gives the balance sheet a fresh-start. Beginning January 1, 2003 and continuing forward, the Company will be crediting net income and charging net losses to retained earnings.











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



On April 1, 2004, the Company engaged Jewett Schwartz & Associates to act as the Companys independent certified public accountant.  Jewett Schwartz & Associates Certified Public Accountants were appointed by the Company on April 1, 2004 to audit the Companys financial statements for the fiscal year ended December 31, 2003. In March of 2005 the registrant appointed Madsen & Associates, CPAs, Inc. as their new Independent Auditors. Prior to their appointment as independent accountants, neither the Company nor anyone on its behalf consulted  Madsen& Associates CPAs, Inc. regarding either the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company's consolidated financial statements, nor has the Companys provided to the Company a written report or oral advice regarding such principles or audit opinion.



During the Companys last fiscal year and any subsequent interim period preceding the date of dismissal, there were no disagreements between Jewett, Schwartz & Associates and the Company, whether resolved or not resolved, on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved, would have caused them to make reference to the subject matter of the disagreement in connection with their reports.



ITEM 8A. CONTROLS AND PROCEDURES



Evaluation of disclosure controls and procedures



As of the end of the period covered by this report, the Company carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Exchange Act Rule 13a-14.  This evaluation was done under the supervision and with the participation of the Companys Principal Executive Officer and Principal Financial Officer. Based upon that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that the Companys disclosure controls and procedures are effective in gathering, analyzing and disclosing information needed to satisfy the Companys disclosure obligations under the Exchange Act.



Changes in internal controls



There were no significant changes in the Companys internal controls or in other factors that could significantly affect those controls since the most recent evaluation of such controls.









PART III



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



EXECUTIVE OFFICERS AND DIRECTORS



The directors and executive officers are as follows:



NAME

AGE                         POSITION



Lance Larsen

44

CEO, Chief Accounting Officer, Director



Lance Larsen has been an officer and a director of the Company since March 31, 2003. From December, 1996 to the present he has served as President and Chief Executive Officer of Larsen International, Inc., a business consultancy firm specializing in mergers and acquisitions. From August 1997 to June 2000, he served as Vice President and General Manager of Bio-Med Marketing Inc., a Calgary, Alberta firm that specializes in financing and consulting to bio-medical companies. His duties there include hiring and training all sales personnel, designing and developing all in-house applications software applications, including the company network design and maintenance. From June 1988, Mr. Larsen served as General Manager of West Coast International, a company specializing in international sales of communications accessories. His duties there were to hire and train all sales staff and design and maintain all software and network installations. Mr. Larsen graduated with honors from the Canadian Investment Funds Institute and the Dale Carnegie sales course.





BOARD OF DIRECTORS



Directors are elected at the Company's annual meeting of shareholders and serve for one year until the next annual shareholders' meeting or until their successors are elected and qualified. Officers are elected by the Board of Directors and their terms of office are at the discretion of the Board.



COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934



Section 16(a) of the Securities Exchange Act of 1934, as amended, requires that the Company directors and executive officers, and persons who own more than ten percent (10%) of the Company's outstanding common stock, file with the Securities and Exchange Commission (the "Commission") initial reports of ownership and reports of changes in ownership of Common Stock. Such persons are required by the Commission to furnish the Company with copies of all such reports they file. The Company's knowledge, based solely on a review of the copies of such reports furnished to the Company and written representation, as of December 31, 2003, all of the Section 16(a) filing requirements applicable to its officers, directors and greater than 10%  Beneficial owners have been satisfied.

CODE OF ETHICS

The Company has adopted a code of business conduct and ethics that applies to its directors, officers, and employees, including its principal executive officers, principal financial officer, principal accounting officer, controller or persons performing similar functions. A copy of the code is attached to this report as Exhibit 14.



ITEM 10. EXECUTIVE COMPENSATION AND EMPLOYMENT AGREEMENTS



The registrant paid no compensation to its Chief Executive Officer during the year ended December 31, 2004.  It has no employment contract with its sole officer and director.



INCENTIVE AND NON-QUALIFIED STOCK OPTION PLANS



Pursuant to the Company's Stock Option Plan (the "Stock Option Plan") and Directors Stock Option Plan (the "Directors Plan"), 175,000 shares of Common Stock and 75,000 shares of Common Stock, respectively, are reserved for issuance upon exercise of options. The Plans are designed to serve as an incentive for retaining qualified and competent employees and directors. Both the Stock Option Plan and the Directors Plan apply to Andean Development Corporation and each of its subsidiaries. Only non-employee directors are eligible to receive options under the Directors Plan.



The options mentioned above in this paragraph have been cancelled.  As a result the registrant has no outstanding option s as of December 31, 2004.



The Company's Board of Directors, or a committee thereof, administers and interprets the Stock Option Plan and is authorized to grant options thereunder to all eligible employees of the Company, including officers and directors (whether or not employees) of the Company. The Stock Option Plan provides for the granting of "incentive stock options" (as defined in Section 422 of the Internal Revenue Code), non-statutory stock options and "reload options." Options may be granted under the Stock Option Plan on such terms and at such prices as determined by the Board, or a committee thereof, except that in the case of an incentive stock option granted to a 10% shareholder, the per share exercise price will not be less than 110% of such fair market value. The aggregate fair market value of the shares covered by incentive stock options granted under the Plans that become exercisable by a grantee for the first time in any calendar year is subject to a $100,000 limit.



The purchase price for any option under the Stock Option Plan may be paid in cash, in shares of Common Stock or such other consideration that is acceptable to the Board of Directors or the committee thereof. If the exercise price is paid in whole or in part in Common Stock, such exercise may result in the issuance of additional options, known as "reload options," for the same

number of shares of Common Stock surrendered upon the exercise of the underlying option. The reload option would be generally subject to the same provisions and restrictions set forth in the Stock Option Plan as the underlying option except as varied by the Board of Directors or the committee thereof. A reload option enables the optionee to ultimately own the same number of shares as the optionee would have owned if the optionee had exercised all options for cash.

Options granted under the Stock Option Plan are exercisable after the period or periods specified in the option agreement, and options granted under the Directors Plan are exercisable immediately. Options granted under the Plans are not exercisable after the expiration of five years from the date of grant and are not transferable other than by will or by the laws of descent and distribution. The Plans also authorize the Company to make loans to optionees to enable them to exercise their options.



No options are outstanding under either plan.



ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT



The following table sets forth, as of December 31, 2004, the beneficial ownership of Common Stock of all directors of the Company, all directors and officers of the Company as a group, and each person who is known to the Company to own beneficially more than 5% of the Company's Common Stock.





|Name of Beneficial Owner        |  | Amount/ Nature of
Ownership (1) | Percentage of Class
|------------------------------- |  | ------------------------------- | -------------------
|Lance Larsen                    |  | 900,000                         | 31.92              
|Sandringham Investments Limited |  | 525,000                         | 18.62              



Addresses of beneficial owners are on record with the company and are available by written request.



(1) Pursuant to applicable rules of the Securities and Exchange Commission, "beneficial ownership" as used in this table means the sole or shared power to vote shares (voting power) or the sole or shared power to dispose of shares (investment power). Unless otherwise indicated, the named individual has sole voting and investment power with respect to the shares shown as beneficially owned. In addition, a person is deemed the beneficial owner of those securities not outstanding which are subject to options, warrants, rights or conversion privileges if that person has the right to acquire beneficial ownership within sixty days.





ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS



None.



ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K



The following documents are filed as a part of this report or are incorporated by reference to previous filings, if so indicated:





(a)      Exhibits





23.1     Consent of Independent Auditors



99.1

Certification of Chief Executive Officer Pursuant to Section 302 of the

Sarbanes-Oxley Act.    (3)



99.2

Certification of Principal Financial and Accounting Officer Pursuant

to Section 302 of the Sarbanes-Oxley Act.   (3)



99.3

Certification of Chief Executive Officer Pursuant to Section 906 of the

Sarbanes-Oxley Act.   (3)



99.4Certification of Chief Accounting Officer Pursuant to Section 906 of the

Sarbanes-Oxley Act. (3)



(b) Reports on Form 8-K. The Company  filed a Report on Form 8-K on April 21, 2005 regarding the change in the Registrants Independent Accountant.  Acopy of this is included in this filing as Exhibit 99.5



ITEM 14: PRINCIPAL ACCOUNTANT FEES AND SERVICES



Year ended December 31, 2003



Audit Fees:   The aggregate fees, including expenses, billed by the Companys principal accountant in connection with the audit of our consolidated financial statements for the most recent fiscal year and for the review of our financial information included in our Annual Report on Form 10-KSB; and our quarterly reports on Form 10-QSB during the fiscal year ending December 31, 2004 was approximately $2,000.



Audit Related Fees:  The aggregate fees, including expenses, billed by the Companys principal accountant for services reasonably related to the audit for the year ended December 31, 2004 were $-0-.



All Other Fees:  The aggregate fees, including expenses, billed for all other services rendered to the Company by its principal accountant during year 2004 was $-0-.









SIGNATURES



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







Andean Development Corporation.



By /s/ Lance Larsen

-------------------------------------------

Chief Executive Officer

and Chief Accounting  Officer



Date: April 15, 2004