United States Securities and Exchange Commission
                             Washington, D.C. 20549

                                  Form 10-KSB/A

                                   (Mark One)

  |X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                  ACT OF 1934,

                   For The Fiscal Year Ended December 31, 2005

     |_| 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: 0-25416

           UNIVERSAL PROPERTY DEVELOPMENT AND ACQUISITION CORPORATION
             (Exact name of registrant as specified in its charter)

               Nevada                                       20-3014499
-----------------------------------                   --------------------------
   (State or other jurisdiction of                       (I.R.S. Employer
   incorporation or organization)                       Identification No)

             14255 U.S. Highway #1, Suite 209, Juno Beach, FL 33408

               (Address of principal executive offices) (Zip Code)

                                 (561) 630-2977
                (Issuer's Telephone Number, Including Area Code)

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

                    Common Stock, par value $0.001 per share

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

<PAGE>

Indicate by checkmark whether the registrant: (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES |X| NO |_|

Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein and will not be contained, to the best of
the registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. |_|

Registrant's revenues for its most recent fiscal year ended December 31, 2005
were $28,965.

The aggregate market value of the registrant's common stock held by
non-affiliates of the registrant as of March 30, 2006 was $15,810,998 based on
the closing bid price of $0.18 per share as reported on the Over-the-Counter
Bulletin Board ("OTC Bulletin Board") operated by the National Association of
Securities Dealers, Inc.

As of March 31, 2006, the registrant had 89,992,108 shares of common stock, par
value $0.001 per share, outstanding.

Transitional Small Business Disclosure Format (check one): Yes |_| No |X|

                           Forward Looking Statements

All statements, other than statements of historical fact included in this Annual
Report on Form 10-KSB (herein, "Annual Report") regarding our strategy, future
operations, financial position, estimated revenues and losses, projected costs,
prospects, plans and objectives of management are forward-looking statements.
When used in this Annual Report, the words "could", "believe", "anticipate",
"intend", "estimate", "expect", "project", and similar expressions are intended
to identify forward-looking statements, although not all forward-looking
statements contain such identifying words. All forward-looking statements speak
only as of the date of this Annual Report. You should not place undue reliance
on these forward-looking statements. Although we believe that our plans,
intentions and expectations reflected in or suggested by the forward-looking
statements we make in this Annual Report are reasonable, we can give no
assurance that these plans, intentions or expectations will be achieved. We
disclose important factors that could cause our actual results to differ
materially from our expectations under the "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
sections and elsewhere in this Annual Report. These cautionary statements
qualify all forward-looking statements attributable to us or persons acting on
our behalf.

Unless the context otherwise requires, references in this Annual Report to
"UPDA", "registrant", "issuer", "we", "us", "our", "the Company" or "ours" refer
to Universal Property Development and Acquisition Corporation.

                                        2
<PAGE>

                                     PART I

ITEM 1 - Description of Business

Historical Background

Universal Property Development and Acquisition Corporation (the "registrant")
was incorporated in the State of California in 1982 under the name Tahoe Lake
Concession. In August 1983 we changed our name to BAOA, Inc., in November 2000
we changed the name to Call Solutions, Inc., and in November 2003 we changed our
name to Procore Group, Inc. In June 2005, the Board of Directors of the
registrant authorized and approved the upstream merger of the registrant's
wholly owned subsidiary, Universal Property Development and Acquisition
Corporation, a Nevada corporation which had no operations, with and into the
registrant pursuant to Chapter 92A of the Nevada Revised Statutes (the "Upstream
Merger"). The Upstream Merger became effective on June 17, 2005, when the
registrant filed Articles of Merger with the Nevada Secretary of State. In
connection with the Upstream Merger, and as authorized by Section 92A.180 of the
Nevada Revised Statutes, the registrant changed its state of domicile from
California to Nevada and changed its name from Procore, Inc. to Universal
Property Development and Acquisition Corporation. The Board of Directors of the
registrant as it existed prior to the Upstream Merger survived the merger with
no resignations or new appointments. As a result of the name change, the
registrant's common stock now trades on the OTC Bulletin Board under the trading
symbol "UPDA.OB".

General

Our principal executive offices are located at 14255 U.S. Highway #1, Suite 209,
Juno Beach, FL 33408, and our telephone number is (561) 630-2977.

We are engaged in oil and natural gas acquisition, development and production,
with activities currently in Texas. Our focus will be on developing our existing
properties, while continuing to pursue acquisitions of oil and gas properties
with upside potential.

We operate as a holding company which operates through the formation of joint
ventures with other entities in the oil and natural gas acquisition, development
and production industry. We currently are joint venture partners in three joint
ventures through which we have operations in the states of Texas. Through the
formation of joint ventures, we have been able to expand our portfolio of
assets, broaden our base of operations and hire, or otherwise engage individuals
with extensive industry knowledge and experience.

Our current operating joint ventures are Canyon Creek Oil & Gas, Inc., West Oil
& Gas, Inc., Winrock Energy, Inc., Texas Energy, Inc. and UPDA Petro Trading,
Inc.

Joint Ventures

Canyon Creek Oil & Gas, Inc.

Canyon Creek Oil & Gas Inc. ("CANYON"), a Nevada corporation, was formed in July
2005 as a joint venture entity between us, US Production & Exploration, LLC
("USPX") and Triple Crown Consulting ("TCC") for the purpose of acquiring
currently producing oil and gas properties, low risk drilling prospects and
existing wells in need of state-of-the-art technology to improve profitability
within the state of Texas. We own sixty-five percent (65%) of the capital stock
of CANYON, USPX owns thirty percent (30%) of the capital stock of CANYON and TCC
owns five percent (5%) of the capital stock of CANYON. CANYON holds the leases
to over sixty (60) oil and gas wells located on more than 2,000 acres in North
Texas. CANYON also holds leases on oil and gas properties located in the Inez
Field in Victoria County, Texas and the Giddings Gas Field in Fayette County,
Texas as well as properties in Archer, Palo Pinto, Starr, Young and Coleman
County, Texas. CANYON is pursuing a revitalization program on all of its
properties in order to improve production and bring more wells on line.

The following table shows the current status of the work being done by CANYON on
its leases and the current oil and gas production statistics for each of those
leases:


                                        3

<PAGE>


<TABLE>
<CAPTION>
                                                                              Oil         Natural Gas
        Site County     Total    Total    Wells                            Production      Production       Oil      Natural Gas
                        Acres    Wells    Online     Current Status        (bopm)(1)       (mcfgm)(2)     Purchaser   Purchaser
---------------------- -------- -------- ------- ------------------------ ------------ ----------------- ---------- --------------
<S>                      <C>       <C>      <C>  <C>                         <C>       <C>               <C>        <C>
Coleman County (Hagler   915       16       7    Workover in progress           750         1,000        Sunoco     West Texas Gas
Field)                                                                                                              (WTG)
---------------------- -------- -------- ------- ------------------------ ------------ ----------------- ---------- --------------
Archer County            960       17       11   Workover completed on        2,600    In the process    Sunoco
                                                 11 wells                              of building
                                                                                       gathering system
---------------------- -------- -------- ------- ------------------------ ------------ ----------------- ---------- --------------
Palo Pinto County        614       28       0    Workover in progress           0             0
---------------------- -------- -------- ------- ------------------------ ------------ ----------------- ---------- --------------
Victoria (Inez Field)    243       1        0    Workover completed -           0             0                     Duke Energy
                                                 connecting to sales
                                   line
---------------------- -------- -------- ------- ------------------------ ------------ ----------------- ---------- --------------
Fayette County           80     1 (gas)     0    Workover scheduled for         0             0
(Giddings Field)                                 March
---------------------- -------- -------- ------- ------------------------ ------------ ----------------- ---------- --------------
Young County (Prideaux   40        1        1    Workover completed -           60          4,500        Sunoco     Dynergy
Field)                                           Online
---------------------- -------- -------- ------- ------------------------ ------------ ----------------- ---------- --------------
Starr County (Boyle      268       4        0    Workover scheduled for         0             0
Field)                                           April
---------------------- -------- -------- ------- ------------------------ ------------ ----------------- ---------- --------------
Total for 7 sites       3,120      68       17                                3,410         5,500
</TABLE>


(1) "bopm" means "barrels of oil per month". (2) "mcfgm" means "Natural Gas
Production per month".

West Oil & Gas, Inc.

West Oil & Gas Inc. ("WOG"), a Nevada corporation, was formed in October 2005 as
a joint venture entity between us, Triple Crown Consulting, Inc. ("TCC"), RAKJ
("R"), Rene Kronvold ("RK") and Masaood Group ("MG") for the purpose of
acquiring currently producing oil and gas properties, low risk drilling
prospects and existing wells within the state of Utah. We own seventy percent
(70%) of the capital stock of WOG, TCC owns five percent (5%) R owns five
percent (5%), RK owns five percent (5%) and MG owns fifteen percent (15%) of the
capital stock of WOG. WOG is in the process of reviewing several properties in
the Uintah Basin, Utah, the Altamont-Bluebell field in Utah and elsewhere
throughout the State of Utah. Under the current structure of the WOG joint
venture, MG will provide the necessary funding for any workover or additional
drilling of wells on the properties ultimately acquired by WOG.

This joint venture was inactive at December 31, 2005.

Winrock Energy, Inc.

Winrock Energy, Inc. ("WEG"), a Nevada corporation, was formed in December 2005
as a joint venture entity between us and Lion Partners Hedge Fund ("LPHF") for
the purpose of acquiring certain mineral leases on properties located in Osage
County, Oklahoma. The property subject to such leases covers 3,840 acres in
Osage County, Oklahoma and has a history of oil and gas production dating back
to the 1950's. We own sixty percent (60%) of the capital stock of WEG and LPHF
owns the other forty percent (40%) of the capital stock of WEG.

This joint venture was inactive at December 31, 2005.

Texas Energy, Inc.

Texas Energy, Inc., a Nevada corporation, was formed in March 2006 as a joint
venture entity between us and Sundial Resources, Inc. of Graham, Texas for the
purpose of development of Thresher-Medlin leasehold in Young County, Texas. Upon
completion of the formation of this joint venture entity, we will own seventy
percent (70%) of the capital stock of Texas Energy and Sundial Resources, Inc.
will own percent (25%) and Triple Crown Consulting 2.5 % and RAKJ, Inc. will own
the remaining 2.5% of the capital stock of Texas Energy.

                                        4
<PAGE>

This joint venture was inactive at December 31, 2005.

UPDA Texas Trading, Inc.

This joint venture was inactive at December 31, 2005.

Business Development

Since August 2005, we have striven to build our asset base and achieve growth
primarily through property acquisitions. From the implementation of our business
plan through December 31, 2005, we have increased our proved reserves to
approximately 310,928 Boe (barrel of oil equivalent), and 6,275,000 mcf (natural
gas), based on in-house estimates, through the acquisition of interests in five
properties. As of December 31, 2005, our estimated proved reserves had a pre-tax
PV10 (present value of future net revenues before income taxes discounted at
10%) of approximately $27.6 million. We spent approximately $1.9 million on
acquisitions and capital projects during 2005.

We have a portfolio of oil and natural gas reserves, with approximately 5% of
our proved reserves consisting of oil and approximately 95% consisting of
natural gas. Approximately 52% of our proved reserves are classified as proved
developed producing, or "PDP." None of our proved reserves are classified as
proved developed non-producing, or "PDNP," and approximately 48% are classified
as proved undeveloped, or "PUD."

Competitive Business Conditions

We operate in a highly competitive environment for acquiring properties,
marketing oil and natural gas and securing trained personnel. The majority of
our competitors possess and employ financial, technical and personnel resources
substantially greater than ours, which can be particularly important in the
areas in which we operate. Those companies may be able to pay more for
productive oil and natural gas properties and exploratory prospects and to
evaluate, bid for and purchase a greater number of properties and prospects than
our financial or personnel resources permit. Our ability to acquire additional
prospects and to find and develop reserves in the future will depend on our
ability to evaluate and select suitable properties and to consummate
transactions in a highly competitive environment. Also, there is substantial
competition for capital available for investment in the oil and natural gas
industry.

Current competitive factors in the domestic oil and gas industry are unique. The
actual price range of crude oil is largely established by major international
producers. Pricing for natural gas is more regional. Because the current
domestic demand for oil and gas exceeds supply, we believe there is little risk
that all current production will not be sold at relatively fixed prices. To this
extent we do not believe we are directly competitive with other producers, nor
is there any significant risk that we could not sell all our current production
at current prices with a reasonable profit margin. The risk of domestic
overproduction at current prices is not deemed significant. However, more
favorable prices can usually be negotiated for larger quantities of oil and/or
gas product. In this respect, while we believe we have a price disadvantage when
compared to larger producers, we view our primary pricing risk to be related to
a potential decline in international prices to a level which could render our
current production uneconomical.

We are presently committed to use the services of the existing gathering
companies in our present areas of production. This potentially gives such
gathering companies certain short-term relative monopolistic powers to set
gathering and transportation costs, because obtaining the services of an
alternative gathering company would require substantial additional costs (since
an alternative gathering would be required to lay new pipeline and/or obtain new
rights of way to any lease from which we are selling production).

                                        5
<PAGE>

Major Customers

We principally sell our oil and natural gas production to end users, marketers
and other purchasers that have access to nearby pipeline facilities. In areas
where there is no practical access to pipelines, oil is trucked to storage
facilities. Our marketing of oil and natural gas can be affected by factors
beyond our control, the effects of which cannot be accurately predicted. For
fiscal year 2005, one customer, Sonoco, was responsible for generating 100% of
our total oil sales, and two customers, Dynergy and West Texas Gas, were
responsible for generating all of our natural gas sales. Dynergy accounted for
approximately 82% of our total natural gas sales and West Texas Gas accounted
for approximately 18% of our total gas sales. However, we believe that the loss
of either of these customers would not materially impact our business, because
we could readily find other purchasers for our oil and gas as produced.

Governmental Regulations

Regulation of Transportation of Oil

Sales of crude oil, condensate and natural gas liquids are not currently
regulated and are made at negotiated prices. Nevertheless, Congress could
reenact price controls in the future.

Our sales of crude oil are affected by the availability, terms and cost of
transportation. The transportation of oil in common carrier pipelines is also
subject to rate regulation. The Federal Energy Regulatory Commission, or the
FERC, regulates interstate oil pipeline transportation rates under the
Interstate Commerce Act. Intrastate oil pipeline transportation rates are
subject to regulation by state regulatory commissions. The basis for intrastate
oil pipeline regulation, and the degree of regulatory oversight and scrutiny
given to intrastate oil pipeline rates, varies from state to state.

Insofar as effective interstate and intrastate rates are equally applicable to
all comparable shippers, we believe that the regulation of oil transportation
rates will not affect our operations in any way that is of material difference
from those of our competitors. Further, interstate and intrastate common carrier
oil pipelines must provide service on a non-discriminatory basis. Under this
open access standard, common carriers must offer service to all shippers
requesting service on the same terms and under the same rates. When oil
pipelines operate at full capacity, access is governed by pro-rationing
provisions set forth in the pipelines' published tariffs. Accordingly, we
believe that access to oil pipeline transportation services generally will be
available to us to the same extent as to our competitors.

Regulation of Transportation and Sale of Natural Gas

Historically, the transportation and sale for resale of natural gas in
interstate commerce have been regulated pursuant to the Natural Gas Act of 1938,
the Natural Gas Policy Act of 1978 and regulations issued under those Acts by
the FERC. In the past, the federal government has regulated the prices at which
natural gas could be sold. While sales by producers of natural gas can currently
be made at uncontrolled market prices, Congress could reenact price controls in
the future.

Since 1985, the FERC has endeavored to make natural gas transportation more
accessible to natural gas buyers and sellers on an open and non-discriminatory
basis. The FERC has stated that open access policies are necessary to improve
the competitive structure of the interstate natural gas pipeline industry and to
create a regulatory framework that will put natural gas sellers into more direct
contractual relations with natural gas buyers by, among other things, unbundling
the sale of natural gas from the sale of transportation and storage services.
Although the FERC's orders do not directly regulate natural gas producers, they
are intended to foster increased competition within all phases of the natural
gas industry.

We cannot accurately predict whether the FERC's actions will achieve the goal of
increasing competition in markets in which our natural gas is sold. Therefore,
we cannot provide any assurance that the less stringent regulatory approach
recently established by the FERC will continue. However, we do not believe that
any action taken will affect us in a way that materially differs from the way it
affects other natural gas producers.

Intrastate natural gas transportation is subject to regulation by state
regulatory agencies. The basis for intrastate regulation of natural gas
transportation and the degree of regulatory oversight and scrutiny given to
intrastate natural gas pipeline rates and services varies from state to state.
Insofar as such regulation within a particular state will generally affect all
intrastate natural gas shippers within the state on a comparable basis, we
believe that the regulation of similarly situated intrastate natural gas
transportation in any states in which we operate and ship natural gas on an
intrastate basis will not affect our operations in any way that is of material
difference from those of our competitors.

                                        6
<PAGE>

Regulation of Production

The production of oil and natural gas is subject to regulation under a wide
range of local, state and federal statutes, rules, orders and regulations.
Federal, state and local statutes and regulations require permits for drilling
operations, drilling bonds and reports concerning operations. All of the states
in which we own and operate properties have regulations governing conservation
matters, including provisions for the unitization or pooling of oil and natural
gas properties, the establishment of maximum allowable rates of production from
oil and natural gas wells, the regulation of well spacing, and plugging and
abandonment of wells. The effect of these regulations is to limit the amount of
oil and natural gas that we can produce from our wells and to limit the number
of wells or the locations at which we can drill, although we can apply for
exceptions to such regulations or to have reductions in well spacing. Moreover,
each state generally imposes a production or severance tax with respect to the
production and sale of oil, natural gas and natural gas liquids within its
jurisdiction.

The failure to comply with these rules and regulations can result in substantial
penalties. Our competitors in the oil and natural gas industry are subject to
the same regulatory requirements and restrictions that affect our operations.

Environmental Compliance and Risks

Our oil and natural gas exploration, development and production operations are
subject to stringent federal, state and local laws and regulations governing the
discharge of materials into the environment or otherwise relating to
environmental protection. Historically, most of the environmental regulation of
oil and gas production has been left to state regulatory boards or agencies in
those jurisdictions where there is significant gas and oil production, with
limited direct regulation by such federal agencies as the Environmental
Protection Agency. However, while we believe this generally to be the case for
our production activities in Texas, there are various regulations issued by the
Environmental Protection Agency ("EPA") and other governmental agencies that
would govern significant spills, blow-outs, or uncontrolled emissions.

In Texas, specific oil and gas regulations apply to the drilling, completion and
operations of wells, and the disposal of waste oil and salt water. There are
also procedures incident to the plugging and abandonment of dry holes or other
non-operational wells, all as governed by the applicable governing state agency.

At the federal level, among the more significant laws and regulations that may
affect our business and the oil and gas industry are: The Comprehensive
Environmental Response, Compensation and Liability Act of 1980, also known as
"CERCLA" or Superfund; the Oil Pollution Act of 1990; the Resource Conservation
and Recovery Act, also known as "RCRA"; the Clean Air Act; Federal Water
Pollution Control Act of 1972, or the Clean Water Act; and the Safe Drinking
Water Act of 1974.

Compliance with these regulations may constitute a significant cost and effort
for us. No specific accounting for environmental compliance has been maintained
or projected by us at this time. We are not presently aware of any environmental
demands, claims, or adverse actions, litigation or administrative proceedings in
which either us or our acquired properties are involved or subject to, or
arising out of any predecessor operations.

In the event of a breach of environmental regulations, these environmental
regulatory agencies have a broad range of alternative or cumulative remedies
which include: ordering a clean-up of any spills or waste material and
restoration of the soil or water to conditions existing prior to the
environmental violation; fines; or enjoining further drilling, completion or
production activities. In certain egregious situations the agencies may also
pursue criminal remedies against us or our principal officers.

Current Employees

As of December 31, 2005, we had two full-time employees and two consultants. Our
employees are not represented by any labor union. We consider our relations with
our employees to be satisfactory and have never experienced a work stoppage or
strike.

                                        7
<PAGE>

We, or our joint venture entities, retain certain engineers, geologists,
landmen, pumpers and other personnel on a contract or fee basis as necessary for
our operations.

ITEM 2 - Description of Property

General Background

Since the implementation of our business plan in July 2005, we have begun to
build an asset base and achieve growth, primarily through property acquisitions,
but with some exploitation activities. From the implementation of our business
plan through December 31, 2005, our proved reserves have grown to 310,928 Boe,
at an average acquisition/drilling cost of $0.29 per Boe. All reserves are from
properties located in Texas. We spent approximately $1.9 million on capital
projects during 2005. We expect to further develop these properties through
additional drilling. Although our focus will be on development of our existing
properties, we also intend to continue seeking acquisition opportunities that
compliment our current portfolio. We intend to fund our development activity
primarily through use of cash flow from operations and cash on hand, while
proceeds from future equity transactions may also be available for development
projects or future acquisitions. We believe that our acquisition experience,
together with our operating experience and efficient cost structure, provides us
with the potential to continue our growth.

We have a portfolio of oil and natural gas reserves, with approximately 5% of
our proved reserves consisting of oil and approximately 95% consisting of
natural gas. Approximately 52% of our proved reserves are classified as proved
developed producing, or "PDP." None of our proved reserves are classified as
proved developed non-producing, or "PDNP," and approximately 48% are classified
as proved undeveloped, or "PUD."

The following table summarizes our total net proved reserves as of December 31,
2005.

        Geographic Area      Oil      Natural Gas     Total
        --------------     -------    -----------   ---------
                            (Bbl)        (Mcf)
        Texas              310,928     6,274,966    6,585,894


Cost Information

We conduct our oil and natural gas activities entirely in the United States. Our
average production costs, per Boe were $0.29 in 2005. Net costs capitalized
during the years ended December 31, 2005, related to our oil and natural gas
producing activities are shown below.

       For the Year Ended December 31, 2005
       Acquisition of proved properties                                 680,031
       Acquisition of unproved properties                               110,000
       Exploration costs                                                     --
       Development costs                                              1,145,375
       Acquisition of support and office equipment                           --
       Asset retirement costs recognized according to SFAS No. 143           --
                                                                     ----------
                                                                     ----------
       Total Costs Incurred                                          $1,935,406
                                                                     ==========


Reserve Quantity Information

Our estimates of proved reserves and related valuations were based on reports
prepared in-house in accordance with the provisions of SFAS 69, "Disclosures
About Oil and Gas Producing Activities." The estimates of proved reserves are
inherently imprecise and are continually subject to revision based on production
history, results of additional exploration and development, price changes and
other factors.

Our oil and natural gas reserves are attributable solely to properties within
the United States.

                                        8
<PAGE>

Management's Business Strategy Related to Properties

Our goal is to increase stockholder value by investing in oil and gas projects
with attractive rates of return on capital employed. We plan to achieve this
goal by exploiting and developing our existing oil and natural gas properties
and pursuing acquisitions of additional properties. Specifically, we have
focused, and plan to continue to focus, on the following:

Developing and Exploiting Existing Properties. We believe that there is
significant value to be created by drilling the identified undeveloped
opportunities on our properties. We believe that our current and future cash
flow will enable us to undertake the exploitation of our properties through
additional drilling and development activities.

Pursuing Profitable Acquisitions. We have historically pursued acquisitions of
properties that we believe to have exploitation and development potential
comparable to our existing inventory of drilling locations. We will pursue an
acquisition program designed to increase reserves and complement our existing
core properties. We have access to an experienced team of management and
engineering professionals who identify and evaluate acquisition opportunities,
negotiate and close purchases and manage acquired properties. While our emphasis
in 2006 and beyond is anticipated to focus on the further development of our
existing properties, we will continue to look for properties with both existing
cash flow from production and future development potential.

Other Properties and Commitments

We currently lease our principal executive offices in Juno Beach, Florida. At
December 31, 2005, the lease was for approximately 900 square feet of office
space, at an annual rental of $5,000 the current facility is adequate for our
current operations.

Risk Factors

You should carefully consider each of the risks described below, together with
all of the other information contained or incorporated by reference in this
Annual Report. If any of the following risks develop into actual events, our
business, financial condition or results of operations could be materially
adversely affected and the trading prices of our common stock could decline.

General Risks Related to Our Company

We Have a Limited Operating History.

Because our business plan was only adopted in July 2005 we have a limited
operating history. Such limited operating history makes it more difficult to
predict whether or not we will be successful in the future. Our future financial
and operational success is subject to the risks, uncertainties, expenses, delays
and difficulties associated with managing a new business, many of which may be
beyond our control. In addition, we compete in a volatile and highly competitive
industry and we may face many uncertainties. Our success will depend on many
factors, including those described in this Risk Factors section.

We Have a History of Losses and May Need Additional Financing

We have experienced operating losses, as well as net losses, for each of the
years during which we have operated. We anticipate future losses and negative
cash flow to continue for the foreseeable future.

To date, we have received only limited revenue from the sale of our products. We
have incurred significant costs in connection with the development of our leases
and properties and there is no assurance that we will achieve sufficient
revenues to offset anticipated operating costs. Although we anticipate deriving
revenues from the sale of our oil and gas production, no assurance can be given
that these products can be sold on a net profit basis. Included in such former
and future losses are development expenses and general and administrative
expenses. We anticipate that our losses will continue until we are able to
generate sufficient revenues to support our operations. If we achieve
profitability, we cannot give any assurance that we would be able to sustain or
increase profitability on a quarterly or annual basis in the future.

                                        9
<PAGE>

Similarly, in the future, we may not generate sufficient revenue from operations
to pay our operating expenses. If we fail to generate sufficient cash from
operations to pay these expenses, our management will need to identify other
sources of funds. We may not be able to borrow money or issue more shares of
common or preferred stock to meet our cash needs. Even if we can complete such
transactions, they may not be on terms that are favorable or reasonable from our
perspective.

We May Not Be Able to Borrow Funds

There currently are no legal limitations on our ability to borrow funds to
increase the amount of capital available to us to carry out our business plan.
However, our limited resources and limited operating history will make it
difficult to borrow funds. The amount and nature of any such borrowings would
depend on numerous considerations, including our capital requirements, our
perceived ability to meet debt service on any such borrowings and the then
prevailing conditions in the financial markets, as well as general economic
conditions. There can be no assurance that debt financing, if required or
sought, would be available on terms deemed to be commercially acceptable by us
and in our best interest.

Managing Growth and Expansion.

We currently anticipate a period of growth as a result of the recent production
and sale of the oil and gas by our joint venture entities under the leases on
their properties. The resulting strain on our managerial, operational, financial
and other resources could be significant. Success in managing this expansion and
growth will depend, in part, upon the ability of senior management to manage
effectively. Any failure to manage the anticipated growth and expansion could
have a material adverse effect on our business.

Risks Relating to the Oil and Natural Gas Industry and Our Business

A substantial or extended decline in oil and natural gas prices may adversely
affect our business, financial condition or results of operations and our
ability to meet our capital expenditure obligations and financial commitments.

The price we receive for our oil and natural gas production heavily influences
our revenue, profitability, access to capital and future rate of growth. Oil and
natural gas are commodities and, therefore, their prices are subject to wide
fluctuations in response to relatively minor changes in supply and demand.
Historically, the markets for oil and natural gas have been volatile. These
markets will likely continue to be volatile in the future. The prices we receive
for our production, and the levels of our production, depend on numerous factors
beyond our control. These factors include, but are not limited to, the
following:

o changes in global supply and demand for oil and natural gas;

o the actions of the Organization of Petroleum Exporting Countries, or OPEC;

o the price and quantity of imports of foreign oil and natural gas;

o political conditions, including embargoes, in or affecting other oil-producing
activity;

o the level of global oil and natural gas exploration and production activity;

o the level of global oil and natural gas inventories;

o weather conditions;

o technological advances affecting energy consumption; and

o the price and availability of alternative fuels.

Lower oil and natural gas prices may not only decrease our revenues on a per
share basis but also may reduce the amount of oil and natural gas that we can
produce economically. Lower prices will also negatively impact the value of our
proved reserves. A substantial or extended decline in oil or natural gas prices
may materially and adversely affect our future business, financial condition,
results of operations, liquidity or ability to finance planned capital
expenditures.

                                       10
<PAGE>

A substantial percentage of our proven properties are undeveloped; therefore the
risk associated with our success is greater than would be the case if the
majority of our properties were categorized as proved developed producing.

Because a substantial percentage of our proven properties are proved undeveloped
(approximately 95%) we will require significant additional capital to develop
such properties before they may become productive. Further, because of the
inherent uncertainties associated with drilling for oil and gas, some of these
properties may never be developed to the extent that they result in positive
cash flow. Even if we are successful in our development efforts, it could take
several years for a significant portion of our undeveloped properties to be
converted to positive cash flow.

While our current business plan is to fund the development costs with cash flow
from our other producing properties, if such cash flow is not sufficient we may
be forced to seek alternative sources for cash, through the issuance of
additional equity or debt securities, increased borrowings or other means.

Drilling for and producing oil and natural gas are high risk activities with
many uncertainties that could adversely affect our business, financial condition
or results of operations.

Our future success will depend on the success of our exploitation, exploration,
development and production activities. Our oil and natural gas exploration and
production activities are subject to numerous risks beyond our control,
including the risk that drilling will not result in commercially viable oil or
natural gas production. Our decisions to purchase, explore, develop or otherwise
exploit prospects or properties will depend in part on the evaluation of data
obtained through geophysical and geological analyses, production data and
engineering studies, the results of which are often inconclusive or subject to
varying interpretations. Please read "--Reserve estimates depend on many
assumptions that may turn out to be inaccurate" (below) for a discussion of the
uncertainty involved in these processes. Our cost of drilling, completing and
operating wells is often uncertain before drilling commences. Overruns in
budgeted expenditures are common risks that can make a particular project
uneconomical. Further, many factors may curtail, delay or cancel drilling,
including the following:

o delays imposed by or resulting from compliance with regulatory requirements;

o pressure or irregularities in geological formations;

o shortages of or delays in obtaining equipment and qualified personnel;

o equipment failures or accidents;

o adverse weather conditions;

o reductions in oil and natural gas prices;

o title problems; and

o limitations in the market for oil and natural gas.

If our assessments of recently purchased properties are materially inaccurate,
it could have significant impact on future operations and earnings.

We have aggressively expanded our base of producing properties, the successful
acquisition of producing properties requires assessments of many factors, which
are inherently inexact and may be inaccurate, including the following:

o the amount of recoverable reserves;

o future oil and natural gas prices;

o estimates of operating costs;

o estimates of future development costs;

o estimates of the costs and timing of plugging and abandonment; and

o potential environmental and other liabilities.

                                       11
<PAGE>

Our assessment will not reveal all existing or potential problems, nor will it
permit us to become familiar enough with the properties to assess fully their
capabilities and deficiencies. As noted previously, we plan to undertake further
development of our properties through the use of cash flow from existing
production. Therefore, a material deviation in our assessments of these factors
could result in less cash flow being available for such purposes than we
presently anticipate, which could either delay future development operations
(and delay the anticipated conversion of reserves into cash), or cause us to
seek alternative sources to finance development activities.

If oil and natural gas prices decrease, we may be required to take write-downs
of the carrying values of our oil and natural gas properties, potentially
negatively impacting the trading value of our securities.

Accounting rules require that we review periodically the carrying value of our
oil and natural gas properties for possible impairment. Based on specific market
factors and circumstances at the time of prospective impairment reviews, and the
continuing evaluation of development plans, production data, economics and other
factors, we may be required to write down the carrying value of our oil and
natural gas properties. A write-down could constitute a non-cash charge to
earnings. It is likely the cumulative effect of a write-down could also
negatively impact the trading price of our securities.

Reserve estimates depend on many assumptions that may turn out to be inaccurate.
Any material inaccuracies in these reserve estimates or underlying assumptions
will materially affect the quantities and present value of our reserves.

The process of estimating oil and natural gas reserves is complex. It requires
interpretations of available technical data and many assumptions, including
assumptions relating to economic factors. Any significant inaccuracies in these
interpretations or assumptions could materially affect the estimated quantities
and present value of our reported reserves.

In order to prepare our estimates, we must project production rates and timing
of development expenditures. We must also analyze available geological,
geophysical, production and engineering data. The extent, quality and
reliability of this data can vary. The process also requires economic
assumptions about matters such as oil and natural gas prices, drilling and
operating expenses, capital expenditures, taxes and availability of funds.
Therefore, estimates of oil and natural gas reserves are inherently imprecise.

Actual future production, oil and natural gas prices, revenues, taxes,
development expenditures, operating expenses and quantities of recoverable oil
and natural gas reserves most likely will vary from our estimates. Any
significant variance could materially affect the estimated quantities and
present value of our reported reserves. In addition, we may adjust estimates of
proved reserves to reflect production history, results of exploration and
development, prevailing oil and natural gas prices and other factors, many of
which are beyond our control.

You should not assume that the present value of future net revenues from our
reported proved reserves is the current market value of our estimated oil and
natural gas reserves. In accordance with SEC requirements, we generally base the
estimated discounted future net cash flows from our proved reserves on prices
and costs on the date of the estimate. Actual future prices and costs may differ
materially from those used in the present value estimate. If future values
decline or costs increase it could negatively impact our ability to finance
operations, and individual properties could cease being commercially viable,
affecting our decision to continue operations on producing properties or to
attempt to develop properties. All of these factors would have a negative impact
on earnings and net income, and most likely the trading price of our securities.

                                       12
<PAGE>

Prospects that we decide to drill may not yield oil or natural gas in
commercially viable quantities.

Our prospects are in various stages of evaluation, ranging from prospects that
are currently being developed, to prospects that will require substantial
additional seismic data processing and interpretation. There is no way to
predict in advance of drilling and testing whether any particular prospect will
yield oil or natural gas in sufficient quantities to recover drilling or
completion costs or to be economically viable. This risk may be enhanced in our
situation, due to the fact that a significant percentage 95% of our proved
reserves are currently proved undeveloped reserves. The use of seismic data and
other technologies and the study of producing fields in the same area will not
enable us to know conclusively prior to drilling whether oil or natural gas will
be present or, if present, whether oil or natural gas will be present in
commercial quantities. We cannot assure you that the analogies we draw from
available data from other wells, more fully explored prospects or producing
fields will be applicable to our drilling prospects.

We may incur substantial losses and be subject to substantial liability claims
as a result of our oil and natural gas operations.

We are not insured against all risks. Losses and liabilities arising from
uninsured and underinsured events could materially and adversely affect our
business, financial condition or results of operations. Our oil and natural gas
exploration and production activities are subject to all of the operating risks
associated with drilling for and producing oil and natural gas, including the
possibility of:

o environmental hazards, such as uncontrollable flows of oil, natural gas,
brine, well fluids, toxic gas or other pollution into the environment, including
groundwater and shoreline contamination;

o abnormally pressured formations;

o mechanical difficulties, such as stuck oil field drilling and service tools
and casing collapse;

o fires and explosions;

o personal injuries and death; and

o natural disasters.

Any of these risks could adversely affect our ability to conduct operations or
result in substantial losses to our company. We may elect not to obtain
insurance if we believe that the cost of available insurance is excessive
relative to the risks presented. In addition, pollution and environmental risks
generally are not fully insurable. If a significant accident or other event
occurs and is not fully covered by insurance, then it could adversely affect us.

We are subject to complex laws that can affect the cost, manner or feasibility
of doing business.

Exploration, development, production and sale of oil and natural gas are subject
to extensive federal, state, local and international regulation. We may be
required to make large expenditures to comply with governmental regulations.
Matters subject to regulation include:

o discharge permits for drilling operations;

o drilling bonds;

o reports concerning operations;

o the spacing of wells;

o unitization and pooling of properties; and

o taxation.

Under these laws, we could be liable for personal injuries, property damage and
other damages. Failure to comply with these laws also may result in the
suspension or termination of our operations and subject us to administrative,
civil and criminal penalties. Moreover, these laws could change in ways that
substantially increase our costs. Any such liabilities, penalties, suspensions,
terminations or regulatory changes could materially adversely affect our
financial condition and results of operations.

                                       13
<PAGE>

Our operations may incur substantial liabilities to comply with the
environmental laws and regulations.

Our oil and natural gas operations are subject to stringent federal, state and
local laws and regulations relating to the release or disposal of materials into
the environment or otherwise relating to environmental protection. These laws
and regulations may require the acquisition of a permit before drilling
commences, restrict the types, quantities and concentration of substances that
can be released into the environment in connection with drilling and production
activities, limit or prohibit drilling activities on certain lands lying within
wilderness, wetlands and other protected areas, and impose substantial
liabilities for pollution resulting from our operations. Failure to comply with
these laws and regulations may result in the assessment of administrative, civil
and criminal penalties, incurrence of investigatory or remedial obligations or
the imposition of injunctive relief. Changes in environmental laws and
regulations occur frequently, and any changes that result in more stringent or
costly waste handling, storage, transport, disposal or cleanup requirements
could require us to make significant expenditures to maintain compliance, and
may otherwise have a material adverse effect on our results of operations,
competitive position or financial condition as well as the industry in general.
Under these environmental laws and regulations, we could be held strictly liable
for the removal or remediation of previously released materials or property
contamination regardless of whether we were responsible for the release or if
our operations were standard in the industry at the time they were performed.

Unless we replace our oil and natural gas reserves, our reserves and production
will decline, which would adversely affect our cash flows and income.

Unless we conduct successful development, exploitation and exploration
activities or acquire properties containing proved reserves, our proved reserves
will decline as those reserves are produced. Producing oil and natural gas
reservoirs generally are characterized by declining production rates that vary
depending upon reservoir characteristics and other factors. Our future oil and
natural gas reserves and production, and, therefore our cash flow and income,
are highly dependent on our success in efficiently developing and exploiting our
current reserves and economically finding or acquiring additional recoverable
reserves. If we are unable to develop, exploit, find or acquire additional
reserves to replace our current and future production, our cash flow and income
will decline as production declines, until our existing properties would be
incapable of sustaining commercial production.

The unavailability or high cost of drilling rigs, equipment, supplies, personnel
and oil field services could adversely affect our ability to execute on a timely
basis our exploration and development plans within our budget.

With the recent increase in the prices of oil and natural gas, we have
encountered an increase in the cost of securing drilling rigs, equipment and
supplies. Shortages or the high cost of drilling rigs, equipment, supplies and
personnel are expected to continue in the near-term. In addition, larger
producers may be more likely to secure access to such equipment by virtue of
offering drilling companies more lucrative terms. If we are unable to acquire
access to such resources, or can obtain access only at higher prices, not only
would this potentially delay our ability to convert our reserves into cash flow,
but could also significantly increase the cost of producing those reserves,
thereby negatively impacting anticipated net income.

If our access to markets is restricted, it could negatively impact our
production, our income and ultimately our ability to retain our leases.

Market conditions or the unavailability of satisfactory oil and natural gas
transportation arrangements may hinder our access to oil and natural gas markets
or delay our production. The availability of a ready market for our oil and
natural gas production depends on a number of factors, including the demand for
and supply of oil and natural gas and the proximity of reserves to pipelines and
terminal facilities. Our ability to market our production depends in substantial
part on the availability and capacity of gathering systems, pipelines and
processing facilities owned and operated by third parties. Our failure to obtain
such services on acceptable terms could materially harm our business.

                                       14
<PAGE>

Currently, the majority of our production is sold to marketers and other
purchasers that have access to nearby pipeline facilities. However, as we begin
to further develop our properties, we may find production in areas with limited
or no access to pipelines, thereby necessitating delivery by other means, such
as trucking, or requiring compression facilities. Such restrictions on our
ability to sell our oil or natural gas have several adverse affects, including
higher transportation costs, fewer potential purchasers (thereby potentially
resulting in a lower selling price) or, in the event we were unable to market
and sustain production from a particular lease for an extended time, possibly
causing us to lose a lease due to lack of production.

Competition in the oil and natural gas industry is intense, which may adversely
affect our ability to compete.

We operate in a highly competitive environment for acquiring properties,
marketing oil and natural gas and securing trained personnel. Many of our
competitors possess and employ financial, technical and personnel resources
substantially greater than ours, which can be particularly important in the
areas in which we operate. Those companies may be able to pay more for
productive oil and natural gas properties and exploratory prospects and to
evaluate, bid for and purchase a greater number of properties and prospects than
our financial or personnel resources permit. Our ability to acquire additional
prospects and to find and develop reserves in the future will depend on our
ability to evaluate and select suitable properties and to consummate
transactions in a highly competitive environment. Also, there is substantial
competition for capital available for investment in the oil and natural gas
industry. We may not be able to compete successfully in the future in acquiring
prospective reserves, developing reserves, marketing hydrocarbons, attracting
and retaining quality personnel and raising additional capital.

Risks Relating to Our Common Stock

The market price of our stock may be affected by low volume float and the
issuance of additional shares of our common stock upon the conversion of shares
of our preferred stock.

As of March 31, 2006 we had an aggregate of 340,258 shares of our three classes
of preferred stock outstanding, which are convertible, or will be convertible
within the next twelve (12) months, into an aggregate of 358,245,520 shares of
our common stock.

Substantial sales of our common stock, including shares issued upon the
conversion of our preferred shares, in the public market, or the perception that
these sales could occur, may have a depressive effect on the market price of our
common stock. Such sales or the perception of such sales could also impair our
ability to raise capital or make acquisitions through the issuance of our common
stock.

We have no plans to pay dividends on our common stock. You may not receive funds
without selling your stock.

We do not anticipate paying any cash dividends on our common stock in the
foreseeable future. We currently intend to retain future earnings, if any, to
finance the expansion of our business. Our future dividend policy is within the
discretion of our board of directors and will depend upon various factors,
including our business, financial condition, results of operations, capital
requirements and investment opportunities.

Provisions under Nevada law could delay or prevent a change in control of our
company, which could adversely affect the price of our common stock.

While we do not believe that we currently have any provisions in our
organizational documents that could prevent or delay a change in control of our
company (such as provisions calling for a staggered board of directors, or the
issuance of stock with super-majority voting rights), the existence of some
provisions under Nevada law could delay or prevent a change in control of our
company, which could adversely affect the price of our common stock. Nevada law
imposes some restrictions on mergers and other business combinations between us
and any holder of 10% or more of our outstanding common stock.

                                       15
<PAGE>

Our Common Stock Is Subject To "Penny Stock" Restrictions Under Federal
Securities Laws, Which Could Reduce The Liquidity Of Our Common Stock

The Securities and Exchange Commission has adopted regulations, which generally
define penny stocks to be an equity security that has a market price less than
$5.00 per share or an exercise price of less than $5.00 per share, subject to
certain exemptions. On March 31, 2006, the closing price for our common stock,
as quoted on the Over the Counter Bulletin Board, was $0.18 per share and
therefore, our common stock is designated a "Penny Stock." As a penny stock, our
common stock may become subject to Rule 15g-9 under the Exchange Act or the
Penny Stock Rules. These rules include, but are not limited to, Rules 3a5l-l,
15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6 and 15g-7 under the Securities Exchange
Act of 1934, as amended. These rules impose additional sales practice
requirements on broker-dealers that sell such securities to persons other than
established customers and "accredited investors" (generally, individuals with a
net worth in excess of $1,000,000 or annual incomes exceeding $200,000, or
$300,000 together with their spouses). For transactions covered by Rule 15g-9, a
broker-dealer must make a special suitability determination for the purchaser
and have received the purchaser's written consent to the transaction prior to
sale. As a result, this rule may affect the ability of broker-dealers to sell
our securities and may affect the ability of purchasers to sell any of our
securities in the secondary market.

The rules may further affect the ability of owners of our shares to sell their
securities in any market that may develop for them. There may be a limited
market for penny stocks, due to the regulatory burdens on broker-dealers. The
market among dealers may not be active. Investors in penny stock often are
unable to sell stock back to the dealer that sold them the stock. The mark-ups
or commissions charged by the broker-dealers may be greater than any profit a
seller may make. Because of large dealer spreads, investors may be unable to
sell the stock immediately back to the dealer at the same price the dealer sold
the stock to the investor. In some cases, the stock may fall quickly in value.
Investors may be unable to reap any profit from any sale of the stock, if they
can sell it at all.

For any transaction involving a penny stock, unless exempt, the rules require
delivery, prior to any transaction in a penny stock, of a disclosure schedule
prepared by the Securities and Exchange Commission relating to the penny stock
market. Disclosure is also required to be made about sales commissions payable
to both the broker-dealer and the registered representative and current
quotations for the securities. Finally, monthly statements are required to be
sent disclosing recent price information for the penny stock held in the account
and information on the limited market in penny stock.

The penny stock restrictions will no longer apply to our common stock if we
become listed on a national exchange. In any event, even if our common stock
were exempt from the penny stock restrictions, we would remain subject to
Section 15(b)(6) of the Exchange Act, which gives the Securities and Exchange
Commission the authority to restrict any person from participating in a
distribution of penny stock, if the Securities and Exchange Commission finds
that such a restriction would be in the public interest.

 Significant dilution may be caused by the conversion of our outstanding shares
of Series A Preferred Stock, and other shares of our preferred stock, to common
stock. Additional dilution may be caused by any issuance of additional shares of
our Series A Preferred Stock or other class of preferred stock.

On August 4, 2005, the Company issued 80,000 shares of the company's Series A
Convertible Preferred Stock to Kamal Abdallah for an aggregate purchase price of
$800,000. Each share of the Preferred Stock is convertible into 1,000 shares of
UPDA common stock. 53,334 shares of Mr. Abdallah's Preferred Stock are currently
convertible, or are convertible into 80,000,000 shares of UPDA common stock. Mr.
Abdallah paid for the shares of Preferred Stock by transferring securities owned
by him with an aggregate market value of $800,000 to UPDA.

                                       16
<PAGE>

On August 4, 2005, the Company issued 20,000 shares of the company's Series A
Convertible Preferred Stock to Christopher McCauley for an aggregate purchase
price of $200,000. Each share of the Preferred Stock is convertible into 1,000
shares of UPDA common stock. 13,334 shares of Mr. McCauley's Preferred Stock are
currently convertible, or are convertible into 20,000,000 shares of UPDA common
stock. Mr. McCauley paid for the shares of Preferred Stock by transferring
securities owned by him with an aggregate market value of $200,000 to UPDA.

In addition, as of March 31, 2006, we had 236,995 shares of our Procore
Preferred Stock and 3,263 shares of our Class B Preferred Stock issued and
outstanding. In the aggregate, these outstanding shares of Procore Preferred
Stock and Class B Preferred Stock will be convertible within the next twelve
(12) months into 258,245,520 shares of our common stock. The issuance of such a
substantial number of shares of our common stock, or the perception that such
issuances will occur, may have a depressive effect on the market price of our
common stock. Furthermore, such share conversions or the perception that such
share conversions will occur, could also impair our ability to raise capital or
make acquisitions through the issuance of our common stock. See the "Item 5 -
Market for Registrant's Common Stock and Related Stockholder Matters" section of
this Annual Report at page 17 for a more detailed description of our
capitalization.

The ownership of our voting capital stock is closely held, giving a small group
of shareholders control of our company.

Approximately 44.2% of the outstanding voting shares of our capital stock are
currently held by two (2) insider investors. See the "Security Ownership of
Certain Beneficial Owners and Management and Related Stockholder Matters"
section of this Annual Report at page 32. Consequently, this small number of
shareholders will be able to control the business decisions of our company,
including, but not limited to, the election of the members of our Board of
Directors.

ITEM 3 - Legal Proceedings

In the ordinary course of business, we may be, from time to time, a claimant or
a defendant in various legal proceedings. We do not presently have any material
litigation pending or threatened.

ITEM 4 - Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of our securities holders during our fiscal
quarter ended December 31, 2005

                                     PART II

ITEM 5 - Market for Registrant's Common Stock and Related Stockholder Matters

Market for our Common Stock

Our common stock, par value $0.001 per share, is traded on the Over-the-Counter
Bulletin Board operated by the National Association of Securities Dealers, Inc.
under the symbol "UPDA.OB".

The following table sets forth the range of high and low closing bid prices for
our common stock for the periods indicated as reported by the National Quotation
Bureau, Inc. These prices represent quotations between dealers, do not include
retail markups, markdowns or commissions, and do not necessarily represent
actual transactions.

                 Period                                       High Bid   Low Bid
                 ------                                       --------   -------

           1st Quarter 2004                                   $0.58       $0.20
           2nd Quarter 2004                                    0.28        0.10
           3rd Quarter 2004                                    0.10        0.05
           4th Quarter 2004                                    0.14        0.01

           1st Quarter 2005                                   $0.14       $0.04
           2nd Quarter 2005                                    0.05        0.01
           3rd Quarter 2005                                    0.88        0.25
           4th Quarter 2005                                    1.00        0.21

           1st Quarter 2006 (through                          $0.55       $0.17
           March 31, 2006)

                                       17
<PAGE>

As of March 31, 2006, the National Quotation Bureau, Inc. reported that the
closing bid and ask prices on our common stock were $0.178 and $0.18
respectively.

Record Holders

As of March 31, 2006, there were 385 holders of record of our common stock. The
Board of Directors believe that the number of beneficial owners is substantially
greater than the number of record holders because a portion of our outstanding
common stock is held of record in broker "street names" for the benefit of
individual investors. The beneficial owners of such shares are not known to us.

As of March 31, 2006, the shareholders list from our transfer agent shows that
there were 89,992,108 shares of common stock outstanding. Of those shares,
2,781,429 shares, or 3 percent of our outstanding common stock, were owned by
our officers and directors.

Dividend Policy

Our Board of Directors determines any payment of dividends to our common
stockholders. We have not paid any dividends on our common stock during the last
two years, and we do not anticipate paying any cash dividends on our common
stock in the foreseeable future. We currently intend to retain future earnings,
if any, to finance the expansion of our business. Our future dividend policy is
within the discretion of our board of directors and will depend upon various
factors, including our results of operations, financial condition, capital
requirements and investment opportunities. In addition, our credit facility
prohibits us from paying dividends.

Recent Sales of Unregistered Securities

During the fourth quarter of 2005, the Company issued 867,809 shares of common
stock as payment for past services rendered to the Company by various
consultants. The Company recorded non-cash compensation charges for $529,433
related to the issuances, reflecting the fair market value of the shares when
granted. The transactions referred to above did not involve an underwriter or
placement agent and there were no underwriter's discounts or commissions, or
placement agent fees or commissions, paid in connection with the transaction.
Each of the consultants who received shares of our common stock in the above
referenced transactions are accredited investors, as defined by Rule 501 of
Regulation D, and have the business and financial knowledge to analyze the risks
associated with ownership of our common stock. The transactions referred to
above were exempt transactions in accordance with the provisions of Section 4(2)
of the Securities Act of 1933, as amended, as a transaction by an issuer not
involving any public offering. We did not engage in any public solicitations in
connection with the above transaction.

In December 2005, we issued 576,923 shares of our common stock to Dr. Fred
Harris in settlement of a $106,731 outstanding debt owed by the Company to Dr.
Harris. In December 2005, we also issued 135,000 shares of our common stock to
Mr. Hunter Covington in settlement of a $40,000 outstanding debt owed by the
Company to Mr. Covington. The transactions referred to above did not involve an
underwriter or placement agent and there were no underwriter's discounts or
commissions, or placement agent fees or commissions, paid in connection with the
transaction. Dr. Harris and Mr. Covington are accredited investor, as defined by
Rule 501 of Regulation D, and have the business and financial knowledge to
analyze the risks associated with ownership of our common stock. The
transactions referred to above were exempt transactions in accordance with the
provisions of Section 4(2) of the Securities Act of 1933, as amended, as a
transaction by an issuer not involving any public offering. We did not engage in
any public solicitations in connection with the above transaction.

                                       18
<PAGE>

During the quarter ended December 31, 2005, we issued one thousand, two hundred
and eighteen (1,218) shares of our Class B Preferred Stock to Miramar
Investments, Inc. pursuant to the terms of an investment agreement between
Miramar and us. The shares of Class B preferred stock issued to Miramar are
restricted shares and cannot be resold unless they are subsequently registered
pursuant to the Securities Act of 1933, as amended, or such sale is pursuant to
a valid exemption from such registration. Each share of Class B Preferred Stock
is convertible into 2,000 shares of our common stock and is so convertible
immediately upon issuance. The transaction referred to above did not involve an
underwriter or placement agent and there were no underwriter's discounts or
commissions, or placement agent fees or commissions, paid in connection with the
transaction. Miramar Investments, Inc. is an accredited investor, as defined by
Rule 501 of Regulation D, and has the business and financial knowledge to
analyze the risks associated with an investment in our Class B Preferred Stock.
The securities issued to Miramar Investments, Inc., were in exchange for the sum
of one million, two hundred and eighteen Thousand Dollars ($1,218,000.00) in
cash. The transaction referred to above was an exempt transaction in accordance
with the provisions of Section 4(2) of the Securities Act of 1933, as amended,
as a transaction by an issuer not involving any public offering. We did not
engage in any public solicitations in connection with the above transaction.

During the third quarter of 2005 the Company advised its stock transfer agent
that it should convert certificates surrendered representing 102 shares of $.001
par value of Procore convertible preferred stock into common stock of the
Company at a conversion rate of 200,000 free trading common shares per preferred
share. These previously Rule 144 restricted preferred shares have been in the
hands of holders for a period in excess of two years from the date the
convertible preferred shares were issued by the Company. Accordingly, these
convertible preferred shares qualified to be released from that share trading
restriction and the underlying common stock from the conversion can now be
freely trading shares. During the year ended December 31, 2005, 66 preferred
shares were converted into approximately 13,200,000 shares of common stock under
this arrangement.

During the fourth quarter of 2005 the Company advised its stock transfer agent
that it should convert certificates surrendered representing 500 shares of $.001
par value of Procore convertible preferred stock into common stock of the
Company at a conversion rate of 500,000 free trading common shares per preferred
share. These previously restricted preferred shares have been in the hands of
holders for a period in excess of two years from the date the convertible
preferred shares were issued by the Company. Accordingly, these convertible
preferred shares qualified to be released from that share trading restriction
and the underlying common stock from the conversion can now be freely trading
shares. During the year ended December 31, 2005, 25 shares of these preferred
were converted into approximately 12,500,000 shares of common stock under this
arrangement.

On February 13, 2006, we issued Eight Hundred and Ten (810) shares of our Class
B Preferred Stock to Miramar Investments, Inc. pursuant to the terms of an
investment agreement. The shares of Class B preferred stock issued to Miramar
are restricted shares and cannot be resold unless they are subsequently
registered pursuant to the Securities Act of 1933, as amended, or such sale is
pursuant to a valid exemption from such registration. Each share of Class B
Preferred Stock is convertible into 2,000 shares of our common stock and is so
convertible immediately upon issuance. The transaction referred to above did not
involve an underwriter or placement agent and there were no underwriter's
discounts or commissions, or placement agent fees or commissions, paid in
connection with the transaction. Miramar Investments, Inc. is an accredited
investor, as defined by Rule 501 of Regulation D, and has the business and
financial knowledge to analyze the risks associated with an investment in our
Class B Preferred Stock. The securities issued to Miramar Investments, Inc.,
were in exchange for the sum of Eight Hundred and Ten Thousand Dollars
($810,000.00) in cash. The transaction referred to above was an exempt
transaction in accordance with the provisions of Section 4(2) of the Securities
Act of 1933, as amended, as a transaction by an issuer not involving any public
offering. We did not engage in any public solicitations in connection with the
above transaction.

On March, 2006, we issued nine hundred and eighty (980) shares of our Class B
Preferred Stock to Miramar Investments, Inc. pursuant to the terms of an
investment agreement. The shares of Class B preferred stock issued to Miramar
are restricted shares and cannot be resold unless they are subsequently
registered pursuant to the Securities Act of 1933, as amended, or such sale is
pursuant to a valid exemption from such registration. Each share of Class B
Preferred Stock is convertible into 2,000 shares of our common stock and is so
convertible immediately upon issuance. The transaction referred to above did not
involve an underwriter or placement agent and there were no underwriter's
discounts or commissions, or placement agent fees or commissions, paid in
connection with the transaction. Miramar Investments, Inc. is an accredited
investor, as defined by Rule 501 of Regulation D, and has the business and
financial knowledge to analyze the risks associated with an investment in our
Class B Preferred Stock. The securities issued to Miramar Investments, Inc.,
were in exchange for the sum of nine Hundred and eighty Thousand Dollars
($980,000.00) in cash. The transaction referred to above was an exempt
transaction in accordance with the provisions of Section 4(2) of the Securities
Act of 1933, as amended, as a transaction by an issuer not involving any public
offering. We did not engage in any public solicitations in connection with the
above transaction.

Capitalization

As of March 31, 2006, we had 236,998 shares of our Procore Preferred Stock,
issued and outstanding. The outstanding shares of Procore Preferred Stock are
restricted shares that have been fully paid and outstanding for a period in
excess of two years from their date of their issuance and, therefore, they
cannot be resold unless they are subsequently registered pursuant to the
Securities Act of 1933, as amended, or such sale is pursuant to a valid
exemption from such registration. On or after June 30, 2006, each share of
Procore Preferred Stock will be convertible into common stock based on the type
of Procore Preferred Stock. As of March 31, 2006, 236,998 shares of our Procore
Preferred Stock was outstanding and is convertible into 192,985,520 shares of
our common stock, issuable upon the conversion of all the outstanding shares of
Procore Preferred Stock. No additional consideration is payable upon the
conversion of the Procore Preferred Stock to shares of our common stock. As
described above, the holders of the shares of underlying common stock issued
upon conversion of the Procore Preferred Stock shall be entitled to request the
removal of any restrictive legends that would be attached to the common shares
so issued in accordance with the provisions of Rule 144(k) under the Securities
Act of 1933, as amended.

                                       19
<PAGE>

As of March 31, 2006, we had 100,000 shares of our Class A Preferred Stock,
issued and outstanding. The outstanding shares of Class A Preferred Stock are
restricted shares and, therefore, they cannot be resold unless they are
subsequently registered pursuant to the Securities Act of 1933, as amended, or
such sale is pursuant to a valid exemption from such registration. Each share of
Class A Preferred Stock is convertible into 10,000 shares of our common stock.
Based upon 100,000 shares of Class A Preferred Stock being outstanding, an
aggregate of 100,000,000 shares of our common stock are issuable upon the
conversion of all the outstanding shares of Class A Preferred Stock. No
additional consideration is payable upon the conversion of the Class A Preferred
Stock to shares of our common stock. The holders of shares of our Class A
Preferred Stock are entitled to vote those shares on an as converted basis in
all matters for which our common stockholders are entitled to vote.

As of March 31, 2006, we had 3,263 shares of our Class B Preferred Stock, issued
and outstanding. The outstanding shares of Class B Preferred Stock are
restricted shares and, therefore, they cannot be resold unless they are
subsequently registered pursuant to the Securities Act of 1933, as amended, or
such sale is pursuant to a valid exemption from such registration. On or after
April 1, 2007, each share of Class B Preferred Stock will be convertible into
2,000 shares of our common stock. Based upon 3,263 shares of Class B Preferred
Stock being outstanding, an aggregate of 6,526,000 shares of our common stock
will be issuable upon the conversion of all the outstanding shares of Class B
Preferred Stock. No additional consideration is payable upon the conversion of
the Class B Preferred Stock to shares of our common stock.

The following table sets forth our current capitalization and our capitalization
on a fully diluted basis based upon our outstanding common and preferred stock
as of March 31, 2006:

<TABLE>
<CAPTION>

                                                   Common Shares
                                                   Issuable Upon                         Aggregate Common
                                                 Conversion of One                        Issuable Upon
  Class of Stock            Shares Outstanding     Share of Class    Date Convertible       Conversion
  -----------------------   ------------------   -----------------   -----------------   ----------------
<S>                            <C>                      <C>            <C>                   <C>
  Procore Preferred Stock            364                500,000         June 30, 2006        182,000,000
  Procore Preferred Stock             36                200,000         June 30, 2006          7,200,000
  Procore Preferred Stock        236,595                     16         June 30, 2006          3,785,520
  Class A Preferred Stock        100,000                 10,000        August 3, 2007*       100,000,000
  Class B Preferred Stock         3,263                  2,000          April 1, 2007          6,526,000
  Common Stock                 89,992,108                N/A                N/A               89,992,108
</TABLE>


* The outstanding shares of our Class A Preferred Stock held by officers and
directors of the Company and are subject to certain vesting schedules. See Item
11 - "Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matter" at page 32. The ownership of the shares of Class A Preferred
Stock by such officers and directors will be fully vested on August 3, 2007.

Section 15(g) of the Securities Exchange Act of 1934

Our shares are currently covered by Section 15(g) of the Securities Exchange Act
of 1934, as amended, and Rules 15g-1 through 15g-6 promulgated thereunder, which
impose additional sales practice requirements on broker/dealers who sell our
securities to persons other than established customers and accredited investors.

Rule 15g-2 declares unlawful any broker-dealer transactions in penny stocks
unless the broker-dealer has first provided to the customer a standardized
disclosure document.

Rule 15g-3 provides that it is unlawful for a broker-dealer to engage in a penny
stock transaction unless the broker-dealer first discloses and subsequently
confirms to the customer the current quotation prices or similar market
information concerning the penny stock in question.

Rule 15g-4 prohibits broker-dealers from completing penny stock transactions for
a customer unless the broker-dealer first discloses to the customer the amount
of compensation or other remuneration received as a result of the penny stock
transaction.

                                       20
<PAGE>

Rule 15g-5 requires that a broker dealer executing a penny stock transaction,
other than one exempt under Rule 15g-1, disclose to its customer, at the time of
or prior to the transaction, information about the sales persons compensation.

Our common stock may remain subject to the foregoing rules for the foreseeable
future. The application of the penny stock rules may affect our stockholder's
ability to sell their shares because some broker/dealers may not be willing to
make a market in our common stock because of the burdens imposed upon them by
the penny stock rules.

ITEM 6 - Management's Discussion and Analysis of Financial Condition and Results
of Operations

Introduction

The following discussion and analysis should be read in conjunction with our
accompanying financial statements and the notes to those financial statements
included elsewhere in this Annual Report. The following discussion includes
forward-looking statements that reflect our plans, estimates and beliefs. Our
actual results could differ materially from those discussed in these
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed below and elsewhere
in this Annual Report.

Overview

We are engaged in oil and natural gas acquisition, and exploitation activities
in the state of Texas. Since the adoption of our business plan in July 2005, we
have emphasized the acquisition of properties that provided current production
and significant upside potential through further development. We have acquired
our reserves by investing approximately $1.9 million in the acquisition of
leases to oils and gas producing properties, and enhancements thereto, in 2005.

We also intend to continue seeking acquisition opportunities that compliment our
current portfolio. We intend to fund our development activity through use of
cash flow from operations and cash on hand. Proceeds from future equity
transactions may also be available for development projects or future
acquisitions.

Our business plan has involved increasing our base of reserves until we have
acquired a sufficient core to enable us to utilize cash from existing production
to fund further workover and production activities. We plan to continue our
strategy of acquiring producing properties with additional development and
exploitation potential.

Our revenue, profitability and future growth rate depend substantially on
factors beyond our control, such as economic, political and regulatory
developments and competition from other sources of energy. Oil and natural gas
prices historically have been volatile and may fluctuate widely in the future.
Sustained periods of low prices for oil or natural gas could materially and
adversely affect our financial position, our results of operations, the
quantities of oil and natural gas reserves that we can economically produce and
our access to capital.

In a worst case scenario, future workover operations could be largely
unsuccessful, oil and gas prices could sharply decline and/or other factors
beyond our control could cause us to greatly modify or substantially curtail our
development plans, which could negatively impact our earnings, cash flow and
most likely the trading price of our securities.

                                       21
<PAGE>

Results of Operations

The following table sets forth selected operating data from the Canyon Creek Oil
& Gas, Inc. joint venture for the periods indicated:

                                For the Years Ended December 31,
                                --------------------------------
                                           2005    2004
                                           ----    ----
Net production:
  Oil (Bbls)                               2,910     --
  Natural gas (Mcf)                        5,500     --
Net sales:
  Oil                                    $15,112    $--
  Natural gas                             13,853     --
Average sales price:
  Oil (per Bbl)                          $ 55.91    $--
  Natural gas (per Mcf)                    7.260     --
Production costs and expenses
  Lease operating expenses               $ 2,040    $--
  Production taxes                         1,754     --
  Depletion expense                       13,311     --


Year Ended December 31, 2005 Compared to Year Ended December 31, 2004

Oil and natural gas sales . During 2005, the Company entered into the oil and
gas business by establishing the first of several joint ventures, Canyon Creek
Oil & Gas, Inc. Oil and natural gas net sales revenue was approximately $29,000
in 2005, and none in 2004. Net oil sales were approximately $15,100 and net
natural gas sales were approximately $13,900. This represents approximately one
month of sales, in the future we expect our sales to be much higher as we
continue to acquire more leases and have a full period of production.

Lease operating expenses . Our aggregate lease operating expenses include
management fees of 7.5% of net operating revenues to USPX, the operator, for all
production expenses. This amount was $2,040 for the year ended December 31,
2005.

Production taxes . Production taxes as a percentage of oil and natural gas sales
were approximately 6 % during 2005 and none in 2004. Production taxes vary from
state to state. Therefore, these taxes are likely to vary in the future
depending on the mix of production we generate from various states, and on the
possibility that any state may raise its production tax.

Depreciation, depletion and amortization. Our depletion expense for 2005 was
$13,311, based on 2005 production. There was no depletion in 2004 as the Company
was not in the oil and gas business. Depreciation on property and equipment was
$104 in 2005 and none in 2004, as the Company has only recently begun to
purchase and accumulate office equipment.

General and administrative expenses. General and administrative expenses
increased by $286,498 to $355,547 during 2005. This increase was primarily due
to our growth as a company with an increase in personnel and other cost such as
rent expense and audit fees required for our growth.

Consulting Fees and Services. Consulting fees and services increased by
$6,487,198 to $8,192,344 (of which $8,122,973 was non- cash) during 2005. This
increase was primarily related to increases in compensation expenses associated
with increased personnel required to administer our growth,

Debt Conversion Expense, Debt conversion expense in 2005 was $528,934 relating
to the conversion of old liability and debt. In 2004 we did not have any such
expense.

                                       22
<PAGE>

Interest expense. Interest expense, net increased $8,180 to $16,661 in 2005. The
increase was due to higher amounts of debt being outstanding during the year in
2005.

Financial fee revenue, Financial fee revenue in 2005 was $65,000 related to a
real estate transaction under the company old operating model. In 2004 there
were no such revenues.

Income tax expense. Our effective tax rate was 25% during 2005 and 2004. As we
have significant net operating loss carryforwards, income tax expense is
comprised of minimum state filing fees only.

Net loss. Net loss increased from $1,761,226 for 2004 to $9,034,444 for 2005.
The primary reason for this increase relates to our increase in consulting
expense and general administrative expenses. In addition, $6.3 million of the
loss was prior to July 2005 when we reorganized the Company and change our
business to oil and natural gas acquisition, development and production.

Net loss attributable to common stock holders increased to approximately
$172,865,000 as compared to $1,761,000. The increased was primarily related to
the changes in conversions of our unlettered preferred convertible stock and
beneficial conversion related to our Series A preferred stock.

Liquidity and Capital Resources

Cash Requirements

The Company has incurred recurring operating losses since its inception, and as
of December 31, 2005 had an accumulated deficit of approximately $28,350,000 and
had insufficient capital to fund all of its obligations. These conditions raise
substantial doubt about the Company's ability to continue as a going concern.
The financial statements do not include any adjustments to reflect the possible
future effect of the recoverability and classification of assets or the amounts
and classifications of liabilities that may result from the outcome of this
uncertainty.

The Company's continuation as a going concern is dependant upon receiving
additional financing. The Company anticipates that during its 2006 fiscal year
it will need to raise substantial funds to support its working capital needs and
to continue to execute the requirements of its business plan. On February 13,
2006, the Company agreed to issue Eight Hundred and Ten (810) shares of its
Class B Preferred Stock in exchange for $810,000 in cash. In March, 2006, the
Company agreed to issue nine Hundred and eighty (980) shares of its Class B
Preferred Stock in exchange for $980,000 in cash.

Management of the Company is currently in a process of trying to secure
additional capital. There can be no assurance that the Company will be
successful in this capital raise or with other attempts to raise sufficient
capital.

Off-Balance Sheet Financing Arrangements

As of December 31, 2005 we had no off-balance sheet financing arrangements.

Operating Activities

From January 1, 2005 to December 31, 2005 compared to the twelve months ended
December 31, 2004.Net cash used in operating activities was $513,027 for the
year ended December 31, 2005. We had a net loss of $9,034,444 of which
$8,122,973 was due to consulting fees and services related to the issuance of
common shares or options to acquire such shares and $528,934 was due to loan
conversion costs. We also had non-cash charges of $13,415 related to
depreciation, amortization and depletion. In addition, cash used in operating
assets and liabilities totaled $161,820 during the period ended December 31,
2005.

Net cash used in operating activities was $203,769 for the year ended December
31, 2004. We had a net loss of $1,761,226 of which $1,371,450 was due to
consulting fees and services related to the issuance of common shares or options
to acquire such shares and $212,192 was due to an increase in accounts payable.

                                       23

<PAGE>

Investing Activities

Cash flows used in investing activities was $1,095,385 during the year ended
December 31, 2005, compared to $315,000 used during the year ended December 31,
2004. The increase in cash used was primarily due to workover expenses of
$964,890 related to the Canyon creek leases.

Financing Activities

The cash flows provided by financing activities of $1,737,696 during the year
ended December 31, 2005, consisting of $200,000 proceeds from the sale of our
common stock and $1,473,000 proceeds from the sale of our Class B preferred
stock and $64,696 in the increase of notes payable, compared to $517,981 for the
year ended December 31, 2004.

Critical Accounting Policies and Estimates

Our discussion of financial condition and results of operations is based upon
the information reported in our financial statements. The preparation of these
statements requires us to make assumptions and estimates that affect the
reported amounts of assets, liabilities, revenues and expenses as well as the
disclosure of contingent assets and liabilities at the date of our financial
statements. We base our assumptions and estimates on historical experience and
other sources that we believe to be reasonable at the time. Actual results may
vary from our estimates due to changes in circumstances, weather, politics,
global economics, mechanical problems, general business conditions and other
factors. Our significant accounting policies are detailed in Note 1 to our
financial statements included in this Annual Report. We have outlined below
certain of these policies as being of particular importance to the portrayal of
our financial position and results of operations and which require the
application of significant judgment by our management.

Revenue Recognition. We predominantly derive our revenue from the sale of
produced crude oil and natural gas. Revenue is recorded in the month the product
is delivered to the purchaser. We receive payment from one to three months after
delivery. At the end of each month, we estimate the amount of production
delivered to purchasers and the price we will receive. Variances between our
estimated revenue and actual payment are recorded in the month the payment is
received; however, differences have been insignificant.

Full Cost Method of Accounting. We account for our oil and natural gas
operations using the full cost method of accounting. Under this method, all
costs associated with property acquisition, exploration and development of oil
and gas reserves are capitalized. Costs capitalized include acquisition costs,
geological and geophysical expenditures, lease rentals on undeveloped properties
and cost of drilling and equipping productive and non-productive wells. Drilling
costs include directly related overhead costs. All of our properties are located
within the continental United States.

Oil and Natural Gas Reserve Quantities. Reserve quantities and the related
estimates of future net cash flows affect our periodic calculations of depletion
and impairment of our oil and natural gas properties. Proved oil and natural gas
reserves are the estimated quantities of crude oil, natural gas and natural gas
liquids which geological and engineering data demonstrate with reasonable
certainty to be recoverable in future periods from known reservoirs under
existing economic and operating conditions. Reserve quantities and future cash
flows included in this Annual Report are prepared in accordance with guidelines
established by the SEC and FASB. The accuracy of our reserve estimates is a
function of:

o the quality and quantity of available date;

o the interpretation of that data;

o the accuracy of various mandated economic assumptions; and

o the judgments of the persons preparing the estimates.

Our proved reserve information included in this Annual Report is based on
in-house estimates. Because these estimates depend on many assumptions, all of
which may differ substantially from actual results, reserve estimates may be
different from the quantities of oil and natural gas that are ultimately
recovered. We continually make revisions to reserve estimates throughout the
year as additional properties are acquired. We make changes to depletion rates
and impairment calculations in the same period that changes to the reserve
estimates are made.

                                       24

<PAGE>

All capitalized costs of oil and gas properties, including estimated future
costs to develop proved reserves and estimated future costs of site restoration,
are amortized on the unit-of-production method using estimates of proved
reserves as determined by independent engineers. Investments in unproved
properties and major development projects are not amortized until proved
reserves associated with the projects can be determined.

Impairment of Oil and Natural Gas Properties. We review the value of our oil and
natural gas properties whenever management judges that events and circumstances
indicate that the recorded carrying value of properties may not be recoverable.
We provide for impairments on undeveloped property when we determine that the
property will not be developed or a permanent impairment in value has occurred.
Impairments of proved producing properties are calculated by comparing future
net undiscounted cash flows on a field-by-field basis using escalated prices to
the net recorded book cost at the end of each period. If the net capitalized
cost exceeds net future cash flows, the cost of the property is written down to
"fair value," which is determined using net discounted future cash flows from
the producing property. Different pricing assumptions or discount rates could
result in a different calculated impairment. We have never recorded any property
impairments.

Income Taxes. We provide for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes." Deferred
income taxes are provided for the difference between the tax basis of assets and
liabilities and the carrying amount in our financial statements. This difference
will result in taxable income or deductions in future years when the reported
amount of the asset or liability is settled. Since our tax returns are filed
after the financial statements are prepared, estimates are required in valuing
tax assets and liabilities. We record adjustments to actual in the period we
file our tax returns.

Effects of Inflation and Pricing

The oil and natural gas industry is very cyclical and the demand for goods and
services of oil field companies, suppliers and others associated with the
industry puts extreme pressure on the economic stability and pricing structure
within the industry. Typically, as prices for oil and natural gas increase, so
do all associated costs, and this proved to be the case in 2005 as oil and gas
prices rose significantly. Costs for oilfield services and materials increased
during 2005 due to higher demand as a result of the higher oil and gas prices.
Material changes in prices impact the current revenue stream, estimates of
future reserves, borrowing base calculations of bank loans and value of
properties in purchase and sale transactions. Material changes in prices can
impact the value of oil and natural gas companies and their ability to raise
capital, borrow money and retain personnel. We anticipate the increased business
costs will continue while the commodity prices for oil and natural gas, and the
demand for services related to production and exploration, both remain high
(from an historical context) in the near term.

Quantitative and Qualitative Disclosure About Market Risk

Commodity Price Risk

We have not historically entered into derivative contracts to manage our
exposure to oil and natural gas price volatility. Normal hedging arrangements
have the effect of locking in for specified periods the prices we would receive
for the volumes and commodity to which the hedge relates. Consequently, while
hedges are designed to decrease exposure to price decreases, they also have the
effect of limiting the benefit of price increases.

ITEM 7 - Financial Statements

The financial statements and supplementary data required by this item are
included in the F pages.

ITEM 8 - Changes in and Disagreements with Accountants and Accounting and
Financial Disclosure

None.

                                       25

<PAGE>

ITEM 8A - Controls and Procedures

Evaluation of disclosure controls and procedures. We maintain "disclosure
controls and procedures," as such term is defined in Rule 13a-15(e) under the
Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to
ensure that information required to be disclosed by us in reports that we file
or submit under the Exchange Act is recorded, processed, summarized, and
reported within the time periods specified in Securities and Exchange Commission
rules and forms, and that such information is accumulated and communicated to
our management, including our Chief Executive Officer and General Counsel, as
appropriate, to allow timely decisions regarding required disclosure. In
designing and evaluating our disclosure controls and procedures, management
recognized that disclosure controls and procedures, no matter how well conceived
and operated, can provide only reasonable, not absolute, assurance that the
objectives of the disclosure controls and procedures are met. Additionally, in
designing disclosure controls and procedures, our management necessarily was
required to apply its judgment in evaluating the cost-benefit relationship of
possible disclosure controls and procedures. The design of any disclosure
controls and procedures also is based in part on certain assumptions about the
likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions.

Based on their evaluation as of the end of the period covered by this Annual
Report on Form 10-KSB/A (December 31, 2005), our Chief Executive Officer and
General have each concluded that there was a material weakness in our internal
controls.


A material control weakness is a significant deficiency or a combination of
significant deficiencies that results in more than a remote likelihood that a
material misstatement in financial statements will not be prevented or detected
on a timely basis by employees in the normal course of their work. As of
December 31, 2005, the management has identified that the Company has a material
control weakness in its accounting for convertible preferred shares. The company
did not account for the change old preferred "unlettered" shares to the proper
conversion rate resulting in an induced conversion. The Company has now put
procedures in place to properly account for the convertible preferred shares.

This material weakness impacted our ability to properly record and report our
old unlettered preferred shares and common during the fiscal year 2005. However,
the Company's management is actively engaged in remediation efforts to address
this material weaknesses identified in our internal control.

The total net adjustments as a result of this weakness was approximately
$163,846,000 to net loss attributable to common stockholders in the fiscal year
ended December 31, 2005.

The Company's management believes that the Company has improved its disclosure
controls and procedures and remedy the identified material weakness. Because of
the inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that all control issues and instances of fraud, if
any, will be or have been detected. These inherent limitations include the
realities that judgments in decision-making can be faulty, and that breakdowns
can occur because of simple error or mistake. Additionally, controls can be
circumvented by the individual acts of some persons, by collusion of two or more
people, or by management override of the control. The design of any system of
controls also is based in part upon certain assumptions about the likelihood of
future events, and there can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions; over time,
control may become inadequate because of changes in conditions, or the degree of
compliance with the policies or procedures may deteriorate. Because of the
inherent limitations in a cost-effective control system, misstatements due to
error or fraud may not occur and not be detected

The changes in our internal control over financial reporting described above
were implemented subsequent to the year ended December 31, 2005. There were no
changes in our internal control over financial reporting identified in
management's evaluation during the fiscal year to which this report relates that
have materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting.

ITEM 8B - Other Information

None

                                    PART III

ITEM 9 - Directors and Executive Officers

Executive Officers and Directors

The following table sets forth information regarding our executive officers,
certain other officers and directors as of December 31, 2005:

     Name                         Age   Position
     ----                         ---   --------
     Kamal Abdallah                41   President; Chief Executive Officer and
                                        Chairman of the Board of Directors
     Christopher McCauley          45   Director, Secretary and General Counsel
     Steve Barrera                 45   Director and Regional Manager


Mr. Abdallah has served as a member of our Board of Directors since March 2005.
Mr. McCauley was appointed to our board in July 2005 and Mr. Barrera was
appointed in June 2005 by the Board of Directors to fill vacant seats on the
board that resulted from an expansion of the size of the full board to five
members.

Background of Officers and Directors

The following biographies describe the business experience of our executive
officers and directors:

Kamal Abdallah - President, Chief Executive Officer and Chairman.

                                       26
<PAGE>

Mr. Abdallah, 41, has over fifteen years experience in commercial real estate
investment and development. Mr. Abdallah relocated to Florida in 2000. From 2000
to the present, Mr. Abdallah has been self-employed as a real estate development
entrepreneur and he has developed a very successful real estate investment
business, concentrated in the structuring and financing of a variety of
transactions. Mr. Abdallah attended Oakland Community College and Oakland
University in Michigan where he focused his studies in the area of accounting
and finance.

Christopher J. McCauley - Vice- President, General Counsel, Secretary and
Director.

Mr. McCauley, 45, has over twenty years experience in the areas of real estate
and commercial law and over 8 years experience in oil and gas acquisitions and
operations. From 1990 to July 2005, Mr. McCauley was in private practice in the
state of Ohio as a sole practitioner. Mr. McCauley now devotes all of his
professional efforts to the growth and management of the company. In 1982, Mr.
McCauley graduated from The Ohio State University and in 1986 Mr. McCauley
received his J.D. degree from Cleveland-Marshall College of Law.

Steven Barrera - Regional Manager and Director.

For over 17 years, Mr. Barrera has performed large loss mitigation for insurance
firms such as Lloyd's of London, AIG, Royal Insurance, CIGNA and USAA as well as
for the United States Department of Agriculture and Department of Labor. Mr.
Barrera also has over thirteen years experience in real estate development and
construction. Mr. Barrera was appointed regional manager in January 2006 to
oversee the operations of Canyon Creek Oil & Gas, Inc. in the state of Texas.
Mr. Barrera holds a bachelors degree in marketing from St. Mary's University in
San Antonio, Texas.

General

Our executive officers are elected by, and serve at the pleasure of, our board
of directors. Our directors serve terms of one year each, with the current
directors serving until the next annual meeting of stockholders, and in each
case until their respective successors are duly elected and qualified.

None of our directors currently serves as a director of any other company that
is required to file periodic reports under the Securities Exchange Act of 1934.

None of our directors, executive officers, promoters or control persons has,
within the last five years: (i) had a bankruptcy petition filed by or against
any business of which such person was a general partner or executive officer
either at the time of the bankruptcy or within two years prior to that time;
(ii) been convicted in a criminal proceeding or is currently subject to a
pending criminal proceeding (excluding traffic violations or similar
misdemeanors); (iii) been subject to any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring, suspending or
otherwise limiting his involvement in any type of business, securities or
banking activities; (iv) been found by a court of competent jurisdiction (in a
civil action), the Securities and Exchange Commission (the "Commission") or the
Commodity Futures Trading Commission to have violated a federal or state
securities or commodities law, and the judgment has not been reversed, suspended
or vacated. There are no family relationships among any of our directors and
executive officers.

Board of Directors and Committees

Our Board of Directors currently consists of five positions, of which three are
filled and two are vacant. Historically, our Board of Directors has generally
acted as a whole on most corporate governance matters. We plan to form audit,
nominating and corporate governance and compensation committees that will meet
the criteria for independence under, and other applicable requirements of, the
Sarbanes-Oxley Act of 2002, the current rules of the NASDAQ Stock Market and the
rules and regulations adopted by the SEC. We plan to appoint to these committees
individuals who are determined by our Board of Directors to be "independent"
within the meaning of these laws and requirements. We intend to comply with
future committee requirements as they become applicable to us. Our Board of
Directors will adopt charters for these three committees. We intend to make the
text of these charters available on our website at www.updac.com.

                                       27
<PAGE>

Audit Committee

The audit committee will provide assistance to the Board of Directors in
fulfilling its legal and fiduciary obligations in matters involving our
accounting, auditing, financial reporting, internal control and legal compliance
functions by approving the services performed by our independent accountants and
reviewing the adequacy of our company's accounting practices and systems of
internal accounting controls. The audit committee will oversee the audit efforts
of our independent accountants and review their independence.

We currently do not have a separately designated standing audit committee or a
committee performing similar functions. Our Board of Directors is currently
acting as our audit committee. Our Board of Directors has determined that we do
not have a person qualifying as an audit committee financial expert serving on
our Board of Directors. We plan to change the composition of our Board of
Directors to include at least one person qualifying as an audit committee
financial expert.

Compensation Committee

The Compensation Committee will be responsible for recommending to the Board of
Directors the compensation for our executives. The compensation committee will
determine our general compensation policies and the compensation provided to our
directors and executive officers. The compensation committee will review and
determine bonuses for our officers and certain other employees. In addition, the
compensation committee will review and determine equity-based compensation for
our directors, officers, employees and consultants and administer our stock
option plan and any other future benefit plans.

Nominating and Corporate Governance Committee

The Nominating and Governance Committee will be responsible for assisting our
Board of Directors in its selection of individuals as nominees for election to
the Board of Directors at annual meetings of our stockholders and for filling
any vacancies or newly created directorships on the Board of Directors. The
nominating and corporate governance committee will make recommendations to the
Board of Directors regarding candidates for directorships and the size and
composition of the board. In addition, the nominating and corporate governance
committee will oversee our corporate governance guidelines and report and make
recommendations to the board concerning corporate governance matters.

Election of Directors and Officers

Holders of our common stock are entitled to one (1) vote for each share held on
all matters submitted to a vote of the stockholders, including the election of
directors. Holders of our Series A Preferred Stock are entitled to one (1) vote
for each share of common stock into which their preferred shares are convertible
on all matters submitted to a vote of the common stockholders, including the
election of directors. Cumulative voting with respect to the election of
Directors is not permitted by our Certificate of Incorporation. Our Board of
Directors is elected at the annual meeting of the stockholders or at a special
meeting called for that purpose. Each director holds office until the next
annual meeting of the stockholders and until the director's successor is elected
and qualified. If a vacancy occurs on the Board of Directors, including a
vacancy resulting from an increase in the number of directors, the vacancy may
be filled by the Board of Directors or by the stockholders at the next annual
stockholders' meeting or at a special meeting of the stockholders called for
that purpose.

Code of Business Conduct and Ethics

Our Board of Directors intends to adopt a Code of Ethics applicable to our Chief
Executive Officer and other executive officers, and a Code of Business Conduct
and Ethics applicable to all of our employees, officers and directors. Once
adopted, our Code of Ethics and Code of Business Conduct will be available on
our website. We intend to satisfy the disclosure requirement under Item 10 of
Form 8-K relating to amendments or waivers from any provision of our Code of
Ethics and our Code of Business Conduct and Ethics applicable to our principal
executive officer, principal financial officer, principal accounting officer or
controller by either filing a Form 8-K with the SEC or posting this information
on our website within five days business days following the date of amendment or
waiver. Upon request, we will provide to any person, without charge, a copy of
our Code of Ethics and Code Business Conduct and Ethics. Requests may be
directed to Universal Property Development & Acquisition Corporation, 14225 U.S.
Highway 1, Suite 209, Juno Beach, Florida 33408, attention Christopher J.
McCauley, Esq., or by calling (561) 630-2977.

                                       28
<PAGE>

Corporate Governance Guidelines

Our Board of Directors intends to adopt Corporate Governance Guidelines, which
will provide the framework for our company's governance. These guidelines our
Board of Directors will annually evaluate its effectiveness and the
effectiveness of management, define director independence and establish a
minimum number of meetings per year for the board of directors and its
committees. Once adopted, the text of our Corporate Governance Guidelines will
be made available on our website. Upon request, we will provide to any person,
without charge, a copy of our Corporate Governance Guidelines. Requests may be
directed to Universal Property Development & Acquisition Corporation, 14225 U.S.
Highway 1, Suite 209, Juno Beach, Florida 33408, attention Christopher J.
McCauley, Esq., or by calling (561) 630-2977.

Our board may establish other committees from time to time to facilitate our
management.

Director Compensation

Our outside directors currently do not receive any compensation for their roles
as members of our Board of Directors and no director receives a salary as a
director.

Compensation Committee Interlocks and Insider Participation

None of our executive officers serve as a member of the board of directors or
compensation committee of any entity that has one or more of its executive
officers serving as a member of our board of directors or compensation
committee.

Financial Experts

At the present time no member of our Board of Directors meets the SEC definition
of "Financial Expert", which basically is limited to those who have prepared or
audited comparable public company financial statements. While it might be
possible to recruit a person who qualifies, the Board has determined that in
order to fulfill all functions of our Board and our Audit Committee, each member
of our Board and our Audit Committee should meet the criteria that have been
established by our Board for board membership, and it is not in the best
interests of our company to nominate someone who does not have all the
experience, attributes and qualifications we seek.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities and Exchange Act of 1934 requires certain
defined persons to file reports of and changes in beneficial ownership of a
registered security with the Commission. Under the regulatory procedure,
officers, directors and persons who own more than ten percent of a registered
class of a company's equity securities are also required to furnish the company
with copies of all Section 16(a) forms they filed.

To our knowledge, and based solely upon a review of the copies of such reports
furnished to us and written representations that no other reports were required
during the fiscal year ended December 31, 2005, all Section 16(a) filing
requirements applicable to our officers, directors and 10% or greater beneficial
owners were complied with, except that the following forms were filed:
Kamal Abdallah's Form 5 reporting his transactions in shares of our common
stock, Christopher McCauley's Form 5 reporting his transactions in shares of our
common stock and Steven Barrera's Form 5 reporting his ownership of 71,429
shares of our common stock at the time of his appointment to our Board of
Directors.

                                       29
<PAGE>

ITEM 10 - Executive Compensation

The following Summary Compensation Table sets forth information concerning the
annual and long-term compensation earned by our Chief Executive Officer and each
of the other most highly compensated executive officers (collectively the "named
executive officers") for the three most recent fiscal years. This information
includes the dollar value of base salaries and bonus awards and the number of
stock options granted, if any, and certain other compensation, if any.

                              Summary Compensation Table

                                             Annual Compensation
                                        ----------------------------
Name and Principal Position             Year     Salary       Bonus
                                        ----   ----------   --------

Kamal Abdallah (1)                      2005   $  208,048   $569,738
President and Chief Executive Officer
                                        2004   $     0.00   $   0.00
                                        2003   $     0.00   $   0.00

Christopher J. McCauley (2)             2005   $   50,000   $280,429
Vice-President and General Counsel
                                        2004   $     0.00   $   0.00
                                        2003   $     0.00   $   0.00

Steven Barrera (3)                      2005   $43,572.00   $   0.00
Regional Manager
                                        2004   $     0.00   $   0.00
                                        2003   $     0.00   $   0.00


(1) Mr. Kamal was not an officer or director of the registrant prior to March
2005 and, therefore, he did not receive any salary or bonuses from us prior to
our 2005 fiscal year. Mr. Abdallah's salary and bonus for the 2005 fiscal year
were paid by us with $70,986 in cash and through the issuance to Mr. Abdallah of
an aggregate of 1,940,000 shares of our common stock which we valued on the
dates of issuance at an aggregate of $706,800.

(2) Mr. McCauley was not an officer or director of the registrant prior to July
2005 and, therefore, he did not receive any salary or bonuses from us prior to
our 2005 fiscal year. Mr. McCauley's salary and bonus for the 2005 fiscal year
were paid by us with $22,000 in cash and through the issuance to Mr. McCauley of
an aggregate of 778,572 shares of our common stock which we valued on the dates
of issuance at an aggregate of $308,429.

(3) Mr. Barrera was not an officer or director of the registrant prior to
November 2005 and, therefore, he did not receive any salary from us prior to our
2005 fiscal year. Mr. Barrera's salary for the 2005 fiscal year was paid in its
entirety by us through the issuance to Mr. Barrera of an aggregate of 71,429
shares of our common stock which we valued on the date of issuance at $43,572.

There are no current plans to change any officers' salary from their level at
December 31, 2005.

Employee Benefit Plans

Equity Incentive Plan. In November 2004, our board of directors adopted an
incentive stock option plan that was subsequently approved by our shareholders.
The stock option plan is intended to promote continuity of management and to
provide increased incentive and personal interest in our welfare by those
employees and consultants who are primarily responsible for shaping and carrying
out our long-range plans and securing our continued growth and financial
success. In addition, by encouraging stock ownership by directors who are not
our employees, the stock option plan is intended to attract and retain qualified
directors.

The plan is administered by our board of directors, and they have the authority
to select the employees, consultants and non-employee directors who participate
in the plan, to determine the awards to be granted to participants, to set the
terms and conditions of such awards and to establish, amend or waive rules for
the administration of the plan.

                                       30
<PAGE>

The plan provides that up to a total of 65,000,000 shares of common stock,
subject to adjustment to reflect stock dividends and other capital changes, are
available for granting of awards under the stock option plan. No options to
acquire shares are currently outstanding and no options to acquire shares were
granted under the plan in 2005.

During 2005, our Board of Directors approved the issuance of an aggregate of
7,174,433 shares of our common stock to employees, directors, consultants and
others under the terms of the stock option plan.

Employment Contracts

We have written employment contracts with Kamal Abdallah, Christopher McCauley,
and Steven Barrera.

Employment Agreement with Kamal Abdallah.

On October 1, 2005, we entered into an employment agreement with Mr. Kamal
Abdallah which has an initial term of four (4) years. Mr. Abdallah serves as our
President and Chief Executive Officer and is a member of our board of directors.
Mr. Abdallah receives a base salary of $150,000 per year and is entitled to a
discretionary bonus of up to $600,000 per year. The amount of Mr. Abdallah's
bonus will be determined by the board of directors, and will be based on the
achievement of certain performance milestones as determined by the board of
directors in its sole discretion. As additional compensation, the Company shall
also issue and sell to Mr. Kamal certain restricted shares of common stock in
the amounts and at the share prices determined by the board of directors in its
sole discretion.

Mr. Abdallah's employment agreement would be terminated under its terms upon the
death or disability of Mr. Abdallah. If we terminate his employment agreement
for "Cause" (as defined in the agreement) or if Mr. Abdallah terminates his
employment voluntarily for any reason before the end of the term, Mr. Abdallah
will be entitled to receive his accrued compensation through the date his
employment terminates in addition to his pro rata bonus. If Mr. Abdallah's
employment is terminated by us without "Cause" then he will be entitled to
receive (1) his accrued compensation through the termination date; (2) a single
sum payment equal to one million dollars ($1,000,000); and (3) reimbursement for
the cost of up to the first twelve months of continuing group health plan
coverage which Executive and his covered dependents receive pursuant to COBRA.

Employment Agreement with Christopher McCauley.

On October 1, 2005, we entered into an employment agreement with Mr. Christopher
McCauley which has an initial term of four (4) years. Mr. McCauley serves as our
Vice-President, Secretary and General Counsel and is a member of our board of
directors. Mr. McCauley receives a base salary of $120,000 per year and is
entitled to a discretionary bonus of up to $600,000 per year. The amount of Mr.
McCauley's bonus will be determined by the board of directors, and will be based
on the achievement of certain performance milestones as determined by the board
of directors in its sole discretion. As additional compensation, the Company
shall also issue and sell to Mr. McCauley certain restricted shares of common
stock in the amounts and at the share prices determined by the board of
directors in its sole discretion.

Mr. McCauley's employment agreement would be terminated under its terms upon the
death or disability of Mr. McCauley. If we terminate his employment agreement
for "Cause" (as defined in the agreement) or if Mr. McCauley terminates his
employment voluntarily for any reason before the end of the term, Mr. McCauley
will be entitled to receive his accrued compensation through the date his
employment terminates in addition to his pro rata bonus. If Mr. McCauley's
employment is terminated by us without "Cause" then he will be entitled to
receive (1) his accrued compensation through the termination date; (2) a single
sum payment equal to one million dollars ($1,000,000); and (3) reimbursement for
the cost of up to the first twelve months of continuing group health plan
coverage which Executive and his covered dependents receive pursuant to COBRA.

                                       31
<PAGE>

Employment Agreement with Steven Barrera.

On January 1, 2006, we entered into an employment agreement with Mr. Steven
Barrera which has an initial term of one (1) year. Mr. Barrera serves as our
Regional Manager for operations in the State of Texas and is a member of our
board of directors. Mr. Barrera receives a base salary of $60,000 per year. As
additional compensation, the Company shall also issue and sell to Mr. Barrera
certain restricted shares of common stock in the amounts and at the share prices
determined by the board of directors in its sole discretion.

Mr. Barrera's employment agreement would be terminated under its terms upon the
death or disability of Mr. Barrera. If we terminate his employment agreement for
"Cause" (as defined in the agreement), without such "Cause" or if Mr. Barrera
terminates his employment voluntarily for any reason before the end of the term,
Mr. Barrera will be entitled to receive his accrued compensation through the
date his employment terminates.

Indemnification

Under our Articles of Incorporation and Bylaws, we may indemnify an officer or
director who is made a party to any proceeding, including a lawsuit, because of
his position, if he acted in good faith and in a manner he reasonably believed
to be in our best interest. We may advance expenses incurred in defending a
proceeding. To the extent that the officer or director is successful on the
merits in a proceeding as to which he is to be indemnified, we must indemnify
him against all expenses incurred, including attorney's fees. With respect to a
derivative action, indemnity may be made only for expenses actually and
reasonably incurred in defending the proceeding, and if the officer or director
is judged liable, only by a court order. The indemnification is intended to be
to the fullest extent permitted by the laws of the State of Nevada. Regarding
indemnification for liabilities arising under the Securities Act, which may be
permitted to directors or officers under Nevada law, we are informed that, in
the opinion of the Commission, indemnification is against public policy, as
expressed in the Act and is, therefore, unenforceable.

ITEM 11 - Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters

The following table sets forth, as of March 31, 2006, information regarding the
beneficial ownership of our common stock: (i) by each of our directors and
executive officers; (ii) by all directors and executive officers as a group; and
(iii) by all persons known to us to own 5% or more of our outstanding shares of
common stock. The mailing address for each of the persons indicated is our
corporate headquarters.

Beneficial ownership is determined under the rules of the Securities and
Exchange Commission. In general, these rules attribute beneficial ownership of
securities to persons who possess sole or shared voting power and/or investment
power with respect to those securities and includes, among other things,
securities that an individual has the right to acquire within 60 days. Unless
otherwise indicated, the stockholders identified in the following table have
sole voting and investment power with respect to all shares shown as
beneficially owned by them.

                          Shares of Common Stock Beneficially Owned (1)
                          ---------------------------------------------
          Name                        Number      Percent
-----------------------             ----------    -------
Kamal Abdallah                      55,474,000(2)  38.54%
Christopher J. McCauley             14,004,000(3)  13.47%
Steven Barrera                          71,429          *

All directors and
 executive officers                 69,549,429     44.22%(4)


* Represents beneficial ownership of less than 1%

(1) As used in this table, a beneficial owner of a security includes any person
who, directly or indirectly, through contract, arrangement, understanding,
relationship or otherwise has or shares (a) the power to vote, or direct the
voting of, such security or (b) investment power which includes the power to
dispose, or to direct the disposition of, such security. In addition, a person
is deemed to be the beneficial owner of a security if that person has the right
to acquire beneficial ownership of such security within 60 days. Because our
common stock has one (1) vote per share on all matters and holders of our Series
A Preferred Stock are entitled to one (1) vote for each share of common stock
into which their preferred shares are convertible on all matters submitted to a
vote of the common stockholders, including the election of directors, the
percentage ownership is presented on the basis of the percentage of the sum of
the number of shares of common stock outstanding and the number of shares of
common stock into which the outstanding vested shares of Series A Preferred
Stock are currently convertible or will be convertible within the next 60 days.

                                       32
<PAGE>

(2) Mr. Abdallah owns 2,140,000 shares of our common stock. In addition, Mr.
Abdallah owns 53,334 shares of our Series A Preferred Stock which have vested
and are currently convertible, or which shall be convertible within 60 days of
the date of this filing, into 53,334,000 shares of our common stock. The shares
of Series A Preferred Stock owned by Mr. Abdallah are entitled to vote on an as
converted basis in all matters for which the holders of shares of our common
stock are entitled to vote, including, but not limited to, the election of our
directors.

(3) Mr. McCauley owns 670,000 shares of our common stock. In addition, Mr.
McCauley owns 13,334shares of our Series A Preferred Stock which have vested and
are currently convertible, or which shall be convertible within 60 days of the
date of this filing, into 13,334,000 shares of our common stock. The shares of
Series A Preferred Stock owned by Mr. McCauley are entitled to vote on an as
converted basis in all matters for which the holders of shares of our common
stock are entitled to vote, including, but not limited to, the election of our
directors.

(4) This percentage ownership of our common stock by our officers and directors
is based upon 157,288,306 shares of our common stock being outstanding. The
157,288,306 common share number is computed by adding the 66,668,000 shares of
our common stock that would be issued as a result of the conversion of the
shares of Series A Preferred Stock held by Mr. Kamal and Mr. McCauley which have
vested and are currently convertible, or which shall be convertible within 60
days, to the 9089,992,108 of our common stock that was outstanding as of March
31, 2006.

The percentages in the above table are computed based upon a total of 89,992,108
shares or common stock being outstanding on March 31, 2006.

ITEM 12 - Certain Relationships and Related Transactions

None

ITEM 13 - Exhibits and Reports on Form 8-K

                                       33
<PAGE>

(a) Exhibits:

The following documents heretofore filed by the Company with the Securities and
Exchange Commission are hereby incorporated by reference:

<TABLE>
<CAPTION>

     Exhibit
     Number    Description Of Document
     ------    -----------------------
<S>            <C>
     2.1 #     Agreement and Plan of Merger dated June 17, 2005, among Pro Core Group, Inc., now known as
               Universal Property Development and Acquisition Corporation, and Universal Property Development
               and Acquisition Corporation, a Nevada corporation, which was a wholly-owned subsidiary of
               Procore Group, Inc. Incorporate by reference to Exhibit 1 to the Current Report on Form 8-K
               filed by the Company on July 15, 2005.

     2.2 #     Articles of Merger by and between Universal Property Development and Acquisition Corporation
               and Pro Core Group, Inc. dated June 17, 2005. Incorporate by reference to Exhibit 2 to the
               Current Report on Form 8-K filed by the Company on July 15, 2005.

     3.1 *     Articles of Incorporation of Universal Property Development and Acquisition Corporation.

     3.2 *     By-Laws of Universal Property Development and Acquisition Corporation

     4.1 *     Certificate of Designation of Powers, Preferences and Rights of the Series B Convertible
               Preferred Stock of Universal Property Development and Acquisition Corporation.

     4.2 *@    Universal Property Development and Acquisition Corporation 2004 Stock Incentive Plan.

     10.1 #    Joint Venture Agreement dated November 17, 2005 by and between by and between US Production &
               Exploration, LLC, Universal Property Development and Acquisition Corp, and Triple Crown
               Consulting governing the formation and management of the joint venture entity Canyon Creek Oil
               & Gas, Inc.  Incorporate by reference to Exhibit 10.1 to the Current Report on Form 8-K filed
               by the Company on November 22, 2005.
     10.2 *    Joint Venture Agreement dated October 2005 by and between by and between Universal Property
               Development and Acquisition Corp, Triple Crown Consulting, Inc., RAKJ, Rene Kranvold and
               Masaood Group governing the formation and management of the joint venture entity West Oil &
               Gas, Inc.

     10.3 *    Joint Venture Agreement dated December 2005 by and between by and between Universal Property
               Development and Acquisition Corp and Lion Partners Hedge Fund governing the formation and
               management of the joint venture entity Winrock Energy, Inc.

     10.4 #    Memorandum of Understanding dated March 2006 by and between by and between Sundial Resources,
               Inc,  Ty  McDermett  and Andrew  McDermett,  Jr.  and Universal Property  Development and
               Acquisition  Corporation governing the formation and management of the joint venture entity
               Texas Energy, Inc.  Incorporate by reference to Exhibit 10.1 to the Current Report on Form 8-K
               filed by the Company on March 14, 2006.

     10.5 #@   Employment Agreement between Universal Property Development and Acquisition Corporation and Mr.
               Kamal Abdallah dated October 1, 2005.  Incorporate by reference to Exhibit 99.1 to the Current
               Report on Form 8-K filed by the Company on October 12, 2005.

     10.6 #@   Employment Agreement between Universal Property Development and Acquisition Corporation and Mr.
               Christopher McCauley dated October 1, 2005.  Incorporate by reference to Exhibit 99.2 to the
               Current Report on Form 8-K filed by the Company on October 12, 2005.

     10.7 #@   Employment Agreement between Universal Property Development and Acquisition Corporation and Mr.
               Steven Barrera dated January 1, 2006.  Incorporate by reference to Exhibit 10.1 to the Current
               Report on Form 8-K filed by the Company on January 23, 2006.

     31.1 *    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act.

     31.2 *    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act.

     32.1 *    Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act.

     32.2*     Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act.
</TABLE>

----------
# Incorporated herein by reference.
* Filed herewith. @ Management compensation agreement, plan or arrangement.

                                       34
<PAGE>

(b) Reports on Form 8-K:

The following reports on Form 8-K have been filed during the last quarter of the
period covered by this report:

On October 11, 2005, we filed a Current Report on Form 8-K which disclosed that
on October 8, 2005, the Company entered into an MOU with Dark Horse Exploration,
Inc., a Wyoming corporation, to form a joint venture entity to acquire mineral
leases for the drilling and production of oil and gas wells on properties
consisting of 4000 acres in Northern Utah.

On October 12, 2005, we filed a Current Report on Form 8-K which disclosed that
on October 10, 2005, the Company entered into an agreement with Bratenahl
Estates Development, LLC. to terminate an MOU previously executed by the
parties. We also reported in this Current Report on Form 8-K that the Company
had entered into employment agreements with Mr. Kamal Abdallah and Mr.
Christopher McCauley.

On November 22, 2005, we filed a Current Report on Form 8-K which disclosed that
on November 17, 2005, the Company, U. S. Production & Exploration, LLC, and
Triple Crown Consulting entered into a Joint Venture Agreement (the
"Agreement"). Pursuant to the terms of the Agreement, the parties formed Canyon
Creek Oil & Gas, Inc., a Nevada corporation, as the joint venture entity to
acquire mineral leases for the drilling and production of oil and gas wells on
properties in the State of Texas.

ITEM 14 - Principal Accountant Fees and Services

The firm of KBL, LLP formerly known as Kahn Boyd Levychin , LLP. has served as
our independent auditors since October 2000. The Board of Directors selected KBL
, LLP as our independent auditors for the fiscal year ending December 31, 2005,
and the Audit Committee has selected KBL , LLP to serve in the same capacity for
the fiscal year ending December 31, 2006. The Audit Committee has adopted a
policy that requires advance approval of all audit, audit-related, tax services
and other services performed by the independent auditor.

                              Fees and Independence

Audit Fees. KBL, LLP formerly Kahn Boyd Levychin , LLP billed us an aggregate of
$ 64,826 and $34,710 for professional services rendered for the audit of our
financial statements for the years ended December 31, 2005 and 2004,
respectively, and its reviews of our financial statements included in our Form
10-QSB's for the first three quarters of 2005 and 2004.

Tax Fees. KBL, LLP formerly Kahn Boyd Levychin, LLP did not bill us for any tax
related services, however the audit fees included the cost for our tax return
preparation for the years ended December 31, 2005 and 2004.

                                       35
<PAGE>

All Other Fees. No other fees were billed by KBL, LLP formerly Kahn Boyd
Levychin , LLP to us during 2005 or 2004.

The Audit Committee of the Board of Directors has determined that the provision
of services by KBL , LLP described above is compatible with maintaining
independence as our principal accountant.

                                       36
<PAGE>

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

Date April 17, 2006              UNIVERSAL PROPERTY DEVELOPMENT AND
                                 ACQUISITION CORPORATION

                                 By:      /s/ Kamal Abdallah
                                     -----------------------------------
                                      Kamal Abdallah
                                      Chief Executive Officer and President


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

          Signature                         Title                   Date
          ---------                         -----                   ----


/s/ Kamal Abdallah            Chief Executive Officer,        November, 2006
---------------------------   President and Director
    Kamal Abdallah            (Principal Executive Officer)


/s/ Christopher J. McCauley   Vice-President, Secretary       November, 2006
---------------------------   and Director
   Christopher J. McCauley

/s/ Steven Barrera            Director                        November, 2006
---------------------------
   Steven Barrera

                                       37
<PAGE>

                                  EXHIBIT INDEX

The following documents are filed as exhibits to this Report:

<TABLE>
<CAPTION>

Exhibit
Number    Description Of Document
------    -----------------------
<S>       <C>
  10.3    Joint Venture Agreement dated December 2005 by and between by and between Universal Property
          Development and Acquisition Corp and Lion Partners Hedge Fund governing the formation and
          management of the joint venture entity Winrock Energy, Inc.

  31.1    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act.

  31.2    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act.

  32.1    Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act.

  32.2    Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act.
</TABLE>

                                       38

<PAGE>

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Registered Independent Auditors
Consolidated Balance Sheets                                            F1
Consolidated Statements of Operations                                  F2
Consolidated Statements of Changes in Shareholders' Deficit            F3
Consolidated Statements of Cash Flows                                  F4 - F5
Notes to Consolidated Financial Statements                             F7 - F25
Supplemental Information on Oil and Gas Producing Activities           F26 - F27

<PAGE>

                                    KBL, LLP
                     CERTIFIED PUBLIC ACCOUNTANTS & ADVISORS

                    REPORT OF REGISTERED INDEPENDENT AUDITORS

Board of Directors and the Shareholders
Universal Property Development and Acquisition Corporation Juno Beach, Florida

We have audited the accompanying consolidated balance sheets of Universal
Property Development and Acquisition Corporation (a corporation formerly known
as Procore Group, Inc.) as of December 31, 2005 and 2004, and the related
consolidated statements of operations, changes in shareholders' deficit, and
cash flows, for the years 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.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Universal Property Development
and Acquisition Corporation as of December 31, 2005 and 2004, and the results of
its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America


As discussed in Note 21 to the financial statements, an error was made in the
Company's originally issued financial statements for the year ended December 31,
2005 concerning the recording of "Unlettered Convertible Preferred Stock"
converted to common stock during the year ended December 31, 2005. In addition,
the financial statements for that period did not reflect preferred stock
dividends resulting from beneficial conversion features associated with Series A
for $1,000,000, and including an induced conversion of "Unlettered" preferred
stock convertible into common stock of $162,830,529.

Correction of the aforementioned items has resulted in an $88 increase in the
amount recorded for preferred stock in the equity section at December 31, 2005,
have resulted in an increase of $162,830,529 in the Company's Accumulated
Deficit attributed to the recording of stock dividends on various classes of
convertible preferred stock either issued in the current year or whose
conversion features were changed during the current year. These corrections also
resulted in an increase in additional paid-in capital of the Company in the
amount of $162,830,441. The errors and corrections thereof did not affect
originally reported net loss.

In addition to the restatements described in the preceding two paragraphs, Note
20 concerning events subsequent to the Company financial statements date have
been restated to reflect updated information concerning the ultimate disposition
of an $1,000,000 investment in certain preferred stock the Company had received
from a principal officer/shareholder of the Company during the year ended 2005
and subsequently sold at no gain or loss to the Company for $1,000,000 in cash.
Finally, the 2005 financial statements have been restated to reflect updated
information concerning litigation commenced subsequent to the original issuance
date of the financial statements involving a joint venture partner that
performed workovers on leases included in the cost of Company Oil and Gas
Property Assets.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has suffered recurring losses from operations,
and is dependent upon the sale of equity securities to provide sufficient
working capital to maintain continuity. These circumstances create substantial
doubt about the Company's ability to continue as a going concern. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.


KBL, LLP
Certified Public Accountants and Advisors

New York, NY


April 14, 2006, except for the effects of financial statement restatements
described in Notes 3, 11, 13, 20 and 21, as to which the dates are November 20,
2006, for change in conversions of unlettered convertible preferred stock to
common stock and beneficial conversion features related to preferred stock and
the ultimate disposition of the Company's investment in preferred stock of
another public entity in consideration for cash by an officer/stockholder of the
Company.

                                       F-1

<PAGE>

        UNIVERSAL PROPERTY DEVELOPMENT ACQUISITION CORP. AND SUBSIDIARIES

                           Consolidated Balance Sheets
                    December 31, 2005 (As Restated) and 2004

<TABLE>
<CAPTION>

                                                                                    2005            2004
                                                                               -------------   ------------
                                                                               (As Restated-
                                                                                See Note 21)
<S>                                                                             <C>            <C>
ASSETS
  Current:
     Cash                                                                      $     132,935   $      3,651
     Marketable securities                                                         1,000,000
     Accounts receivable- oil and gas sales                                           13,137
     Security deposits                                                                   672
     Unsecured bridge loan receivable, including accrued interest
         receivable of 4,735 in 2004                                                                304,735
                                                                               -------------   ------------
  Total current assets                                                             1,146,744        308,386
                                                                               -------------   ------------

  Property and Equipment
     Oil and gas properties, using Full Cost Accounting
         Subject to amortization                                                   1,311,546
         Not subject to amortization                                                 623,860
                                                                               -------------   ------------
                   Gross                                                           1,935,406
        Accumulated depletion                                                        (13,311)
                                                                               -------------   ------------
                    Net                                                            1,922,095
     Office equipment, at cost, net of accumulated depreciation of 104                 2,391
                                                                               -------------   ------------
                    Property and equipment, net                                    1,924,486
                                                                               -------------   ------------

   Total assets                                                                $   3,071,230   $    308,386
                                                                               =============   ============

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
  Current Liabilities:
     Accounts payable and accrued expenses                                     $     485,544   $    375,612
     Notes payable                                                                   161,413        592,448
     Due to USPX                                                                       2,041
     Income taxes payable                                                              2,219          6,763
  Total current liabilities                                                          651,217        974,823

                                                                               -------------   ------------
  Total liabilities                                                                  651,217        974,823
                                                                               -------------   ------------

  35% minority interest in Canyon Creek Oil and Gas, Inc. subsidiary                 609,691

STOCKHOLDERS' EQUITY (DEFICIT)
  Common stock, 2,000,000,000 shares $.001 par value authorized,
     32,964,256 and 398,454 shares issued/to be issued and
     outstanding in 2005 and 2004, respectively                                       32,964            398
 "Unlettered" Convertible preferred stock, 500,000,000 shares $.001
     par value authorized, 237,106 as restated (Note 21) and 237,197
     shares issued and outstanding
     in 2005 and 2004, respectively                                                      237            237
  Class A convertible preferred stock, 100,000 shares $10.00 par
     value authorized, 100,000 and - shares issued and outstanding in
     2005 and 2004, respectively                                                   1,000,000
  Class B preferred stock, 1,473 shares $1,000.00 face value
     authorized, 1,473, as restated (Note 21) and - shares issued and to be
     issued in 2005 and 2004, respectively                                         1,473,000
  Additional paid-in capital, as restated in 2005 (Note 21)                      189,011,741     16,505,575
  Accumulated deficit as restated in 2005 (Note 21)                             (189,707,620)   (16,842,647)
  Less: stock subscription receivable                                                              (330,000)
                                                                               -------------   ------------
  Total stockholders' equity (deficit)                                             1,810,322       (666,437)
                                                                               -------------   ------------
Total liabilities and stockholder's equity (deficit)                           $   3,071,230   $    308,386
                                                                               =============   ============
</TABLE>

See registered independent auditor report and notes to the financial statements

                                       F-2

<PAGE>

       UNIVERSAL PROPERTY DEVELOPMENT ACQUISITION CORP. AND SUBSIDIARIES
                     Consolidated Statements of Operations
          For the years ended December 31, 2005 (As Restated) and 2004

<TABLE>
<CAPTION>

                                                                             2005          2004
                                                                        -------------   -----------
                                                                        (As Restated-
                                                                         See Note 21)
<S>                                                                     <C>             <C>
Revenue - sales of crude oil and gas                                    $      28,965   $        --
Cost of goods sold, including depletion of $13,311                             17,105            --
                                                                        -------------   -----------
Gross profit                                                                   11,860            --
                                                                        -------------   -----------
Operating expenses:
   Consulting fees and services, including $8,122,973 in 2005
      and $1,371,450 in 2004 incurred through issuance of
      common shares or options to acquire such shares                       8,192,344     1,705,146
   General and administrative                                                 355,547        69,049
   Depreciation                                                                   104
Total operating expenses                                                    8,547,995     1,774,195
Loss from operations                                                       (8,536,135)   (1,774,195)
                                                                        -------------   -----------
Other income (expense)
   Debt conversion expense                                                   (528,934)           --
   Interest expense, net                                                      (16,661)       (8,481)
   Gain on write off of liabilities no longer due and payable,
      including $37,250 in 2004 related to liability partly settled
      through issuance of common shares                                         6,801        37,250
   Loss on impairment of investment acquisition costs                         (21,355)      (15,000)
   One-time financial fee earned in Company abandoned arrangement to
     provide long-term construction/development financing                      65,000
                                                                        -------------   -----------
Total other (expense) income                                                 (495,149)       13,769
                                                                        -------------   -----------
Loss before provision for income taxes                                     (9,031,284)   (1,760,426)
Provision for income taxes (current)                                              800           800
                                                                        -------------   -----------
Net loss before minority interest                                          (9,032,084)   (1,761,226)
Add, 35% minority interest in net income of Canyon Creek Oil and Gas,
   Inc. subsidiary                                                              2,360            --
                                                                        -------------   -----------
Net loss after minority interest                                        $  (9,034,444)  $(1,761,226)
                                                                        =============   ===========
Preferred stock dividend resulting from
beneficial feature associated with Series A
being convertible to common stock                                          (1,000,000)           --
Preferred stock dividend resulting from the change
in conversion feature associated with unlettered preferred stock
being convertible to common stock, as restated (Note 21)                 (162,830,529)           --
                                                                        -------------   -----------
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS                               $(172,864,973)  $(1,761,226)
                                                                        =============   ===========
Basic  net loss attributable to common stockholders per
  weighted-average shares common stock Outstanding                      $       (1.55)  $    (16.94)
                                                                        =============   ===========
 Diluted net loss per share attributable to common
  stockholders As restated, Note 21                                     $      (16.46)  $    (16.94)
                                                                        =============   ===========
Weighted-average number of shares of common stock outstanding              10,504,859       103,985
                                                                        =============   ===========
</TABLE>

See registered independent auditor report and notes to the financial statements.

                                       F-3

<PAGE>

        UNIVERSAL PROPERTY DEVELOPMENT ACQUISITION CORP. AND SUBSIDIARIES
      Consolidated Statements of Changes in Shareholders' Equity (Deficit)
          (As Restated) For the Years Ended December 31, 2005 and 2004

<TABLE>
<CAPTION>

                                                           (Shares)       (Shares)
                                                                         Preferred
                                                                          Stock(As
                                                                        Restated in                  Preferred Stock(As
                                                                          2005-See                      Restated in
                                                         Common Stock     Note 21)    Common Stock    2005-See Note 21)
                                                         ------------   -----------   ------------   ------------------
<S>                                                      <C>              <C>            <C>             <C>
Balance at December 31, 2003 (adjusted for 100:1
  reverse split)                                               35,784      237,197      $    36         $      237
Company common stock options issued
   for consulting fees and services
     incurred by Company
Company common shares issued for
   consulting fees and services incurred
      by Company                                              120,450                       120
Shares issued in settlement of
  Liabilities                                                  20,000                        20
Common shares sold/not yet
  issued to investors
Restricted shares issued to subscribing
  investor in transaction involving
    pending real estate acquisition by
       Company (*)                                            222,220                       222
Net loss
                                                           ----------      -------      -------          ---------
Balance at December 31, 2004                                  398,454      237,197          398                237
                                                           ----------      -------      -------          ---------
Unlettered Convertible Preferred shares
 with induced conversion feature converted
 into common shares, as restated (Note 21)*                25,855,000          (91)       25,855                --
Class B convertible preferred stock
  to be issued for cash received by Company (Note 21)*                       1,473                       1,473,000
Preferred stock dividend resulting from
 Change in conversion feature associated with
 certain Unlettered Convertible Preferred
Common stock issued for cash                                  133,333                       133
Common stock issued for services                            5,136,750                     5,137
Common shares issued for investment in
  oil and gas exploration and development
     joint venture                                            100,000                       100
Common shares issued for consulting
  services in connection with oil and gas
    exploration and development joint venture                 500,000                       500
Common stock issued in settlement of
   Liabilities                                              1,062,939                     1,063
Cancellation of common shares returned
   on unwinding of prior real estate
       acquisition transaction (*)                           (222,220)                     (222)
Class A convertible preferred stock
   issued in exchange for investment in
     preferred series B restricted stock                                   100,000                       1,000,000
Preferred stock dividend resulting
   from beneficial feature associated
     with Series A being convertible to
      common stock*
Net loss
                                                           ----------      -------      -------          ---------
Balance at December 31, 2005, As restated (Note 21)        32,964,256      338,579       32,964          2,473,237
                                                           ==========      =======      =======          =========

<CAPTION>

                                                                           Accumulated
                                                                            Deficit(As
                                                       APIC(As Restated    restated in         Stock
                                                          in 2005-See       2005-See       Subscription
                                                           Note 21)          Note 21)       Receivable       TOTAL
                                                       ----------------   -------------   -------------   ----------
<S>                                                         <C>             <C>              <C>          <C>
Balance at December 31, 2003 (adjusted
  for 100:1 reverse split)                                  14,737,892      (15,081,421)           --      (343,256)
Company common stock options issued
   for consulting fees and services
     incurred by Company                                        93,500                                       93,500
Company common shares issued for
   consulting fees and services incurred
      by Company                                             1,265,905                                     1,266,025
Shares issued in settlement of
  Liabilities                                                   18,000                                        18,020
Common shares sold/not yet
  issued to investors                                           62,500                                        62,500
Restricted shares issued to subscribing
  Investor in transaction involving
    pending real estate acquisition by
       Company (*)                                             327,778                       (330,000)        (2,000)
Net Loss                                                                     (1,761,226)                  (1,761,226)
                                                           -----------    -------------      --------     ----------
Balance at December 31, 2004                                16,505,575      (16,842,647)     (330,000)      (666,437)
                                                           ===========    =============      ========     ==========
Unlettered Convertible Preferred shares
 with induced conversion feature converted
  into common shares, as restated (Note 21)*                   (25,855)
Common stock issued for cash                                   199,867                                       200,000
 Change in conversion feature associated
  with certain unlettered preferred stock                  162,830,529     (162,830,529)
Common stock issued for services                             7,636,723                                     7,641,860
Common shares issued for investment in
  oil and gas exploration and development
     joint venture                                              54,900                                        55,000
Common shares issued for consulting
  services in connection with oil and gas
    exploration and development joint
      Venture                                                  264,500                                       265,000
Common stock issued in settlement of
   Liabilities                                                 875,280                                       876,343
Cancellation of common shares returned
   on unwinding of prior real estate
       acquisition transaction (*)                            (329,778)                       330,000
Class A convertible preferred stock
   issued in exchange for investment in
     preferred series B restricted stock                                                                   1,000,000
Preferred stock dividend resulting
   from beneficial feature associated
     with Series A being convertible to
     common stock*                                           1,000,000       (1,000,000)
Net loss                                                                     (9,034,444)                  (9,034,444)
                                                           -----------     ------------      --------     ----------
Balance at December 31, 2005, As restated (Note 21)        189,011,741     (189,707,620)           --      1,810,322
                                                           ===========     ============      ========     ==========
</TABLE>

See registered independent auditor report and notes to the financial statements.

                                       F-4

<PAGE>

        UNIVERSAL PROPERTY DEVELOPMENT ACQUISITION CORP. AND SUBSIDIARIES

                      Consolidated Statements of Cash Flows
                 For the Years Ended December 31, 2005 and 2004

<TABLE>
<CAPTION>

                                                                                  2005          2004
                                                                              -----------   -----------
<S>                                                                           <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                                                      $(9,034,444)  $(1,761,226)
Adjustments to reconcile net loss to net cash used in operating activities:
   35% minority interest in Canyon Creek Oil and Gas, Inc. subsidiary               2,360
   Gain on write off of liabilities no longer due and payable, including
      $37,250 in 2004 related to liability partly settled through issuance
      of common shares                                                            (10,535)      (37,250)
   Loss on impairment of investment acquisition costs                              21,355        15,000
   Accrued interest receivable on unsecured bridge loan receivable                  4,735        (4,735)
   Depletion and depreciation expense                                              13,415            --
   Consulting fees and services incurred through issuance of company
      equity shares or options to acquire such shares                           8,122,973     1,371,450
   Loan conversion costs                                                          528,934            --
   Changes in operating assets and liabilities:
        Increase in accounts receivable                                           (13,137)           --
        Increase in security deposits                                                (672)           --
        (Decrease) increase in accounts payable & accrued expenses               (145,508)      212,192
        Increase in due to USPX                                                     2,041            --
        (Decrease) increase in income taxes payable                                (4,544)          800
                                                                              -----------   -----------
NET CASH USED IN OPERATING ACTIVITIES                                            (513,027)     (203,769)
                                                                              -----------   -----------
CASH FLOWS FROM INVESTING ACTIVITIES
   Unsecured bridge loan made by Company for potential investment
      acquisition                                                                      --      (300,000)
   Payment of investment acquisition costs                                             --       (15,000)
   Payment of capitalized oil and gas properties work-over costs                 (964,890)           --
   Payments for assignment of rights to oil and gas leases to the Company        (128,000)           --
   Purchases of office equipment                                                   (2,495)           --
                                                                              -----------   -----------
NET CASH USED IN INVESTING ACTIVITIES                                          (1,095,385)     (315,000)
                                                                              -----------   -----------
CASH FLOWS FROM FINANCING ACTIVITIES
  Net increase in notes payable                                                    64,696       435,481
  Proceeds from sale of common stock                                              200,000        62,500
  Proceeds from sale of Class B  convertible preferred stock                    1,473,000            --
  Proceeds of cash received against common stock subscription  receivable              --        20,000
                                                                              -----------   -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES                                       1,737,696       517,981
                                                                              -----------   -----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                              129,284          (788)
Cash and cash equivalents, beginning of year                                        3,651         4,439
                                                                              -----------   -----------
CASH AND CASH EQUIVALENTS, END OF YEAR                                        $   132,935   $     3,651
                                                                              ===========   ===========
Cash paid during the year for:
Income taxes                                                                  $     5,344   $        --
                                                                              ===========   ===========
Interest expense                                                              $    14,000   $        --
                                                                              ===========   ===========
</TABLE>


See registered independent auditor report and notes to the financial statements.

                                       F-5

<PAGE>

        UNIVERSAL PROPERTY DEVELOPMENT ACQUISITION CORP. AND SUBSIDIARIES

                Consolidated Statements of Cash Flows (Continued)
                 For the Years Ended December 31, 2005 and 2004

<TABLE>
<CAPTION>
                                                                         2005      2004
                                                                       --------   -----
<S>                                                                    <C>         <C>
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:
  Write-off of bridge loan receivable                                  $300,000    $ --
    Gain on write off of liabilities no longer due and payable
    attributed to unwinding of related loans from and to the Company      1,000      --
                                                                       --------    ----
  Write-off of note payable                                            $301,000    $ --
                                                                       ========    ====
Non-cash financing activity:
    Fair market value of 100,000 shares of common stock issued in
      connection with investment in oil &gas
       exploration and development joint venture                       $ 55,000    $ --
</TABLE>


See registered independent auditor report and notes to the financial statements.

                                       F-6

<PAGE>

UNIVERSAL PROPERTY DEVELOPMENT ACQUISITION CORP. AND SUBSIDIARIES

Notes to Consolidated financial Statements December 31, 2005 and 2004

NOTE 1 - BASIS OF PRESENTATION - Going concern (As Restated)

The Company has incurred recurring operating losses since its inception, and, as
of December 31, 2005, had an accumulated deficit of approximately $189,708,000,
as restated. These conditions raise substantial doubt about the Company's
ability to continue as a going concern. The financial statements do not include
any adjustments to reflect the possible future effect of the recoverability and
classification of assets or the amounts and classifications of liabilities that
may result from the outcome of this uncertainty.

The Company's continuation as a going concern is dependent upon receiving
additional financing. The Company anticipates that during its 2006 fiscal year
it will need to raise substantial funds to support its working capital needs and
to continue to execute the requirements of its business plan. Management of the
Company is currently in a process of trying to secure additional capital. There
can be no assurance that the Company will be successful in this capital raise or
with other attempts to raise sufficient capital.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Universal Property Development and Acquisition Corporation ("the Company")
focuses on investments in ventures operating in exploration and development of
domestic energy, particularly oil and gas. In June 2005, the Company changed its
name from Procore Group, Inc. to Universal Property Development and Acquisition
Corporation. Prior to November 2003, the Company was known as Call Solutions,
Inc. and was inactive.

In November of 2003, the Company increased the number of its authorized shares
of common stock from 90,000,000 to 750,000,000. In addition, the Company
effectuated a 76:1 reverse split of the Company's common stock. In June 2005,
the Company increased the number of its authorized shares of common stock from
750,000,000 to 2,000,000,000 and effectuated a 100:1 reverse split of the
Company's common stock. The company is authorized to issue an aggregate of
2,500,000,000 shares, of which 2,000,000,000 are to be common shares.

During the first quarter of 2005, the Company moved its head office from Ohio to
Florida.

Principles of Consolidation

The consolidated financial statements include the financial position and
operating activities of UPDA and its 65% owned subsidiary, Canyon Creek Oil and
Gas, Inc. The Company has an additional subsidiary, West Oil and Gas, Inc.,
which was inactive as of December 31, 2005. All inter-company balances have been
eliminated in consolidation.

Cash and cash equivalents

The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents. Cash equivalents are
carried at cost, which approximates market value.

Estimates

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

Segment information

The Company operates in one segment.

                                       F-7

See independent auditor's report.

<PAGE>

UNIVERSAL PROPERTY DEVELOPMENT ACQUISITION CORP. AND SUBSIDIARIES

Notes to Consolidated financial Statements December 31, 2005 and 2004

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Fair value of financial instruments

For financial statement instruments including cash, accounts receivable, and
accounts and accrued expenses payable, the carrying amounts approximated fair
value because of their short maturity.

Depreciation

Depreciation of office equipment is provided for by the straight-line method
over an estimated useful life of 5 years.

Basic and Diluted Loss per Share (As Restated)

Basic and diluted net loss per share information for all periods is presented
under the requirements of SFAS No. 128, Earnings Per Share. Basic loss per share
is calculated by dividing the net loss attributable to common stockholders by
the weighted-average common shares outstanding during the period. Diluted loss
per share is calculated by dividing net loss attributable to common stockholders
by the weighted-average common shares outstanding. The dilutive effect of
preferred stock, warrants, and options convertible into an aggregate of
approximately 350,365,000 and 6,116,000 of common shares as of December 31, 2005
and 2004, respectively, are not included because the inclusion of such would be
anti-dilutive for all periods presented.

Major Customers

During the year ended December 31, 2005, sales to two oil and gas customers
represented 100% of total sales.

Asset Retirement Obligations

The Company follows SFAS No. 143, Accounting for Asset Retirement Obligations.
In accordance with the provisions of SFAS No. 143, the Company records asset
retirement costs and liabilities at the time of property acquisition as a
reduction in earnings.

Oil and Gas Properties

The Company uses the full cost method of accounting for oil and gas properties.
Under this method, all costs associated with acquisition and development of oil
and gas properties are capitalized. The Company does not engage in exploration
activities. Costs capitalized include acquisition costs, geological and
geophysical expenditures, brokers and finders fees, lease rentals on undeveloped
properties and costs of drilling and equipping productive and non-productive
wells. Drilling costs include directly related overhead costs. Capitalized costs
are categorized either as being subject to amortization or not subject to
amortization.

All capitalized costs of oil and gas properties, including the estimated future
costs to develop proved reserves and estimated future costs to plug and abandon
wells and costs of site restoration, are amortized on the unit-of-production
method using estimates of proved reserves as determined by independent
engineers. Investments in unproved properties and major development projects are
not amortized until proved reserves associated with the projects can be
determined or until impairment occurs. If the results of an assessment indicate
that the properties are impaired, the amount of the impairment is added to the
capitalized costs to be amortized. Depletion expense for the year ended December
31, 2005, was $13,311, based on depletion at the rate of $1.58 per
barrel-of-oil-equivalent.

Revenue Recognition

The Company recognizes net operating revenues from oil and natural gas at the
time of delivery that is once the oil and gas purchasers have taken delivery.

EITF 98-5

EITF 98-5 applies to convertible securities with beneficial conversion features
that must be settled in stock and to those that give the issuer a choice in
setting the obligation in either stock or cash. EITF 98-5 requires that the
beneficial conversion feature should be valued at the commitment date as the
difference between the conversion price and the fair market value of the common
stock into which the security is convertible, multiplied by the number of shares
into which the security is convertible. EITF 98-5 further limits this amount to
the proceeds allocated to the convertible instrument.

                                       F-8

See independent auditor's report.

<PAGE>

UNIVERSAL PROPERTY DEVELOPMENT ACQUISITION CORP. AND SUBSIDIARIES

Notes to Consolidated financial Statements December 31, 2005 and 2004

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Income taxes

The Company accounts for income taxes using the asset and liability method as
required by Statement of Financial Accounting Standards No. 109, under which
deferred tax assets and liabilities are determined based upon the differences
between financial statement carrying amounts and the tax bases of existing
assets and liabilities. Deferred taxes are also recognized for operating losses
that are available to offset future taxable income.

Valuation allowances are established when necessary to reduce deferred tax
assets to the amount expected to be realized. Income tax expense is the tax
payable or refundable for the period plus or minus the change during the period
in deferred tax assets and liabilities.

Recent Accounting Pronouncements

In November 2004, the FASB issued SFAS No. 151, "Inventory Costs, an amendment
of APB No. 43, Chapter 4." SFAS No. 151 retains the general principle of APB No.
43, Chapter 4, "Inventory Pricing (AC Section I78)," that inventories are
presumed to be stated at cost; however, it amends APB No. 43 to clarify that
abnormal amounts of idle facility expense, freight, handling costs, and wasted
materials (spoilage) should be recognized as current-period charges and requires
the allocation of fixed production overheads to inventories based on the normal
capacity of the production facilities. The guidance is effective for inventory
costs incurred during fiscal years beginning after June 15, 2005. Earlier
application is permitted for inventory costs incurred during fiscal years
beginning after November 23, 2004. We have evaluated SFAS No. 151 and do not
anticipate that the adoption of SFAS No. 151 will have a significant impact on
our overall results of operations or financial position.

In December 2004, the FASB issued SFAS No. 123(R), "Share-Based Payment," which
establishes standards for transactions in which an entity exchanges its equity
instruments for goods or services. This standard requires a public entity to
measure the cost of employee services received in exchange for an award of
equity instruments based on the grant date fair value of the award. This
eliminates the exception to account for such awards using the intrinsic method
previously allowable under APB Opinion No. 25. SFAS No. 123 (R) became effective
for the interim period beginning July 1, 2005. The Company does not anticipate
that the adoption of SFAS No. 123(R) will have a significant impact on the
Company's overall results of operations or financial position.

In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary
Assets, an amendment of APB Opinion No. 20, Accounting for Nonmonetary
Transactions." The amendments made by SFAS No. 153 are based on the principle
that exchanges of nonmonetary assets should be measured based on the fair value
of the assets exchanged. Further, the amendments eliminate the narrow exception
for nonmonetary exchanges of similar productive assets and replace it with a
broader exception for exchanges of nonmonetary assets that do not have
commercial substance. A nonmonetary exchange has commercial substance if the
future cash flows of the entity are expected to change significantly as a result
of the exchange. This statement shall be applied prospectively and is effective
for nonmonetary asset exchanges occurring in fiscal periods beginning after June
15, 2005. Earlier application is permitted for nonmonetary asset exchanges
occurring in fiscal periods beginning after the date of issuance. The Company
does not anticipate that the adoption of SFAS No. 153 will have a significant
impact on the Company's overall results of operations or financial position.

In May 2005, the FASB issued SFAS 154, "Accounting Changes and Error
Corrections," that applies to all voluntary changes in accounting principle.
This Statement requires retrospective application to prior periods' financial
statements of changes in accounting principle, unless it is impracticable to
determine either the period-specific effects or the cumulative effect of the
change. When it is impracticable to determine the period-specific effects of an
accounting change on one or more individual prior periods presented, this
Statement requires that the new accounting principle be applied to the balances
of assets and liabilities as of the beginning of the earliest period for which
retrospective application is practicable and that a corresponding adjustment be
made to the opening balance of retained earnings (or other appropriate
components of equity or net assets in the statement of financial position) for
that period rather than being reported in an income statement. When it is
impracticable to determine the cumulative effect of applying a change in
accounting principle to all prior periods, this Statement requires that the new
accounting principle be applied as if it were adopted prospectively from the
earliest date practicable. SFAS 154 will be effective for the Company for fiscal
year ended December 31, 2007. The Company does not anticipate that the adoption
of SFAS No. 154 will have an impact on the Company's overall results of
operations or financial position.

                                       F-9

See independent auditor's report.

<PAGE>

UNIVERSAL PROPERTY DEVELOPMENT ACQUISITION CORP. AND SUBSIDIARIES

Notes to Consolidated financial Statements December 31, 2005 and 2004

NOTE 3 - INVESTMENT IN OIL & GAS DEVELOPMENT JOINT VENTURE

In July 2005, the Company formed a joint venture with US Production &
Exploration, LLC ("USPX") and Triple Crown Consulting ("TCC") named Canyon Creek
Oil & Gas, Inc. ("Canyon."). Canyon was formed for the purpose of acquiring oil
and gas producing properties, low risk drilling prospects, and prospects in need
of state-of-the-art technology to make them viable. USPX is an independent
production and exploration company located in Sugar Land, Texas, engaged in the
acquisition of oil and gas producing properties with multiple enhancement
opportunities. TCC is engaged in the merchant and investment banking and
commercial finance broker services and is located in Miami Beach, Florida. In a
memorandum of understanding dated July 4, 2005, the ownership percentages were
to be as follows: the Company - 25%, USPX -70%, and TCC - 5%. According to the
memorandum of understanding, the Company was required to deliver $300,000 of
funding in cash to Canyon within thirty days of the execution of the agreement.
In addition, that agreement required the Company to deliver another $200,000 in
cash ninety days thereafter.

On August 15, 2005, Canyon entered into an Agreement of Sale and Purchase with
Trend Group Incorporated ("Trend") of Houston Texas, whereby Canyon acquired
undivided 87.50% of the interest in rights, titles, and interests to oil and gas
leases for 100,000 shares of the Company's Common Stock. On August 26, 2005 the
Company issued 50,000 common shares each directly to NTJ Management, LLC and
Armadillo Energy Group, LLC on behalf of Trend. The 100,000 shares of common
stock had a value of $55,000 based on the publicly traded share price of Company
common stock on the date of these issuances.

On November 17, 2005, the joint venture agreement was amended and the parties
agreed, among other things, to change the ownership proportions to the
following: the Company - 65%, USPX-30%, and TCC - 5%. In addition, the Company
was required to make a minimum investment of $1,200,000 in cash and stock in
Canyon on or before January 31, 2006. USPX has the right to pursue other oil and
gas ventures as it deems necessary to carry out its own business plan, provided
it offers Canyon the right of first refusal to participate in such ventures.
Other terms of note in the joint venture agreement provide for payment of
management fees of 7.5% of defined net operating revenue to USPX, and for the
Company to issue 500,000 of its restricted common shares to USPX ten days after
the execution of this agreement. To date, the Company has provided financing to
Canyon in the form of $1,148,000 in cash.

Upon formation of Canyon, USPX contributed leasehold rights to certain oil and
gas properties in North Texas valued at $607,031 and consisting of a total of
2,489 acres and 61 wells in Archer, Coleman, and Palo Pinto Counties. These
wells are classified as proved reserves at December 31, 2005, and, accordingly,
acquisition costs are subject to amortization.

On March 24, 2006, Donald Orr resigned from all of his positions as an officer
and member of the Board of Directors of Canyon Creek Oil & Gas, Inc. Donald Orr
is a member of USPX. USPX was the sole operator of Canyon Creek Oil & Gas, Inc's
oil fields. In the second quarter of 2006, Don Orr commenced a lawsuit against
Canyon Creek to which the Company responded and is countersuing. The details and
current status of the lawsuits is more fully described under Note -14 subsequent
events under the caption "litigation". As of September 30, 2006 UPDA did not
accrue any costs related to this matter because the Company believes the suit is
without merit. As a result of the litigation, USPX is no longer the operator,
leaving Canyon Creek without a licensed field operator in the second quarter.
The Company operated the wells without a field operator's license until October
2006.

The Company has not accrued any costs related to the matters being litigated as
of September 30, 2005 and periods filed subsequent to that because the Company
believes the suit is without merit. In addition, "Oil and Gas Property" assets
associated with the leases originally assigned by Donald Orr, including
workovers applicable to those leases, totaled $1,509,441 on September 30, 2006.
Revenues already earned from October 2005 to September 2006 totaled $290,441.
Should the Company not prevail in this litigation, the financial impact on the
Company could be significant.

See Note 14 for a detailed discussion of the litigation described in the
preceding two paragraphs.

On May 3, 2006, the Company filed articles of incorporation for its new wholly
owned-subsidiary UPDA Operators, Inc. ("UPDA-O"). UPDA-O was formed to manage
all of the Company's oil and gas well operations. Upon filing its P-5
Organization Report, UPDA Operators, Inc. will be authorized to operate over 150
wells that the Company owns through its subsidiaries. UPDA-O will assume all
responsibility for the maintenance and pumping of the Company's oil and gas
wells, manage the reporting and sales of the expanding production, post the
necessary bonds with the Texas Railroad Commission and provide adequate
insurance for the fields which it will operate. On August 9, 2006, the Railroad
Commission of Texas approved UPDA-O's P-5 Organization Report and now UPDA-O is
the sole operator of all the oil and gas wells covered by the Company's leases.
In October 2006 UPDA-O received its P-4 to become the operator of record for
Canyon Creek.

In August 2005, Canyon purchased a 243-acre oil and gas lease in Victoria
County, Texas. The lease is located in the Inez Gas Field, about one mile west
of Inez, Texas. The leasehold was acquired in exchange for 100,000 shares of
UPDA stock under regulation 144r, valued at $55,000, which was the fair market
value on the date of issue. These wells are classified as proved reserves at
December 31, 2005, and, accordingly, acquisition costs are subject to
amortization.

In September 2005, Canyon acquired an 80-acre lease in Fayette County, Texas for
$16,000 cash. The lease is located in the Giddings Gas Field, one of the largest
producing gas fields in Texas. These reserves are classified as unproved
reserves at December 31, 2005 since advanced technology is yet to be employed
during the workover process and no pilot test has yet been performed.
Accordingly, acquisition costs are not subject to amortization until reserves
may be classified proven.

In October 2005, Canyon completed the acquisition of a 266.73-acre oil and gas
lease in Starr County, Texas for $94,000 cash. The lease is located in the Boyle
Field. These reserves are classified as unproved reserves at December 31, 2005
since advanced technology is yet to be employed during the workover process and
no pilot test has yet been performed. Accordingly, acquisition costs are not
subject to amortization until reserves may be classified proven.

In October 2005, Canyon completed the acquisition of a 40-acre oil and gas lease
in Young County, Texas for a cash purchase price of $18,000. The lease is
located in the Prideaux Field. These wells are classified as proved reserves at
December 31, 2005, and accordingly, acquisition costs are subject to
amortization.

                                      F-10

See independent auditor's report.

<PAGE>

UNIVERSAL PROPERTY DEVELOPMENT ACQUISITION CORP. AND SUBSIDIARIES

Notes to Consolidated financial Statements December 31, 2005 and 2004

NOTE 3 - INVESTMENT IN OIL & GAS DEVELOPMENT JOINT VENTURE (CONTINUED)

Summary of leasehold rights acquired as of December 31, 2005

The acquisition cost of the above leases was allocated to the assets acquired
and the liabilities assumed as follows:

Oil and gas properties subject to amortization       $1,311,546
Oil and gas properties not subject to amortization      623,860
Asset retirement obligation                                  --
                                                     ----------
     Net assets acquired                             $1,935,406
                                                     ==========

NOTE 4 - ASSET RETIREMENT OBLIGATIONS

The Company follows SFAS No. 143, Accounting for Asset Retirement Obligations,
which requires entities to record the fair value of a liability for an asset
retirement obligation when it is incurred, which, for the Company, is typically
when an oil or gas well is drilled or purchased. The standard applies to legal
obligations associated with the retirement of long-lived assets that result from
the acquisition, construction, development or normal use of the asset. The
Company's asset retirement obligations relate primarily to the obligation to
plug and abandon oil and gas wells and support wells at the conclusion of their
useful lives.

SFAS No. 143 requires that the fair value of a liability for an asset retirement
obligation be recognized in the period in which it is incurred, if a reasonable
estimate of fair value can be made. When the liability is initially recorded,
the related cost is capitalized by increasing the carrying amount of the related
oil and gas property. Over time, the liability is accreted upward for the change
in its present value each period until the obligation is settled. The initial
capitalized cost is amortized as a component of oil and gas properties.

As a part of the Operating Agreement of Canyon Creek Oil and Gas, Inc., USPX has
agreed to bear responsibility for all asset retirement obligations. As such,
Canyon Creek did not record any such obligations at December 31, 2005.

                                      F-11

See independent auditor's report.

<PAGE>

UNIVERSAL PROPERTY DEVELOPMENT ACQUISITION CORP. AND SUBSIDIARIES

Notes to Consolidated financial Statements December 31, 2005 and 2004

NOTE 5 - SUPPLIER AGREEMENTS

Sunoco Oil

On November 4, 2005, Canyon entered into month-to-month agreement with Sunoco to
gather and purchase the oil produced from Canyon Creek's wells in the Fort Worth
basin in North Central Texas. Sunoco has agreed to pay a one dollar bonus over
the posted price for West Texas Intermediate crude. In its agreement with
Sunoco, Canyon Creek has specifically listed all of its properties located in
Coleman, Palo Pinto, and Archer Counties. Accordingly, Canyon Creek has also
reserved the right and option to renegotiate the price or change the purchaser
every 30 days as it deems necessary.

West Texas Gas (WTG)

On October 1, 2005, Canyon Creek entered a three year natural gas purchase
contract with WTG Jameson, LP to market casing head gas at its Hagler leases in
Coleman County. Under the agreement, CCOG must pay certain fees and commissions
on natural gas sales to WTG Jameson, LP.

NOTE 6- HURRICANES IN 2005

Neither Canyon Creek's well revitalization program nor its production of natural
gas was affected by Hurricanes Rita or Katrina.

NOTE 7 - OFFICE EQUIPMENT

During 2005, UPDA purchased office equipment at a cost of $2,495 during 2005.

Fixed assets are stated at cost, less accumulated depreciation and are
summarized below together with estimated useful lives used in computing
depreciation:

                                          December 31,   Estimated Useful
                                              2005            Lives
                                          ------------   ----------------

          Office equipment                    2,495           5 years
                                          ------------
                                              2,495
          Less accumulated depreciation        (104)
                                          ------------
                                             $2,391
                                          ============

Depreciation expense for office equipment for the year ended December 31, 2005
was $104.

                                      F-12

See independent auditor's report.

<PAGE>

UNIVERSAL PROPERTY DEVELOPMENT ACQUISITION CORP. AND SUBSIDIARIES

Notes to Consolidated financial Statements December 31, 2005 and 2004

NOTE 8 - NOTES PAYABLE

At December 31, 2005 and 2004, notes payable, none of which require periodic
regular payments of either principal or interest, are explicated below:

<TABLE>
<CAPTION>
                                                                                  December   December
                                                                                  31, 2005   31, 2004
                                                                                  --------   --------
<S>                                                                               <C>        <C>
Unsecured non-interest bearing notes payable due on demand by Company to
Bashiruddin Usama, a former Company Chief Executive Officer and President
and still significant Company shareholder as a result of a management change
subsequent to December 31, 2004 (See Notes 13 and 14)                             $     --   $ 13,817

Unsecured non-interest bearing notes payable due on demand by Company to
Charles W. Harper, a former Company Treasurer and Director and still Company
shareholder as a result of a management change subsequent to December 31,
2004 (See Notes 13)                                                                     --     28,762

Unsecured non-interest bearing notes payable due on demand by Company to Fred
Harris, a minor Company shareholder (See Note 13)                                       --    106,731

Unsecured non-interest bearing notes payable due on demand by Company to Robert
Gilmore, a minor Company shareholder (See Note 13)                                      --      5,421

Unsecured notes payable due on demand by Company to Katherine Betts, a minor
Company shareholder, of which $20,000 bears interest at 11% per annum.
(See Note 13)                                                                       80,000     80,000

Unsecured non-interest bearing notes payable due on demand by Company to
Kamal Abdallah, Company Chief Executive Officer and President and significant
Company shareholder                                                                 64,696         --
                                                                                  --------   --------

Subtotal, notes payable, related parties                                           144,696    234,731

Unsecured 18% interest bearing balloon note payable originally due November
30, 2004 to Bereishis Investment Group, LLC, with interest at a default rate
thereafter of 24% per annum. The note holder is a shareholder in the Company
to whom the bridge loan receivable of $300,000 described in Note 15 and 18 was
made.                                                                                   --    301,000

Unsecured non-interest bearing notes payable due on demand by Company to Hunter
Covington                                                                               --     40,000

Unsecured 8% note payable on demand                                                  6,000      6,000

Other unsecured non-interest notes payable on demand                                10,717     10,717
                                                                                  --------   --------
Total notes payable, excluding interest                                           $161,413   $592,448
                                                                                  ========   ========
</TABLE>

At December 31, 2005 and 2004, accrued interest payable on the above notes
payable included within accounts payable and accrued expenses totaled $26,727
and $36,176, respectively, including amounts accrued for loans from former
officers and current shareholders of $24,226 in 2005 and $21,545 in 2004.
Accrued interest payable at December 31, 2005 and 2004 includes several years of
interest from years prior to December 31, 2004.

                                      F-13

See independent auditor's report.

<PAGE>

UNIVERSAL PROPERTY DEVELOPMENT ACQUISITION CORP. AND SUBSIDIARIES

Notes to Consolidated financial Statements December 31, 2005 and 2004

NOTE 9 - INCOME TAXES

Temporary differences between the recognition of certain expense items for
income tax purposes and financial reporting purposes are as follows:

                                                  December    December
                                                  31, 2005    31, 2004
                                                -----------  -----------
                                                             As restated
                                                              (Note 25)
       Deferred tax asset:
              Net operating loss carryforward   $ 6,468,683  $ 4,210,662
              Valuation allowance                (6,468,683)  (4,210,662)
                                                -----------  -----------
       Net deferred tax asset                   $        --  $        --
                                                ===========  ===========

The Company incurred no federal income tax expense for the years ended December
31, 2005 and 2004, and utilized no tax carryforward losses. The Company incurred
$800 and $800 of state income tax expense for years ended December 31, 2005 and
2004, respectively.

The Company has a net operating loss carryover of approximately $25,874,731 to
offset future income tax. The net operating losses expire as follows:

             December 31, 2009   $1,431,255
                    2010            947,760
                    2011          1,269,670
                    2017            885,291
                    2019          2,289,386
                    2020          2,671,128
                    2021          3,736,141
                    2022            850,127
                    2023          1,001,233
                    2024          1,760,656
                    2025          9,032,084


The net operating loss carryforward may be subject to further limitation
pursuant to Section 382 of the Internal Revenue Code due to events including
changes of control and change in business activities.

NOTE 10 - RESCISSION OF CAROL POP STOCK SUBSCRIPTION RECEIVABLE

In August 2004, the Company entered into a financing agreement with Carol Pop,
an individual investor, which had already been amended to extend the closing to
May 1, 2005. Under the terms of the agreement, the Company issued 22,222,000
restricted common shares for $350,000, of which the Company received $20,000
against the subscription prior to December 31, 2004. Accordingly, at December
31, 2004, the remainder balance of the subscription receivable was $330,000 and
had been offset against shareholders' deficit (see Note 13). In August 2005 the
Company and Carol Pop agreed to cancel 22,222,000 shares previously issued, as
Carol Pop was unable to deliver the remaining $330,000. The Company issued
common stock for the $20,000 previously received from Carol Pop. To date, the
shares have not as yet been issued to Carol Pop. However, Carol Pop did return
the shares during the third quarter.

The Company had incurred $21,354 in costs associated with the previously pending
Company acquisition of real estate from Carol Pop involved in the financing
agreement discussed in the previous paragraph. The aforementioned costs
previously recorded as due from Carol Pop by the Company have been written off
as a "loss on impairment of investment acquisition costs" during the second
quarter of 2005.

Mr. Pop remains a member of Bratenahl Estates Development, LLC. This termination
agreement was negotiated and executed after it was determined by the Company
that the real estate involved was not consistent with its modified business
model. The Company incurred no termination penalties for this termination
agreement.

                                      F-14

See independent auditor's report.

<PAGE>

UNIVERSAL PROPERTY DEVELOPMENT ACQUISITION CORP. AND SUBSIDIARIES

Notes to Consolidated financial Statements December 31, 2005 and 2004

NOTE 11 - INVESTMENT IN PREFERRED SERIES B RULE 144 RESTRICTED STOCK OF
SITEWORKS BUILDING AND DEVELOPMENT CO., A PUBLICLY-TRADED ENTITY (AS RESTATED -
SEE NOTE 21)

Transfer

Pursuant to the terms of the rescission of a real estate acquisition transaction
between the Company and Mr. Kamal Abdallah, on July 27, 2005, Mr. Abdallah
transferred 1,000,000 restricted shares of $1 face value per share Convertible
Preferred Series B stock of Siteworks Building and Development Co.
("Siteworks"), a publicly-traded company, to the Company in exchange for the
conveyance to Mr. Abdallah of certain real estate properties by the Company.
These transferred marketable securities of Siteworks had an aggregate fair value
of approximately $1,000,000 on the date of the transfer, based on the publicly
traded share price of the underlying common stock of Siteworks into which the
preferred stock is convertible. Mr. Abdallah is the current Chairman, President
and CEO of the Company.

Background

On June 17, 2005, Mr. Abdallah received 1,100,000 restricted shares of Siteworks
Convertible Preferred Series B Stock from Siteworks as a partial compensation
for his transferring certain real property (comprised of a former Wal-Mart
store, vacant land, and a parking lot) with an aggregate appraised value of
$2,800,000 to Siteworks on that date. In addition to receiving Convertible
Preferred Series B stock, Mr. Abdallah also received 35,000,000 Siteworks common
shares with an estimated fair value of $1,000,000, based on the publicly traded
share price of that common stock on the date of issuance. On July 27, 2005, as
described in the preceding paragraph, Mr. Abdallah transferred 1,000,000 shares
of his Siteworks Convertible Preferred Series B stock to the Company. Mr.
Abdallah retained ownership of 100,000 shares of the Convertible Preferred
Series B stock, the 35,000,000 shares of 44% of the voting capital stock of
Siteworks (assuming that both the Company's and Mr. Abdallah's Siteworks
Convertible Preferred Series B Stock were converted to that entity's common
stock).

In its originally filed Form 10-QSB for the quarterly period ended June 30, 2006
filed on August 18, 2006, Siteworks (now known as "SBD International, Inc.")
indicated in its footnotes to the financial statements that it had determined
the property was not free and clear of mortgages and liens, that there was a
second mortgage of approximately $1,200,000 in the name of former seller who was
committed to make the payments on the mortgage and that the 35,000,000 described
in the preceding paragraph had been placed in escrow and would be retired if the
individual did not make the payment.

Substitution of Siteworks B Preferred Stock with $1 million

During the month of June 2006, the Company deposited an aggregate of $1,000,000
it received from Mr. Abdallah in consideration for the Company's assignment of
the 100,000 Convertible Preferred Series B stock back to him, resulting in no
gain or loss to the Company on the preferred shares. This substitution of cash
occurred a year after the original transfer of Abdallah's 1,000,000 shares of
his Siteworks Convertible Preferred Series B stock to the Company. The
transaction was memorialized in an agreement between the Company and Mr.
Abdallah dated July 18, 2006 and approved by its two other members of the Board
of Directors. (See Note 13 - "Equity Transactions" concerning the fair value of
beneficial conversion feature related to the Company's Series A convertible
preferred stock received by Mr. Abdallah on August 4, 2005 in conjunction with
the original Siteworks preferred stock transfer).

NOTE 12 - ADVANCE FINANCIAL FEE RECEIVED ON ARRANGED CUSTOMER
CONSTRUCTION/DEVELOPMENT FINANCING, NET OF COST OF $15,000 TO FACILITATE
NON-COMPANY FINANCING ALTERNATIVE

In May 2005, the Company entered into a financing and construction arrangement
with Tucker-Norcross Adventist Church of Norcross, Georgia, whereby the Company
would utilize its network of consultants to perform construction and provide
materials for that purpose and the underlying financing in the form of long-term
preferred redeemable notes to complete development of certain facilities for an
aggregate of up to $2,575,000. Upon execution of this agreement the Company
received $80,000 as a prepayment on this contract.

During the quarter ended September 30, 2005, the Company made a payment of
$15,000 to an unrelated third party entity as an advance fee to facilitate
transferring both the Company's commitment to provide financing and the benefits
of the income to be derived under that financing. The amount paid to this entity
has been offset against the $80,000 advance financial fee received by the
Company described in the preceding paragraph. During the fourth quarter of 2005,
the Company assigned the entire agreement to a third party for the right to
retain cash received to date. Accordingly, the Company recognized $65,000 of
other income related to the transaction during the year ended 2005. Company and
its legal counsel do not believe that there will be any financial consequences
resulting from the need to assign its obligations to provide the construction
financing.

                                      F-15

See independent auditor's report.

<PAGE>

UNIVERSAL PROPERTY DEVELOPMENT ACQUISITION CORP. AND SUBSIDIARIES

Notes to Consolidated financial Statements December 31, 2005 and 2004

NOTE 13 - EQUITY TRANSACTIONS (AS RESTATED-SEE NOTE 21)

Chronological Listing of Common and Preferred Stock Equity Transactions

In January 2004, the Company issued 750 shares to Berithorn Holdings for
consulting fees and services incurred by the Company. The Company recorded a
charge of $41,250 based on the trading price of the stock on the date of
issuance of $55.

In March of 2004, the Company sold 2,942 shares of common stock at $17.00 per
share for cash consideration of $50,000 received from WFFS, an entity who
received a bridge loan from the Company (See Note 15). As of December 31, 2004,
the shares were not issued to this investor.

In June 2004, the Board of Directors approved the issuance of 27,200 common
shares and an 8,500 common share stock option, valued in the aggregate at
$392,700, for financial statement purposes. The option exercise price is $.01
and has a five-year life and vested immediately. These shares and options were
issued to former officers/directors and current shareholders and consultants for
consulting fees and services incurred by the Company. The shares and options
were valued at $11.00 per share based on the trading price of the stock on the
date of the stock issuance or option grant. Of the 27,200 shares approved, 8,500
were issued to Dr. Harper, a member of the board at that time, and 8,500 to
Payment Solutions, Inc., a significant shareholder of the Company. The 8,500
common shares option was issued to Dr B. Usama, the Chairman of the Company at
that time.

In June 2004, the Company sold 1,563 of common shares for $12,500 to an
accredited investor who is a paid consultant to the Company. The shares were
valued at $11.00 per share based on the trading price of the stock on the date
of issuance. As of December 31, 2004, the shares have not been issued to the
investor.

As further discussed in Note 10 the Company entered into a financing agreement
with Carol Popp for the purpose of acquiring commercial real estate located in
Cleveland, Ohio. In October 2004, the Company issued 222,220 shares subject to
Rule 144 to the new investor as he delivered a quitclaim deed for a building
with an equity well in excess of $350,000. Since the investor was unable to
provide the cash by May 2005, the 222,220 shares were rescinded.

In October 2004, the Company issued 10,000 shares subject to rule 144 for an
option the Company obtained to purchase 125 residential condominium units
located in Warrensville, Ohio. The shares were valued at $3.00 per share based
on the trading price of the stock on the date of issuance and resulted in a
charge of $30,000 included within consulting fees and services incurred by the
Company. As of December 31, 2004, the condominium unit purchase option has
expired.

In December 2004, the Company issued 20,000 free tradable common shares to
Marcus Dukes for consulting fees and services incurred by the Company. The
Company recorded an expense of $220,000 related to this issuance to this minor
shareholder of the Company, based on the trading price of the Company's stock on
the date of issuance of $11.00 per share.

In December 2004, the Company issued 10,000 free tradable common shares to
Teresa Hodges for consulting fees and services incurred by the Company. The
Company recorded an expense of $110,000 related to this issuance to this minor
shareholder based on the trading price of the Company's stock on the date of
issuance of $11.00 per share.

In December 2004, the Company issued 30,000 free tradable common shares to
Vincent Kenyon for consulting fees and services incurred by the Company to this
significant share holder in the Company. The Company recorded an expense of
$330,000 related to this issuance based on the trading price of the Company's
stock on the date of issuance of $11.00 per share.

In December 2004, the Company issued an additional 12,500 free tradable common
shares to Payment Solutions Group, Inc. for consulting fees and services
incurred by the Company to this significant shareholder of the Company. The
Company recorded an expense of $137,500 related to this issuance based on the
trading price of the Company's stock on the date of issuance of $11.00 per
share.

In December 2004, the Company issued 20,000 common shares in settlement of a
liability to Joe Risk, a minor shareholder, totaling $57,250 for shares valued
at $20,000 based upon the trading price of the stock on the date of issuance of
$1.00 per share. This settlement resulted in a gain of $37,250 in 2004 on the
write-off of this liability now no longer due and payable.

In December 2004, the Company issued 10,000 free tradable common shares to Jack
Wolf for consulting fees and services incurred by the Company. The Company
recorded an expense of $110,000 related to this issuance based on the trading
price of the Company's stock on the date of issuance of $11.00 per share.

                                      F-16

See independent auditor's report.

<PAGE>

UNIVERSAL PROPERTY DEVELOPMENT ACQUISITION CORP. AND SUBSIDIARIES

Notes to Consolidated financial Statements December 31, 2005 and 2004

NOTE 13 - EQUITY TRANSACTIONS (AS RESTATED-SEE NOTE 21) (CONTINUED)

Chronological Listing of Common and Preferred Stock Equity Transactions
(Coninued)

On January 19, 2005, prior to Company collection difficulties encountered with
the unsecured bridge loan described in Note 15, the Company issued 1,000 shares
of its free trading common stock to Bereishis Investment Group, LLC. The Company
recorded a non-cash expense of $11,000 for this issuance, based on the trading
price of Company shares on the date of issuance.

On March 10, 2005, the Company entered into an agreement with Ten and Ten
Marketing Entertainment Company ("Ten and Ten") to form a strategic alliance to
develop real estate solutions. In consideration of this transaction, on March
10, 2005, the Company issued 400,000 shares of common stock to Ten and Ten. The
Company recorded a non-cash expense of $3,600,000 for this issuance, based on
the trading price of Company shares on the contract signing date, which is
earlier than the date of issuance of the stock to Ten and Ten.

The Ten and Ten agreement also requires the Company to set aside an additional
200,000 of restricted common shares for sub-consultants, certain of which are
identified in the agreements text. On March 10, 2005, the Company issued 117,500
of these shares for services rendered; 6,000 shares to NUCNStep and 57,500
shares to Digital Freedom. The Company recorded a non-cash charge of $817,500
related to these issuances, based on the trading price of Company shares on the
contract signing date or the date on which the shares were issued, whichever was
earlier. The Company had already executed agreements for 379,500 shares besides
the 1,933,333 total ascribed to Kamal Abdallah and Ten and Ten. In June 2005,
the Company terminated the Ten and Ten agreement contract.

The Company also issued 68,500 free trading shares under the 379,500 share
allotment between March 17 and March 31, 2005, and recorded a non-cash expense
of $362,500, based on the trading price of Company shares on the contract
signing date or the date on which the shares were issued, whichever was earlier.
20,000 of the free trading shares each were issued to Payment Solutions Group,
Inc. and Theresa Hodges, while 500 shares each were issued to the principals of
Profit Planners, Inc., Maurice Carmey and Vincent Kenyon, 3,500 shares were
issued to Richard Britt and a further 10,000 shares were issued to LL Capital.

On March 24, 2005, Payment Solutions Group, Inc. was issued 100,000 shares of
stock subject to Rule 144. The Company recorded a non-cash expense of $500,000
related to this issuance, based on the trading price of Company shares on the
issuance date.

The Ten and Ten agreement gave that entity an option to purchase $2,000,000 of
the Company's common stock through June 30, 2006 at a 50% discount from the 30
day trading of its shares. Finally, the Company agreed to have Curtis L. Pree, a
Vice President of Ten and Ten, on its Board. 20,000 of the shares were
restricted and 10,000 of the shares were free trading. In June 2005 the Company
terminated the Ten and Ten agreement contract.

On March 24, 2005, the Company issued to Curtis L. Pree 27,500 shares of stock,
2,500 free-trading shares and 25,000 shares subject to Rule 144 restrictions, as
part of his employment agreement. The Company recorded a non-cash charge of
$87,500 related to this stock issuance, based on the trading price of Company
shares on the date of issuance.

Coincident to the March 10, 2005 agreement in the preceding paragraph, the Board
of Directors of the Company authorized entry in new or amended consulting or
employment agreements in which the Company could issue restricted and free
trading common shares aggregating 3,229,333 On March 17, 2005, the Company
issued 1,533,333 shares of its common stock (subject to Rule 144) to Kamal
Abdallah, in exchange for a)$100,000 of cash and for b)real estate--with an
appraised valuation of $4,000,000--which was to be transferred to the Company by
June 2005. Accordingly $4,000,000 had been recorded as a subscription receivable
and offset against shareholders' deficit. During the quarter ended September 30,
2005, this agreement was cancelled.

On March 31, 2005, the Company issued 30,000 shares its common stock to George
Csatary, its Chief Financial Officer, for consulting services. The Company
recorded a non-cash expense of $150,000 related to this stock issuance, based on
the trading price of Company shares on the date of issuance. On March 17 and
March 31, 2005, the Company issued 10,000 and 32,370 of freely trading common
stock to Jack Wolf for consulting services. The Company recorded a non-cash
expense of $211,849 related to these stock issuances, based on the trading price
of Company shares on the date of issuances.

On July 1, 2005, the Company entered into a consulting agreement with Donald
Williams for strategic advisory services for which he received 75,000
free-trading shares of Common Stock. Accordingly, the Company recorded a
non-cash charge of $45,750 related to these issuances, based on the trading
price of Company shares on the contract signing date or the date on which the
shares were issued, whichever was earlier.

                                      F-17

See independent auditor's report.

<PAGE>

UNIVERSAL PROPERTY DEVELOPMENT ACQUISITION CORP. AND SUBSIDIARIES

Notes to Consolidated financial Statements December 31, 2005 and 2004

NOTE 13 - EQUITY TRANSACTIONS (AS RESTATED-SEE NOTE 21) (CONTINUED)

Chronological Listing of Common and Preferred Stock Equity Transactions
(Continued)

On July 1, 2005, the Company entered into a consulting agreement with Executive
Payment Solutions, Inc. for strategic advisory services. The term of the
contract is three months, for which they received 100,000 free-trading shares of
Common Stock. Accordingly, the Company recorded a non-cash charge of $61,000
related to these issuances, based on the trading price of Company shares on the
contract signing date or the date on which the shares were issued, whichever was
earlier.

On August 1, 2005, the Company entered into a consulting agreement with Suffian
Abdallah for strategic advisory services. The term of the contract is three
months, for which the consultant received 25,000 free-trading shares of Common
Stock. Accordingly, the Company recorded a non-cash charge of $15,250 related to
these issuances, based on the trading price of Company shares on the contract
signing date or the date on which the shares were issued, whichever was earlier.

On July 15, 2005, the Company issued 71,429 free-trading shares of common stock
to Steve Berrera for consulting services. Accordingly, the Company recorded a
non-cash charge of $43,572 related to these issuances, based on the trading
price of Company shares on the contract signing date or the date on which the
shares were issued, whichever was earlier.

On July 17, 2005, the Company issued 128,572 shares of free-trading common stock
to Christopher McCauley, Secretary of the Company, for consulting services.
Accordingly, the Company recorded a non-cash charge of $78,429 related to these
issuances, based on the trading price of Company shares on the contract signing
date or the date on which the shares were issued, whichever was earlier.

On July 17, 2005, the Company issued 53,571 shares of free-trading common stock
to Ben Kaplan for consulting services. Accordingly, the Company recorded a
non-cash charge of $32,678 related to these issuances, based on the trading
price of Company shares on the contract signing date or the date on which the
shares were issued, whichever was earlier.

On August 4, 2005, as further discussed in Note 11 the Company's board of
directors authorized the cancellation of Kamal Abdallah "Stock subscription
receivable" of $4,000,000 in exchange for his return of the 1,433,333 shares for
Company cancellation. In addition, Kamal Abdallah was released from assigning
title to the real estate with an appraised value of $4,000,000 to the Company.
In consideration for the aforementioned rescission transactions, the Company was
required to and did issue 100,000 Class A convertible preferred shares and Kamal
Abdallah was required to transfer marketable securities having an aggregate fair
value of $1,000,000 to the Company. See Note 11 above entitled "Investment in
Preferred Series B Rule 144 restricted stock of Siteworks Building and
Development Co, publicly-traded entity" for a description of the securities
furnished by Kamal Abdallah to the Company.

On August 4, 2005, the Company issued 80,000 shares of the company's Series A
Convertible Preferred Stock to Kamal Abdallah for an aggregate purchase price of
$800,000. Each share of the Preferred Stock is convertible into 1,000 shares of
UPDA common stock. 53,334 shares of Mr. Abdallah's Preferred Stock are currently
convertible, or are convertible within the next sixty (60) days, into 53,334,000
shares of UPDA common stock. Mr. Abdallah paid for the shares of Preferred Stock
by transferring securities owned by him with an aggregate market value of
$800,000 to UPDA.

On August 4, 2005, the Company issued 20,000 shares of the company's Series A
Convertible Preferred Stock to Christopher McCauley for an aggregate purchase
price of $200,000. Each share of the Preferred Stock is convertible into 1,000
shares of UPDA common stock. 13,334 shares of Mr. McCauley's Preferred Stock are
currently convertible, or are convertible within the next sixty (60) days, into
13,334,000 shares of UPDA common stock. Mr. McCauley paid for the shares of
Preferred Stock by transferring securities owned by him with an aggregate market
value of $200,000 to UPDA.

The fair value of the common stock that would be issued under the Series A
preferred stock conversion feature, based on the trading price of the common
stock on August 4, 2005 of $40,000,000 exceeded the consideration of $1,000,000
received for the issuance of that preferred stock. Accordingly, during the nine
months ended September 30, 2005 the Company has reflected a dividend in the form
of a beneficial conversion feature, to the extent of the consideration received
($1,000,000), offset by a corresponding credit to additional paid in capital.
The Company recorded a beneficial conversion relating to the conversion of the
Class A preferred stock because the fair market value of the common stock was
greater than the face value of the preferred stock. The beneficial conversion as
measured is limited to the capital raised from the sale of the preferred stock
pursuant to EITF 98-5.

On August 17, 2005, the Company advised its stock transfer agent that the
certificates for 70,000 of previously Rule 144 restricted shares of common stock
in the hands of holders for a period in excess of one year from the date the
shares were issued by the Company qualified to be released from that share
trading restriction and on now freely trading shares. The Company had previously
recorded a non-cash charge for consulting services in conjunction with the
issuance of the shares.

On August 18, 2005, the Company issued 71,429 shares of free-trading common
stock to Dr. Bashiruddin Usama in settlement of a preexisting liability of
$31,500 for past consulting services accrued at December 31, 2004. The Company
has recorded an additional non-cash charge of $19,929 for difference between the
trading price of the shares on the date of their issuance in excess of the
trading price on the date the past consulting services accrued liability was
measured.

                                      F-18

See independent auditor's report.

<PAGE>

UNIVERSAL PROPERTY DEVELOPMENT ACQUISITION CORP. AND SUBSIDIARIES

Notes to Consolidated financial Statements December 31, 2005 and 2004

NOTE 13 - EQUITY TRANSACTIONS (AS RESTATED-SEE NOTE 21) (CONTINUED)

Chronological Listing of Common and Preferred Stock Equity Transactions
(Continued)

On August 18, 2005, the Company issued 8,500 shares of free-trading common stock
to Dr. Bashiruddin Usama for current year consulting services. Accordingly, the
Company recorded a non-cash charge of $6,120 related to these issuances, based
on the trading price of Company shares on the contract signing date or the date
on which the shares were issued, whichever was earlier.

On August 18, 2005, the Company issued 150,000 shares of free-trading common
stock to Christopher McCauley for current year consulting services. Accordingly,
the Company recorded a non-cash charge of $108,000 related to these issuances,
based on the trading price of Company shares on the contract signing date or the
date on which the shares were issued, whichever was earlier.

On August 18, 2005, the Company issued 440,000 shares of free-trading common
stock to Kamal Abdallah for current year consulting services. Accordingly, the
Company recorded a non-cash charge of $316,800 related to these issuances, based
on the trading price of Company shares on the contract signing date or the date
on which the shares were issued, whichever was earlier.

On August 18, 2005, the Company issued 27,105 shares of free-trading common
stock to Dr. Robert Gilmore in settlement of notes payable totaling $5,421.
Accordingly, the Company recorded a non-cash debt conversion charge of $14,095,
based on the difference between the prices of the shares on the date of their
issuance in excess of face value of the debt obligation.

On September 15, 2005, the Company issued 120,000 shares of free-trading common
stock to the principals of Profit Planners, Inc. in settlement of a portion of a
preexisting liability of $18,000 for past consulting services accrued at
December 31, 2004. The Company has recorded an additional non-cash charge of
$24,000 for the difference between the trading prices of the shares on the date
of their issuance in excess of the trading price on the date the portion of past
consulting services accrued liability was measured.

On September 16, 2005, the Company issued 53,571 shares of free-trading common
stock to Triple Crown Consulting for current year consulting services.
Accordingly, the Company recorded a non-cash charge of $18,750 related to these
issuances, based on the trading price of Company shares on the contract signing
date or the date on which the shares were issued, whichever was earlier.

On September 28, 2005, the Company issued 200,000 shares of free-trading common
stock to the principals of Profit Planners, Inc. in settlement of the remainder
of preexisting liability of $9,477 for past year consulting services accrued at
December 31, 2004. The Company has recorded an additional non-cash charge for
difference between the trading price of the shares on the date of their issuance
in excess of the trading price on the date the portion of past consulting
services accrued liability was measured. It has also recorded a non-cash charge
for the current year consulting services based on the trading price of Company
shares on the contract signing date or the date on which the shares were issued,
whichever was earlier. Aggregate non-cash charges recorded in the current period
for past and current year consulting services total 19,000 to date.

On September 30, 2005, the Company issued 69,085 shares of free-trading common
stock to Dr. Bashiruddin Usama in settlement of notes payable totaling $11,468.
Accordingly, the Company recorded a non-cash debt conversion charge of $6,494,
based on the difference between the prices of the shares on the date of their
issuance in excess of face value of the debt obligation.

On September 30, 2005, the Company issued 143,810 shares of free-trading common
stock to Dr. Charles Harper in settlement of notes payable totaling $37,391.
Accordingly, the Company recorded a non-cash debt conversion charge of $8,629,
based on the difference between the prices of the shares on the date of their
issuance in excess of face value of the debt obligation.

On September 30, 2005, the Company issued 500,000 shares of free-trading common
stock to Christopher McCauley , Secretary of the Company, for current year
consulting services. Accordingly, the Company recorded a non-cash charge of
$130,000 related to these issuances, based on the trading price of Company
shares on the contract signing date or the date on which the shares were issued,
whichever was earlier.

On September 30, 2005, the Company issued 1,500,000 shares of free-trading
common stock to Kamal Abdallah, Chairman and CEO of the Company, in settlement
of current year accrued unpaid compensation totaling $145,548. Accordingly, the
Company recorded a non-cash charge of $244,452, related to these issuances,
based on the trading price of Company shares on the contract signing date or the
date on which the shares were issued, whichever was earlier.

On September 30,2005 the Company agreed to issue 255 shares of Class B
convertible preferred stock ("Class B Preferred") with a $1,000 face value to
Bratenahl Estates Development, LLC in consideration of $255,000 in cash. One
share of Class B Preferred is convertible into 2,000 shares of Common Stock,
which would equate to 510,000 common shares if the entire 255 preferred shares
were converted. The 255 preferred shares or common stock converted there under
are subject to Rule 144 restrictions. The Company received the entire $255,000
in cash during the third quarter. The 255 shares of Class B Preferred Stock
certificates were issued to Bratenahl during the first quarter of 2006.

                                      F-19

See independent auditor's report.

<PAGE>

On October 10, 2005, the Company issued 200,000 shares of free-trading common
stock to the principals of Profit Planners, Inc. for current year consulting
services. Accordingly, the Company recorded a non-cash charge of $120,000
related to these issuances, based on the trading price of Company shares on the
contract signing date or the date on which the shares were issued, whichever was
earlier. In addition, on November 14, 2005 Company issued another 200,000 shares
of free-trading common stock to the principals of Profit Planners, Inc. for
current year consulting services. Accordingly, the Company recorded another
non-cash charge of $100,000 related to these issuances, based on the trading
price of Company shares on the contract signing date or the date on which the
shares were issued, whichever was earlier.

On October 17, 2005, the Company issued 150,000 shares of free-trading common
stock to Hiyam Ahmed for current year consulting services. Accordingly, the
Company recorded a non-cash charge of $123,000 related to these issuances, based
on the trading price of Company shares on the contract signing date or the date
on which the shares were issued, whichever was earlier.

During the fourth quarter of 2005, the Company issued 160,000 shares of
free-trading common stock to Bradford Moore for current year consulting
services. Accordingly, the Company recorded a non-cash charge of $103,000
related to these issuances, based on the trading price of Company shares on the
contract signing date or the date on which the shares were issued, whichever was
earlier.

On November 3, 2005, the Company issued 100,000 shares of free-trading common
stock to Charles Hsin for current year consulting services. Accordingly, the
Company recorded a non-cash charge of $50,000 related to these issuances, based
on the trading price of Company shares on the contract signing date or the date
on which the shares were issued, whichever was earlier.

On October 17, 2005, the Company issued 7,655 shares of free-trading common
stock to Peter Nasca for current year consulting services. Accordingly, the
Company recorded a non-cash charge of $6,277 related to these issuances, based
on the trading price of Company shares on the contract signing date or the date
on which the shares were issued, whichever was earlier.

During the fourth quarter of 2005, the Company issued 35,154 shares of
free-trading common stock to Stephen Britt for current year consulting services.
Accordingly, the Company recorded a non-cash charge of $15,456 related to these
issuances, based on the trading price of Company shares on the contract signing
date or the date on which the shares were issued, whichever was earlier.

On October 17, 2005, the Company issued 576,923 shares of free-trading common
stock to Fred Harris in settlement of notes payable totaling $106,731.
Accordingly, the Company recorded a non-cash debt conversion charge of $366,346,
based on the difference between the prices of the shares on the date of their
issuance in excess of face value of the debt obligation.

On October 12, 2005, the Company issued 15,000 shares of free-trading common
stock to Gary Wolf in settlement of accrued legal expenses payable totaling
$13,175. Accordingly, the Company recorded a non-cash debt conversion gain of
$1,475, based on the difference between the prices of the shares on the date of
their issuance in excess of face value of the debt obligation.

In December 2005 the Company agreed to issue 1,218 shares Class B Preferred
stock in exchange for an investment of $1,218,000 from Miramar Investments, Inc.
pursuant to a previously executed investment agreement. The stock certificates
were issued during the first quarter of 2006.

On December 30, 2005, the Company issued 135,000 shares of free-trading common
stock to Hunter Covington in settlement of notes payable totaling $40,000.
Accordingly, the Company recorded a non-cash debt conversion gain of $14,350,
based on the difference between the prices of the shares on the date of their
issuance in excess of face value of the debt obligation.

                                      F-20

See independent auditor's report.

<PAGE>

NOTE 8 - EQUITY TRANSACTIONS -- CONTINUED (AS RESTATED-SEE NOTE 21)

Chronological Listing of Common and Preferred Stock Equity Transactions -
Continued


Preferred Stock, Beneficial Conversion Features, and Change in Conversions made
into Common Stock (As Restated-See Note 21)

During the third quarter of 2005, pursuant to an agreement between Bratenhal and
the Company, the Company advised its stock transfer agent that it should convert
certificates surrendered representing 102 shares of $.001 par value "unlettered"
convertible preferred stock into common stock of the Company held by Bratenahl
at a conversion rate of 200,000 free trading common shares per preferred share
(20,400,000 shares of common stock on a fully basis converted). These previously
Rule 144 restricted preferred shares had been in the hands of holders for a
period in excess of two years from the date the convertible preferred shares
were issued by the Company. Accordingly, these convertible preferred shares
qualified to be released from that share trading restriction and the underlying
common stock from the conversion can now be freely trading shares.

The July 29, 2005 agreement between Bratenahl and the Company required Bratenahl
to reinvest 80% of the proceeds derived from the 20,400,000 free trading common
shares of the Company back into the Company in the form of purchasing the
Company restricted common stock at market value. Subsequently Bratendahl and the
Company verbally amended the "80% reinvestment" feature of the original
agreement. The new terms called for Bratendahl to invest an amount at their
discretion in restricted Class B preferred shares of UPDA.

During the first quarter of 2006 in accordance with the verbally amended
agreement described above, the Company issued 255 shares of Class B convertible
preferred stock for cash consideration from Bratenahl of $255,000 that was
received in September 2005.

Management of the Company considers the conversion of the "Unlettered
Convertible Preferred" shares to Bratenahl as a change in conversion feature in
accordance with EITF 00.27 which required the difference in conversion to be
treated as a dividend to the unlettered stockholder. The difference between the
original conversion feature and the fair market value on the commitment date
(July 29, 2005) of the Company's common stock (20,400,000) was $12,850,972. .
Accordingly a change in conversion feature has been recorded in accordance with
EITF 00.27 and the Company has reflected a stock dividend during the third
quarter of 2005 of $12,850,972.

Miramar is a division of DVD Construction, Inc. a privately held company
domiciled in the British Virgin Islands. DVD Construction, Inc. is in the
business of construction, real estate development and, through Miramar,
investments. Neither DVD Construction, Inc. nor Miramar is related to the
Company through common officers, directors, shareholders, key employees, family
members or business relationships through other entities.

During the third quarter and fourth quarter ended December 31, 2005, a block of
representing 66 out of the 102 "unlettered" convertible preferred shares were
converted by Bratenahl into approximately 13,200,000 shares of common stock.
Recording of the conversion of the 66 shares into common stock resulted in
crediting "Common Stock" within "Shareholders' Deficiency" for $13,225 at its
par value and a corresponding charge against "Additional Paid-in Capital" in the
same amount, since the par value of the "Unlettered Convertible Preferred"
shares was nominal.

During the fourth quarter of 2005, pursuant to an oral agreement between Miramar
and the Company, the Company advised its stock transfer agent that it should
convert certificates surrendered representing 500 shares of $.001 par value
"unlettered" convertible preferred stock into common stock of the Company held
by Miramar at a conversion rate of 500,000 free trading common shares per
preferred share (250,000,000 shares of common stock on a fully basis converted).
These previously Rule 144 restricted preferred shares had been in the hands of
holders for a period in excess of two years from the date the convertible
preferred shares were issued by the Company. Accordingly, these convertible
preferred shares qualified to be released from that share trading restriction
and the underlying common stock from the conversion can now be freely trading
shares.

The October 10, 2005 oral agreement between Miramar and the Company required
Miramar to invest an unspecified amount of cash into the Company. Subsequently,
Miramar and the Company verbally amended the original agreement to invest $ 6
million in Series B Preferred Stock .

During the fourth quarter of,2005 the Company agreed to issue 1,218 shares of
Class B convertible preferred stock ("Class B Preferred") with a $1,000 face
value to Miramar Investment in consideration of $1,218,000 in cash. One share of
Class B Preferred is convertible into 2,000 shares of Common Stock, which would
equate to 2,436,000 common shares if the entire 1,218 preferred shares were
converted. The 1,218 preferred shares or common stock converted there under are
subject to Rule 144 restrictions. The Company received the entire $1,218,000 in
cash during the fourth quarter of 2005. The 1,218 shares of Class B Preferred
Stock certificates were issued to Miramar during the first quarter of 2006.

Management of the Company considers the conversion of the "Unlettered
Convertible Preferred" shares to Miramar as a change in conversion feature in
accordance with EITF 00.27 which required the difference in conversion to be
treated as a dividend to the unlettered stock holder. The fair market value on
the commitment date (October 10, 2005) of the Company's common stock
(249,967,000) was valued at $149,980,200. Accordingly a change in conversion
feature has been recorded in accordance with EITF 00.27 and the Company has
reflected a stock dividend during the fourth quarter of 2005 for $149,980,200

Miramar is a division of DVD Construction, Inc. a privately held company
domiciled in the British Virgin Islands. DVD Construction, Inc. is in the
business of construction, real estate development and, through Miramar,
investments. Neither DVD Construction, Inc. nor Miramar is related to the
Company through common officers, directors, shareholders, key employees, family
members or business relationships through other entities.

During the quarter ended December 31, 2005, a block of representing 25 out of
the 500 "unlettered" convertible preferred shares were converted by Miramar into
approximately 12,500,000 shares of common stock. Recording of the conversion of
the 25 shares into common stock resulted in crediting "Common Stock" within
"Shareholders' Deficiency" for $12,630 at its par value and a corresponding
charge against "Additional Paid-in Capital" in the same amount, since the par
value of the "Unlettered Convertible Preferred" shares was nominal.

As discussed above under "Chronological Listing of Common and Preferred Stock
Equity Transactions," the Company has reflected a stock dividend attributable to
Series A Convertible Preferred Stock issued to Kamal Abdallah (80,000 shares)
and Christopher McCauley (20,000 shares) during the third quarter of 2005 of
$1,000,000. If and when the 100,000 shares of preferred stock are converted into
common stock it will equate to 100,000,000 shares. As described under Preferred
Stock, Beneficial Conversion Features, and Conversions made into Common Stock,
at least 66,668 shares of the preferred stock may be converted into common stock
on or after October 3, 2005, which equate to 66,668,000 shares of common stock.
As of November 14, 2006, none of these preferred shares have as yet been
converted to common stock. If these preferred shares had been converted to
common stock as of December 31, 2005 Kamal Abdallah and Christopher McCauley, as
officers of the Company would control 27% of the ownership of the Company common
stock, while Bratenahl would control 2% and Mirimar would control 63%.

As discussed above under "Chronological Listing of Common and Preferred Stock
Equity Transactions," the Company has reflected a stock dividend attributable to
Series A Convertible Preferred Stock issued to Kamal Abdallah (80,000 shares)
and Christopher McCauley (20,000 shares) during the third quarter of 2005 of
$1,000,000.

                                      F-21

See independent auditor's report.

<PAGE>



UNIVERSAL PROPERTY DEVELOPMENT ACQUISITION CORP. AND SUBSIDIARIES

Notes to Consolidated financial Statements December 31, 2005 and 2004

NOTE 13 - EQUITY TRANSACTIONS (RESTATED) (CONTINUED)

Preferred Stock Conversions (As Restated-See Note 21)

During the third quarter of 2005 the Company advised its stock transfer agent
that it should convert certificates surrendered representing 102 shares of $.001
par value "unlettered" convertible preferred stock into common stock of the
Company held by Bratenthal at a conversion rate of 200,000 free trading common
shares per preferred share (20,400,000 shares of common stock on a fully basis
converted). These previously Rule 144 restricted preferred shares had been in
the hands of holders for a period in excess of two years from the date the
convertible preferred shares were issued by the Company. Accordingly, these
convertible preferred shares qualified to be released from that share trading
restriction and the underlying common stock from the conversion can now be
freely trading shares. During the year ended December 31, 2005, a block of 66 ,
as restated, of these "unlettered" convertible preferred shares were converted
into approximately 13,200,000, as restated, shares of common stock under this
arrangement.

                                      F-22

See independent auditor's report.

<PAGE>

UNIVERSAL PROPERTY DEVELOPMENT ACQUISITION CORP. AND SUBSIDIARIES

Notes to Consolidated financial Statements December 31, 2005 and 2004

NOTE 13 - EQUITY TRANSACTIONS (RESTATED) (CONTINUED)

Preferred Stock Conversions (As Restated-See Note 21) (Continued)
During the fourth quarter of 2005 the Company advised its stock transfer agent
that it should convert certificates surrendered representing 500 shares, as
restated, of $.001 par value unlettered convertible preferred stock held by
Miramar into common stock of the Company at a conversion rate of 0.002,
(250,000,000 shares of common stock on a fully converted basis). These
previously restricted preferred shares had been in the hands of holders for a
period in excess of two years from the date the convertible preferred shares
were issued by the Company. Accordingly, these convertible preferred shares
qualified to be released from that share trading restriction and the underlying
common stock from the conversion can now be freely trading shares. During the
year ended December 31, 2005, 25 shares, as restated, of these preferred were
converted into approximately 12,500,000 shares, as restated, of common stock
under this arrangement.

A total of 91 shares of unlettered convertible preferred stock, as restated,
were converted into 25,855,000 shares of common stock, as restated, during the
year ended December 31, 2005, valued at $25,855, based on the conversions
described in the two preceding paragraphs - See Note 21.

NOTE 14 - RELATED PARTY TRANSACTIONS

In addition to consulting fees and services incurred through issuances of common
stock described in Note 13 above, the Company also incurred other consulting
fees and services to Payment Solutions Group, Inc. paid or payable in cash of
$25,000 and $249,350 during the years ended December 31, 2005 and 2004,
respectively. Accordingly, consulting fees and services incurred by the Company
to Payments Solutions Group, Inc., including share issuances paid or payable in
cash aggregated $375,000 and $480,350 during the year ended December 31, 2005
and 2004, respectively. In May 2005, the Company issued 61,534 shares of common
stock to Payment Solutions in settlement of accounts payable and accrued
expenses payable of $92,301, resulting in $92,301 of the loss on conversion
costs being incurred from their liabilities. In addition, at December 31, 2005
and 2004, the Company has an accrued liability of $125,000 for such consulting
fees and services incurred to Payment Solutions, Inc.

During the years ended December 31, 2005 and 2004, the Company incurred $26,000
and $31,500, respectively, of consulting fees and services to Dr. Bashirudden
Usama, the former Chief Executive Officer and President of the Company, $31,500
of which is included in accrued liabilities at December 31, 2004. Consulting
fees and services incurred by the Company to Dr. Bashirudden Usama, including
options granted and paid or payable in cash aggregated $32,120 and $125,000
during the years ended December 31, 2005 and 2004, respectively.

In May 2005, the Company issued 14,333 and 20,148 shares of common stock to
Richard Brit and Teena Martin, in settlement of accounts payable and accrued
expenses payable of $19,350 and $27,200, respectively, resulting in $56,894 of
the loss on conversion costs being incurred from their liabilities.

In March 2005, Kamal Abdallah was appointed by the Company as Chief Executive
Officer, President and Chairman of its Board of Directors for a term of five (5)
years, expiring March 11, 2010, with first year annual compensation of Three
Hundred Thousand Dollars and issuance of Five Hundred Thousand free-trading
shares each quarter and an additional two million shares each year. The
agreement also entitles him to certain fringe benefits, such as vacation and
health insurance, and guarantees payment of his compensation in the event of
termination. The Board has also authorized a further issuance of 2,000,000
shares per annum for every one million dollars in Company net income as well as
a bonus of no less than ten thousand dollars per quarter. Effective October 1,
2005, the employment agreement was amended to reduce annual compensation to
$150,000 per year (See Note 15).

During the year ended December 31, 2005 and 2004, the Company incurred $208,048
and $-, respectively, of consulting fees and services to Kamal Abdallah, the
Chairman, President and Chief Executive Officer of the Company, of which $37,500
is included in accrued liabilities at December 31, 2005. Accordingly, consulting
fees and services incurred by the Company to Kamal Abdallah, including share
issuances and amounts paid or payable in cash, aggregated $769,300 and $0 during
the years ended December 31, 2005 and 2004, respectively.

During the year ended December 31, 2005, consulting fees and services incurred
by the Company includes $12,500 to Teresa Hodge, a minor shareholder consultant
and the CEO of Ten and Ten.

During the year ended December 31, 2005 and 2004, the Company incurred $30,000
and none, respectively, of consulting fees and services to Chris McCauley, the
Company's in-house counsel, of which none is included in accrued liabilities at
December 31, 2005. Accordingly, consulting fees and services incurred by the
Company to Chris McCauley, including share issuances and amounts paid or payable
in cash, aggregated $30,000 and none during the years ended December 31, 2005
and 2004, respectively.

                                      F-23

See independent auditor's report.

<PAGE>

UNIVERSAL PROPERTY DEVELOPMENT ACQUISITION CORP. AND SUBSIDIARIES

Notes to Consolidated financial Statements December 31, 2005 and 2004

NOTE 15 - COMMITMENTS AND CONTINGENCIES

Employment Agreements

Effective, October 1, 2005, the Company entered into an Employment Agreement
with a four year term with Kamal Abdallah, the Chairman, President and CEO of
the Company, with automatic annual one year renewals, at a $150,000 annual
compensation. It provides for a thirty-day notice period for non-renewal. It
also provides for a performance bonus of up to $600,000 at the discretion of the
Board of Directors, plus fringe benefits such as health and life insurance. In
the event of termination without cause Mr. Abdallah is to receive a lump-sum
payment from the Company of $1,000,000.

Effective October 1, 2005, the Company entered into an Employment Agreement with
a four year term with Christopher McCauley, the Vice President and Secretary of
the Company, with automatic annual one year renewals, at a $120,000 annual
compensation. It provides for a thirty-day notice period for non-renewal. It
also provides for a performance bonus of up to $600,000 at the discretion of the
Board of Directors, plus fringe benefits such as health and life insurance. Mr.
McCauley is to receive a lump-sum payment from the Company of $1,000,000.

Effective January 1, 2006, the Company entered into an Employment Agreement with
one year term with Steven Barrera, the Texas Regional Manager of the Company
with automatic annual one year renewals, at a $60,000 annual compensation. It
provides for a thirty-day notice period for non-renewal.

At December 31, 2005 the Company is committed as follows, under the agreements:

Years ending December 31:

                  2006    $  330,000
                  2007       270,000
                  2008       270,000
                  2009       202,500
                          ----------
                  Total   $1,072,500
                          ==========

Lease Agreements

Effective October 1, 2005, the company entered into a lease agreement for office
space which provides for annual aggregate lease payments of approximately $6,900
for the year ending September 30, 2006.

Rent expense was $6,128 and $0 for the years ended December 31, 2005 and 2004
respectively.

Write Off of Note Payable

In November 2004, the Company advanced $300,000 to World Wide Financial
Services, Inc. ("WWFS") as a bridge loan to purchase its technology assets. The
loan bore interest of 8% per annum and was due on demand. The Company also
received the cash for this investment from Bereishis Investment Group, LLP, a
shareholder in WWFS, pursuant to an unsecured 18% interest bearing balloon note
payable originally due November 30, 2004 to Bereishis Investment Group, LLC,
with interest at a default rate thereafter of 24% per annum. The noteholder was
a shareholder in the Company to whom the bridge loan receivable of $300,000.
Subsequent to December 31, 2004, the Company determined it was unable to close
on the technology asset purchase and that WWFS had refused to repay the bridge
loan and had claimed the proceeds thereof as liquidated damages. As of December
31, 2004, the Company investigated its options concerning the transaction,
including possibly seeking to invalidate the promissory note payable. The
Company engaged legal counsel for the purpose of reviewing and evaluating
documents and correspondence in order to advise the Company of its options.
Company legal counsel has advised that future losses as a result of this
transaction are not probable and accordingly, no contingent liability should be
reflected in the Company's consolidated financial statements. In addition,
during the fourth quarter of 2005, the Company's Board voted to invalidate the
entire transaction as it was never properly authorized by the Company and to
write off all related assets and liabilities, resulting in a gain of $6,801 on
the write off principally attributable to accrued interest income and expense.

                                      F-24

See independent auditor's report.

<PAGE>

UNIVERSAL PROPERTY DEVELOPMENT ACQUISITION CORP. AND SUBSIDIARIES

Notes to Consolidated financial Statements December 31, 2005 and 2004

NOTE 16 - BOARD APPROVED CHANGE IN COMPANY MANAGEMENT AND TERMINATION OF CERTAIN
AGREEMENTS WITH NOW FORMER OFFICERS AND A SHAREHOLDER CONSULTANT AND SUBSEQUENT
PLAN OF MERGER

On June 9, 2005, the Board of Directors of the Company agreed by a majority vote
to remove both Curtis Pree as the Company's COO, and George Csatary as the
Company's CFO and terminated an employment agreement with Curtis Pree.

On June 17, 2005, the Board of Directors of the successor Company ("Universal
Property Development and Acquisition Corporation") in a Board resolution
affirmed that the Board members now consists of Kamal Abdallah, Chairman and
CEO, Christopher J. McCauley, Secretary, and Steven Barrera. In that same
resolution the Board terminated existing consulting agreements with Ten and Ten
and its principals.

It is unclear what financial impact, if any, the termination of the agreements
with Curtis Pree, a Vice president in Ten and Ten, and with Ten and Ten may have
on the Company.

On June 17, 2005, Procore Group, Inc., a California corporation, entered into a
Plan and Agreement of Merger with its subsidiary, Universal Property Development
and Acquisition Corporation, a Nevada corporation, pursuant to action of the
board and shareholders and in conformance with Nevada and California law. The
Articles of Merger (Exhibit A) were filed as required by Nevada law and
notification of this merger was filed with the California Secretary of State as
required by the California Corporations Code. The Plan and Agreement of Merger
was duly approved and executed by the constituent corporations.

The Plan and Agreement of Merger and the Articles of Incorporation of Universal
establish that Universal shall be authorized to issue a total of 2,500,000,000
shares of stock with 2,000,000,000 of those shares being common stock .001 par
value. In addition, the Board of Directors of Universal is authorized to
prescribe the classes, series and the number of each class or series of stock
and the voting powers, designations, preferences, limitations, restrictions and
relative rights of each class or series of stock. The Board of Directors may be
made up of 5 members each elected to concurrent annual terms. The Board of
Universal as existed prior to the merger survives the merger. It has scheduled
regular meetings and will act as necessary to pursue the objectives of the
company, including the acquisition of underperforming commercial and residential
real estate and redevelopment of proven mineral opportunities through joint
ventures with under funded property owners and leaseholders.

On July 11, 2005, Universal was issued a new trading symbol and issued a press
release announcing the merger. Universal will trade on the OTC BB under the
trading symbol UPDA and the new CUSIP number for its common stock is 91379U10 5.

NOTE 17 - STOCK OPTIONS

The Company granted an option to purchase 8,500 common shares in June 2004 with
an exercise price of $.001 to Dr. Bashiruddin Usama. The option has a five year
life and vested immediately. The fair value for option was estimated on the date
of grant using the share price on the date of the grant.

The Board of Directors adopted a stock option plan effective October 18, 2004.
This Plan shall expire on October 17, 2014. The Company has reserved 65,000,000
shares of common stock under this plan to be issued to employees, directors and
consultants. As of December 31, 2005, the Company has issued 8,500 shares under
this plan, consisting of an 8,500 option that replaced the option issued to Dr.
Bashiruddin Usama in June of 2004.

                                      F-25

See independent auditor's report.

<PAGE>

UNIVERSAL PROPERTY DEVELOPMENT ACQUISITION CORP. AND SUBSIDIARIES

Notes to Consolidated financial Statements December 31, 2005 and 2004

NOTE 18 - RESCISSION OF CAROL POP STOCK SUBSCRIPTION RECEIVABLE

In August 2004, the Company entered into a financing agreement with Carol Pop,
an individual investor that had already been amended to extend the closing to
May 1, 2005. Under the terms of the agreement, the Company issued 222,220
restricted common shares for $350,000, of which the Company received $20,000
against the subscription prior to December 31, 2004. Accordingly, at December
31, 2004, the remainder balance of the subscription receivable was $330,000 and
had been offset against shareholders' deficit .In August 2005 the Company and
Carol Pop agreed to cancel 222,220 shares previously issued as Carol Pop was
unable to deliver the remaining $330,000. The Company agreed to issue common
stock for the $20,000 previously received from Carol Pop. To date, the shares
have not as yet been issued to Carol Pop. However, Carol Pop did return the
shares during the current quarter

The Company had incurred $21,354 in costs associated with the previously pending
Company acquisition of real estate from Carol Pop involved in the financing
agreement discussed in the previous paragraph. The aforementioned costs
previously recorded as due from Carol Pop by the Company have been written off
as a "loss on impairment of investment acquisition costs" during the second
quarter of 2005.

NOTE 19 - ABANDONED PLANS FOR ACQUISITION OF EQUITY INTEREST IN BRATENAHL
EXTENSION, LLC

During July 2005 the Company entered into a memorandum of understanding with
Bratenahl Estates Development, LLC ("Bratenahl"). Bratenahl is an Ohio based
company engaged directly and through affiliates in the acquisition and
development of real estate projects in Cleveland, Ohio and the ownership,
management, engineering, renovation, construction, installation and maintenance
of such real estate.

Bratenahl and the Company agreed to join forces as strategic alliance partners.
This strategic alliance was to undertake to acquire Bratenahl Extension, LLC an
Ohio limited liability company, which owned an 83 apartment building in
Cleveland, Ohio. Bratenahl was to own 70% and the Company was to own 30% of the
acquired LLC. The Company agreed to pay $300,000 in cash or stock to Bratenahl
in consideration of its consultation on this project and to provide an
additional $200,000 in cash or stock to the acquired LLC 90 days thereafter, and
an additional $500,000 in cash or stock to the acquired LLC within 90 days after
that. Said funds will be utilized for the sole purpose of renovation and repair
of the real estate owned by the acquired LLC. To date the Company has not yet
provided the initial $300,000. Carol Pop, who is mentioned in the subscription
receivable matter, is a managing member in Bratenahl.

In September 2005, Bratenahl and the Company, by mutual agreement, informally
cancelled the memorandum of understanding without penalty to either of the
parties, as this investment did not fit with either entities' business plans
upon further reflection. Accordingly, the Company has no gain or loss to report
as a result of the cancellation of this transaction.

                                      F-26

See independent auditor's report.

<PAGE>

UNIVERSAL PROPERTY DEVELOPMENT ACQUISITION CORP. AND SUBSIDIARIES

Notes to Consolidated financial Statements December 31, 2005 and 2004

NOTE 20- SUBSEQUENT EVENTS (AS RESTATED - SEE NOTE 21)

STATUS OF MEMORANDUMS OF UNDERSTANDING

In October 2005, the Company executed a memorandum of understanding with Dark
Horse Exploration, Inc. (DHE), a Wyoming corporation, and Masaood Group, Ltd.
for the development and production of a natural gas and oil field consisting of
4,000 acres in Northern Utah. UPDA was to own sixty percent (60%) of the joint
venture, DHE was to own thirty percent (30%) and Masaood was to own ten percent
(10%). Pursuant to the memorandum of understanding, DHE was to operate the field
which had five (5) wells and which was to be expanded to eighty (80) wells.
Masaood had agreed to invest $1,000,000 and had provided initial funding of
$150,000 for the revitalization of the existing wells. UPDA had agreed to
re-invest its portion of the initial profits, up to $1,000,000, for the drilling
of additional wells. In January, 2006, West Oil & Gas, Inc. ("West") terminated
its relationship with Dark Horse Exploration and Byron T. Woodard. In
conjunction with this termination, UPDA increased its stake in West to 70% and
Masaood Group, LTD. and Mr. Kronvold now owns 20% of the outstanding shares.

In November 2005, the Company executed a memorandum of understanding with the
Lion Partners Hedge Fund to acquire certain oil and gas leases in Osage County,
Oklahoma for 3,840 acres including of 69 producing wells and 27 injection wells.
There was no activity within the venture during 2005.

In March 2006, UPDA and Sundial Resources, Inc. of Graham, Texas executed a
Memorandum of Understanding for the development of 320 acres on three leases in
Young County, Texas. Pursuant to the MOU, UPDA is required to provide $ 100,000
of funding in cash for the workover of the 17 wells on the property. As set
forth in the MOU, UPDA will own 75% of a joint venture corporation, tentatively
known as Texas Energy, Inc. Sundial is to assign its 100% working interest in
the leases and wells to the joint venture corporation and will own the remaining
25% interest in the new venture. Sundial will manage the workover procedures and
will operate the wells upon completion.

SALE OF SITEWORKS CONVERTIBLE STOCK TO MR. ABDALLAH

During the month of June 2006, the Company deposited an aggregate of $1,000,000
it received from Mr. Abdallah in consideration for the Company's assignment of
the 100,000 Convertible Preferred Series B stock back to him, resulting in no
gain or loss to the Company on the preferred shares. The transaction was
memorialized in an agreement between the Company and Mr. Abdallah dated July 18,
2006 and approved by its two other members of the Board of Directors.

SIGNIFICANT STOCK ISSUANCE ACTIVITIES

In January 2006, the Company issued 375,000 shares of free-trading common stock
to the principals of Profit Planners, Inc. for consulting services. Accordingly,
the Company is expected to record a non-cash charge of $75,000 related to these
issuances, based on the trading price of Company shares on the contract signing
date or the date on which the shares were issued, whichever was earlier.

In February 2006 the Company approved a settlement agreement with Peter Nasca
Associates, Inc. related to the termination of his consulting agreement, and
authorized the payment of the sum of $5,000 and the issuance of 15,000 shares.

On February 13, 2006, the Company agreed to issue Eight Hundred and Ten (810)
shares of its Class B Preferred Stock to Miramar Investments, Inc. pursuant to
the terms of an investment agreement between the registrant and Miramar. The
shares of Class B preferred stock issued to Miramar are restricted shares and
cannot be resold unless they are subsequently registered pursuant to the
Securities Act of 1933, as amended or such sale is pursuant to a valid exemption
from such registration. The securities issued to Miramar Investments, Inc., were
in exchange for $810,000 in cash.

In March, 2006, the Company agreed to issue nine hundred and eighty (980) shares
of its Class B Preferred Stock to Miramar Investments, Inc. pursuant to the
terms of an investment agreement between the registrant and Miramar. The shares
of Class B preferred stock issued to Miramar are restricted shares and cannot be
resold unless they are subsequently registered pursuant to the Securities Act of
1933, as amended or such sale is pursuant to a valid exemption from such
registration. The securities issued to Miramar Investments, Inc., were in
exchange for $980,000 in cash.

In March 2006 the Company issued 500,000 shares of free trading shares in
settlement of a dispute arising with Payment Solutions, Inc. concerning
consulting services and previously issued shares of the Company's stock.

During the first quarter of 2006 the Company converted a substantial portion of
its "unlettered" preferred stock and some of its Series B preferred stock into
common stock representing 55,650,000 shares of common stock of the Company. In
the opinion of Company management and its legal counsel, these convertible
preferred shares qualified to be released from that share trading restriction
and the underlying common stock from the conversion can now be freely trading
shares.

                                      F-27

See independent auditor's report.

<PAGE>

Substitution of Siteworks B Preferred Stock with $1 million

During the month of June 2006, the Company deposited an aggregate of $1,000,000
it received from Mr. Abdallah in consideration for the Company's assignment of
the 100,000 Convertible Preferred Series B stock back to him, resulting in no
gain or loss to the Company on the preferred shares. The transaction was
memorialized in an agreement between the Company and Mr. Abdallah dated July 18,
2006 and approved by its two other members of the Board of Directors.(as
restated- see Note 3, in particular "Substitution of Siteworks B Preferred Stock
with $1 million").

LITIGATION

On November 17, 2005 the Company, USPX, and Triple Crown Consulting ("TCC"), a
private corporation, entered into a joint venture agreement (the "Agreement").
Pursuant to the terms of the Agreement, the Company, USPX and TCC formed Canyon
Creek as the joint venture entity to carry out the proposed operations of the
joint venture. The Company owns 65% of the capital stock of Canyon Creek, USPX
owns 30% of the capital stock of Canyon Creek and TCC owns 5% of the capital
stock of Canyon Creek.

Under the terms of the Agreement, and as consideration for their respective
shares of the capital stock of Canyon Creek, the Company invested $1,200,000 to
finance the operations of the joint venture, USPX assigned certain oil and gas
leases to the joint venture and TCC agreed to provide ongoing management
consulting services to the joint venture. The leases assigned to the joint
venture by USPX cover approximately two thousand acres and contain approximately
60 oil and gas wells. The joint venture also acquired additional acreage and
wells and intended to pursue further acquisitions of currently producing oil and
gas properties, low risk drilling prospects and existing wells in need of
state-of-the-art technology to improve profitability. In addition, USPX
principal was installed as President of Canyon Creek.

The Company paid an additional $2 million in workover costs that were incurred
to place the oil and gas wells into working order.

USPX was responsible for the day-to-day operations of Canyon Creek, but the
Company has control over the appointment of the financial officer of Canyon
Creek. USPX is to be paid a managerial fee equal to 7.5% of the net operating
revenue of Canyon Creek.

On April 12, 2006 USPX filed suit against the Company alleging that the Company
had breached the above joint venture agreement. Specifically USPX alleged that
the Company committed wrongful acts including misappropriation of opportunities,
misappropriation of business and proprietary information, fraud, and conspired
to intentionally cause damage to USPX. In addition USPX is alleging that it has
failed to receive any or all of the consideration that it was promised by the
Company or Canyon Creek. USPX is also alleging that the Company and Canyon Creek
fraudulently induced USPX and its principal Donald Orr into causing the transfer
and assignment of certain oil and gas interests held by them.

The Company is contending that Donald Orr had received and/or incurred expenses
that were not related to Canyon Creek, based upon a preliminary internal
investigation. Upon being confronted with these allegations, Mr. Orr resigned
has position with Canyon Creek. The Company is the process of filing a counter
claim that would include USPX to relinquish their 30% equity interest in Canyon
Creek and repayment of cash received that was spent inappropriately.

On June 20, 2006 the Company filed a response denying the allegations. The
matter is currently pending. As of the consolidated balance sheet date, the
Company has not accrued any costs related to this matter because the Company
believes the suit is without merit. In addition, "Oil and Gas Property" assets
associated with the leases originally assigned by Donald Orr, including
workovers applicable to those leases, totaled $1,509,441 on September 30, 2006.
Revenues already earned from October 2005 to September 2006 totaled $290,441.
Should the Company not prevail in this litigation, the financial impact on the
Company could be significant.

NOTE 21 - RESTATEMENT OF CURRENT YEAR'S FINANCIAL INFORMATION

An error was made in the Company's originally issued financial statements for
the year ended December 31, 2005 concerning the recording of "Unlettered
Convertible Preferred Stock" converted to common stock during the year ended
December 31, 2005. In addition, the financial statements for that period did not
reflect preferred stock dividends resulting from beneficial conversion features
associated with Series A preferred stock and Changes in Conversions of
Unlettered" preferred stock convertible into common stock of $163,830,529.

Corrections of aforementioned items described in the preceding paragraph, and as
discussed in Note 21 to the financial statements, an $88 error was made in the
Company's recording of unlettered convertible preferred shares converted during
the year ended December 31, 2005 into common stock. In addition, the Company's
financial statements for that year did not reflect a $163,830,529 beneficial
conversion dividend. Correction of the aforementioned items has resulted in an
$88 increase in the amount recorded for preferred stock in the equity section at
December 31, 2005, have resulted in an increase of $163,830,529 in the Company's
Accumulated Deficit attributed to the recording of stock dividends on various
classes of convertible preferred stock , the corrections also resulted in an
increase in additional paid-in capital of the Company in the amount of
$163,830,529. The errors and corrections thereof did not affect originally
reported net loss.

                                      F-28

See independent auditor's report.

<PAGE>

The transactions for which the corrections discussed in the preceding paragraph
were made are properly described in Note 13 - Equity Transactions (As Restated).

In addition to the restatements described in the preceding three paragraphs NOTE
3 entitled "INVESTMENT IN PREFERRED SERIES B RULE 144 RESTRICTED STOCK OF
SITEWORKS BUILDING AND DEVELOPMENT CO., A PUBLICLY-TRADED ENTITY" and Note 14
entitled "SUBSEQUENT EVENTS" have been restated to reflect updated information
concerning the ultimate disposition of an investment in certain preferred stock
the Company has received from Kamal Abdallah during the year ended 2005.

The transactions for which the corrections discussed in the preceding paragraphs
were made are properly described in Note 13- Equity Transactions and Note 20 -
Subsequent Events (As Restated).

Certain other Notes to the financial statements have also been restated for
minor corrections of facts determined after the original 10KSB for the year
ended December 31, 2005, was filed.


                                      F-29

See independent auditor's report.

<PAGE>

UNIVERSAL PROPERTY DEVELOPMENT ACQUISITION CORP. AND SUBSIDIARIES

Notes to Consolidated financial Statements December 31, 2005 and 2004

     SUPPLEMENTAL INFORMATION ON OIL AND GAS PRODUCING ACTIVITIES

Capitalized Costs Relating to Oil and Gas Producing Activities

December 31, 2005
Unproved oil and gas properties                               $  110,000
Proved oil and gas properties                                  1,825,406
Drilling advances on uncompleted projects                             --
Support and office equipment                                          --
                                                              ----------
Total capitalized costs                                        1,935,406
Less accumulated depreciation and amortization                   (13,311)
                                                              ----------
Net Capitalized Costs                                         $1,922,095
                                                              ==========

Costs Incurred in Oil and Gas Producing Activities

For the Year Ended December 31, 2005
Acquisition of proved properties                                 680,031
Acquisition of unproved properties                               110,000
Exploration costs                                                     --
Development costs                                              1,145,375
Acquisition of support and office equipment                           --
Asset retirement costs recognized according to SFAS No. 143           --
                                                              ----------
Total Costs Incurred                                          $1,935,406
                                                              ==========

Results of Operations from Oil and Gas Producing Activities - The Company's
results of operations from oil and gas producing activities are as follows.
Income taxes are based on statutory tax rates, reflecting allowable deductions.

For the Year Ended December 31, 2005
Oil and gas revenues                          $ 28,965
Production costs                                (2,040)
Production taxes                                (1,754)
Depreciation and amortization                  (13,311)
General and administrative expense                  --
                                              --------
Results of operations before income taxes       11,860
Provision for income taxes                          --
                                              --------
Results of Oil and Gas Producing Operations   $ 11,860
                                              ========


Reserve Quantities Information - The following estimates of proved and proved
developed reserve quantities and related standardized measure of discounted net
cash flow are estimates only, and do not purport to reflect realizable values or
fair market values of the Company's reserves. The Company emphasizes that
reserve estimates are inherently imprecise and that estimates of new discoveries
are more imprecise than those of producing oil and gas properties. Accordingly,
these estimates are expected to change as future information becomes available.
All of the Company's reserves are located in the United States of America.

Proved reserves are estimated reserves of crude oil (including condensate and
natural gas liquids) and natural gas that geological and engineering data
demonstrate with reasonable certainty to be recoverable in future years from
known reservoirs under existing economic and operating conditions. Proved
developed reserves are those expected to be recovered through existing wells,
equipment and methods.

                                      F-30

See independent auditor's report.

<PAGE>

UNIVERSAL PROPERTY DEVELOPMENT ACQUISITION CORP. AND SUBSIDIARIES

Notes to Consolidated financial Statements December 31, 2005 and 2004

    SUPPLEMENTAL INFORMATION ON OIL AND GAS PRODUCING ACTIVITIES (CONTINUED)

The standardized measure of discounted future net cash flows is computed by
applying year-end prices of oil and gas to the estimated future production of
proved oil and gas reserves, less estimated future expenditures (based on
year-end costs) to be incurred in developing and producing the proved reserves,
less estimated future income tax expenses (based on year-end statutory tax
rates) to be incurred on pretax net cash flows less tax basis of the properties
and available credits, and assuming continuation of existing economic
conditions. The estimated future net cash flows are then discounted using a rate
of 10 percent per year to reflect the estimated timing of the future cash flows.

      For the Year Ended December 31, 2005
                                                    Oil (1)     Gas (1)
                                                  ----------   ---------
      Proved Developed and Undeveloped Reserves
      Beginning of year                                   --          --
      Purchases of minerals in place                 313,838   6,280,466
      Improved recovery and development                   --          --
      Production                                      (2,910)     (5,500)
      Revision of previous estimate                       --          --
                                                  ----------   ---------
      End of year                                    310,928   6,274,966
                                                  ==========   =========
      Proved Developed at end of year                     60       4,500

1 Oil reserves are stated in barrels; gas reserves are stated in thousand cubic
feet.

      Standardized Measure of Discounted Cash Flows

      December 31, 2005
      Future cash flows                                        $ 59,400,101
      Future production costs                                    (1,581,395)
      Future development costs                                   (2,271,702)
      Future income taxes                                       (13,886,752)
                                                               ------------
      Future net cash flows                                      41,660,252
      10% annual discount for estimated timing of cash flows    (14,097,237)
                                                               ------------
      Standardized Measure of Discounted Cash Flows            $ 27,563,015
                                                               ============

                                      F-27

See independent auditor's report.