SECURITIES EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-KSB-A
                            Annual Report Pursuant to
                       the Securities Exchange Act of 1934


                       For the fiscal year ended 12-31-97
                       Commission file number 33-26531-LA

                        COMMERCIAL LABOR MANAGEMENT, INC.
             (Exact name of registrant as specified in its charter)

        Nevada                                             88-0241079
------------------------                                   -------------------
(State of incorporation)                                   (I.R.S. Employer
                                                           Identification No.)

                  137 N. Larchmont, #507, Los Angeles, CA 90004
             ------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

        Registrant's telephone number, including area code: (323)933-0565

           Securities registered pursuant to Section 12(b) of the Act:

                            Title of each class: None

                 Name of each exchange on which registered: N/A

           Securities registered pursuant to Section 12(g) of the Act:

                            Title of each class: None

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

                      Yes_______           No_________    

Check if disclosure of delinquent  filers pursuant to Item 405 of Regulation S-B
is not contained in this form, and no disclosure will be contained,  to the best
of  Registrant's  knowledge,  in  definitive  proxy  or  information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB.   X
                  -----

State issuer's revenues for its most recent fiscal year. $0



                                        1

<PAGE>



Transitional Small Business Disclosure Format:

                         Yes              X  No
                    -----               -----

Aggregate  market  value  of the  voting  stock  held by  non-affiliates  of the
registrant as of December 31, 1997: $11,187 (based on the average of the closing
bid and prices as reported on OTC BB as of January 15, 1998)

Number of outstanding  shares of the registrant's  $.001 par value common stock,
as of December 31, 1997: 8,173,804.



                                        2

<PAGE>



                                     PART 1

Item 1.           Business

         Commercial  Labor  Management,   Inc.  is  a  Nevada  corporation  (the
"Company")  organized on October 18, 1988 with the initial  name Tokyo  Raiders,
Inc. It  subsequently  changed its name to Club USPN,  Inc. then to XL Corp. and
then to Commercial Labor  Management,  Inc. The Company was incorporated for the
purpose  of  engaging  in any  lawful  business,  with its  original  purpose to
evaluate and acquire one or more unspecified businesses or properties. Until May
1990,  the  Company  was  a  developmental  stage  enterprise  raising  capital,
searching for an acquisition, and acquiring 7.5 acres of undeveloped residential
land in New  Jersey,  at which time it changed  its name to Club USPN,  Inc.  An
acquisition of a pizza marketing network company in 1990 was mutually  rescinded
on September 30, 1990.

         Principal  operations of the Company were not re-established  until May
10,  1993,  when  the  Company  agreed  to  acquire  all of the  shares  of SONO
International, a Nevada corporation,  effective on June 9, 1993, in exchange for
625,000  shares of the Company's  common stock.  SONO  International  ("SI") was
organized  in Nevada  on July 2,  1992 to  provide  contract  manufacturing  and
maquilador  (shelter) services in Tijuana,  Baja California,  Mexico,  with four
wholly-owned subsidiaries: WIRETECH and EXCEL Mexican Manufacturing (both Nevada
corporations),  and WIRETECH de Mexico, S.A. de C.V., and Operadora de Shelters,
S.A. de C.V. (both Mexican corporations).

         On September 30, 1994, the Company sold its SI operations  unit to SI's
former  stockholders  and  received in return  619,200  shares of the  Company's
common stock held by those former SI stockholders.  The Company's motivation for
this  transaction  was due to the  substantial  losses  incurred by the SI unit,
without signs of immediate improvement.  The shares received back by the Company
provided  the Company with a reduction  in share  capitalization  which could be
used in acquiring or merging with a more promising operating company.

         On March 21, 1995,  the Company  entered into an Agreement  and Plan of
Reorganization  with Commercial  Labor  Management,  Inc.  pursuant to which the
Company  acquired 100% of the total issued and outstanding  common and preferred
stock of Commercial Labor  Management,  Inc. in exchange for 1,928,330 shares of
the Company's  stock.  Effective July 1, 1995, the Company and Commercial  Labor
Management,  Inc.  entered  into a Rescission  Agreement  pursuant to which they
mutually agreed to rescind the  acquisition  because the Company did not believe
that it had received adequate  consideration for its purchase.  As a result, the
Company  received a return of its  1,928,330  shares of common  stock which have
been  canceled,  and the Company  tendered  back all of the shares of Commercial
Labor  Management, Inc.  which  it owned.  The  Company is  now seeking  to make

                                        3

<PAGE>




another business  acquisition or enter into another business combination with an
operating entity.

         In June 1997, all issued and outstanding shares of the Company's Series
A  Convertible  Preferred  Stocks were  converted by their holders into 7,200,00
shares of the Company's common stock.

         In December  1997 the Company,  by the written  consent of its majority
shareholders   representing   approximately   82.6%  of  the  total  issued  and
outstanding   common  stock  of  the  Company,   (i)  amended  its  Articles  of
Incorporation  to  increase  the  authorized  common  stock from  15,000,000  to
50,000,000  shares,  par value $.001 per share, and (ii) effected a one for five
reverse  stock  split to result  in a total of  643,804  shares of common  stock
issued and outstanding.  On December 31, 1997, an additional 7,530,600 shares of
the common stock were issued to a consultant for services rendered, resulting in
a total of 8,173,804 shares of the Company's common issued and outstanding as of
December 31, 1997.

EMPLOYEES:

         The  Company  does not  currently  have any  employees.  The  executive
officers of the Company are not currently paid any salary or other  compensation
for their services.

         No  significant  business  activity was conducted by the Company during
the fiscal year. As a result,  no income was realized by the Company in its last
fiscal year.

         The Company was  inactive and  presently  does not  participate  in any
industry segment. The Company had no material revenues,  or operating profits or
identifiable assets attributable to its industry segment.



                                        4

<PAGE>



Item 2.           Property

         The Company previously owned 7.5 acres of undeveloped  residential land
in the township of Howell,  County of Monmouth,  in the State of New Jersey. The
land was originally  transferred to the Company in April 1990 and was encumbered
by a first mortgage in the principal amount of $81,776,  bearing simple interest
at the rate of 12% per annum,  payable  upon  demand.  The Company  conveyed the
property in 1997 in consideration for the assumption of the mortgage debt by the
purchaser.  The Company  does not  presently  lease any office  facilities.  The
leasing  of office  facilities  is pending  the  acquisition  of or merger  with
another business which has not yet be identified.

         The Company does not have any formal  offices at year end.  Records are
maintained and mail received at 137 N. Larchmont,  #507, Los Angeles,  CA 90004.
The Company owns no real property.

Item 3.           Legal Proceedings

         The  Company is a party to no  pending  legal  proceedings,  nor is any
property subject to such proceedings, at year end 1997.

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

         In December 1997, the Company effected a  one-for-twenty  reverse stock
split of the issued and outstanding shares through written consent of a majority
of  the  issued  and  outstanding  shares  and  concurrent  Board  of  Directors
Resolution.  For trading purposes, there was a delay in implementing the reverse
split.  On November 3, 1998,  the NASDAQ  Stock  Market,  Inc.  issued a Uniform
Practice  Advisory (UPC #084-98) advising NASDAQ members that the effective date
of the one-for-20  reverse stock split for settlement  purposes would be revised
to occur on October  14,  1998 rather than  September  22, 1998  because  NASDAQ
believes that "a sufficient lack of information  and uncertainty  existed in the
marketplace to warrant a revision" ruling.  There is no assurance  regarding the
final outcome of the NASDAQ'S UPC #084-98,  or the effect the ruling and dispute
will have on the Company.


                                     PART II

Item 5.           Market for Registrant's Common Equity and Related
                  Stockholder Matters

         The Company's common stock trades on the NASD OTC Bulletin Board Market
under the symbol "CLMI."

     As of the  date of this  report,  management  knows  of no  trading  of the
Company's common stock. The range of high and low bid quotations for each fiscal

                                        5

<PAGE>



quarter since the last report and previous to years, as reported by the National
Quotation Bureau Incorporated, was as follows:

                           1997                          High     Low 

                     First quarter                       .01              *
                     Second quarter                      .01              *
                     Third quarter                       .01              *
                     Fourth quarter                     $.01              *

                           1996                          High      Low 
                      First quarter                       .07               .05
                      Second quarter                      .02               .01
                      Third quarter                       .02               .01
                      Fourth quarter                     $.02              $.01

                           1995                          High      Low 

                      First quarter                       8.00              .13
                      Second quarter                      1.25              .75
                      Third quarter                       3.25              .25
                      Fourth quarter                     $3.25             $.13

* No quotations reported

         The  above  quotations  reflect  inter-dealer  prices,  without  retail
mark-up,  mark-down,  or commission  and may not  necessarily  represent  actual
transactions.

         As of December 31, 1997, there were 284 record holders of the Company's
common Stock.

         The Company has not  declared or paid any cash  dividends on its common
stock and does not anticipate paying dividends for the foreseeable future.

Item 6.           Management's Discussion and Analysis of
                  Financial Condition and Results of Operations

                  Financial Condition and Changes in Financial
                  Condition

         During the fiscal year ended December 31, 1997,  the Company  continued
to search for and  evaluate  operating  businesses  for  potential  acquisition,
although  no offers  were made by the  Company.  The search  for a new  business
acquisition was only conducted  sporadically  because management,  which was not
paid any  compensation by the Company during the fiscal year ending December 31,
1997,  was able to  dedicate  only a  limited  amount  of time to the  Company's
affairs.  Management plans to continue to maintain  the Company's reports to the

                                        6

<PAGE>



Securities and Exchange Commission current in 1998 and to intensify its focus on
the Company's goal of acquiring or entering into a business  combination  with a
new operating business.

         The Company did not incur operating expenses or earn revenue during the
fiscal year ending  December 31, 1997. In December 1996, the Company wrote off a
$180,000 demand note receivable from Edward L. Torres,  the Company's  President
and Chairman of the Board of Directors as an  uncollectible  debt. See "CERTAIN
TRANSACTIONS."  Mr. Torres was paid no  compensation  by the Company  during the
fiscal year ending  December 31,  1997.  He has been  providing  services to the
Company at no cost in its endeavor to update its financial statements and public
reports to the Securities and Exchange Commission.

LIQUIDITY AND CAPITAL RESOURCES:

         The Company has no working  capital and had a working  capital  deficit
(i.e.,  current  liabilities  in excess of  current  assets)  of  $25,875  as of
December 31, 1997. The current  liabilities are comprised of accounts payable to
the Company's independent certified public accountants for professional services
rendered.  The Company presently has no financial  resources to pay its accounts
payable.  The  Company  has no  operations  and would  have to raise  capital by
issuing stock or incurring  borrowings  in order to repay its accounts  payable.
There is no assurance  that the Company will be able to raise  capital or borrow
funds in the future, or acquire an operating business with revenues.

         No operations  were  conducted  and no revenues  were  generated in the
fiscal  year.  The  Company at year end had no  capital,  no cash,  and no other
assets.  The Company at year end was totally  illiquid and needed cash infusions
from shareholders to provide capital, or loans from any sources.

                  Results of Operations

1997 Compared to 1996

     During the fiscal year ended  December  31, 1997,  the Company  incurred no
general and  administrative  expenses.  In 1996 the Company  incurred $25,875 in
General and  Administrative  expenses most of which were  professional  fees and
wrote off as  uncollectable a $180,000  receivable from an officer.  At present,
the Company has no business  income or  operations.  Accordingly,  the  reported
financial  information herein may not be indicative of future operating results.
Profit/loss  on  operations  in 1997  was  ($0)  compared  to the  1996  loss on
operations ($205,875).


                                        7

<PAGE>



1996 Compared to 1995

         During the fiscal year ended  December 31, 1996,  the Company  incurred
$25,875 general and administrative expenses most of which were professional fees
and  wrote  off  $180,000  which was an  uncollectible  receivable.  In 1995 the
Company incurred $0 in General and Administrative  expenses.  The Company had no
business income or operations in 1996 but attempted an acquisition in 1995 which
was rescinded within 3 months.  Accordingly,  the reported financial information
herein may not be indicative of future operating results.  Loss on operations in
1996 was ($205,875) compared to the 1995 profit/loss on operations $0.

Item 7.           Financial Statements and Supplementary Data

                  Please refer to pages F-1 through F-11.

Item 8.           Changes in and Disagreements on Accounting and
                  Financial Disclosure

         In  connection  with  audits of two most  recent  fiscal  years and any
interim period preceding  resignation,  no  disagreements  exist with any former
accountant  on any  matter of  accounting  principles  or  practices,  financial
statement disclosure, or auditing scope of procedure, which disagreements if not
resolved to the  satisfaction of the former  accountant would have caused him to
make  reference  in  connection  with his  report to the  subject  matter of the
disagreement(s).

         The principal  accountants' reports on the financial statements for any
of the past two years  contained no adverse  opinion or a disclaimer  of opinion
nor was  qualified as to  uncertainty,  audit scope,  or  accounting  principles
except for the "going concern" qualification.

                                    PART III

Item 9.           Directors and Executive Officers of the
                  Registrant and Compliance with Section 16(a)

         The directors and executive  officers of the Company as of December 31,
         1997, are as follows:

          Name                      Age           Position      
-----------------                  -----          ------------------------------
Edward L. Torres                     39           President, CFO, Director
Mark French                          35           Secretary, Treasurer, Director

         The term of office of each director and  executive  officer ends at, or
immediately  after,  the next annual  meeting of  shareholders  of the  Company.
Except as otherwise indicated, no organization by which any  director or officer

                                        8

<PAGE>



has been  previously  employed  is an  affiliate,  parent or  subsidiary  of the
Company.

     Edward L.  Torres has been the  President,  Chief  Financial  Officer,  and
Chairman of the Board of  Directors  of the Company  since July 30, 1995 and was
the President of the Company from March 21, 1995 until June 1, 1995.  Mr. Torres
was also the President and principal shareholder of Commercial Labor Management,
Inc. from its  inception in 1992 until July 30, 1995,  when it ceased to conduct
business.  Commercial  Labor  Management,  Inc.  was engaged in the  business of
leasing employees to a variety of businesses, primarily in California. Since the
cessation of business by Commercial Labor Management,  Inc., Mr. Torres has been
an independent  marketing  consultant for other employee leasing companies.  Mr.
Torres has a Bachelors in Business Administration from South Bay University.

         Mark French has been the  Secretary and a director of the Company since
July 30, 1995 and March 21,  1995,  respectively,  and was the  president of the
Company  from June 1, 1995 until July 30, 1995.  Mr.  French began his career in
investments  and  securities in London,  England  where he was an  institutional
options and bond trader for Barclays De Zoete Wedd, an investment  banking firm.
From 1990 to 1994, Mr. French was a registered  representative with the National
Association of Securities  Dealers,  Inc. holding Series 7, 24, and 63 licenses.
During  that  period he held  positions  with  Chatfield  Dean &  Associates  an
Financial West Group.  Since 1994, Mr. French has been an independent  financial
consultant for different companies seeking to raise capital.

         Section 16(a) of the  Securities  Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors,  and persons who
own more than 10% of a registered class of the Company's equity  securities,  to
file reports of ownership  and changes in ownership of equity  securities of the
Company  with the  Securities  and  Exchange  Commission  and NASDAQ.  Officers,
directors and  greater-than  10% shareholders are required by the Securities and
Exchange Commission regulation to furnish the Company with copies of all Section
16(a) filings.

         1. The  following  people did not file any reports  under Section 16(a)
during the most recent fiscal year:

         a.   Edward Torres                       President and Director
         b.   Mark Richardson                     Shareholder
         c.   Mark French                         Vice President and Director


                                        9

<PAGE>



         2. For each person, listed by subparagraph letter above:

Number of late                Number of                     Known failures
reports                       transactions not              to file forms
                              reported on a
                              timely basis
----------------              ---------------------         --------------
a.       none                               none                none

b.       none                               none                none

c.       none                               none                none

Item 10.          Executive Compensation

         The Company  accrued no  compensation  to the  executive  officers as a
group for  services  rendered to the Company in all  capacities  during the 1997
fiscal year. No one executive officer received,  or has accrued for his benefit,
in excess of $60,000  for the year.  No cash  bonuses  were or are to be paid to
such persons.

         The Company does not have any employee incentive stock option plans.

         There are no plans pursuant to which cash or non-cash  compensation was
paid or  distributed  during the last fiscal year,  or is proposed to be paid or
distributed in the future,  to the executive  officers of the Company.  No other
compensation not described above was paid or distributed  during the last fiscal
year to the executive  officers of the Company.  There are no compensatory plans
or  arrangements,  with respect to any  executive  office of the Company,  which
result or will result from the resignation,  retirement or any other termination
of such individual's  employment with the Company or from a change in control of
the Company or a change in the individual's  responsibilities following a change
in control.


                                       10

<PAGE>

<TABLE>
<CAPTION>


                                     SUMMARY COMPENSATION TABLE OF EXECUTIVES

                                      Annual Compensation                                  Awards

<S>                 <C>            <C>                <C>            <C>                         <C>                     <C>
Name and            Year           Salary             Bonus          Other Annual                Restricted              Securities
Principal                          ($)                ($)            Compensation                Stock                   Underlying
Position                                                             ($)                         Award(s)                Options/
                                                                                                 ($)                     SARs (#)
------------------------------------------------------------------------------------------------------------------------------------

Edward L.           1995           0                  0              0                           0                       0
Torres,
President

                    1996           0                  0              0                           0                       0

                    1997           0                  0              0                           0                       0
------------------------------------------------------------------------------------------------------------------------------------

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

Mark                1995           0                  0              0                           0                       0
French,
Secretary

                    1996           0                  0              0                           0                       0

                    1997           0                  0              0                           0                       0

</TABLE>

         Option/SAR Grants Table (None)

     Aggregated  Option/SAR  Exercises in Last Fiscal Year an FY-End  Option/SAR
value (None)

         Long Term Incentive Plans - Awards in Last Fiscal Year (None)

                   DIRECTOR COMPENSATION FOR LAST FISCAL YEAR

(Except for  compensation of Officers who are also Directors which  Compensation
is listed in Summary Compensation Table of Executives)

<TABLE>
<CAPTION>

<S>                                  <C>                 <C>                <C>                      <C>             <C>
                                     Cash Compensation                                   Security Grants

Name                                 Annual              Meeting            Consulting               Number          Number of
                                     Retainer            Fees               Fees/Other               of              Securities
                                     Fees ($)            ($)                Fees ($)                 Shares          Underlying
                                                                                                     (#)             Options/SARs(#)
------------------------------------------------------------------------------------------------------------------------------------

A. Director                          0                   0                  0                        0                0
Edward L. Torres

B. Director                          0                   0                  0                        0                0
Mark French

</TABLE>

Item 11.          Security Ownership of Certain Beneficial
                  Owners and Management

         The following  table sets forth  information,  as of December 31, 1997,
with respect to the beneficial  ownership of the Company's $.05 par value common
stock by each  person  known by the Company to be the  beneficial  owner of more
than five percent of the outstanding common stock.


                                       11

<PAGE>



      Stock      Names and Address           Beneficial           Percent
Title of Class   of Beneficial Owner         Ownership            of Class
--------------   ---------------------       -----------          --------
Common           Mark J. Richardson (3)       7,530,000             92.1%
                 1299 Ocean Avenue
                 Suite 900
                 Santa Monica, CA  90401

                  Security Ownership of Management (Continued)

         The following  table sets forth  information,  as of December 31, 1997,
with respect to the beneficial  ownership of the Company's $.05 par value common
stock by the directors and officers of the Company,  both  individually and as a
group.

      Stock       Names and Address           Beneficial        Percent
Title of Class    of Beneficial Owner         Ownership         of Class
--------------   --------------------         ----------        --------
Common            Edward L. Torres (1)               0               0
                  208 Mira Mar Ave.
                  Suite One
                  Long Beach, CA  90803

Common            Mark French (2)              100,000             1.2%
                  967 Scottland Drive
                  Mt. Pleasant, SC  29464


(1) Mr.  Torres is  the President,  Chief Financial  Officer and Chairman of the
    Board of Directors of the Company.


(2) Mr. French is the Secretary and a director of the Company.

(3) Mr. Richardson is a consultant to the Company.

Item 12.          Certain Relationships and Related Transactions


         On March 21, 1995,  the Company  entered into an Agreement  and Plan of
Reorganization  with  Commercial  Labor  Management,  Inc.  pursuant to which it
acquired 100% of the total issued and outstanding  common and preferred stock of
Commercial  Labor  Management,  Inc.  from  Edward  L.  Torres in  exchange  for
1,923,380  shares of newly issued common stock of the Company.  Upon the closing
of the reorganization, Mr. Torres became the President of the Company as well as
remaining  the  President  of its  wholly  owned  subsidiary,  Commercial  Labor
Management, Inc. As it became apparent that the reorganization would be mutually
rescinded, Mr. Torres temporarily resigned from his position as President of the
Company  while  the  Rescission   Agreement  was   negotiated,   executed,   and
implemented. Mr. Torres tendered all shares of the Company which had been issued
to him back to the Company  pursuant  to the  Rescission  Agreement.  Commercial
Labor  Management,  Inc. ceased  to conduct  business on July 30, 1995 after the


                                       12

<PAGE>




rescission, and Mr. Torres  then  became the President and Chairman of the Board
of Directors of the Company.  See "Item 1.  BUSINESS - Background."

     On July 1, 1995, the Company  received a  non-interest  bearing demand note
payable to it by Edward L. Torres,  the owner of  Commercial  Labor  Management,
Inc., in connection  with the Rescission  Agreement  entered into by the Company
and Commercial Labor Management,  Inc.  effective July 1, 1995.  Pursuant to the
demand note, Mr. Torres agreed to treat the $180,000  expended by the Company in
connection with its attempted  acquisition of Commercial Labor Management,  Inc.
as an advance by the Company to Mr. Torres.  Mr. Torres agreed to repay $180,000
to the Company upon demand. Commercial Labor Management,  Inc. ceased conducting
business in July 1995,  and the Company is not  currently  paying Mr. Torres any
compensation for his services as an officer or director of the Company.

         On December 31, 1996,  the Company  wrote off the $180,000 note payable
to it by Edward L. Torres, its President and Chairman of the Board of Directors,
as an uncollectible debt. The Company believes that Mr. Torres does not have the
financial capability to repay the note. Furthermore, since July 1995, Mr. Torres
has been providing  valuable  services for the Company for which he has received
no  compensation  to date.  The Company is  contemplating  issuing shares of its
common stock to Mr. Torres as compensation for his services to the Company.  The
Company is also contemplating issuing shares of its common stock to Mark French,
the corporate  Secretary and a director,  in consideration for services rendered
by him for the  Company  since  March 21,  1995.  The number of shares of common
stock to be issued to Mr.  Torres and Mr.  French for services  rendered has not
yet been determined.

         In October  1997,  the Company  conveyed all of its right,  title,  and
interest in and to 7.5 acres of land to the holder of a demand  note  payable by
the Company  and  secured by the land,  in  consideration  for a  discharge  and
cancellation  of the demand note in full.  In June 1997,  the holders of the 180
shares of the Company's  Series A Convertible  Preferred  stock converted all of
their Series A Convertible  Preferred  Stock into 360,000 shares of common stock
(post reverse  split  one-for-20).  In December  1997,  the Company  amended its
Articles  of  Incorporation  to  increase  its  authorized   common  stock  from
15,000,000 shares to 50,000,000  shares. At that time, the Company also effected
a one for 20 reverse  split of its  issued  and  outstanding  common  stock.  On
December 31, 1997,  the Company issued  7,530,600  shares of its common stock to
Mark J. Richardson in consideration for services performed for the Company.

                                       13

<PAGE>

                                     PART IV

Item 13.          Exhibits and Reports on Form 8-K


                  The following documents are filed as part of this report:

                  1.       Reports on Form 8-K: dated July 1
                           1995 and filed November 12, 1997

                  2.       Exhibits:


                                       14
<PAGE>



                            CERTIFICATE OF AMENDMENT
                                       OF
                           ARTICLES OF INCORPORATION
                                       OF
                       COMMERCIAL LABOR MANAGEMENT, INC.


     Commercial Labor Management, Inc., a Nevada corporation (the "Corporation")
does hereby certify that:

1. The Articles of Incorporation of the Corporation shall be amended by revising
Article III to read in full as follows:

                                  "ARTICLE III

                                SHARES OF STOCK
                                ---------------

     The  maximum  number of  shares of all  classes  which the  Corporation  is
authorized  to  have  outstanding  is  fifty-two  million   (52,000,000)  shares
consisting of fifty million  (50,000,000)  shares of Common Stock, all par value
$.001 per share, and two million  (2,000,000) shares of Preferred Stock, all par
value $.001 per share.  The holders of  Preferred  Stock shall have such rights,
preferences,  and privileges as may be determined, prior to the issuance of such
shares, by the Board of Directors."

     2. The issued an  outstanding  common  stock of the  Corporation  is hereby
reverse  split  pursuant  to which one share of common  stock will be issued and
outstanding for every 20 shares of common stock currently issued and outstanding
as of the effective date of this amendment.

     3. The  foregoing  amendment has been duly  authorized  and approved by the
Board of Directors of the Corporation.

     4. The  foregoing  amendment  has been duly  adopted  and  approved  by the
written  consent of the  stockholders  holding  no less than a  majority  of the
Corporation's outstanding stock entitled to vote thereon.

Dated:  December 18, 1997          COMMERCIAL LABOR MANAGEMENT, INC.


                                   /s/ Edward Torres
                                   ----------------------------------
                                   Edward Torres, President


                                   /s/ Edward Torres
                                   ----------------------------------
                                   Edward Torres, Secretary


STATE OF CALIFORNIA      }
                         }  SS.
COUNTY OF LOS ANGELES    }


     On December 18, 1997,  before me, Sheryl J. McLamb,  a notary public in and
for said state, personally appeared Edward Torres,  personally known to me to be
the person whose name is subscribed to the within instrument and acknowledged to
me that he  executed  the  same in his  authorized  capacities,  and that by his
signature on the  instrument  the entity upon behalf of which the persons acted,
executed the instrument.

     WITNESS my hand and official seal.


Signature: /s/ Sheryl J. McLamb              Sheryl J. McLamb
          ------------------------           Comm. #1115587
                                             Notary Public - California
                                             Los Angeles County
                                             My Comm. Expires Nov. 3, 2000

<PAGE>



                            CERTIFICATE OF AMENDMENT
                                       OF
                           ARTICLES OF INCORPORATION
                                       OF
                       COMMERCIAL LABOR MANAGEMENT, INC.

     Commercial Labor Management, Inc., a Nevada corporation (the "Corporation")
does hereby certify that:

     1. The issued and  outstanding  common stock of the  Corporation  is hereby
reverse  split  pursuant  to which one share of common  stock will be issued and
outstanding  for  every  five  shares  of  common  stock  currently  issued  and
outstanding as of the effective date of this amendment.

     2. The  foregoing  amendment has been duly  authorized  and approved by the
Board of Directors of the Corporation.

     3. The  foregoing  amendment  has been duly  adopted  and  approved  by the
written  consent of the  stockholders  holding  no less than a  majority  of the
Corporation's outstanding stock entitled to vote thereon.

Dated:  July 1, 1998                    COMMERICAL LABOR MANAGEMENT, INC.



                                        /s/ Edward Torres
                                        -----------------------------------
                                        Edward Torres, President



                                        /s/ Edward Torres
                                        -----------------------------------
                                        Edward Torres, Secretary

<PAGE>

STATE OF CALIFORNIA      }
                         } SS.
COUNTY OF ANGLES         }


     On July 1, 1998,  before me,  Caroline A. Rhuys, a notary public in and for
said state,  personally  appeared  Edward  Torres,  proved to me on the basis of
satisfactory  evidence to be the person whose name is  subscribed  to the within
instrument  and  acknowledged  to me that he executed the same in his authorized
capacities,  and that by his signature on the  instrument the entity upon behalf
of which the persons acted, executed the instrument.

WITNESS my hand and official seal.


Signature: /s/ Caroline A. Rhuys                  CAROLINE A. RHUYS
          ---------------------------             Commission #1173448
                                                  Notary Public - California
                                                  Los Angeles County
                                                  My Comm. Expires Feb 12, 2002
 

<PAGE>


                                ARMANDO C. IBARRA
                           CERTIFIED PUBLIC ACCOUNTANT
                          (A Professional Corporation)

Armando C. Ibarra, CPA                                            Members of the
Armando Ibarra, Jr., CPA                                   California Society of
Lawrence Hayman, CPA, Ret                           Certified Public Accountants


                          INDEPENDENT AUDITOR'S REPORT


To the Board of Directors and Stockholders
of Commercial Labor Management, Inc.


We have audited the accompanying  balance sheet of Commercial Labor  Management,
Inc. (a Nevada  corporation)  as of  December  31, 1997 and 1996 and the related
statements of income,  stockholder's equity and retained earnings, and statement
of 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 audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatements.  An audit 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  audits  provide  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 Commercial Labor Management,
Inc. as of December 31, 1997 and 1996,  and the results of  operations,  and its
cash flows for the years then ended in conformity  with the  generally  accepted
accounting principles.

 /s/ Armando C. Ibarra 


March 10, 1998

                637 Third Avenue, Suite H, Chula Vista, CA 91910
Tel:  (619) 422-1348                                        Fax:  (619) 422-1465





                                       F-1


<PAGE>

<TABLE>
<CAPTION>


                                         COMMERCIAL LABOR MANAGEMENT, INC.
                                                   BALANCE SHEET





<S>                                                          <C>                           <C>
                                                      ASSETS


                                                             December 31,                  December 31,
                                                             1997                          1996
                                                           ---------------------------------------------------------------

CURRENT ASSETS
Note receivable                                                                       $0                              $0
                                                           ---------------------------------------------------------------

TOTAL CURRENT ASSETS                                                                   0                               0

FIXED ASSETS
Tax benefit                                                                      202,326                         202,326
Land                                                                                   0                         380,000
                                                           ---------------------------------------------------------------

TOTAL FIXED ASSETS                                                               202,326                         582,326
                                                           ---------------------------------------------------------------

TOTAL ASSETS                                                                    $202,326                        $582,326
                                                           ===============================================================




                           The Accompanying Notes are an Integral Part of This Statement

</TABLE>



                                                        F-2


<PAGE>

<TABLE>
<CAPTION>


                                         COMMERCIAL LABOR MANAGEMENT, INC.
                                                   BALANCE SHEET






                                       LIABILITIES AND STOCKHOLDERS' EQUITY


<S>                                                               <C>                          <C>
                                                                  December 31,                 December 31,
                                                                  1997                         1996
                                                                ----------------------------------------------------------

CURRENT LIABILITIES:
Accounts payable                                                                     $25,875                     $25,875
Note payable for land                                                                      0                      88,289
                                                                ----------------------------------------------------------

TOTAL CURRENT LIABILITIES                                                             25,875                     114,164
                                                                ----------------------------------------------------------

TOTAL LIABILITIES                                                                     25,875                     114,164

STOCKHOLDERS' EQUITY:
Preferred convertible stock,
$1,000 par value 1,000 shares
authorized, 180 issued &
outstanding                                                                                                      180,000
Common stock, $.001 par value,
50,000,000 shares authorized,
8,173,804 issued and outstanding
(until June 1997)                                                                    231,813                      51,813
Paid-in Capital                                                                      572,506                     864,217
Accumulated deficit                                                                (627,868)                   (627,868)
                                                                ----------------------------------------------------------

TOTAL STOCKHOLDERS' EQUITY                                                           176,451                     468,162
                                                                ----------------------------------------------------------

TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY                                                                $202,326                    $582,326
                                                                ==========================================================






                           The Accompanying Notes are an Integral Part of This Statement


</TABLE>



                                       F-3


<PAGE>

<TABLE>
<CAPTION>


                                         COMMERCIAL LABOR MANAGEMENT, INC.
                                                STATEMENT OF INCOME






<S>                                                           <C>                           <C>
                                                              December 31,                  December 31,
                                                               1997                          1996
                                                             -------------------------------------------------------------

Expenses:
Bad debt expense                                                                                                $180,000
Professional fees                                                                                                 25,875
                                                             -------------------------------------------------------------

TOTAL EXPENSES                                                                           0                    ($205,875)
                                                             -------------------------------------------------------------

Net Income/(Loss) Before Taxes                                                                                 (205,875)

Income Tax Benefit                                                                                              (70,000)
                                                             -------------------------------------------------------------

NET INCOME (LOSS)                                                                        0                     $135,875)
                                                             -------------------------------------------------------------

Weighted Average Number of
Shares Outstanding                                                              10,205,625                     9,264,585

Income Per Share of Common Stock
                                                                                         0                             0
                                                             =============================================================




                           The Accompanying Notes are an Integral Part of This Statement


</TABLE>

                                                        F-4


<PAGE>

<TABLE>
<CAPTION>


                                         COMMERCIAL LABOR MANAGEMENT, INC.
                                              STATEMENT OF CASH FLOW



<S>                                                                               <C>                      <C>
                                                                                  December                 December
                                                                                  31, 1997                 31, 1996
                                                                                ---------------------------------------------------

CASH FLOWS FROM OPERATING ACTIVITIES

Net Cash from Operating Activities                                                                     0                        0
                                                                                ---------------------------------------------------

CASH FLOWS USED IN INVESTING ACTIVITIES

Net Cash from Investing Activities                                                                     0                        0
                                                                                ---------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES

Net Cash from Financing Activity                                                                       0                        0
                                                                                ---------------------------------------------------

Net Increase (Decrease) in Cash                                                                        0                        0

Cash at beginning of year                                                                              0                        0
                                                                                ---------------------------------------------------

Cash at end of year                                                                                   $0                       $0
                                                                                ===================================================







                               The Accompanying Notes are an Integral Part of This Statement


</TABLE>



                                                            F-5


<PAGE>

<TABLE>
<CAPTION>


                                             COMMERCIAL LABOR MANAGEMENT, INC.
                                      CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                        FROM DECEMBER 31, 1993 TO DECEMBER 31, 1997


<S>                        <C>              <C>        <C>           <C>        <C>           <C>             <C>            <C>
                                   Common Stock             Preferred Stock
                         -------------------------------------------------------
                                                                                Additional
                                                       Number of                Paid-in       Treasury
                           Number of                   Shares                   Capital       Stock &         Accumulated
                           Shares           Amount                   Amount                   Adj's           Deficit        Total
                         -----------------------------------------------------------------------------------------------------------

BALANCE -
12/31/93                     800,000         40,000                             219,192       (171,685)       105,287       364,479

        1994 ACTIVITY
Exercise of
warrants                      50,000
2-for-1 split
3/1/94                       850,000
Warrants
exercised                    197,867         11,813                             473,340        171,685                      656,838
Adjust stock to
reflect the 1993
SEMAC debt
exchange                    (395,141)
Sale of
operations                  (619,200)                                           171,685
Loss for the year
ended 12/31/94
                                                                                                             (590,767)     (590,767)
                         -----------------------------------------------------------------------------------------------------------

BALANCE - Dec.
31, 1994                     883,526        $51,813                             $864,217              0      ($485,480)    $430,550
                         ===========================================================================================================


        1995 ACTIVITY
3-for-1 reverse
split 3/20
1995 Net                    (589,018)
Transactions
Issuance of                8,970,076
Preferred Stock
Loss for the
period ended                                           180,000       180,000                                                180,000
9/30/95

                                                                                                               (6,513)       (6,513)
                         -----------------------------------------------------------------------------------------------------------

BALANCE - Dec.
31, 1995                   9,264,584        $51,813    180,000       180,000    $864,217              0      ($491,993)    $604,037
                         ===========================================================================================================

    1996 ACTIVITY
Loss for the year
ended 12/31/96
                                                                                                             (135,875)     (135,875)
                         -----------------------------------------------------------------------------------------------------------

BALANCE - June
30, 1996                   9,264,584        $51,813    180,000       180,000    $864,217              0      ($627,868)    $468,162
                         ===========================================================================================================

    1997 ACTIVITY
Cancellation of
land transaction                                                                                                           (291,711)
General                                                                         (291,711)
cancellations
                          (2,603,548)
                         -----------------------------------------------------------------------------------------------------------

BALANCE - Mar.
31, 1997                   6,661,036        $51,813    180,000       180,000    $572,506              0      ($627,868)    $176,451
                         ===========================================================================================================

Cancellations
Issuances/Con-            (4,425,000)
versions                  10,628,048        180,000    180,000       180,000    $572,506              0      ($627,868)     176,451
                         -----------------------------------------------------------------------------------------------------------

BALANCE - June
30, 1997                  12,864,048        231,813          0             0    $572,506              0      ($627,868)     176,451
                         ===========================================================================================================

BALANCE - Sept.
30, 1997                  12,864,048        231,813          0             0    $572,506              0      ($627,868)     176,451
                         ===========================================================================================================

20-for-1 reverse
split                        643,204
New issuances              7,530,600
                         -----------------------------------------------------------------------------------------------------------


BALANCE - Dec.
31, 1997                   8,173,804        231,813          0             0    $572,506              0      ($627,868)     176,451
                         ===========================================================================================================





                                         The Accompanying Notes are an Integral Part of This Statement

</TABLE>





                                                                      F-8


<PAGE>



                           COMMERCIAL LABOR MANAGEMENT
                        NOTES TO THE FINANCIAL STATEMENT
                                DECEMBER 31, 1997


1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

         General:

         Commercial  Labor  Management,  Inc.  (formerly XL Corp.)  is  a Nevada
         corporation (the "Company") was organized October 19, 1988.

         The  Company  was  originally  incorporated  in Nevada  under the Tokyo
         Raiders on October 19,  1988.  In 1990,  the Company  acquired  certain
         rights to a pizza  franchise and changed its name to Club USPN, Inc. In
         June of 1993, the Company acquired Sono International,  Inc., but those
         operations were  discontinued,  and the shares of Sono were sold to the
         original shareholders of Sono. In March of 1995, the Board approved the
         merger with Commercial  Labor Management which was handled as a reverse
         merger and also approved a name change to Commercial Labor  Management.
         However, that merger was rescinded and never completed.  The Company is
         currently seeking other potential mergers or acquisitions.

         Income Tax Reporting:

         The Company files a corporate tax return in the U.S.

         Earnings per share:

         The  calculations  of earnings per share was determined by dividing the
         net income or loss by the computed  weighted  average  number of common
         share outstanding  during the applicable  period.  For 1996, the shares
         outstanding  are 9,264,584.  For 1997,  the  calculation is as follows:
         9,264,584  shares  outstanding for 7 weeks,  6,661,036 were outstanding
         for 9 weeks,  11,941,528 for 1 week,  12,864,084 for  approximately  23
         weeks, and 8,173,804 for  approximately 12 weeks,  equals an average of
         10,205,625.

         Income Taxes:

         In December  1992,  the  Financial  Accounting  Standards  Board issued
         Statement of Accounting  Standards  Number 109,  "Accounting for Income
         Taxes"  (FASB 109).  Adoption of FASB 109 is required  for fiscal years
         beginning after December 15, 1992. The Company follows the requirements
         set forth in FASB 109.



                                       F-9


<PAGE>


                           COMMERCIAL LABOR MANAGEMENT
                        NOTES TO THE FINANCIAL STATEMENT
                                DECEMBER 31, 1997

2.       PAID IN CAPITAL:
         ---------------

         Paid in capital is made up in part by contributions of office furniture
         & equipment,  manufacturing equipment,  trade receivable,  and accounts
         payable  in  exchange  for  common  stock.  Common  stock was issued to
         shareholders  of record in exchange for these net assets.  Also, in the
         forth  quarter  of  1994,  the  Company  issued  some  common  stock to
         individuals to whom money was owed for professional  services  rendered
         prior to September 30, 1994.

3.       CAPITAL STOCK:

         Preferred Convertible Stock
         ---------------------------
         Each share of Series A Convertible  Preferred Stock is convertible,  at
         certain times or on the  occurrence of certain  events,  into shares of
         Company  Common  stock valued at 70% of the market  place.  The Company
         authorized 1,000 shares,  and there were 180 shares issued.  The shares
         were  converted to 360,000  shares of common stock in the third quarter
         of 1997.

         Common Stock
         ------------
         The authorized  capital stock of the Company  consists of Common Stock.
         Authorized shares of Common Stock at September 30, 1995 were 15,000,000
         and increased to  50,000,000  shares in April of 1997 at $.05 par value
         subsequently  reduced  to  $.001  par  value,   9,264,584  shares  were
         outstanding  as  of  December  31,  1996;  and  8,173,804  shares  were
         outstanding  as of December 31,  1997. A 20 for 1 reverse  split of the
         outstanding  Common  Stock  occurred  in December  1997,  and after the
         reverse split,  the Company  issued  7,530,600 new shares of its Common
         Stock.

4.       TAX BENEFIT:
         -----------

         The Company has a loss carryforward in the amount of $821,659 available
         to offset  future  taxable  income.  These losses expire as they offset
         income or can be carryforwarded  for a maximum of 15 years. The Company
         believes  it  will  use the  credit  before  it  expires.  However,  no
         estimates of future income are  available,  so the benefit is reflected
         as a long-term asset.







                                      F-10


<PAGE>



                                      INDEX
                                                       Form 10-K
Regulation                                             Consecutive
S-K Number     Exhibit                                 Page Number
-----------    ---------------                         -------------------------
3.1            Articles of                             *Incorporated by
               Incorporation                           reference to Registration
                                                       Statement #2-87742-D

3.2            Bylaws                                  *Incorporated by
                                                       reference to Registration
                                                       Statement #2-87742-D

3.3            Amendments to Articles
               of Incorporation filed
               May 1998

3.4            Amendments to the Articles
               of Incorporation filed
               August 1998

27.1           Financial Data Schedule                 F-12




<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.

                                            COMMERCIAL LABOR MANAGEMENT, INC.
                                            (Registrant)

Date:  March 24, 1999
                                            /s/ Edward L. Torres
                                            ------------------------------------
                                            President


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

                                           COMMERCIAL LABOR MANAGEMENT, INC.
                                           (Registrant)

Date:  March 24, 1999

                                           -------------------------------------
                                           Director


                                           -------------------------------------
                                           Director


                                           -------------------------------------
                                           Director