UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

[x]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934
                   For the fiscal year ended - March 31, 2006
                                       OR
[ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934

                         For the transition period from:

                          Commission file number: 34884

                FEDERAL MORTGAGE CORPORATION OF PUERTO RICO, INC.
                 (Name of Small Business Issuer in its charter)


           Delaware                                             02-0703753
(State or other jurisdiction                                 (I.R.S. Employer
 incorporation or organization)                           Identification Number)

                    444 Park Forest Way, Wellington, FL 33414
                    (Address of principal executive offices)

                     Issuer's telephone number: 561-798-4294

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

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

                    Common Stock, $0.005 par value per share
                                (Title of class)

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

Check if there is no disclosure of delinquent filers in response 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. [ ]

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

State the aggregate market value of the voting stock held by non- affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days. (See definition of affiliate in Rule 12b-2 of the Exchange Act): $ -0-

Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes [ ] No [ ] Not applicable.

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
                        100,000,000 as of June 30, 2006.

   Transitional Small Business Disclosure Format (Check one): Yes [ ]; No [X]

                                        1
<PAGE>

                                     PART I

ITEM 1.  BUSINESS

Federal Mortgage Corporation of Puerto Rico, Inc. (the "Company") was
incorporated on January 5, 1970, under the laws of the State of Delaware as
Modulated Building Systems, Inc., to conduct and carry on the business of
builders and contractors for the purpose of building, erecting, altering,
repairing, wrecking, dig or any other work in connection with any and all
classes of building and improvement of any kind and nature whatsoever; to
design, draw, and prepare plans, specifications and estimates for and to
supervise, bid upon, enter into, and execute contracts for the construction and
alteration of buildings, structures, houses, piers, wharves, canals, docks,
slips, dams, bridges, viaducts, railroads, railways, right-of-ways, cut, fills,
roads, avenues, streets, fortifications, conduits, pipe lines, electric or other
transmission lines, subways, tunnels, foundations, mines, shafts, wells, walls,
waterways, manufactories, plans, machinery, drainage, irrigation, and sewage
disposal systems and any other engineering or construction project or enterprise
of any nature whatsoever; to carry on and conduct any and every kind of general
contracting construction, and engineering business; to carry on the trade or
business of manufacturing, producing, adapting, preparing, buying, selling, and
otherwise dealing in any and all kinds of furniture and supplies, and to
manufacture, produce, purchase, adapt, prepare, use, sell, or otherwise deal in
any materials, articles, or things required for, in connection with, or
incidental to, the manufacture, use, purchase, and sale of, or other, dealing in
any and all kinds of furniture and supplies, and generally to carry on any other
manufacturing business which can conveniently be carried on in conjunction with
any of the matters aforesaid; to engage in and carry on the business of
acquiring, owning, buying, selling, leasing, mortgaging, exchanging,
manufacturing, distributing, marketing, or otherwise dealing in timber, lumber,
and the various products thereof; to conduct logging operations and operate
mills for the manufacture of lumber and products thereof; to acquire, erect,
maintain, and operate mill privileges, water rights, mills and other buildings,
machinery, and all appliances; to carry on in any capacity any business
appertaining to, or which, in the judgment of the Company, may at any time be
convenient; to acquire, by purchase, lease, or otherwise, and to own, mortgage,
equip, maintain, and operate woodworking plants, sash and door factories,
sawmills, planning mills, lumber yards, and other works, plants, machinery, and
equipment for the manufacture and sale of sash, doors, frames, moulding,
millwork, and lumber of all description; to produce, manufacture, glaze, paint,
and otherwise prepare for use, market and sale, and to sell and otherwise
dispose of any and all products and articles made wholly or partly of wood or
similar material; to engage in and transact a general lumber and mill business
in any and all its branches; to deal in with lumber, timber, wood and products
of any and all kinds, and in any and all forms; and to manufacture, purchase, or
otherwise acquire, and to sell, and otherwise deal in and with flooring,
shingles, laths, staves, boxes, barrels, and other articles and things made in
whole or in part of wood, and contractors' and builders' supplies of every kind
and nature; and to engage in any lawful act of activity for which corporations
may be organized under the General Corporation Law of Delaware. On April 17,
1972, the Company amended its name to Federal Mortgage Corporation of Puerto
Rico, Inc. The Company conducted mortgage-banking business in Puerto Rico,
Florida and Minnesota. The Company actively engaged in the placement of
commercial and residential project loans through its lending sources and at the
same time retained servicing of a major portion of these loans for the lenders.
The Company decided, because of market conditions, to discontinue operations in
the early part of 1975, at which time it disposed of all of its assets and
resolved all of its liabilities. No further business was engaged in by the
Company since the disposition of its assets in 1975. On July 15, 2003, the
Company's charter was renewed retroactively back to February 24, 1976, the date
of the expiration of the charter. Its purpose is to engage in any lawful
corporate undertaking, including, but not limited to, selected mergers and
acquisitions. The Company had been in the developmental stage and had no
operations since the renewal of its charter. Effective March 31, 2005, the
Company acquired Pride Lending, Inc. in exchange for 90,000,000 shares of its
common stock. Further references to the Company include the subsidiary, Pride
Lending, Inc. The Board of Directors of the Company has elected to acquire Pride
Lending, Inc. and therefore be in the lending business as described below under
"BUSINESS OF ISSUER". The Company may make additional acquisitions if
opportunities are available. The Company is not pursuing any such opportunities
at this time.

The Company's business is subject to numerous risk factors, including the
following:

                                        2
<PAGE>


BUSINESS OF ISSUER: PRINCIPAL PRODUCTS AND SERVICES

Federal Mortgage Corporation of Puerto Rico is a holding company and has no
business operations. Its wholly owned subsidiary, Pride Lending, Inc., is in the
lending business. The Company's source of revenue is from interest on mortgage
and other notes receivable.

ACQUISITION OF OPPORTUNITIES

While the Company has now become engaged in the lending business, it may choose
to make further acquisitions for business expansion if opportunities arise. In
implementing a structure for a particular business acquisition, the Company may
become a party to a merger, consolidation, reorganization, joint venture, or
licensing agreement with another corporation or entity. It may also acquire
stock or assets of an existing business. On the consummation of a transaction,
it is probable that the present management and shareholders of the Company will
no longer be in control of the Company. In addition, the Company's directors
may, as part of the terms of the acquisition transaction, resign and be replaced
by new directors without a vote of the Company's shareholders or may sell their
stock in the Company. Any and all such sales will only be made in compliance
with the securities laws of the United States and any applicable state.

It is anticipated that any securities issued in any such reorganization would be
issued in reliance upon exemption from registration under applicable federal and
state securities laws. In some circumstances, however, as a negotiated element
of its transaction, the Company may agree to register all or a part of such
securities immediately after the transaction is consummated or at specified
times thereafter. If such registration occurs, of which there can be no
assurance, it will be undertaken by the surviving entity after the Company has
successfully consummated a merger or acquisition and the Company is no longer
considered a "shell" company. Until such time as this occurs, the Company does
not intend to register any additional securities. The issuance of substantial
additional securities and their potential sale into any trading market which may
develop in the Company's securities may have a depressive effect on the value of
the Company's securities in the future, if such a market develops, of which
there is no assurance.

While the actual terms of a transaction to which the Company may be a party
cannot be predicted, it may be expected that the parties to the business
transaction will find it desirable to avoid the creation of a taxable event and
thereby structure the acquisition in a so-called "tax-free" reorganization under
Sections 368(a)(1) or 351 of the Internal Revenue Code (the "Code"). In order to
obtain tax-free treatment under the Code, it may be necessary for the owners of
the acquired business to own 80% or more of the voting stock of the surviving
entity. In such event, the shareholders of the Company would retain less than
20% of the issued and outstanding shares of the surviving entity, which would
result in significant dilution in the equity of such shareholders.

As part of the Company's investigation, officers and directors of the Company
may personally meet with management and key personnel, may visit and inspect
material facilities, obtain analysis of verification of certain information
provided, check references of management and key personnel, and take other
reasonable investigative measures, to the extent of the Company's limited
financial resources and management expertise. The manner in which the Company
participates in an opportunity will depend on the nature of the opportunity, the
respective needs and desires of the Company and other parties, the management of
the opportunity and the relative negotiation strength of the Company and such
other management.

With respect to any merger or acquisition, negotiations with target company
management is expected to focus on the percentage of the Company which the
target company shareholders would acquire in exchange for all of their
shareholdings in the target company. Depending upon, among other things, the
target company's assets and liabilities, the Company's shareholders will in all
likelihood hold a substantially lesser percentage ownership interest in the
Company following any merger or acquisition. The percentage ownership may be
subject to significant reduction in the event the Company acquires a target
company with substantial assets. Any merger or acquisition effected by the
Company can be expected to have a significant dilutive effect on the percentage
of shares held by the Company's then shareholders.

                                        3
<PAGE>

The Company will participate in a business opportunity only after the
negotiation and execution of appropriate written agreements. Although the terms
of such agreements cannot be predicted, generally such agreements will require
some specific representations and warranties by all of the parties thereto, will
specify certain events of default, will detail the terms of closing and the
conditions which must be satisfied by each of the parties prior to and after
such closing, will outline the manner of bearing costs, including costs
associated with the Company's attorneys and accountants, will set forth remedies
on default and will include miscellaneous other terms.

As stated hereinabove, the Company will not acquire or merge with any entity
which cannot provide independent audited financial statements within a
reasonable period of time after closing of the proposed transaction. The Company
is subject to all of the reporting requirements included in the 1934 Act.
Included in these requirements is the affirmative duty of the Company to file
independent audited financial statements as part of its Form 8-K to be filed
with the Securities and Exchange Commission upon consummation of a merger or
acquisition, as well as the Company's audited financial statements included in
its annual report on Form 10-K (or 10-KSB, as applicable). If such audited
financial statements are not available at closing, or within time parameters
necessary to insure the Company's compliance with the requirements of the 1934
Act, or if the audited financial statements provided do not conform to the
representations made by the candidate to be acquired in the closing documents,
the closing documents will provide that the proposed transaction will be
voidable, at the discretion of the present management of the Company. If such
transaction is voided, the agreement will also contain a provision providing for
the acquisition entity to reimburse the Company for all costs associated with
the proposed transaction.

The Company does not intend to provide the Company's security holders with any
complete disclosure documents, including audited financial statements,
concerning an acquisition or merger candidate and its business prior to the
consummation of any acquisition or merger transaction.

COMPETITION

The Company will remain an insignificant participant among the firms which
engage in the lending business and in the acquisition of business opportunities.
There are many established venture capital and financial concerns which have
significantly greater financial and personnel resources and technical expertise
than the Company. In view of the Company's combined limited financial resources
and limited management availability, the Company will continue to be at a
significant competitive disadvantage compared to the Company's competitors.

ITEM 2. DESCRIPTION OF PROPERTY.

The Company currently maintains a mailing address at 444 Park Forest Way,
Wellington, FL 33414, which is the address of its President. The Company pays no
rent for the use of this mailing address. The Company does not believe that it
will need to maintain an office at any time in the foreseeable future in order
to carry out its plan of operations described herein.

ITEM 3. LEGAL PROCEEDINGS.

In the opinion of counsel there are no known legal proceedings or outstanding
judgments against the Company, nor any pending litigation.

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

No matters were submitted during the fourth quarter of the calendar year covered
by this report to a vote of security holders.


                                        4
<PAGE>

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

(a) Market Information.

There is not a market for the Company's securities.

(b) Holders.

As of March 31, 2006, there were fifty-three (53) holders of the Company's
Common Stock. One of the shareholders holds 302,178 shares in one certificate
for the benefit of approximately 800 shareholders.

(c) Dividends.

Except for the special dividend paid by Pride Lending, Inc. to its parent
company prior to the acquisition, Federal Mortgage Corporation of Puerto Rico
has not paid a cash dividend on its Common Stock during the years ended March
31, 2006 and 2005, and has no present intention to declare or pay cash dividends
on the Common Stock in the foreseeable future. The Company intends to retain any
earnings, which it may realize in the foreseeable future to finance its
operations. Future dividends, if any, will depend on earnings, financing
requirements and other factors.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
        FINANCIAL CONDITIONS.

The following discussion should be read in conjunction with the information
contained in the financial statements of the Company and the Notes thereto
appearing elsewhere herein.

Year Ended March 31, 2006

Revenue for the year ended March 31, 2006 was approximately $17,000 as compared
to revenue of approximately $42,000 for the year ended March 31, 2005, a
decrease of approximately $25,000. This decrease was principally the result of
the reduction in interest income due to the collection of mortgage notes
receivable. The average revenue per month for the year ended March 31, 2006 was
approximately $1,400 as compared to approximately $3,500 per month for the year
ended March 31, 2005, a decrease of $2,100 per month.

Operating expenses were approximately $15,000 during the year ended March 31,
2006, and approximately $20,000 during the year ended March 31, 2005, a decrease
of approximately $5,000. The average per month decreased from approximately
$1,700 to $1,300, a decrease of approximately $400 per month. The decrease in
operating expenses was primarily the result in the decrease in officer's
compensation to the Company's President and the decrease in professional fees
and other administrative costs.

Net income after provision for income taxes decreased from approximately $18,000
during the year ended March 31, 2005 to approximately $1,600 during the year
ended March 31, 2006, a decrease of approximately $16,400, or approximately
$1,400 per month.

Year Ended March 31, 2005

Revenue for the year ended March 31, 2005 was approximately $42,000 as compared
to revenue of approximately $65,000 for the year ended March 31, 2004, a
decrease of approximately $23,000. This decrease was principally the result of
the reduction in interest income due to the collection of mortgage notes
receivable. The average revenue per month for the year ended March 31, 2005 was
approximately $3,500 as compared to approximately $5,400 per month for the year
ended March 31, 2004, a decrease of $1,900 per month.

Operating expenses were approximately $20,000 during the year ended March 31,
2005, and approximately $27,000 during the year ended March 31, 2004, a decrease
of approximately $7,000. The average per month decreased from approximately
$2,300 to $1,700, a decrease of approximately $600 per month. The decrease in
operating expenses was primarily the result in the decrease in officer's
compensation to the Company's President and the decrease in professional fees
and other administrative costs.

                                       5
<PAGE>

Net income after provision for income taxes decreased from approximately $31,000
during the year ended March 31, 2004 to approximately $18,000 during the year
ended March 31, 2005, a decrease of approximately $13,000, or approximately
$1,100 per month.

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2006, the Company had cash of approximately $84,000. The Company's
current assets were approximately $127,000 at March 31, 2006 and its current
liabilities totaled approximately $13,000, resulting in net working capital of
approximately $114,000, a current ratio of approximately 100 to one. Working
capital increased by approximately $31,000 from March 31, 2005 to March 31, 2006

At March 31, 2005, the Company had cash of approximately $15,000. The Company's
current assets were approximately $85,000 at March 31, 2006 and its current
liabilities totaled approximately $2,000, resulting in net working capital of
approximately $83,000, a current ratio of approximately 40.1 to one.

The Company's assets increased from approximately $309,000 at March 31, 2005 to
approximately $322,000 at March 31, 2006, an increase of approximately $13,000.

The Company's liabilities increased from approximately $2,000 at March 31, 2005
to approximately $13,000 at March 31, 2006, an increase of $11,000.

The Company's business is not subject to seasonality or any weather seasonality
conditions. The Company knows of no trends, events or uncertainties that have,
or are reasonable likely to have, a material impact on the Company's short-term
or long-term liquidity.

ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Please see pages F-1 through F-10.

                                    PART III

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

OFFICERS AND DIRECTORS

The following table sets forth certain information concerning each of the
Company's directors and executive officers:

NAME                    AGE      POSITION

Michael Schumacher      57       President, Treasurer, Director, Chief Executive
                                    Officer and Chief Financial Officer

Peter Porath            74       Vice-President and Director

George A. Powell        80       Secretary and Director



                                       6
<PAGE>

MICHAEL SCHUMACHER. Michael Schumacher was Treasurer, Secretary and a Director
of the Company since July 2003, and effective March 31, 2005 became President.
Mr. Schumacher was President and Chairman of the Board of Prime Rate Income and
Dividend Enterprises, Inc., a public company, until December 2002. Mr.
Schumacher was a director and officer of Sun Vacation Properties Corporation
(formerly Commonwealth Equities, Inc.), a public company, from November 2000
until February 2001, and a director and officer of Vacation Ownership Marketing,
Inc., a public company) from May 2000 until August 2001. He was also, from June
2003 to May 31, 2005, a Vice-President and Director of National Superstars, Inc,
an inactive pubic company until May 31, 2005. Effective May 31, 2005, National
Superstars, Inc. completed a business combination with MSO Holdings, Inc.
resulting in a change in control of National Superstars, Inc. Since January
2005, he has been President, Treasurer, CFO and a director of Springfield
Financial, Inc., an inactive public company. Also from October 2004 until June
2006, Michael Schumacher was President, Treasurer, Chief Financial Officer and a
Director of Marwich II, Ltd., an inactive public company. Effective June 2006,
Marwich II, Ltd. completed a business combination resulting in a change in
control of Marwich II, Ltd. Since March 2005, he has been Secretary, Treasurer
and a director of American Telstar, Inc., an inactive public company. Mr.
Schumacher is President, Chairman of the Board, and controlling shareholder of
Pride, Inc. and its wholly-owned subsidiaries, including Pride Equities, Inc.
Pride, Inc. and its subsidiaries are primarily in the real estate investment
business. Mr. Schumacher is President and Treasurer of Birch Branch, Inc., a
real estate investment company. Mr. Schumacher is also a Director and President
of Schumacher & Associates, Inc., a certified public accounting firm located in
Denver, Colorado that provides audit services, principally to public companies
on a national basis throughout the U.S.A. Mr. Schumacher is a Certified Public
Accountant, Certified Management Accountant and an Accredited Financial Planning
Specialist. Mr. Schumacher has a Bachelor of the Sciences Degree in Business
Administration with a major in accounting from the University of Nebraska at
Kearney and a Masters in Business Administration from the University of
Colorado.

PETER PORATH. Peter Porath was President and a director of the Company since
July 2003, and effective March 31, 2005, became Vice-President, rather than
President. From October 2004 to June 2006, Peter Porath was Vice-President and a
director of Marwich II, Ltd., an inactive public company. Effective June 2006,
Marwich II, Ltd. completed a business combination, resulting in a change in
control of Marwich II, Ltd. He has also, since June 2003, been a President and
Director of National Superstars, Inc, an inactive pubic company until May 31,
2005. Effective May 31, 2005, National Superstars, Inc. completed a business
combination with MSO Holdings, Inc. resulting in a change in control of National
Superstars, Inc. Since January 2005, he has been Vice-President and a director
of Springfield Financial, Inc., an inactive public company. Since March 2005, he
has been Vice-President and a director of American Telstar, Inc., an inactive
public company. Mr. Porath was a director of Sun Vacation Properties Corporation
(formerly Commonwealth Equities, Inc.), a public company, and was President from
November 2000 until February 2001. Mr. Porath was a director and president of
Vacation Ownership Marketing, Inc., (a public company) from May 2000 until
August 2001. Mr. Porath was a director for Plants For Tomorrow, an environmental
mitigation concern through the years from 1989-1991. From 1990 through 2001, Mr.
Porath, semi-retired operated a retail magic supply store in Fort Lauderdale,
Florida, Merlin's Festival of Magic. From 1978 to 1979, Mr. Porath was executive
vice-president and director of International Resort Properties, Inc., a
timesharing company in Hillsboro Beach, Florida where he was responsible for the
development of a 20-unit project. Prior to 1978, Mr. Porath was Vice President
of Investment Corporation of Florida, a public company on the American Stock
Exchange, and developer of Wellington and Palm Beach Polo, now a city of 40,000
people. Prior to this, Mr. Porath was President of San Andros, Inc., doing real
estate workouts for the Bank of Virginia; Vice-President of Magnuson Corp., a
real estate developer; Supervisor of Customer Service for General Development
Corp., a New York Stock Exchange Company; and Assistant to the Vice-President of
Moody's Investors Service, Chicago, now a New York Stock Exchange Company. Mr.
Porath attended Syracuse University in the U.S. Air Force Security Service and
holds a Bachelor of the Arts Degree in English from Ripon College and a Juris
Doctor from De Paul University in Chicago.

GEORGE A. POWELL. George A. Powell has been Secretary and a Director of the
Company since March, 2005. Mr. Powell was Secretary and a Director of Marwich
II, Ltd. an inactive public company from October 2004 to June 2006. Effective
June 2006, Marwich II, Ltd. completed a business combination, resulting in a
change in control of Marwich II, Ltd. Mr. Powell has been a director, secretary
and vice-president of PRIDE, Inc. Mr. Powell was previously, until September 22,
1999, a director, secretary and vice-president of Rocky Mountain Power Co., a
public reporting company. Mr. Powell was previously, until November 12, 2002, a
director, secretary and vice-president of Prime Rate Income & Dividend

                                       7
<PAGE>

Enterprises, Inc. (PIDV). Mr. Powell is currently a director, secretary, and
vice-president of Birch Branch, Inc. Mr. Powell was previously a director and
president of Continental Investors Life, Inc., a public reporting insurance
company. Since Mr. Powell's retirement from the insurance business in 1988, he
has been self-employed as a business consultant.

SIGNIFICANT EMPLOYEES

The Company has no regular employees. Peter Porath and Michael Schumacher each
devote approximately 5% of their time to the Company's business.

ITEM 10. EXECUTIVE COMPENSATION.

Presently, none of the Company's current officers or directors received any
compensation for their respective services rendered unto the Company, other than
Mr. Schumacher, whose compensation from Pride Lending, Inc. totaled $650 and
$7,317 for the years ended March 31, 2006 and 2005, respectively. They all have
agreed to act without compensation until authorized by the Board of Directors,
which is not expected to occur until the Company has generated revenues from
operations after consummation of a merger or acquisition. The Company currently
has no funds available to pay officers or directors. Further, none of the
officers or directors are accruing any compensation pursuant to any agreement
with the Company.

It is possible that, after the Company successfully consummates a merger or
acquisition with an unaffiliated entity, that entity may desire to employ or
retain one or a number of members of the Company's management for the purposes
of providing services to the surviving entity, or otherwise provide other
compensation to such persons. However, the Company has adopted a policy whereby
the offer of any post-transaction remuneration to members of management will not
be a consideration in the Company's decision to undertake any proposed
transaction. Each member of management has agreed to disclose to the Company's
Board of Directors any discussions concerning possible compensation to be paid
to them by any entity that proposes to undertake a transaction with the Company
and further, to abstain from voting on such transaction. Therefore, as a
practical matter, if each member of the Company's Board of Directors is offered
compensation in any form from any prospective merger or acquisition candidate,
the proposed transaction will not be approved by the Company's Board of
Directors as a result of the inability of the Board to affirmatively approve
such a transaction.

It is possible that persons associated with management may refer a prospective
merger or acquisition candidate to the Company. In the event the Company
consummates a transaction with any entity referred by associates of management,
it is possible that such an associate will be compensated for their referral in
the form of a finder's fee. It is anticipated that this fee will be either in
the form of restricted common stock issued by the Company as part of the terms
of the proposed transaction, or will be in the form of cash consideration.
However, if such compensation is in the form of cash, such payment will be
tendered by the acquisition or merger candidate, because the Company has
insufficient cash available. The amount of such finder's fee cannot be
determined as of the date of this registration statement, but is expected to be
comparable to consideration normally paid in like transactions. No member of
management of the Company will receive any finder's fee, either directly or
indirectly, as a result of their respective efforts to implement the Company's
business plan outlined herein.

No retirement, pension, profit sharing, stock option or insurance programs or
other similar programs have been adopted by the Company for the benefit of its
employees.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information as of March 31, 2006
regarding the beneficial ownership of the Company's Common Stock by (i) each
stockholder known by the Company to be the beneficial owner of more than 5% of
the Company's Common Stock, (ii) by each Director and executive officer of the
Company and (iii) by all executive officer and Directors of the Company as a
group. Each of the persons named in the table has sole voting and investment
power with respect to Common Stock beneficially owned.

                                       8
<PAGE>

NAME AND ADDRESS                                   NUMBER OF         PERCENTAGE
                                                  SHARES OWNED        OF SHARES
                                                 OR CONTROLLED          OWNED


Peter Porath                                          484,919           0.48%
444 Park Forest Way
Wellington, FL 33414

Michael Schumacher
Beneficially through Pride Holdings, Inc.          90,000,000          90.00%
Beneficially through Pride Equities, Inc.           8,000,000           8.00%
2525 15th Street, Ste. 3H
Denver, Colorado 80211

George A. Powell                                      100,000           0.10%
7209 S. Garland Court
Littleton, Colorado 80128


All Officers and Directors as a Group              98,584,919          98.58%

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Effective July, 2003, Pride Equities, Inc. agreed to fund the Company with
$30,000 in exchange for 8,000,000 shares of the Company's common stock.
Effective March 31, 2005, the Company issued 90,000,000 shares of its common
stock to Pride Holdings, Inc. in exchange for Pride Lending, Inc.

The Board of Directors has passed a resolution which contains a policy that the
Company will not seek an acquisition or merger with any entity in which any of
the Company's Officers, Directors, principal shareholders or their affiliates or
associates serve as officer or director or hold any ownership interest.
Management is not aware of any circumstances under which this policy, through
their own initiative may be changed.







                                       9
<PAGE>

                                     PART IV

ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(a) Financial Statements are contained in Item 7.

(b) Reports on Form 8-K

No reports on Form 8-K have been filed during the last quarter of the period
covered by this report.

(c) Exhibits.

     3.1   Articles of Incorporation *

     3.2   Bylaws of the Company *

    31.1   Section 302 Certification by the Corporation's Chief Executive
           Officer.  (Filed herewith).

    31.2   Section 302 Certification by the Corporation's Chief Financial
           Officer.  (Filed herewith).

    32.1   Section 906 Certification by the Corporation's Chief Executive
           Officer.  (Filed herewith).

    32.2   Section 906 Certification by the Corporation's Chief Financial
           Officer.  (Filed herewith).

* These documents are rendered as previously filed and incorporated by reference
to the Company's previous filings with the Securities and Exchange Commission.









                                       10
<PAGE>


                          INDEX TO FINANCIAL STATEMENTS

                FEDERAL MORTGAGE CORPORATION OF PUERTO RICO, INC.
                -------------------------------------------------
                           AND CONSOLIDATED SUBSIDIARY


                              FINANCIAL STATEMENTS

                                      with

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACOUNTING FIRM


    Report of Independent Registered Public Accounting Firm                  F-2

    Consolidated Financial Statements:

             Consolidated Balance Sheets                                     F-3

             Consolidated Statements of Operations                           F-4

             Consolidated Statement of Changes in Stockholders' Equity       F-5

             Consolidated Statements of Cash Flows                           F-6

             Notes to Consolidated Financial Statements                      F-7











                                       F-1
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
             -------------------------------------------------------

The Board of Directors
Federal Mortgage Corporation of Puerto Rico, Inc.
Wellington, Florida

We have audited the accompanying consolidated balance sheets of Federal Mortgage
Corporation of Puerto Rico, Inc. and Consolidated Subsidiary as of March 31,
2006 and 2005, and the related statements of operations, stockholders' equity
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 audits.

We conducted our audits 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 audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. 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 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 Federal Mortgage Corporation of
Puerto Rico, Inc. and Consolidated Subsidiary as of March 31, 2006 and 2005, and
the results of its operations, changes in its stockholders' equity and its cash
flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.




Miller and McCollom
Certified Public Accountants
4350 Wadsworth Blvd., Suite 300
Wheat Ridge, CO 80033

July 10, 2006



                                       F-2
<PAGE>

                FEDERAL MORTGAGE CORPORATION OF PUERTO RICO, INC.
                           AND CONSOLIDATED SUBSIDIARY

                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS
                                     ------

                                                          March 31,    March 31,
                                                            2006         2005
Current Assets:
  Cash                                                   $   84,191   $   14,967
  Mortgage notes receivable, current portion                 23,086       68,338
  Accounts receivable, related party                         19,161         --
  Accrued interest receivable                                   807        2,108
                                                         ----------   ----------
Total Current Assets                                        127,245       85,413

Mortgage notes receivable, net of current portion           102,698      119,445
Note receivable                                              91,993      104,242
                                                         ----------   ----------

TOTAL ASSETS                                             $  321,936   $  309,100
                                                         ==========   ==========


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Accounts payable, related party                        $   12,367   $    2,132
  Accrued officer's compensation payable                        650         --
  Accrued income taxes payable                                  361         --
                                                         ----------   ----------
   Total Current Liabilities                                 13,378        2,132
                                                         ----------   ----------

TOTAL LIABILITIES                                            13,378        2,132
                                                         ----------   ----------

Stockholders' Equity:
  Common stock, $.001 par value
   100,000,000 shares authorized,
   100,000,000 shares issued and outstanding                100,000      100,000
  Additional Paid In Capital                                206,968      206,968
  Retained earnings                                           1,590         --
                                                         ----------   ----------

TOTAL STOCKHOLDERS' EQUITY                                  308,558      306,968
                                                         ----------   ----------


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY               $  321,936   $  309,100
                                                         ==========   ==========




The accompanying notes are an integral part of the financial statements.

                                       F-3
<PAGE>

                FEDERAL MORTGAGE CORPORATION OF PUERTO RICO, INC.
                           AND CONSOLIDATED SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF OPERATIONS




                                               For the Year Ended March 31,
                                                   2006           2005
                                               ------------   ------------

Revenue
  Interest income                              $     17,298   $     42,079
  Other income                                         --             --
                                               ------------   ------------
                                                     17,298         42,079

Expenses:
  Accounting and auditing                            10,860           --
  General and administrative                          1,115         12,604
  Professional services                               2,171           --
  Officer's compensation                                650          7,317
  Administrative and other                              551            209
                                               ------------   ------------

                                                     15,347         20,130
                                               ------------   ------------
Net income before provision for income taxes          1,951         21,949

Provision for income taxes (Note 2):
  Current                                               361          4,061
                                               ------------   ------------
                                                        361          4,061
                                               ------------   ------------

Net Income                                     $      1,590   $     17,888
                                               ============   ============

Per Share                                      $        Nil   $        Nil
                                               ============   ============

Weighted Average Shares Outstanding             100,000,000     90,000,000
                                               ============   ============





The accompanying notes are an integral part of the financial statements.

                                       F-4
<PAGE>
<TABLE>
<CAPTION>

                FEDERAL MORTGAGE CORPORATION OF PUERTO RICO, INC.
                           AND CONSOLIDATED SUBSIDIARY

            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
            For the Period from April 1, 2004 through March 31, 2006



                                                                   Additional
                                         Common        Stock        Paid-in        Retained
                                       No./Shares      Amount       Capital        Earnings        Total
                                      -----------   -----------   -----------    -----------    -----------
<S>                                   <C>           <C>           <C>            <C>            <C>
Balance at April 1, 2004               90,000,000   $    90,000   $   942,301    $   116,403    $ 1,148,704

Recapitalization in connection
with reorganization (Note 1)           10,000,000        10,000        (2,871)          --            7,129

Additional paid-in capital (Note 3)          --            --          23,982           --           23,982


Dividend                                     --            --        (756,444)      (134,291)      (890,735)

Net income for the year ended
March 31, 2005                               --            --            --           17,888         17,888
                                      -----------   -----------   -----------    -----------    -----------

Balance at March 31, 2005             100,000,000       100,000       206,968           --          306,968

Net income for the year ended
March 31, 2006                               --            --            --            1,590          1,590
                                      -----------   -----------   -----------    -----------    -----------
Balance at March 31, 2006             100,000,000   $   100,000   $   206,968    $     1,590    $   308,558
                                      ===========   ===========   ===========    ===========    ===========
</TABLE>




The accompanying notes are an integral part of the financial statements.

                                       F-5
<PAGE>
<TABLE>
<CAPTION>

                FEDERAL MORTGAGE CORPORATION OF PUERTO RICO, INC.
                           AND CONSOLIDATED SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                        For the Year Ended March 31,

                                                            2006            2005
                                                        ------------    ------------
<S>                                                     <C>             <C>
Cash Flows from Operating Activities:
 Net Income                                             $      1,590    $     17,888
 Adjustment to reconcile net income
  to net cash provided by operating activities:
    Increase in accounts payable and accrued expenses         11,246           2,132
    (Increase) in accounts receivable, related party         (19,161)           --
    Decrease in accrued interest receivable                    1,301           5,696
                                                        ------------    ------------

Net Cash Provided by Operating Activities                     (5,024)         25,716
                                                        ------------    ------------


Cash Flows from Investing Activities:
  Collection of mortgage notes receivable                     61,999         653,513
  Collection of note receivable                               12,249          39,822
                                                        ------------    ------------

Net Cash Provided by (Used in) Investing Activities           74,248         693,335
                                                        ------------    ------------


Cash Flows from Financing Activities:
  Additional paid-in capital                                    --            23,982
  (Advances) repayments, related parties                        --          (749,950)
                                                        ------------    ------------

Net Cash Provided by (Used in) Financing Activities             --          (725,968)
                                                        ------------    ------------

Net Increase (decrease) in Cash                               69,224          (6,917)

Cash, Beginning of Period                                     14,967          21,884
                                                        ------------    ------------

Cash, End of Period                                     $     84,191    $     14,967
                                                        ============    ============

Interest Paid                                           $       --      $       --
                                                        ============    ============

Income Taxes Paid                                       $       --      $       --
                                                        ============    ============
</TABLE>

The accompanying notes are an integral part of the financial statements.

                                       F-6
<PAGE>

                FEDERAL MORTGAGE CORPORATION OF PUERTO RICO, INC.
                           AND CONSOLIDATED SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2006

Note 1 - Organization and Summary of Significant Accounting Policies

This summary of significant accounting policies of Federal Mortgage Corporation
of Puerto Rico, Inc. (Company) is presented to assist in understanding the
Company's financial statements. The financial statements and notes are
representations of the Company's management, who is responsible for their
integrity and objectivity. These accounting policies conform to generally
accepted accounting principles in the United States of America and have been
consistently applied in the preparation of the financial statements, which are
stated in U.S. Dollars.

Organization and Principles of Consolidation

The Company was incorporated on January 5, 1970 under the laws of the State of
Delaware as Modulated Building Systems, Inc. On April 17, 1972, the Company
amended its name to Federal Mortgage Corporation of Puerto Rico, Inc. On July
15, 2003, the Company's charter was renewed retroactively back to February 24,
1976, the date of expiration of the charter. Its wholly-owned subsidiary, Pride
Lending, Inc. was organized on August 22, 2001 under the laws of the state of
Colorado. The Company was formerly a wholly-owned subsidiary of Pride, Inc.
(PRIDE). Effective March 31, 2005, the directors of PRIDE agreed to contribute
the Company to Federal Mortgage Corporation of Puerto Rico, Inc. (FEDERAL), a
related entity, in exchange for 90,000,000 shares of the common stock of
FEDERAL. The transaction was treated as a reverse acquisition for accounting
purposes, which is a capital transaction and not a business combination. The
financial statements of the acquired subsidiary are presented for periods prior
to the acquisition.

The consolidated financial statements include the accounts of the companies
listed above. All intercompany account balances have been eliminated in the
consolidation.

Description of business

The Company is principally in the investment business. The Company principally
invests in real estate mortgage loans.

Per Share Information

Per share information is computed by dividing the net income or loss by the
weighted average number of shares outstanding during the period.

Use of Estimates in the Preparation of Financial Statements

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 disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.


                                       F-7
<PAGE>

Note 1 - Organization and Summary of Significant Accounting Policies, continued

Cash and Cash Equivalents

The Company considers cash and cash equivalents to consist of cash on hand and
demand deposits in banks with an initial maturity of 90 days or less.

Investment in Mortgage Notes Receivable and Investment in Note Receivable

The Company's investment in mortgage notes receivable consists principally of
notes receivable collateralized by mortgages and are carried at the amortized
principal balance. The Company's investment in a note receivable is
collateralized by various assets. Management believes there is no impairment in
value of the mortgage notes receivable and its investment in note receivable and
therefore has provided no allowance for uncollectible notes. Management's policy
with respect to impairment determination is to review the carrying values
periodically, and at least quarterly to determine if there is any impairment.
Management believes that the underlying collateral on its mortgage notes
receivable and on its note receivable are sufficient to facilitate collection of
the mortgage notes receivables.

Revenue Recognition Policy

The Company recognizes interest income from mortgage notes receivable and
investment in note receivable on a daily pro-rata basis.

Fair Value of Financial Instruments

Financial Accounting Standards Board ("FASB") issued Statement of Financial
Accounting Standards No. 107 ("SFAS 107"), "Disclosures About Fair Value of
Financial Instruments." SFAS 107 requires disclosure of fair value information
about financial instruments when it is practicable to estimate that value. The
carrying amount of the Company's cash, cash equivalents, and accounts payable
approximate their estimated fair values due to their short-term maturities.

Concentration of Credit Risk

The Company's material concentration of credit risk consists principally of
investments in mortgage notes receivable and investment in note receivable. The
Company's investments in mortgage notes receivable are collateralized
principally by first or second deeds of trust on real estate located primarily
in Colorado and Arizona. At March 31, 2006, the Company had five mortgage notes
receivable from one individual totaling approximately $125,784. The weighted
average interest rate on mortgagee notes receivable is approximately 8% per
annum with monthly repayment terms being amortized over periods up to twenty
years. The interest rate on the note receivable is 2% above prime rate.
Subsequent to March 31, 2006, these notes receivable were paid in full.

Additional financial instruments that potentially subject the Company to
concentrations of credit risk consist primarily of temporary cash investments.
The Company places its temporary cash investments with financial institutions.
As of March 31, 2006, the Company had no concentration of credit risk in its
cash investments since it had no temporary cash investments in bank accounts in
excess of the FDIC insured amounts.

Recent Accounting Pronouncements

There were various accounting standards and interpretations issued during 2006
and 2005, none of which are expected to have a material impact on the Company's
consolidated financial position, operations, or cash flows.

                                       F-8
<PAGE>

Income Taxes

The Company files tax returns on a consolidated basis with its parent company
and affiliates. As such, surtax exemptions are allocated to various entities on
a pro rata basis.

Other

The Company has selected March 31 as its fiscal year end.

No advertising expense has been incurred.

The Company has not entered into any leases.

All of the Company's assets are located in the United States.

Note 2 - Income Taxes

The provision for federal and state income taxes consisted of the following
components:

The reconciliation of income tax (benefit) computed at the federal statutory
rate to income tax expense (benefit) is as follows:

                                                       Year Ended March 31,
                                                        2006          2005
                                                     ----------    ----------
         Expected income tax                         $      722    $    8,231
         Graduated tax brackets                            (429)       (4,938)
         State tax net of federal benefit                    68           768
                                                     ----------    ----------
                                                     $      361    $    4,061
                                                     ==========    ==========

The reconciliation of income tax (benefit) computed at the federal statutory
rate to income tax expense (benefit) for all periods presented is as follows:

         Tax at Federal statutory rate                              15.00%
         State tax net of Federal benefit                            3.50%
                                                          -----------------
         Tax provision                                              18.50%

Note 3 - Common Stock

The Company was formerly a wholly owned subsidiary of Commonwealth Equities,
Inc. (CEI). On January 27, 2003, prior to the change in control of CEI,
2,000,000 shares, representing 100% of the Company's issued and outstanding
common stock, were assigned to a "Trustee of a nominee to be named". Pride
Equities, Inc. owned 1,000,000 of these shares and was a 50% owner of the
Company. Effective January 2004, the Company increased its authorized common
stock from 2,000,000 shares to 100,000,000 shares and changed its par value from
$.10 to $.001 per share. All references to common stock have been retroactively
adjusted to give effect these changes. Also in January 2004, the Company issued
8,000,000 shares of its common stock to Pride Equities, Inc. in exchange for
$30,000, which resulted in Pride Equities, Inc. becoming a 90% owner of the
Company. Effective March 31, 2005, the Company issued 90,000,000 shares of its
common stock in exchange for Pride Lending, Inc., previously a wholly-owned
subsidiary of Pride Holdings, Inc. In addition, Pride Equities, Inc. returned
1,000,000 shares to the Company, and the Company reissued the shares to various
individuals for services valued at $3,355. During the year ended March 31, 2005,
costs totaling $23,982 were paid on behalf of the Company by its parent company
and are shown as contributed capital.

                                       F-9
<PAGE>

Note 4 - Related Party Transactions

Pride Equities, Inc. advanced a total of $30,000 to the Company during the year
ended March 31, 2004. Such advances were converted to 8,000,000 shares of common
stock as described in Note 3 above.

The Company issued 90,000,000 shares of its common stock to Pride Holdings, Inc.
in exchange for Pride Lending, Inc., resulting in Pride, Inc. owning 98% of the
Company through its subsidiaries.

The Company and certain related parties share common staff and operating
expenses. Costs for these shared expenses were allocated to the various
entities. Had the Company not shared staff and certain expenses with other
related parties, the operating results may have been materially different.

Note 5 - Subsequent Event

Subsequent to March 31, 2006, the Company's mortgage notes receivable totaling
$125,784 and notes receivable totaling $91,993 were paid in full.











                                      F-10
<PAGE>

                                   SIGNATURES

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

FEDERAL MORTGAGE CORPORATION OF PUERTO RICO, INC.

Date:  July 13, 2006

By:


 /s/ Michael Schumacher
---------------------------------------------
Michael Schumacher
President, Chief Executive Officer, Treasurer
 and Chief Financial Officer


By:


 /s/ Peter Porath
---------------------------------------------
Peter Porath
Vice-President










                                       11