SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

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

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005

|_|   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934

       For the transition period from _______________ to _______________.

                        COMMISSION FILE NUMBER: 000-49687

                          M-GAB DEVELOPMENT CORPORATION
             (Exact name of registrant as specified in its charter)

                  FLORIDA                                   33-0961490
      (State or other jurisdiction of                    (I.R.S. Employer
       incorporation or organization)                  Identification No.)

             9900 RESEARCH DR.
                 IRVINE, CA                                   92618
  (Address of principal executive offices)                  (Zip Code)


                    ISSUER'S TELEPHONE NUMBER (949) 635-1240

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

      Title of each class              Name of each exchange on which registered

             None                                        None

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

                         COMMON STOCK, PAR VALUE $0.001
                                (Title of class)

      Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act. Yes |_| No |X|.

      Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or 15(d) of the Exchange Act.Yes |_| No |X|.

      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 such
filing requirements for the past 90 days. Yes |X| No |_|.

      Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (ss.229.405 of this chapter) is not contained herein, and
will not 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-K or any amendment to this Form 10-K. |X|

      Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer. See definition of
"accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange
Act. (Check one):

Large accelerated filer |_| Accelerated filer |_| Non-accelerated filer |X|

      Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes |_| No |X|.

      State the aggregate market value of voting and non-voting common equity
held by non-affiliates computed by reference to the price at which the common
equity was last sold, or the average bid and asked price of such common equity,
as of the last business day of the registrant's most recently completed second
fiscal quarter. There was no market for our common stock.

<PAGE>

              APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

      Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act of
1934 subsequent to the distribution of securities under a plan confirmed by a
court. Yes |_| No |_|.

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

      Indicate the number of shares outstanding of each of registrant's classes
of common stock, as of the latest practicable date. As of March 30, 2006, there
were 6,550,512 shares of common stock, par value $0.001, issued and outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

      List hereunder the following documents if incorporated by reference and
the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document
is incorporated: (1) Any annual report to security holders; (2) Any proxy or
information statement; and (3) Any prospectus filed pursuant to rule 424(b) or
(c) of the Securities Act of 1933 ("Securities Act"). The listed documents
should be clearly described for identification purposes (e.g., annual report to
security holders for fiscal year ended December 24, 1980). None.


                                       2
<PAGE>


                          M-GAB DEVELOPMENT CORPORATION

                                TABLE OF CONTENTS
                                -----------------

<TABLE>


<S>                                                                                                             <C>
PART I............................................................................................................4

ITEM 1 - BUSINESS.................................................................................................4
ITEM 1A - RISK FACTORS ...........................................................................................6
ITEM 1B - UNRESOLVED STAFF COMMENTS ..............................................................................8
ITEM 2 - PROPERTIES...............................................................................................8
ITEM 3 - LEGAL PROCEEDINGS........................................................................................8
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS......................................................8

PART II...........................................................................................................9

ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
         PURCHASES OF EQUITY SECURITIES...........................................................................9
ITEM 6 - SELECTED FINANCIAL DATAMANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION........................10
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS...................10
ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.............................................16
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.............................................................16
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE....................16
ITEM 9A - CONTROLS AND PROCEDURES................................................................................16
ITEM 9B - OTHER NFORMATION.......................................................................................16

PART III.........................................................................................................18

ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.....................................................18
ITEM 11 - EXECUTIVE COMPENSATION.................................................................................19
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.........21
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.........................................................22
ITEM 14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES.................................................................23

PART IV..........................................................................................................24

ITEM 15 - EXHIBITS, FINANCIAL STATEMENTS SCHEDULES...............................................................24

</TABLE>


                                       3
<PAGE>


                                     PART I

This Annual Report includes forward-looking statements within the meaning of the
Securities Exchange Act of 1934 (the "Exchange Act"). These statements are based
on management's beliefs and assumptions,  and on information currently available
to management.  Forward-looking  statements  include the information  concerning
possible or assumed  future results of operations of the Company set forth under
the heading "Management's Discussion and Analysis of Financial Condition or Plan
of Operation." Forward-looking statements also include statements in which words
such  as  "expect,"   "anticipate,"  "intend,"  "plan,"  "believe,"  "estimate,"
"consider" or similar expressions are used.

Forward-looking  statements  are not  guarantees  of  future  performance.  They
involve risks,  uncertainties and assumptions.  The Company's future results and
shareholder   values  may  differ  materially  from  those  expressed  in  these
forward-looking  statements.  Readers are cautioned not to put undue reliance on
any forward-looking statements.

ITEM 1 - BUSINESS

GENERAL

      M-GAB Development  Corporation,  a Florida corporation (the "Company") was
incorporated in March 2001. From inception  through early 2003, our business was
the development,  marketing, and distribution of an interactive travel brochure.
On May 16,  2003,  we filed an election to be treated as a business  development
company ("BDC") under the Investment Company Act of 1940 (the "1940 Act"), which
became effective on the date of filing.

      Subsequent to the BDC election our  principal  business is to make venture
capital  investments  in  early-stage  and/or  developing  enterprises  that are
principally   engaged  in  the   development  or   exploitation  of  inventions,
technological  improvements,  and  new or  unique  products  and  services.  Our
principal  objective is long-term  capital  appreciation.  We may invest in debt
securities of these companies,  or may acquire an equity interest in the form of
common or preferred stock,  warrants or options to acquire stock or the right to
convert the debt  securities  into stock.  We may invest alone,  or as part of a
larger investment group. Consistent with our status as a BDC and the purposes of
the  regulatory  framework  for  BDC's  under  the  1940  Act,  we will  provide
managerial  assistance,  potentially in the form of a consulting agreement or in
the form of a board of director's seat, to the developing  companies in which we
invest.

      In addition,  we may acquire either a minority or controlling  interest in
mature companies in a roll-up strategy.  It is anticipated that any acquisitions
will be  primarily  for our  stock,  or a  combination  of cash and  stock.  The
principal  objective of acquisitions  pursuant to a roll-up strategy would be to
consolidate an industry and either sell the acquired  entities as a larger unit,
or take the unit  public  through an initial  public  offering,  spin-off to our
shareholders, or reverse merger into a publicly traded shell corporation.

      We  operate  as an  internally  managed  investment  company  whereby  our
officers and employees  conduct our operations under the general  supervision of
our  Board  of  Directors.  We have  not  elected  to  qualify  to be taxed as a
regulated  investment  company as defined  under  Subchapter  M of the  Internal
Revenue Code, we do not have any intellectual  property protections nor does our
management  feel  that any is  necessary,  and we have not  spent  any  funds on
research and development or compliance with  environmental  laws during the last
two fiscal years.

                                       4
<PAGE>

      During  the  quarter  ended  March  31,  2005,  a  market  maker  filed an
application  to list our  securities on the OTC Bulletin  Board.  On October 10,
2005,  we were  informed by the NASD that our common  stock was  approved by the
NASD for trading on the OTC Bulletin Board. Our trading symbol is MGBD.

REGULATION AS A BDC

      Although the 1940 Act exempts a BDC from  registration  under that Act, it
contains significant limitations on the operations of BDC's. Among other things,
the 1940 Act contains  prohibitions  and  restrictions  relating to transactions
between a BDC and its affiliates,  principal  underwriters and affiliates of its
affiliates  or  underwriters,  and it  requires  that a  majority  of the  BDC's
directors be persons other than "interested  persons," as defined under the 1940
Act. The 1940 Act also  prohibits a BDC from changing the nature of its business
so as to cease to be, or to withdraw its election as, a BDC unless so authorized
by the vote of the holders of a majority of its outstanding  voting  securities.
BDC's are not required to maintain  fundamental  investment policies relating to
diversification and concentration of investments within a single industry.

      Generally,  a BDC must be primarily  engaged in the business of furnishing
capital and providing  managerial  expertise to companies that do not have ready
access to  capital  through  conventional  financial  channels.  Such  portfolio
companies are termed "eligible portfolio companies." More specifically, in order
to  qualify  as a BDC,  a  company  must  (1) be a  domestic  company;  (2) have
registered  a  class  of its  equity  securities  or have  filed a  registration
statement with the Securities and Exchange  Commission pursuant to Section 12 of
the Securities Exchange Act of 1934; (3) operate for the purpose of investing in
the  securities  of certain  types of portfolio  companies,  namely  immature or
emerging  companies and businesses  suffering or just  recovering from financial
distress;  (4)  extend  significant  managerial  assistance  to  such  portfolio
companies;  and (5) have a majority of "disinterested"  directors (as defined in
the 1940 Act).

      An eligible portfolio company is, generally, a U.S. company that is not an
investment  company and that (1) does not have a class of securities  registered
on an  exchange or included  in the  Federal  Reserve  Board's  over-the-counter
margin list;  or (2) is actively  controlled  by a BDC and has an affiliate of a
BDC on its  board of  directors;  or (3) meets  such  other  criteria  as may be
established by the Securities  and Exchange  Commission.  Control under the 1940
Act is  generally  presumed  to exist  where a BDC  owns 25% of the  outstanding
voting securities of the company.

      The 1940 Act prohibits or restricts companies subject to the 1940 Act from
investing in certain  types of  companies,  such as brokerage  firms,  insurance
companies, investment banking firms and investment companies. Moreover, the 1940
Act limits the type of assets that BDC's may acquire to "qualifying  assets" and
certain assets necessary for its operations (such as office furniture, equipment
and facilities)  if, at the time of  acquisition,  less than 70% of the value of
the BDC's assets consist of qualifying  assets.  Qualifying assets include:  (1)
securities of companies that were eligible  portfolio  companies at the time the
BDC acquired their securities; (2) securities of bankrupt or insolvent companies
that  were  eligible  at the  time of the  BDC's  initial  acquisition  of their
securities  but are no longer  eligible,  provided that the BDC has maintained a
substantial portion of its initial investment in those companies; (3) securities
received  in  exchange  for or  distributed  in or  with  respect  to any of the
foregoing; and (4) cash items, government securities and high-quality short-term
debt. The 1940 Act also places restrictions on the nature of the transactions in
which,  and the persons from whom,  securities can be purchased in order for the
securities  to be  considered  qualifying  assets.  These  restrictions  include
limiting purchases to transactions not involving a public offering and acquiring
securities  from either the  portfolio  company or its officers,  directors,  or
affiliates.

                                       5
<PAGE>

      A BDC is permitted to invest in the  securities  of public  companies  and
other investments that are not qualifying assets, but those kinds of investments
may not exceed 30% of the BDC's total asset value at the time of the investment.

      A BDC must make significant managerial assistance available to the issuers
of  eligible  portfolio  securities  in  which  it  invests.   Making  available
significant  managerial  assistance means,  among other things,  any arrangement
whereby  the BDC,  through  its  directors,  officers  or  employees,  offers to
provide,  and,  if  accepted  does  provide,  significant  guidance  and counsel
concerning the management,  operations or business  objectives and policies of a
portfolio company. The portfolio company does not have to accept the BDC's offer
of  managerial  assistance,  and  if  they  do  accept  may be  required  to pay
prevailing market rates for the services.

      We do not currently have any investments in eligible portfolio companies.

EMPLOYEES

      Other than our current sole officer, we do not have any employees,  and do
not anticipate having any other employees other than administrative personnel in
the future.

         ITEM 1A - RISK FACTORS

      On at least an annual basis,  we are required to provide our  shareholders
with a statement  of risk  factors and other  considerations  for their  review.
These risk factors and other considerations include:

      WE HAVE NOT MADE ANY  INVESTMENTS  INTO OTHER  COMPANIES.  We have not yet
made any investments into other companies, and thus we have virtually no assets.
We need to  raise  capital  before  we can  make  investments  into,  and  offer
managerial  assistance to, other companies.  We may not be successful in raising
capital.  If we are successful in raising capital,  we may make investments that
turn out to be worthless.

      WE HAVE NEVER GENERATED ANY REVENUE,  AND WE ARE NOT  PROFITABLE.  We were
incorporated  in March 2001 and have  generated no revenue to date.  Our primary
activity to date has been  development of our business  plan,  which has changed
since our inception. Our success is dependent upon the successful development of
our business model as a business  development  company,  as to which there is no
assurance.   Unanticipated   problems,   expenses  and  delays  are   frequently
encountered in establishing a new business.  These include,  but are not limited
to, inadequate funding,  competition, and investment development. Our failure to
meet any of these conditions would have a materially  adverse effect upon us and
may force us to reduce or curtail operations. We may not ever be profitable.

      WE NEED TO RAISE CAPITAL IN ORDER TO FULFILL OUR BUSINESS PLAN. To date we
have relied on private  funding  from our  founders  and  directors,  short-term
borrowing,  and  capital  raised  from  the  sale of our  common  stock  to fund
operations.  We have  generated  no revenues  and have  extremely  limited  cash
liquidity and capital resources.  Any equity financings could result in dilution
to our  stockholders.  Debt financing may result in high interest  expense.  Any
financing, if available,  may be on unfavorable terms. If adequate funds are not
obtained, we may be required to reduce or curtail operations.

      INVESTING  IN OUR STOCK IS HIGHLY  SPECULATIVE  AND YOU COULD LOSE SOME OR
ALL OF YOUR  INVESTMENT.  The value of our common  stock may  decline and may be
affected by numerous market  conditions,  which could result in the loss of some
or the entire amount invested in our stock.  The securities  markets  frequently
experience  extreme price and volume  fluctuations that affect market prices for
securities of companies generally,  and very small  capitalization  companies in
particular.

                                       6
<PAGE>

      INVESTING IN OUR STOCK MAY BE INAPPROPRIATE  FOR YOUR RISK TOLERANCE.  Our
planned  investments  into other  companies,  in accordance  with our investment
objective and principal strategies, result in a far above average amount of risk
and volatility and may well result in loss of principal.

      WE WILL FACE A LOT OF COMPETITION, MOST OF WHICH IS BETTER CAPITALIZED AND
MORE EXPERIENCED  THAN US. We will face competition in our investing  activities
from private venture capital funds,  investment  affiliates of large industrial,
technology,   service  and  financial   companies,   small  business  investment
companies,  wealthy  individuals and foreign investors.  As a regulated business
development  company ("BDC"), we are required to disclose quarterly the name and
business   description  of  portfolio  companies  and  value  of  any  portfolio
securities.  Most  of  our  competitors  are  not  subject  to  this  disclosure
requirement.  Our  obligation  to disclose  this  information  could  hinder our
ability  to  invest  in  certain  portfolio   companies.   Additionally,   other
regulations,  current and  future,  may make us less  attractive  as a potential
investor to a given portfolio company than a private venture capital fund.

      WE ARE SUBJECT TO REGULATORY RISKS AS A BUSINESS  DEVELOPMENT  COMPANY. We
are subject to  regulation  as a BDC.  The loans and other  investments  that we
expect to make in small  business  concerns are extremely  speculative.  Many of
these  concerns  will be  privately  held.  Even if a public  market  for  their
securities  later  develops,  the  securities  we  purchase  are  likely  to  be
restricted  from sale or other transfer for significant  periods of time.  These
securities will be very illiquid.

      THE SERVICES OF OUR DIRECTORS  AND OFFICER ARE KEY TO OUR FUTURE  SUCCESS.
We are dependent for the selection,  structuring,  closing and monitoring of its
investments on the diligence and skill of our officer, Carl M. Berg, and each of
our  directors.  Our  future  success  depends  to a  significant  extent on the
continued service and coordination of its senior management team.

      WE PLAN TO  INVEST  PRIMARILY  IN  SMALL,  PRIVATE  COMPANIES.  There  are
significant risks inherent in our planned venture capital business. We intend to
invest a substantial portion of our assets in early stage or start-up companies.
These private businesses tend to be thinly capitalized, unproven small companies
with  risky  technologies  that  lack  management  depth  and have not  attained
profitability  or have no history  of  operations.  Because  of the  speculative
nature  and the  lack  of a  public  market  for  these  investments,  there  is
significantly greater risk of loss than is the case with traditional  investment
securities.  We expect that some of our  investments  will be a complete loss or
will be unprofitable and that some will appear to be likely to become successful
but never realize their potential. We intend to be risk seeking rather than risk
averse in our  approach to venture  capital and other  investments.  Neither our
investments  nor an investment in our stock is intended to constitute a balanced
investment program. We intend to rely to a large extent upon proceeds from sales
of investments rather than investment income to defray a significant  portion of
our operating  expenses.  Such sales are  unpredictable  and may not occur.  The
terrorist acts in the United States of September 11, 2001 are the type of events
that could severely  impact a small company that does not have as many resources
to ride out market  downturns and would need immediate  investment  capital that
might be temporarily unavailable.

      THERE WILL BE NO LIQUID MARKET FOR OUR PORTFOLIO INVESTMENTS.  Most of our
intended  investments will be either equity  securities  acquired  directly from
small companies or below investment  grade  subordinated  debt  securities.  Our
portfolio of equity securities will usually be subject to restrictions on resale
or otherwise have no established  trading market. The illiquidity of most of our
portfolio  may  adversely  affect our ability to dispose of such  securities  at
times when it may be advantageous for us.

                                       7
<PAGE>

      Even if our portfolio  companies are able to develop  commercially  viable
products,  the market for new products and  services is highly  competitive  and
rapidly changing.  Commercial  success is difficult to predict and the marketing
efforts of our expected portfolio companies may not be successful.

      OUR BOARD OF  DIRECTORS  WILL VALUE OUR  PORTFOLIO  INVESTMENTS.  There is
typically no public  market of equity  securities  of the small  privately  held
companies in which we intend to invest. As a result, the valuation of the equity
securities  in our portfolio are likely to be stated at fair value as determined
by the good  faith  estimate  of our Board of  Directors.  In the  absence  of a
readily  ascertainable  market value,  the  estimated  value of our portfolio of
securities may differ significantly,  favorably or unfavorably,  from the values
that  would  be  placed  on the  portfolio  if a ready  market  for  the  equity
securities existed.

      OUR QUARTERLY  RESULTS WILL  FLUCTUATE.  Our quarterly  operating  results
could fluctuate as a result of a number of factors. These factors include, among
other things,  variations in and the timing of the  recognition  of realized and
unrealized gains or losses,  the degree to which portfolio  companies  encounter
competition  in their markets and general  economic  conditions.  As a result of
these  factors,  results for any one quarter  should not be relied upon as being
indicative of performance in future quarters.

ITEM 1B - UNRESOLVED STAFF COMMENTS

      This Item is not  applicable to us as we are not an  accelerated  filer, a
large  accelerated  filer,  or a  well-seasoned  issuer;  however,  we have  not
received  written  comments from the Commission  staff regarding our periodic or
current  reports under the  Securities  Exchange Act of 1934 within the last 180
days before the end of our last fiscal year.

ITEM 2 - PROPERTIES

      We utilize the office of our legal  counsel,  The  Lebrecht  Group,  APLC,
under a  verbal  agreement  where we do not pay  rent or  reimburse  him for the
minimal expenses incurred.

ITEM 3 - LEGAL PROCEEDINGS

      We are not a party to or otherwise involved in any legal proceedings.

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

      No matters were  submitted to a vote of the  security  holders  during the
three month period ended December 31, 2005.


                                       8
<PAGE>

                                     PART II

ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY,  RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES

      During  the  quarter  ended  March  31,  2005,  a  market  maker  filed an
application  to list our  securities  on the OTC Bulletin  Board of the National
Association of Securities Dealers, Inc. On October 10, 2005, we were informed by
the NASD that our common  stock was  approved by the NASD for trading on the OTC
Bulletin Board Our trading symbol is MGBD. Our common stock has not traded since
we were listed on the OTC Bulletin  Board and there is no  assurance  that there
will be liquidity in the common stock.

      The following  table sets forth the high and low bid  information for each
quarter within the two most recent fiscal years, as provided by the Nasdaq Stock
Markets,  Inc. The  information  reflects prices between  dealers,  and does not
include retail markup,  markdown,  or commission,  and may not represent  actual
transactions.

                                                            BID PRICES


FISCAL YEAR                                         ----------------------------
ENDED
DECEMBER 31,         PERIOD                           HIGH               LOW
--------------       -----------------------        ----------        ----------

2003                 First Quarter                     N/A               N/A
                     Second Quarter                    N/A               N/A
                     Third Quarter                     N/A               N/A
                     Fourth Quarter                    N/A               N/A

2004                 First Quarter                     N/A               N/A
                     Second Quarter                    N/A               N/A
                     Third Quarter                     N/A               N/A
                     Fourth Quarter                    N/A               N/A

2005                 First Quarter                     N/A               N/A
                     Second Quarter                    N/A               N/A
                     Third Quarter                     N/A               N/A
                     Fourth Quarter                    $ -               $ -

2006                 First Quarter (through            $ -               $ -
                     March 30, 2006)

      The  Securities  Enforcement  and Penny Stock Reform Act of 1990  requires
additional disclosure relating to the market for penny stocks in connection with
trades in any  stock  defined  as a penny  stock.  The  Commission  has  adopted
regulations  that generally  define a penny stock to be any equity security that
has a market  price of less than  $5.00 per share,  subject to a few  exceptions
which we do not meet. Unless an exception is available,  the regulations require
the delivery,  prior to any transaction involving a penny stock, of a disclosure
schedule explaining the penny stock market and the risks associated therewith.

                                       9
<PAGE>

      There are currently warrants  outstanding to acquire 333,334 shares of our
common  stock at $0.15  per  share.  Other  than  these  warrants,  there are no
outstanding  options or warrants to purchase,  or securities  convertible  into,
shares of our common  stock.  If we are  successful  in getting our common stock
traded, of the 6,550,512 shares of common stock  outstanding,  (i) 10,000 shares
held  by  20   shareholders  of  record  were  sold  pursuant  to  an  effective
registration  statement and may be sold without restriction,  (ii) 13,000 shares
held by 12  shareholders  of record  were sold in a private  placement  over two
years ago and the resale of those shares was subsequently  registered,  and thus
the shares may be sold either pursuant to the effective  registration  statement
or pursuant to Rule 144(k), (iii) 450,000 shares are held by one shareholder who
may sell all of them pursuant to Rule 144(k), and (iv) 360,845 shares held by 42
shareholders  were acquired  pursuant to an exemption  from  registration  under
Regulation  E,  promulgated  under the  Securities  Act, and may be sold without
restriction.  In addition  to the above,  Mr.  Carl Berg,  our sole  officer and
director,  is the holder of  5,550,000  shares and may sell up to 63,838  shares
every 90 days pursuant to Rule 144.

      The  number of  holders  of record  of shares of our  common  stock is one
hundred thirty three (133).

      There have been no cash dividends declared on our common stock.  Dividends
are declared at the sole discretion of our Board of Directors.

ITEM 6 - SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>

                                    ----------------------------------------------------------------------
M-GAB DEVELOPMENT CORP.                               For the Years Ended December 31,
                                    ----------------------------------------------------------------------

                                             2005        2004           2003          2002        2001(1)
                                        ----------    --------    -----------    ----------    -----------

Statement of Operations Data:
-----------------------------------
<S>                                      <C>           <C>          <C>           <C>            <C>
Total revenues                       $          -           -              -             -              -

Income (loss) from continuing
operations                               (30,026)      57,059       (63,253)      (37,376)       (19,575)

Net income (loss)                        (30,026)      57,059       (63,253)      (37,376)       (19,575)

Net income (loss) per common
share from continuing operations           (0.01)        0.01         (0.01)        (0.01)         (0.00)

Balance Sheet Data:
-----------------------------------

Current assets                      $           -      17,403              -         6,437              -
Total assets                               25,000      17,403              -         6,437              -

Current liabilities                        21,947       9,324         93,105        46,289          3,476
Total liabilities                          21,947       9,324        103,105        46,289          3,476
Total stockholders' equity
(deficit)                                   3,053       8,079      (103,105)      (39,852)        (3,476)

Total dividends per common share                -           -              -             -              -

</TABLE>


(1)   Statement  of  Operations  Data is from  inception  (March  2001)  through
      December 31, 2001.


                                       10
<PAGE>


ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION

      Our Management's Discussion and Analysis contains not only statements that
are historical facts, but also statements that are  forward-looking  (within the
meaning of Section  27A of the  Securities  Act of 1933 and  Section  21E of the
Securities Exchange Act of 1934).  Forward-looking statements are, by their very
nature,   uncertain   and  risky.   These   risks  and   uncertainties   include
international,  national  and local  general  economic  and  market  conditions;
demographic  changes;  our ability to sustain,  manage, or forecast growth;  our
ability to successfully  make and integrate  acquisitions;  existing  government
regulations  and  changes  in,  or  the  failure  to  comply  with,   government
regulations;  adverse  publicity;  competition;  fluctuations  and difficulty in
forecasting  operating  results;  changes in business  strategy  or  development
plans;  business  disruptions;  the  ability  to attract  and  retain  qualified
personnel;  the  ability to protect  technology;  and other  risks that might be
detailed  from time to time in our  filings  with the  Securities  and  Exchange
Commission.

      Although the forward-looking  statements in this Annual Report reflect the
good faith  judgment of our  management,  such  statements  can only be based on
facts  and  factors   currently  known  by  them.   Consequently,   and  because
forward-looking  statements are inherently  subject to risks and  uncertainties,
the actual  results  and  outcomes  may differ  materially  from the results and
outcomes discussed in the forward-looking statements. You are urged to carefully
review and consider the various disclosures made by us in this report and in our
other  reports  as we  attempt  to advise  interested  parties  of the risks and
factors  that may affect  our  business,  financial  condition,  and  results of
operations and prospects.

PLAN OF OPERATION

      We were  incorporated in March 2001. On May 16, 2003, we filed an election
to be treated as a business  development  company  ("BDC") under the  Investment
Company Act of 1940 (the "1940  Act"),  which  became  effective  on the date of
filing.

      Subsequent to the BDC election our  principal  business is to make venture
capital  investments  in  early-stage  and/or  developing  enterprises  that are
principally   engaged  in  the   development  or   exploitation  of  inventions,
technological  improvements,  and  new or  unique  products  and  services.  Our
principal  objective is long-term  capital  appreciation.  We may invest in debt
securities of these companies,  or may acquire an equity interest in the form of
common or preferred stock,  warrants or options to acquire stock or the right to
convert the debt  securities  into stock.  We may invest alone,  or as part of a
larger investment group. Consistent with our status as a BDC and the purposes of
the  regulatory  framework  for  BDC's  under  the  1940  Act,  we will  provide
managerial  assistance,  potentially in the form of a consulting agreement or in
the form of a board of director's seat, to the developing  companies in which we
invest.

      In addition,  we may acquire either a minority or controlling  interest in
mature companies in a roll-up strategy.  It is anticipated that any acquisitions
will be primarily in exchange for our common stock, or a combination of cash and
stock.  The principal  objective of acquisitions  pursuant to a roll-up strategy
would be to consolidate  an industry and either sell the acquired  entities as a
larger  unit,  or take the unit  public  through  an  initial  public  offering,
spin-off to our  shareholders,  or reverse  merger into a publicly  traded shell
corporation.

      We  operate  as an  internally  managed  investment  company  whereby  our
officers and employees  conduct our operations under the general  supervision of
our  Board  of  Directors.  We have  not  elected  to  qualify  to be taxed as a
regulated  investment  company as defined  under  Subchapter  M of the  Internal
Revenue Code.

                                       11
<PAGE>

      During  the  quarter  ended  March  31,  2005,  a  market  maker  filed an
application  to list our  securities on the OTC Bulletin  Board.  On October 10,
2005,  we were  informed by the NASD that our common  stock was  approved by the
NASD for trading on the OTC Bulletin Board. Our trading symbol is MGBD.

      Management does not anticipate that we will engage in any material product
research and development,  nor do we anticipate that we will purchase a plant or
significant equipment.

      Our financial statements have been prepared assuming we will continue as a
going  concern.  Because we have not  generated  any  revenues  to date and have
minimal  capital  resources,   our  Certified  Public  Accountants  included  an
explanatory  paragraph  in their  report  raising  substantial  doubt  about our
ability to continue as a going concern.

      Subsequent  to our fiscal year end, on March 15, 2006,  we entered into an
Agreement  and  Plan of  Merger  with  China  Agro  Sciences  Corp.,  a  Florida
corporation ("China Agro") whereby,  at the closing,  China Agro will merge with
DaLian  Acquisition  Corp.,  a  Florida  corporation  that  is our  wholly-owned
subsidiary.  As a result of the merger,  China Agro will  become a  wholly-owned
subsidiary of M-GAB, and we will issue  13,349,488  shares of M-GAB common stock
to the former owners of China Agro. At the same time,  certain of the China Agro
shareholders  will acquire  5,500,000  M-GAB shares  directly  from our majority
shareholder,  director, and sole officer, Carl M. Berg, and his holding company.
Following the closing, the China Agro shareholders will own 18,849,488 shares of
our common  stock,  or 94.2% of our  then-outstanding  20,000,000  shares.  As a
condition  precedent to the closing,  we are required to take certain steps that
will  require  shareholder  approval,  including  terminating  our  status  as a
Business  Development  Company  under the  Investment  Company  Act of 1940.  We
anticipate that a closing will take place in late April 2006.

REGULATION AS A BDC

      Although the 1940 Act exempts a BDC from  registration  under that Act, it
contains significant limitations on the operations of BDC's. Among other things,
the 1940 Act contains  prohibitions  and  restrictions  relating to transactions
between a BDC and its affiliates,  principal  underwriters and affiliates of its
affiliates  or  underwriters,  and it  requires  that a  majority  of the  BDC's
directors be persons other than "interested  persons," as defined under the 1940
Act. The 1940 Act also  prohibits a BDC from changing the nature of its business
so as to cease to be, or to withdraw its election as, a BDC unless so authorized
by the vote of the holders of a majority of its outstanding  voting  securities.
BDC's are not required to maintain  fundamental  investment policies relating to
diversification and concentration of investments within a single industry.

      Generally,  a BDC must be primarily  engaged in the business of furnishing
capital and providing  managerial  expertise to companies that do not have ready
access to  capital  through  conventional  financial  channels.  Such  portfolio
companies are termed "eligible portfolio companies." More specifically, in order
to  qualify  as a BDC,  a  company  must  (1) be a  domestic  company;  (2) have
registered  a  class  of its  equity  securities  or have  filed a  registration
statement with the Securities and Exchange  Commission pursuant to Section 12 of
the Securities Exchange Act of 1934; (3) operate for the purpose of investing in
the  securities  of certain  types of portfolio  companies,  namely  immature or
emerging  companies and businesses  suffering or just  recovering from financial
distress;  (4)  extend  significant  managerial  assistance  to  such  portfolio
companies;  and (5) have a majority of "disinterested"  directors (as defined in
the 1940 Act).

                                       12
<PAGE>

      An eligible portfolio company is, generally, a U.S. company that is not an
investment  company and that (1) does not have a class of securities  registered
on an  exchange or included  in the  Federal  Reserve  Board's  over-the-counter
margin list;  or (2) is actively  controlled  by a BDC and has an affiliate of a
BDC on its  board of  directors;  or (3) meets  such  other  criteria  as may be
established by the Securities  and Exchange  Commission.  Control under the 1940
Act is  generally  presumed  to exist  where a BDC  owns 25% of the  outstanding
voting securities of the company.

      The 1940 Act prohibits or restricts companies subject to the 1940 Act from
investing in certain  types of  companies,  such as brokerage  firms,  insurance
companies, investment banking firms and investment companies. Moreover, the 1940
Act limits the type of assets that BDC's may acquire to "qualifying  assets" and
certain assets necessary for its operations (such as office furniture, equipment
and facilities)  if, at the time of  acquisition,  less than 70% of the value of
the BDC's assets consist of qualifying  assets.  Qualifying assets include:  (1)
securities of companies that were eligible  portfolio  companies at the time the
BDC acquired their securities; (2) securities of bankrupt or insolvent companies
that  were  eligible  at the  time of the  BDC's  initial  acquisition  of their
securities  but are no longer  eligible,  provided that the BDC has maintained a
substantial portion of its initial investment in those companies; (3) securities
received  in  exchange  for or  distributed  in or  with  respect  to any of the
foregoing; and (4) cash items, government securities and high-quality short-term
debt. The 1940 Act also places restrictions on the nature of the transactions in
which,  and the persons from whom,  securities can be purchased in order for the
securities  to be  considered  qualifying  assets.  These  restrictions  include
limiting purchases to transactions not involving a public offering and acquiring
securities  from either the  portfolio  company or its officers,  directors,  or
affiliates.

      A BDC is permitted to invest in the  securities  of public  companies  and
other investments that are not qualifying assets, but those kinds of investments
may not exceed 30% of the BDC's total asset value at the time of the investment.

      A BDC must make significant managerial assistance available to the issuers
of  eligible  portfolio  securities  in  which  it  invests.   Making  available
significant  managerial  assistance means,  among other things,  any arrangement
whereby  the BDC,  through  its  directors,  officers  or  employees,  offers to
provide,  and,  if  accepted  does  provide,  significant  guidance  and counsel
concerning the management,  operations or business  objectives and policies of a
portfolio company. The portfolio company does not have to accept the BDC's offer
of  managerial  assistance,  and  if  they  do  accept  may be  required  to pay
prevailing market rates for the services.

      The Company does not currently have any investments in eligible  portfolio
companies. However, we are actively seeking quality eligible portfolio companies
in which to make an investment and provide managerial assistance.

YEAR ENDED DECEMBER 31, 2005 COMPARED TO THE YEAR ENDED DECEMBER 31, 2004

RESULTS OF OPERATIONS

Introduction
------------

      We did not  have any  revenues  for  either  period  presented.  We do not
anticipate  having  revenue  from  our BDC  activities  until  we  begin  making
investments in eligible  portfolio  companies and  subsequently  liquidate those
investments.  If the China Agro transaction  described above closes it will have
an unknown impact on our ability to generate revenues in the future.  Because we
are actively seeking eligible  portfolio  companies and may close the China Agro
transaction we anticipate that our revenues from  quarter-to-quarter  may differ
significantly  depending on whether we realize a return on future investments or
the impact of the China  Agro  transaction.  Our  operating  expenses  increased
slightly  when compared to the prior year. We did not record any other income in
the year ended December 31, 2005,  which differed from the previous year when we
recorded other income of $83,355 related  entirely to forgiveness of debt by two
of our  shareholders,  one of  which  was Carl  Berg,  our  sole  officer  and a
director.  A breakdown of our operating expenses and other expenses,  as well as
management's explanation of each, is outlined below.

                                       13
<PAGE>

Revenues and Income (Loss) from Operations
------------------------------------------

      As  stated  above,  because  we do not have any  investments  in  eligible
portfolio  companies,  we did not have any  revenues for the either  period.  We
generated a net loss of ($30,026) for the year ended December 31, 2005, compared
to net income of $57,059 for the year ended  December 31,  2004.  Our net income
for the year ended December 31, 2004 was primarily  attributed to forgiveness of
debt in the  amount  of  $83,355  which  was  recorded  as other  income  in the
accompanying financial statements for the twelve months ended December 31, 2004.
Our  expenses  for the  year's  ended  December  31,  2005 and 2004 were made up
entirely of general and administrative  expenses. Our general and administrative
expenses for 2005  consisted  of $25,237 in  accounting  and other  professional
fees,  and $4,789 in transfer  agent fees and  miscellaneous  expenses,  such as
postage,  facsimiles,  and copies. Our general and  administrative  expenses for
2004 consisted of $23,480 in accounting and other  professional  fees, $1,375 in
transfer  agent fees,  and $1,441 in  miscellaneous  expenses,  such as postage,
facsimiles, and copies.

Net Income (Loss)
-----------------

      We had a net loss of  ($30,026)  for the year  ended  December  31,  2005,
compared to net income for the year ended December 31, 2004 of $57,059.  The net
loss in the  current  year is due to the fact we did not have any  revenues  and
incurred   general  and   administrative   expenses  related  to  the  reporting
obligations necessary to keep the company current in our reporting  obligations.
Our net income for the year ended  December  31, 2004 is a direct  result of the
forgiveness  of debt in the amount of $83,355 which was recorded as other income
in the  accompanying  financial  statements for the twelve months ended December
31,  2004.  Because  we do  not  have  any  investments  in  eligible  portfolio
companies, and we have not closed the China Agro transaction, we anticipate that
our net income (loss) could differ significantly from period to period.

LIQUIDITY AND CAPITAL RESOURCES

Introduction
------------

      As of  December  31,  2005,  we had no cash  and  our  only  asset  was an
investment in NuQuest,  Inc.  common stock valued at $25,000.  Our total current
liabilities as of December 31, 2005 were $21,947 consisting  entirely of accrued
liabilities.  Although our assets exceeded our liabilities on December 31, 2005,
given our lack of investments in eligible portfolio  companies and the potential
closing  of the China  Agro  transaction,  our  financial  results at the end of
future quarters could differ  significantly.  Until we begin to realize a return
from our  investment  in  eligible  portfolio  companies,  we will  have to fund
operations from the sale of our stock and from loans. We have been successful in
obtaining the necessary funding in the past, and anticipate that we will be able
to continue to do so in the future.

                                       14
<PAGE>

      Our cash, total current assets,  total assets,  total current liabilities,
and total  liabilities  as of December  31, 2005 and  September  30, 2005 are as
follows:

                             December 31,      September 30,
                                 2005               2005             Change
                           -----------------  -----------------  ---------------

Cash                         $            -      $           -      $          -
Total current assets                      -                  -                 -
Total current assets                 25,000             25,000                 -
Total current liabilities            21,947             13,062             8,885
Total liabilities                    21,947             13,062             8,885

Cash Requirements
-----------------

      Currently,  our cash requirements are minimal, related only to the cost of
maintaining the Company in good standing.  Last year we raised a small amount of
capital  through an offering under  Regulation E, which covered our expenses for
approximately  next twelve (12) months.  If  necessary,  we  anticipate  raising
additional  funds  through  another  offering  under  Regulation  E to fund  our
operations until we begin making investments into eligible  portfolio  companies
or for the next twelve (12) months. Additionally,  our two primary shareholders,
Mr. Berg and Mr.  Lebrecht,  have verbally agreed to advance funds to us to fund
our minimal cash  requirements  that cannot otherwise be covered by the proceeds
from the  offering.  For the year ended  December  31, 2005 our net cash used in
operating activities was ($34,604). Due to our lack of substantial operations to
date we do not believe this is necessarily indicative of our cash flow needs for
future years when we may be actively providing managerial assistance to eligible
portfolio companies, or we close the transaction with China Agro.

Sources and Uses of Cash
------------------------

Operations

      We did not receive any cash from  operations  for the year ended  December
31, 2005.  As noted  above,  we used  $34,604 in cash for  operating  activities
during this period.  We anticipate  that both our cash generated from operations
and used for operations will increase as soon as we have investments in eligible
portfolio companies or we close the transaction with China Agro. Until that time
we believe this figure will be fairly  indicative  our cash  generation and cash
used for operations in a twelve month period.

Financing

      During the year ended  December  31, 2005 we paid our  operating  expenses
primarily  from an advance from a shareholder  totaling  $17,201.  We anticipate
that we will have to continue to pay our operating  expenses out of the proceeds
from financing  activities or from advances from our shareholders until we begin
to realize a return from our investments in eligible  portfolio  companies or we
close the China Agro transaction.

Debt Instruments, Guarantees, and Related Covenants
---------------------------------------------------

      Currently,  we do not have any debt  instruments,  guarantees  or  related
covenants.

CRITICAL ACCOUNTING POLICIES

      The  discussion  and analysis of the  Company's  financial  condition  and
results of  operations  are based upon its  consolidated  financial  statements,
which have been  prepared in accordance  with  accounting  principles  generally
accepted in the United States.  The  preparation of these  financial  statements
requires the Company to make  estimates and  judgments  that affect the reported
amounts of assets, liabilities, revenues and expenses.

                                       15
<PAGE>

OFF-BALANCE SHEET ARRANGEMENTS

      We have no off-balance  sheet  arrangements  that are reasonably likely to
have a current or future effect on our financial condition, changes in financial
condition,  revenues or  expenses,  results of  operations,  liquidity,  capital
expenditures  or  capital  resources  that is  deemed  by our  management  to be
material to investors.

ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      Since we have very few assets and do not have any  investments in eligible
portfolio  companies  there  is no  quantitative  information,  as of the end of
December  31,  2005,  about  market  risk  that has any  impact  on our  present
business.  Once we begin making investments in eligible  portfolio  companies we
there  will be  market  risk  sensitive  instruments  and we will  disclose  the
applicable market risk information at that time.

      Our  primary  financial  instruments  are cash in banks and  money  market
instruments.  We do not believe that these  instruments  are subject to material
potential near-term losses in future earnings from reasonably possible near-term
changes  in  market  rates  or  prices.  We do  not  have  derivative  financial
instruments for speculative or trading purposes. We are not currently exposed to
any material currency exchange risk.

ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         Index to Financial Statements

         Report of Independent Certified Public Accountants

         Balance Sheet                                                      F-1

         Statement of Operations                                            F-2

         Statement of Stockholders Equity                                   F-3

         Statement of Cash Flows                                            F-4

         Notes to Financial Statements                                      F-5

ITEM 9 -  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE

      There have been no events required to be reported by this Item 9.

                                       16
<PAGE>

ITEM 9A - CONTROLS AND PROCEDURES

      The Company's  Chief  Executive  Officer and Chief  Financial  Officer (or
those persons performing similar functions),  after evaluating the effectiveness
of the  Company's  disclosure  controls  and  procedures  (as  defined  in Rules
13a-15(e) and 15d-15(e)  under the Securities  Exchange Act of 1934, as amended)
as of a date within 90 days of the filing of this annual report (the "Evaluation
Date"), have concluded that, as of the Evaluation Date, the Company's disclosure
controls  and  procedures  were  effective  to  ensure  the  timely  collection,
evaluation  and  disclosure  of  information  relating to the Company that would
potentially be subject to disclosure under the Securities  Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.  There were no
significant  changes in the Company's internal controls or in other factors that
could  significantly  affect the internal controls  subsequent to the Evaluation
Date.

ITEM 9B - OTHER INFORMATION

      All information required to be filed on a Form 8-K during the three months
ended December 31, 2005 was filed with the Commission on a Form 8-K.



                                       17
<PAGE>

                                    PART III

ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

      The following table sets forth the names and ages of the current directors
and executive officers of the Company,  the principal offices and positions with
the Company  held by each  person and the date such person  became a director or
executive  officer of the  Company.  The  executive  officers of the Company are
elected  annually by the Board of Directors.  The directors serve one-year terms
until their  successors are elected.  The executive  officers serve terms of one
year or until their  death,  resignation  or removal by the Board of  Directors.
Unless  described  below,  there  are no family  relationships  among any of the
directors and officers.

             Name               Age                   Position(s)
-----------------------      ----------     ------------------------------------

Carl M. Berg                    36          Chairman  of the  Board,  President,
                                            Secretary,  and Treasurer (2001)

Kevin J. Gadawski               38          Director (2003)

Mark Stewart                    38          Director (2003)

      CARL M. BERG has served as our director and officer  since our  inception.
He also currently  serves as a company  executive with STSN, Inc., a provider of
wired and wireless broadband communications for business travelers, where he has
served since 2003. Prior to STSN, from 1999 to 2003, he was a company  executive
with Sandlot Corporation,  a startup  subscription  management software company.
Sandlot is involved in managing subscription-based e-commerce. Mr. Berg directed
business  initiatives  as the Business  Development  Manager,  which resulted in
growth of the company from 10 to 75 employees worldwide with offices in the U.S.
and Windsor,  United Kingdom.  Prior to Sandlot Corporation,  from 1992 to 1999,
Mr. Berg served in various  management  positions in the technology  division of
Ameritech  Corporation.  His roles varied from the overall management of library
automation  implementation  projects to directing the implementation division of
roughly 75 technical  staff. Job titles included  Project  Coordinator,  Project
Manager and Director of Implementation.

      KEVIN J.  GADAWSKI  joined  our Board of  Directors  in May 2003.  He also
serves as the President of Worldwide Medical in Lake Forest,  California,  where
he previously  served as the Chief Operating Officer and Chief Financial Officer
for Worldwide  Medical  Corporation from May of 2002. From May of 2001 to May of
2002, Mr. Gadawski served as the Chief Financial Officer of California  Software
Corporation  in Irvine,  California.  From June of 2000 through May of 2001, Mr.
Gadawski was the Chief Financial Officer for e-net  Financial.com in Costa Mesa,
California.  His primary  duties  included  financial  reporting  and  financial
management.  For the five years prior to that,  Mr.  Gadawski  served in various
capacities  including Director of Internal Audit and Divisional  Controller with
Huffy  Corporation  in Miamisburg,  Ohio.  Mr.  Gadawski began his career in the
audit department of KMPG Peat Marwick, LLP.

      MARK STEWART  joined our Board of Directors in November  2003. Mr. Stewart
has been a principal with Mark Stewart  Securities,  Inc., a NASD broker-dealer,
since 1996.  Mr.  Stewart  started his career with  American  Express  Financial
Advisors (IDS) in 1991, and served as head trader at numerous firms from 1991 to
1996.

                                       18
<PAGE>

Audit Committee
---------------

      On May 16, 2003, an Audit Committee of the Board of Directors, established
in accordance  with section  3(a)(58)(A)  of the Exchange  Act, was formed.  The
directors who are members of the Audit  Committee are Kevin J. Gadawski and Mark
Stewart, with Mr. Gadawski considered an audit committee financial expert and an
independent director.

Compliance with Section 16(a) of the Securities Exchange Act of 1934
--------------------------------------------------------------------

      Section  16(a)  of the  Securities  Exchange  Act  of  1934  requires  the
Company's  directors  and  executive  officers and persons who own more than ten
percent of a registered  class of the Company's  equity  securities to file with
the SEC initial  reports of  ownership  and reports of changes in  ownership  of
Common Stock and other equity securities of the Company. Officers, directors and
greater than ten percent shareholders are required by SEC regulations to furnish
the Company with copies of all Section 16(a) forms they file.

      To the Company's knowledge, none of the required parties are delinquent in
their 16(a) filings.

Code of Ethics
--------------

      We have not adopted a written code of ethics, primarily because we believe
and  understand  that our officers and  directors  adhere to and follow  ethical
standards without the necessity of a written policy.

ITEM 11 - EXECUTIVE COMPENSATION

      None of our employees are subject to a written employment  agreement.  Our
president elected to forego a salary during the early developmental  stages, and
also provided office space. We estimate the value of these services to be $6,000
for each year for the years ended December 31, 2005 and 2003. As of December 31,
2004 we did not have any amounts owed to our  president as he elected to forgive
any outstanding amounts he was owed and to forego a salary until further notice.

      On May 15, 2001, our directors and shareholders  approved the M-GAB,  Inc.
2001 Stock  Option  Plan,  effective  June 1,  2001.  The plan  offers  selected
employees,  directors,  and  consultants  an  opportunity  to acquire our common
stock,  and serves to  encourage  such  persons to remain  employed by us and to
attract new employees. The plan allows for the award of stock and options, up to
600,000 shares of our common stock. In November 2003, we agreed to issue options
to  acquire  600,000  shares  under the Plan to our two  independent  directors;
however,  these  options  will not be issued  until such time as approved by the
Commission in accordance  with rules and  regulations  applicable to BDC's.  Our
Application  For an Order  Pursuant  to Section  61(a)(3)(B)  of The  Investment
Company Act of 1940 to Permit the  Issuance of Stock  Options to  Non-Interested
Directors  is  currently  pending  before  the  Commission.  We hope to  receive
approval to issue the options to our non-interested  directors during the second
quarter of our fiscal year ended December 31, 2005.

      The Summary Compensation Table shows certain compensation  information for
services rendered in all capacities for the fiscal years ended December 31, 2004
and 2003.  Other than as set forth  herein,  no executive  officer's  salary and
bonus  exceeded   $100,000  in  any  of  the  applicable  years.  The  following
information includes the dollar value of base salaries, bonus awards, the number
of stock options granted and certain other compensation, if any, whether paid or
deferred.


                                       19
<PAGE>

<TABLE>
<CAPTION>

                                           ANNUAL COMPENSATION                             LONG TERM COMPENSATION
                                   ------------------------------------  -----------------------------------------------------------
                                                                                    AWARDS                          PAYOUTS
                                                                         ------------------------------    -------------------------
                                                                         RESTRICTED      SECURITIES
                                                        OTHER ANNUAL        STOCK        UNDERLYING        LTIP         ALL OTHER
NAME AND                            SALARY    BONUS     COMPENSATION       AWARDS       OPTIONS SARS       PAYOUTS    COMPENSATION
PRINCIPAL POSITION          YEAR     ($)       ($)          ($)              ($)            (#)              ($)           ($)

<S>                         <C>       <C>       <C>         <C>               <C>            <C>              <C>           <C>
Carl M. Berg                2005     -0-       -0-          $-0-             -0-            -0-              -0-           -0-
   Chairman,    President,  2004     -0-       -0-          $-0-             -0-            -0-              -0-           -0-
   Secretary, Treasurer

Kevin J. Gadawski           2005     -0-       -0-       $5,000 (2)          -0-            -0-              -0-           -0-
   Director                 2004     -0-       -0-       $5,000 (3)          -0-            -0-              -0-           -0-

Mark Stewart                2005     -0-       -0-          $-0-             -0-            -0-              -0-           -0-
   Director                 2004     -0-       -0-          $-0-             -0-            -0-              -0-           -0-


(1)   This amount was accrued  until March 26,  2004,  when Mr. Berg elected for
      forgive  all  amounts  owed to him,  as well as any  future  salary  until
      further notice.
(2)   As of December 31, 2005, Mr. Gadawski received $3,750 of this amount.  The
      other $1,250 has been accrued.  (3) Mr.  Gadawski  received $2,500 of this
      amount in the year end December 31, 2004. The other $2,500 was paid in the
      year ended December 31, 2005.

                      OPTION/SAR GRANTS IN LAST FISCAL YEAR
                               (INDIVIDUAL GRANTS)
<CAPTION>

                          NUMBER OF SECURITIES       PERCENT OF TOTAL
                               UNDERLYING          OPTIONS/SARS GRANTED     EXERCISE OR
                          OPTIONS/SARS GRANTED    TO EMPLOYEES IN FISCAL    BASE PRICE
NAME                               (#)                     YEAR               ($/SH)        EXPIRATION DATE

<S>                                <C>                    <C>                  <C>               <C>
Carl M. Berg                       -0-                     N/A                  N/A               N/A

Kevin J. Gadawski                  -0-                     N/A                  N/A               N/A

Mark Stewart                       -0-                     N/A                  N/A               N/A



              AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR
                          AND FY-END OPTION/SAR VALUES
<CAPTION>

                                                                                     VALUE OF UNEXERCISED
                                                         NUMBER OF UNEXERCISED           IN-THE-MONEY
                         SHARES ACQUIRED                 SECURITIES UNDERLYING            OPTION/SARS
                                ON         VALUE        OPTIONS/SARS AT FY-END             AT FY-END
                             EXERCISE      REALIZED               (#)                         ($)
NAME                           (#)            ($)      EXERCISABLE/UNEXERCISABLE   EXERCISABLE/UNEXERCISABLE

<S>                           <C>            <C>                  <C>                        <C>
Carl M. Berg                   N/A            N/A                 N/A                         N/A

Kevin J. Gadawski              N/A            N/A                 N/A                         N/A

Mark Stewart                   N/A            N/A                 N/A                         N/A

</TABLE>


                                       20
<PAGE>

COMPENSATION OF DIRECTORS

      In  November  2003,  we  agreed to issue to each of Mr.  Gadawski  and Mr.
Stewart  options to acquire  300,000  shares of our common  stock for serving as
directors of the Corporation. The issuance of the options is subject to approval
of the SEC pursuant to provisions  of the  Investment  Company Act of 1940,  and
will not be issued until the issuance is approved by the SEC. The options are to
be  exercisable  for a period of ten years from their grant date, at an exercise
price  equal to the fair market  value on the grant  date,  and will expire upon
their  resignation  from the Board.  Our  Application  For an Order  Pursuant to
Section 61(a)(3)(B) of The Investment Company Act of 1940 to Permit the Issuance
of Stock Options to  Non-Interested  Directors is currently  pending  before the
Commission.   We  hope  to  receive   approval  to  issue  the  options  to  our
non-interested  directors  during  the second  quarter of our fiscal  year ended
December 31, 2006.

      In  addition,  we have agreed to pay Mr.  Gadawski  $1,250 per quarter for
additional consulting services.

      Mr.  Berg has not  received  any  compensation  for serving as a director.
Other than as set forth  herein,  no  compensation  has been given to any of the
directors,  although they may be reimbursed for any  pre-approved  out-of-pocket
expenses.

ITEM 12 - SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS AND  MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

      The following table sets forth, as of March 30, 2006, certain  information
with respect to the Company's equity  securities owned of record or beneficially
by (i) each  Officer  and  Director  of the  Company;  (ii) each person who owns
beneficially  more than 5% of each  class of the  Company's  outstanding  equity
securities; and (iii) all Directors and Executive Officers as a group.

<TABLE>
<CAPTION>

                                                                                 Percentage of
                                  Nature of              Common Stock            Common Stock
Name and Address (1)              Affiliation            Ownership               Ownership (2)
------------------------------    -------------------    --------------------    ---------------------

<S>                               <C>                       <C>                       <C>
Carl M. Berg                      Chairman of the           5,550,000 (3)               84.7%
                                  Board, President,
                                  Secretary and
                                  Treasurer

Brian A. Lebrecht (4)             5% Shareholder               450,000                   6.8%

Kevin J. Gadawski                 Independent              300,500 (5)(6)              4.6% (5)
                                  Director

Mark Stewart                      Independent                300,000 (5)               4.6% (5)
                                  Director

All Officers and Directors                               6,150,500 (3)(5)(6)          93.9% (5)
as a Group
(3 Persons)

</TABLE>


                                       21
<PAGE>

      (1)   Unless stated otherwise,  the address of each affiliate is c/o M-GAB
            Development Corporation, 9900 Research Drive, Irvine, CA 92618.

      (2)   Unless  otherwise  indicated,  based on  6,550,512  shares of common
            stock  issued and  outstanding.  Shares of common  stock  subject to
            options or warrants currently exercisable,  or exercisable within 60
            days,  are  deemed   outstanding   for  purposes  of  computing  the
            percentage of the person  holding such options or warrants,  but are
            not deemed  outstanding  for purposes of computing the percentage of
            any other person.

      (3)   Includes  3,000,000  shares held of record by Sadie,  LLC, an entity
            wholly-owned  and  controlled  by Mr.  Berg.  Mr.  Berg is our  sole
            officer.

      (4)   Mr. Lebrecht is President of The Lebrecht Group,  APLC, which serves
            as our securities counsel.

      (5)   Includes  options to acquire  300,000  shares of common  stock which
            will be  granted  to  each of Mr.  Gadawski  and  Mr.  Stewart  upon
            approval by the Commission in compliance with the Investment Company
            Act of 1940.

      (6)   Includes 500 shares held by Mr. Gadawski's spouse.

      The issuer is not aware of any  person who owns of record,  or is known to
own  beneficially,  five percent or more of the  outstanding  securities  of any
class of the issuer,  other than as set forth above.  The issuer is not aware of
any  person  who  controls  the issuer as  specified  in section  2(a)(1) of the
Investment  Company Act of 1940. There are no classes of stock other than common
stock issued or outstanding. There are currently warrants outstanding to acquire
333,334  shares of our common  stock at $0.15 per  share,  and other than as set
forth herein, there are no options,  warrants, or other rights to acquire common
stock outstanding. The Company does not have an investment advisor.

      Subsequent  to our fiscal year end, on March 15, 2006,  we entered into an
Agreement  and  Plan of  Merger  with  China  Agro  Sciences  Corp.,  a  Florida
corporation ("China Agro") whereby,  at the closing,  China Agro will merge with
DaLian  Acquisition  Corp.,  a  Florida  corporation  that  is our  wholly-owned
subsidiary.  As a result of the merger,  China Agro will  become a  wholly-owned
subsidiary of M-GAB, and we will issue  13,349,488  shares of M-GAB common stock
to the former owners of China Agro. At the same time,  certain of the China Agro
shareholders  will acquire  5,500,000  M-GAB shares  directly  from our majority
shareholder,  director, and sole officer, Carl M. Berg, and his holding company.
Following the closing, the China Agro shareholders will own 18,849,488 shares of
our common  stock,  or 94.2% of our  then-outstanding  20,000,000  shares.  As a
condition  precedent to the closing,  we are required to take certain steps that
will  require  shareholder  approval,  including  terminating  our  status  as a
Business  Development  Company  under the  Investment  Company  Act of 1940.  We
anticipate  that a  closing  will  take  place  in  late  April  2006.  If  this
transaction closes it will result in a change of control.

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      On April 20, 2001, our founder,  Carl M. Berg,  purchased 2,550,000 shares
of  common  stock  for  $255.00.  On April  20,  2001,  Sadie,  LLC,  an  entity
wholly-owned  and controlled by Mr. Berg,  purchased  3,000,000 shares of common
stock for $300.00. Also on April 20, 2001, Brian A. Lebrecht, our legal counsel,
purchased  450,000  shares of common stock for $45.00.  The total purchase price
from these transactions was $600.00.

      We have engaged one of our  shareholders,  Mr. Lebrecht,  as our corporate
counsel.  For the twelve  months ended  December 31, 2005,  we did not incur any
legal fees to Mr. Lebrecht's law firm since he has agreed to forego all fees for
legal services  related to our Company until further  notice.  Mr. Lebrecht also
agreed to forgive amounts due to his law firm in 2004.

                                       22
<PAGE>

      Our  President,  Mr. Berg, has elected to forego a salary during our early
development  stages. He also provided office space for us. We estimate the value
of these services to be $6,000 per year for the twelve months ended December 31,
2005 and 2003.  As of December 31, 2004, we did not have any amounts owed to Mr.
Berg as he has  agreed to  forgive  all  amounts  we owed to him  until  further
notice. In addition,  one of our directors,  Mr. Gadawski,  provides  consulting
services to us

      In  November  2003,  we  agreed to issue to each of Mr.  Gadawski  and Mr.
Stewart  options to acquire  300,000  shares of our common  stock for serving as
directors of the Corporation. The issuance of the options is subject to approval
of the SEC pursuant to provisions  of the  Investment  Company Act of 1940.  The
options are to be  exercisable  for a period of ten years from their grant date,
at an exercise price of $0.15 per share, and will expire upon their  resignation
from the Board.  In  addition,  we have  agreed to pay Mr.  Gadawski  $1,250 per
quarter for consulting services.

ITEM 14 - PRINCIPAL ACCOUNTING FEES AND SERVICES

AUDIT FEES

      During  the  fiscal  years  ended  December  31,  2005 and  2004,  Ramirez
International  billed  us  $19,000  and  $18,860,   respectively,  in  fees  for
professional  services  for the audit of our  annual  financial  statements  and
review of financial statements included in our Forms 10-KSB and 10-QSB.

AUDIT - RELATED FEES

      During  the  fiscal  years  ended  December  31,  2005 and  2004,  Ramirez
International  billed  us  $$19,000  and  $18,860,  respectively,  in  fees  for
assurance  and  related  services  related to the  performance  of the audit and
review of the Company's financial statements.

TAX FEES

      During  the  fiscal  years  ended  December  31,  2005 and  2004,  Ramirez
International billed us $1,020 and $800, respectively,  in fees for professional
services for tax planning and preparation.

ALL OTHER FEES

      During  the  fiscal  years  ended  December  31,  2005 and  2004,  Ramirez
International did not bill the Company for any other fees.

      Of the fees  described  above for the fiscal year ended December 31, 2005,
100% were  approved by the by the Audit  Committee  of the Board of Directors of
the Company.  Of the fees described above for the fiscal year ended December 31,
2004,  100% were either  approved in advance by the Audit Committee if it was in
existence  at the  time of  approval,  or  subsequently  ratified  by the  Audit
Committee.


                                       23
<PAGE>


                                     PART IV

ITEM 15 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES

         (A)   EXHIBITS

          3.1(1)    Articles of Incorporation of M-GAB Development Corporation

          3.2(1)    Bylaws of M-GAB Development Corporation

          10.1(2)   M-GAB  Development  Corporation  Amended and  Restated  2001
                    Omnibus Securities Plan

          10.2(2)   M-GAB Development Corporation 2004 Omnibus Securities Plan

          31.1      Rule  13a-14(a)/15d-14(a)  Certification  of Chief Executive
                    Officer

          31.2      Rule  13a-14(a)/15d-14(a)  Certification  of Chief Financial
                    Officer

          32.1      Chief Executive  Officer  Certification  Pursuant to 18 USC,
                    Section  1350,  as Adopted  Pursuant  to Section  906 of the
                    Sarbanes-Oxley Act of 2002.

          32.2      Chief Financial  Officer  Certification  Pursuant to 18 USC,
                    Section  1350,  as Adopted  Pursuant  to Section  906 of the
                    Sarbanes-Oxley Act of 2002.

          (1)  Incorporated by reference from our Registration Statement on Form
               SB-2 filed with the Commission on August 31, 2001.
          (2)  Incorporated  by  reference  from our annual  Form  10-KSB  dated
               December  31,  2005,  as filed with the  Commission  on March 25,
               2005.


         (B)   REPORTS ON FORM 8-K

              We made no 8-K filings during the quarter ended December 31, 2005.



                                       24
<PAGE>



                                   SIGNATURES

      In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                        M-GAB Development Corporation


Dated:   March 30, 2006                 /s/ Carl M. Berg
                                        ------------------------
                                        By: Carl M. Berg
                                        Its:President, Chief Executive Officer,
                                            Chief Financial Officer


      In accordance  with the Exchange Act, this report has been signed below by
the following  persons on behalf of the  registrant and in the capacities and on
the dates indicated.


Dated:   March 30, 2006                 /s/ Carl M. Berg
                                        ------------------------
                                        By: Carl M. Berg, Director


Dated:   March 30, 2006                 /s/ Kevin J. Gadawski
                                        ------------------------
                                        By: Kevin J. Gadawski, Director


Dated:   March 30, 2006                 /s/ Mark Stewart
                                        ------------------------
                                        By: Mark Stewart, Director





                                       25
<PAGE>







                          M-GAB DEVELOPMENT CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)

                       FINANCIAL STATEMENTS AND REPORT OF
             INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM

                           DECEMBER 31, 2005 AND 2004






<PAGE>




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




To:      The Board of Directors of
         M-GAB DEVELOPMENT CORPORATION

We have audited the accompanying balance sheets of M-GAB DEVELOPMENT CORPORATION
(the  "Company") (a Development  Stage Company) as of December 31, 2005 and 2004
and the related  statements of operations,  stockholders'  equity and cash flows
for each of the years then ended and the period from inception  (March 27, 2001)
through December 31, 2005. These financial  statements are the responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
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 audit to obtain reasonable  assurance about whether
the financial  statements are free of material  misstatement.  An audit includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
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 the Company as of December 31,
2005 and 2004 and the results of its  operations  and its cash flows for each of
the years then ended and the period  from  inception  (March 27,  2001)  through
December 31, 2005, in conformity with accounting  principles  generally accepted
in the United States of America.

The accompanying  financial  statements have been prepared  assuming the Company
will  continue  as a going  concern.  As  discussed  in Note 2 to the  financial
statements, the Company has no established source of revenue and is dependent on
its  ability to raise  substantial  amounts of  capital.  Management's  plans in
regard to these  matters  are also  described  in Note 2.  These  matters  raise
substantial  doubt about the Company's  ability to continue as a going  concern.
The financial  statements do not include any adjustments  that might result from
the outcome of this uncertainty.


RAMIREZ INTERNATIONAL
FINANCIAL & ACCOUNTING SERVICES, INC.




March 30, 2006
Irvine, CA



<PAGE>


                          M-GAB DEVELOPMENT CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                                  BALANCE SHEET
                                  DECEMBER 31,

<TABLE>
<CAPTION>

                                                                                2005             2004
                                                                           -----------------------------

                                     ASSETS
<S>                                                                           <C>               <C>
Current assets:

       Cash                                                                   $     --          $ 17,403

Non current assets:
       Investment in stock                                                      25,000                --
                                                                              --------------------------
       Total assets                                                           $ 25,000          $ 17,403
                                                                              ==========================

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
       Accounts payable and accrued liabilities                               $  4,746          $  9,324
       Payable to stockholder                                                   17,201                --
                                                                              --------------------------
       Total current liabilities                                                21,947             9,324


Commitments and contingencies                                                       --                --

Stockholders' equity:
       Preferred stock, $0.001 par value;
          5,000,000 shares authorized; No shares
          issued or outstanding                                                     --                --
       Common stock, $0.001 par value; 100,000,000
          shares authorized; 6,550,512 and 6,383,845
          shares issued and outstanding                                          6,550             6,384
       Additional paid in capital                                               89,674            64,840
       Deficit accumulated during the development stage                        (93,171)          (63,145)
                                                                              --------------------------
          Total stockholders' equity
                                                                                 3,053             8,079
                                                                              --------------------------

Total liabilities and stockholders' equity                                    $ 25,000          $ 17,403
                                                                              ==========================
</TABLE>





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


                                      F-1
<PAGE>


                          M-GAB DEVELOPMENT CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                             STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>

                                                    Cumulative from           Year               Year
                                                    inception (March          Ended              Ended
                                                   27, 2001) through         December           December
                                                   December 31, 2005         31, 2005           31, 2004
                                                   --------------------------------------------------------
<S>                                                       <C>                   <C>                  <C>
Revenue                                               $        --          $        --                   $-

General and administrative expenses                       176,526               30,026               26,296

Other income                                               83,355                   --               83,355

                                                   --------------------------------------------------------
Net income (loss)                                     $   (93,171)         $   (30,026)         $    57,059
                                                   ========================================================

Basic and diluted net income (loss) per share                              $     (0.01)         $      0.01

Weighted average shares outstanding                                          6,507,130            6,321,699

</TABLE>



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


                                      F-2
<PAGE>

                          M-GAB DEVELOPMENT CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                        STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>

                                                                                           Deficit
                                                Common Stock             Additional   Accumulated During
                                          -------------------------        Paid-in      the Development
                                             Shares       Par Value        Capital           Stage          Total
                                          -----------  -------------   --------------   ------------    ------------
<S>                                         <C>            <C>             <C>             <C>             <C>
Issuance of common stock to
   founders on April 20, 2001               6,000,000      $   6,000       $   (5,400)     $      --       $     600

Issuance of common stock for
   cash in August 2001                         13,000             13            1,287                          1,300


Contributed capital-services                                                   14,199                         14,199


Net loss                                                                                     (19,575)        (19,575)
                                            ---------      ---------       ----------      ---------       ---------
Balance, December 31, 2001                  6,013,000          6,013           10,086        (19,575)         (3,476)

Issuance of common stock for
   cash in September 2002                      10,000             10              990                          1,000


Net loss                                                                                     (37,376)        (37,376)
                                            ---------      ---------       ----------      ---------       ---------
Balance, December 31, 2002                  6,023,000      $   6,023       $   11,076      $ (56,951)      $ (39,852)
                                            =========      =========       ==========      =========       =========

Net loss                                                                                   ($ 63,253)      $ (63,253)
                                            ---------      ---------       ----------      ---------       ---------
Balance, December 31, 2003                  6,023,000      $   6,023       $   11,076      $(120,204)      $(103,105)
                                            =========      =========       ==========      =========       =========

Issuance of common stock for                  360,385            361           46,547                         46,908
  cash in March 2004

Issuance of common stock for
  cash in March 2004                                                            7,217                          7,217


Net income                                                                                    57,059          57,059

                                            ---------      ---------       ----------      ---------       ---------
Balance, December 31, 2004                  6,383,385      $   6,384       $   64,840      $ (63,145)      $   8,079
                                            =========      =========       ==========      =========       =========

Shares issued in stock exchange               166,667            166           24,834                         25,000

Net loss                                                                                     (30,026)        (30,026)

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

Balance, December 31, 2005                  6,550,052      $   6,550       $   89,674      $ (93,171)      $   3,053
                                            =========      =========       ==========      =========       =========
</TABLE>


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


                                      F-3
<PAGE>


                         M-GAB DEVELOPMENT CORPORATION
                         (A DEVELOPMENT STAGE COMPANY)
                            STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>

                                                         Cumulative from
                                                         inception (March
                                                           27, 2001) to      Year Ended        Year Ended
                                                            December 31,     December 31,      December 31,
                                                               2005             2005              2004
                                                         --------------------------------------------------
<S>                                                           <C>              <C>               <C>
Cash flows from operating activities:
Net income (loss)                                             (93,171)         $(30,026)         $ 57,059
Adjustments to reconcile net loss to cash used in
  operating activities:

      Contributed capital for services rendered                14,199                --                --
      Forgiveness of accounts payable and payable
        to stockholder                                        (83,355)               --           (83,355)
      Increase (decrease) in accounts payable
        and accrued liabilities                                78,101            (4,578)          (10,426)
                                                         --------------------------------------------------

       Net cash used by operating activities                  (84,226)          (34,604)          (36,722)
                                                         --------------------------------------------------

Cash flows from financing activities:

      Proceeds from issuance of stock                          57,025                --            54,125

      Advance from shareholder                                 27,201            17,201                --
                                                         --------------------------------------------------
       Net cash provided by financing activities
                                                               84,226                --            54,125

      Net increase (decrease) in cash                              --           (17,403)           17,403
                                                         --------------------------------------------------

      Cash and cash equivalents, beginning of period               --            17,403                --
                                                         --------------------------------------------------
      Cash and cash equivalents, end of period               $     --          $     --          $ 17,403
                                                         ==================================================

</TABLE>



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



                                      F-4
<PAGE>


1.   NATURE OF OPERATIONS AND ACCOUNTING POLICIES
     --------------------------------------------

Nature of Operations. The Company incorporated in Florida on March 27, 2001. The
fiscal year end of the Company is December 31. Planned  principal  operations of
the Company  have not yet  commenced;  activities  to date have been  limited to
forming the  Company,  developing  its  business  plan,  and  obtaining  initial
capitalization.  On May 16, 2003, the Company filed an election to be treated as
a business  development company ("BDC") under the Investment Company Act of 1940
(the "1940 Act"),  which became  effective on the date of filing.  Subsequent to
the BDC election the  Company's  principal  business is to make venture  capital
investments in early-stage  and/or  developing  enterprises that are principally
engaged  in  the  development  or  exploitation  of  inventions,   technological
improvements, and new or unique products and services.

Principles  of  Accounting.  The  accompanying  financial  statements  have been
prepared in conformity with generally accepted accounting principles.

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

Shares  Issued in  Exchange  for  Services.  The fair value of shares  issued in
exchange for services  rendered to the Company is  determined  by the  Company's
officers and directors, as there is currently no market for the Company's stock.

Cash and Cash  Equivalents.  The Company includes cash on deposit and short-term
investments  with  original  maturities  less than  ninety days as cash and cash
equivalents in the accompanying financial statements.

General and  Administrative  Expenses.  The Company's general and administrative
expenses  consisted  primarily of legal and accounting  fees for the years ended
December 31, 2005 and 2004.

Research  and  Development.  Research  and  development  costs are  expensed  as
incurred as required by  Statement  of  Financial  Accounting  Standards  No. 2,
"Accounting  for Research and  Development  Costs." As of December 31, 2005,  no
research and development costs have been incurred.

Advertising.  Advertising  costs are charged to operations  when  incurred.  The
Company has not incurred any advertising costs.

Stock-Based  Compensation.  Statement of Financial Accounting Standards No. 123,
Accounting  for Stock  Based  Compensation,  encourages,  but does not  require,
companies to record  compensation  cost for  stock-based  employee  compensation
plans  at fair  value.  The  Company  has  chosen  to  account  for  stock-based
compensation  using the intrinsic value method  prescribed in previously  issued
standards. Accordingly,  compensation cost for stock options issued to employees
is  measured as the excess,  if any, of the fair market  value of the  Company's
stock at the date of grant over the amount an  employee  must pay to acquire the
stock.  Compensation  is charged to expense  over the  shorter of the service or
vesting period.  Stock options issued to non-employees  are recorded at the fair
value  of the  services  received  or the  fair  value  of the  options  issued,
whichever is more reliably  measurable,  and charged to expense over the service
period.

Income  Taxes.  The Company has not made a provision for income taxes because of
its financial  statement and tax losses since its inception on March 27, 2001. A
valuation  allowance has been used to offset the recognition of any deferred tax
assets related to net operating  loss  carryforwards  due to the  uncertainty of
future realization.  The use of any tax loss carry-forward  benefits may also be
limited as a result of changes in Company ownership.

Fair  Value  of  Financial   Instruments.   The  Company  considers  all  liquid
interest-earning investments with a maturity of three months or less at the date
of purchase to be cash  equivalents.  Short-term  investments  generally  mature
between  three  months  and six  months  from the  purchase  date.  All cash and
short-term  investments are classified as available for sale and are recorded at
market using the specific identification method; unrealized gains and losses are
reflected  in other  comprehensive  income.  Cost  approximates  market  for all
classifications of cash and short-term investments.

                                      F-5
<PAGE>

Net  Income  (Loss)  per  Common  Share.  Net loss per  share is  calculated  in
accordance with Statement of Financial  Accounting  Standards No. 128,  Earnings
Per Share. Basic net loss per share is based upon the weighted average number of
common shares outstanding. Diluted net loss per share is based on the assumption
that  options are  included in the  calculation  of diluted  earnings per share,
except  when their  effect  would be  anti-dilutive.  Dilution  is  computed  by
applying the treasury stock method. Under this method,  options and warrants are
assumed  to be  exercised  at the  beginning  of the  period  (or at the time of
issuance,  if later),  and as if funds  obtained  thereby  were used to purchase
common stock at the average market price during the period.

Recently  Enacted  Accounting  Standards.   Statement  of  Financial  Accounting
Standards  ("SFAS")  No.  146,  "Accounting  for Costs  Associated  with Exit or
Disposal  Activities",   SFAS  No.  147,   "Acquisitions  of  Certain  Financial
Institutions  - an  Amendment  of  FASB  Statements  No.  72 and  144  and  FASB
Interpretation No. 9", SFAS No. 148, "Accounting for Stock-Based  Compensation -
Transition and  Disclosure - an Amendment of FASB  Statement No. 123",  SFAS No.
149,  "Amendment  of  Statement  133  on  Derivative   Instruments  and  Hedging
Activities",  and SFAS No. 150,  "Accounting for Certain  Financial  Instruments
with Characteristics of both Liabilities and Equity", were recently issued. SFAS
No. 146, 147, 148, 149 and 150 have no current  applicability  to the Company or
their effect on the financial statements would not have been significant.

2    GOING CONCERN
     -------------

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going concern. As shown in the financial  statements,
the Company has no established  source of revenue,  and as of December 31, 2005,
the Company had limited working  capital.  In addition,  the Company has been in
the  development  stage since its  inception in 2001 and is dependent on outside
financing to fund its operations. These factors, among others, raise substantial
doubt about the Company's ability to continue as a going concern.

Management's  plans  in  regard  to  these  matters  are to  continue  to  raise
additional  capital  from  selling the  Company's  stock.  However,  there is no
assurance  that the Company  will be able to obtain such  financing.  Management
believes  actions  currently being taken provide the opportunity for the Company
to continue as a going  concern.  The  financial  statements  do not include any
adjustments that might result from the outcome of this uncertainty.

3.   STOCKHOLDERS' EQUITY
     --------------------

Founders'  Stock.  The Company issued  6,000,000 shares of common stock on April
20, 2001 for cash totaling $600.

2001  Private  Placement  Memorandum.  On June 1,  2001,  the  Company  began an
offering  to sell up to  100,000  shares  of  common  stock at $0.10  per  share
pursuant to a Private  Placement  Memorandum.  In August 2001,  the Company sold
13,000  shares of its common  stock at $0.10 under this private  placement.  All
proceeds  from  this  offering  were  used for  pre-incorporation  expenditures,
consulting fees and working capital.

Registered  Stock  Offering.  During the quarter  ended  December 31, 2002,  the
Company  sold  10,000  shares of its  common  stock at $0.10 per share for total
proceeds of $1,000.  The stock offering was pursuant to the Company's  effective
Form SB-2/A registration statement dated November 15, 2001. The Company used the
proceeds  to  repay  advances  and  general  and  administrative  expenses.  The
Company's registered offering expired on October 30, 2002.

2004 Private  Placement  Memorandum.  On March 2, 2004, the Company sold 360,845
stock units at $0.15 each for net proceeds of $54,125.  Each stock unit consists
of one share of  common  stock and a  warrant  to  purchase  one share of common
stock.  The stock  warrants are  exercisable at any time before March 8, 2007 at
$0.15 per share of common stock. The Company's net proceeds of $54,125 from this
stock sale will be used to fund Company operations.

The Company has computed the fair value of the stock warrants issued to be $0.02
per warrant. The Company recorded the total fair value of the warrants of $7,217
as an increase to its additional paid in capital in the  accompanying  financial
statements.  The Company used the Black-Sholes option pricing model to value the
warrants  with  the  following  assumptions:  risk-free  interest  rate of 6.0%,
expected dividend yield of 0, expected life of 3 years, and expected  volatility
of 1.0.

Stock Exchange  Agreement.  On April 1, 2005,  the Company  entered into a Stock
Exchange Agreement with NuQuest,  Inc.  ("NuQuest").  Pursuant to the agreement,
the  Company  agreed to issue a total of 166,667  shares of its common  stock to
NuQuest in exchange for a total of 20,000  shares of restricted  NuQuest  common
stock.  The value of the stock to be  exchanged by both parties was agreed to be
$25,000.  NuQuest further agreed to declare a dividend and distribute the shares
of the Company's  exchanged  common stock pro-rata to all of their  shareholders
except for three,  who agreed to forego the  dividend.  The Company has recorded
the  NuQuest  shares as a long term asset on the  enclosed  balance  sheet as of
December 31, 2005.  As of December 31, 2005,  the Company has not  established a
valuation allowance relative to the NuQuest shares.

                                      F-6
<PAGE>

Amended  and  Restated  2001  Stock  Option  Plan.   The  Company's   Board  and
shareholders  approved a Stock Option Plan, effective June 1, 2001. The plan was
amended by the Board and shareholders to the Company's Amended and Restated 2001
Omnibus  Securities  Plan,  effective May 27, 2004 ("2001 Plan").  The 2001 Plan
limits the aggregate number of shares available to 600,000. Each award under the
2001 Plan will be evidenced by a Stock Purchase  Agreement;  each agreement will
establish the vesting  requirements and the maximum term of the options granted.
On November 4, 2003,  the Company  agreed to issue  600,000 stock options to two
directors  under the 2001 Plan.  In accordance  with the  Company's  status as a
business  development  company,  the stock  options will not be issued until the
Securities and Exchange  Commission  ("SEC")  approves the issuances,  which the
Company believes will occur during the next quarter. If approved by the SEC, the
exercise price of the stock options will be at or above the fair market value of
the Company's common stock on the issuance date.

2004 Omnibus Securities Plan. The Company's Board and shareholders  approved the
Company's 2004 Omnibus  Securities  Plan,  effective May 27, 2004 ("2004 Plan").
The 2004 Plan  limits the  aggregate  number of shares  that can issue under the
plan to 650,000  shares.  Each award under the 2004 Plan will be  evidenced by a
Stock Purchase Agreement; each agreement will establish the vesting requirements
and the maximum  term of the  options  granted.  The Company has not issued,  or
agreed to issue,  any stock or options under the 2004 Plan.  In accordance  with
the Company's status as a business development company, no stock or options will
be issued under the Plan until the SEC  approves  the 2004 Plan.  If approved by
the SEC, any stock or option  issuances  under the 2004 Plan will be at or above
the fair market value of the Company's common stock on the date of issuance.

4.   INCOME (LOSS) PER SHARE
     -----------------------

The  following  data show the amounts  used in computing  net income  (loss) per
share for the periods presented:

                                                For the Years Ended
                                                   December 31,
                                                -------------------
                                                  2005         2004
                                                ---------    ---------
       Income   (loss)   from   continuing
       operations   available   to  common
       shareholders (numerator)
                                                $ (30,026)   $ 57,059
                                               ----------   ----------
        Weighted  average  number of common
        shares outstanding used in loss per
        share     during     the     period
        (denominator)
                                                6,507,130   6,321,699
                                               ----------   ----------

Dilutive loss per share was not presented, as the Company had no common
equivalent shares for all periods presented that would effect the computation of
diluted loss per share.

5.   INCOME TAXES
     ------------

The Company  accounts for income taxes in accordance with Statement of Financial
Accounting  Standards No. 109  "Accounting  for Income Taxes" which requires the
liability approach for the effect of income taxes.

                                      F-7
<PAGE>

The  Company  has  available  at  December  31,  2005,   unused  operating  loss
carryforwards  of  approximately  $93,000,  which may be applied  against future
taxable  income  and which  expire in various  years  through  2025.  If certain
substantial  changes in the Company's  ownership should occur, there could be an
annual limitation on the amount of net operating loss carryforward  which can be
utilized.  The  amount of and  ultimate  realization  of the  benefits  from the
operating loss carryforwards for income tax purposes is dependent, in part, upon
the tax laws in effect,  the future  earnings of the  Company  and other  future
events,  the effects of which cannot be determined.  Because of the  uncertainty
surrounding  the  realization  of  the  loss  carryforwards,   the  Company  has
established  a  valuation  allowance  equal  to  the  tax  effect  of  the  loss
carryforwards, therefore, no deferred tax asset has been recognized for the loss
carryforwards.  The net  deferred  tax assets  were  approximately  $32,000  and
$21,000  at  December  31,  2005  and  2004,  respectively,  with an  offsetting
valuation  allowance of the same amount  resulting in a change in the  valuation
allowance of approximately $11,000 during the year ended December 31, 2005.

6.   RELATED PARTY TRANSACTIONS
     --------------------------

The Company has engaged one of its shareholders,  Mr. Lebrecht, as its corporate
counsel.  For the years ended December 31, 2005 and 2004,  the Company  incurred
total legal  services and out of pocket costs to Mr.  Lebrecht's  firm of $1,567
and $324,  respectively.  As of  December  31,  2005 and 2004,  the  Company had
amounts due to Mr.  Lebrecht  of  approximately  $17,000 and $24,  respectively,
which  are  recorded  in  accounts  payable  and  accrued   liabilities  in  the
accompanying financial statements.  In addition, the Company received an advance
of $10,000 from Mr. Lebrecht for organizational costs. The Company recorded this
advance as a payable to  stockholder as of December 31, 2003. On March 26, 2004,
The Lebrecht  Group,  APLC,  agreed to forgive  amounts owed to them of $73,955,
including the $10,000 advance.  The forgiveness of these amounts was recorded as
other  income  in the  accompanying  financial  statements  for the  year  ended
December 31, 2004.

The Company's President, Mr. Berg, has elected to forego a salary during its
early development stages. Mr. Berg has also provided office space to the
Company. In prior years, the Company estimated the value of these services to be
$6,000 for the year ended December 31, 2004. As of December 31, 2003, the
Company had amounts due to Mr. Berg of $9,400, which were recorded in accounts
payable and accrued liabilities in the accompanying financial statements. On
March 26, 2004, the Company's director and officer agreed to forgive $9,400 of
the Company's debt owed to him. As of December 31, 2005, there were no amounts
due Mr. Berg. The forgiveness of debt was recorded as other income in the
accompanying financial statements for the year ended December 31, 2004.

In addition, one of the Company's directors, Mr. Gadawski, provided consulting
services to the Company in 2005 and 2004. As of December 31, 2005, the Company
had $1,250 due to Mr. Gadawski for services rendered during the year ended
December 31, 2005.

In November 2003, the Company agreed to issue to each of Mr. Gadawski and Mr.
Stewart options to acquire 300,000 shares of our common stock for serving as
directors of the Corporation. As of December 31, 2005, the Company has not
issued these options, as this issuance of options is subject to approval of the
SEC pursuant to provisions of the Investment Company Act of 1940.

7.   SUBSEQUENT EVENTS
     -----------------

On  February  10,  2006,  the Company  entered  into a letter of intent with the
shareholders  of  DaLian  RunZe  Chemurgy  Co.,  Ltd  (the   "Purchasers.")  The
Purchasers  agreed  to pay a total  of  $515,000  to The  Lebrecht  Group,  APLC
("TLG,")  legal  counsel  for the  Company,  the  Company  and  its  controlling
shareholders. Upon signing the letter of intent, the Purchasers paid $300,000 as
a  deposit  and  the  remaining  amount  will  be  paid  at the  closing  of the
Transaction.  Subsequent to entering into this letter of intent,  the Purchasers
were replaced with China Agro Sciences  Corp.,  a Florida  corporation,  and the
terms of the letter of intent remained the same.

On March 15, 2006, the Company entered into an Agreement and Plan of Merger (the
"Agreement")  with China Agro  Sciences  Corp.,  a Florida  corporation  ("China
Agro") whereby,  at the closing,  China Agro will merge with DaLian  Acquisition
Corp, a Florida  corporation  that is a wholly-owned  subsidiary  created by the
Company  in 2006 for this  merger.  As a result of the  merger,  China Agro will
become a  wholly-owned  subsidiary  of the  Company,  and the Company will issue
13,349,488 shares of its common stock to the former owners of China Agro. At the
same time,  certain of the China Agro shareholders will acquire 5,500,000 shares
of the Company's common stock directly from the Company's majority  shareholder,
director, and sole officer, Carl M. Berg, and his holding company. Following the
closing, the China Agro shareholders will own 18,849,488 shares of the Company's
common stock, or 94.2% of the Company's then-outstanding 20,000,000 shares. As a
condition  precedent  to the  closing,  the Company is required to take  certain
steps that will require shareholder  approval,  including terminating its status
as a Business  Development Company under the Investment Company Act of 1940. The
closing of the  Agreement  shall take place no later than May 31,  2006,  unless
extended by a written agreement.

                                      F-8