SECURITIES AND EXCHANGE
COMMISSION WASHINGTON, D.C.
20549  FORM 10-KSB  [x]      Annual Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 [Fee
Required]  For the fiscal year ended June 30,
2005  [ ]      Transition
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
[No Fee Required]  For the transition period from
 to  Commission File Number 0-27835   COZUMEL
CORPORATION  (Exact name of small business
issuer in its charter)  DELAWARE                       
                    
                       
33-0619262 (State or other jurisdiction
of incorporation or organization)     (I.R.S. Employer
Identification No.)  24351 Pasto Road, Suite B Dana
Point,
California                    
                                                           
               92629 (Address of principal executive
offices)                                                                    
(Zip
Code)  Registrant's telephone number, including area
code:         
(949) 489-2400  Securities registered pursuant to Section 12(b)
of the Act: 
None  Securities registered pursuant to Section 12(g)
of the Act:  Common Stock, par value $.001  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  Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in part III of this Form 10-K
or any amendment to this Form 10-K. [ X ]  State issuer's revenues for its most recent fiscal year: None  The aggregate market value of the voting stock held by non-affiliates of the
registrant as of June 30, 2005 was not determinable since the Common Stock was
not traded.  The number of shares outstanding of the issuer's classes of Common Stock as of
June 30, 2005:  Common Stock, $.001 Par Value - 1,000,000
shares  DOCUMENTS INCORPORATED BY REFERENCE:  NONE PART I  Item 1.  DESCRIPTION OF
BUSINESS  Background  Cozumel Corporation, a Delaware corporation (the "Company") was incorporated on
April 20, 1994.  Until January 2005, the Company had no operating history
other than organizational matters, and was formed specifically to be a "clean
public shell" and for the purpose of either merging with or acquiring an
operating company with operating history and assets.  On January 25, 2005,
the Company organized a Florida subsidiary, Cozumel Yacht Brokers, Inc.
(“Cozumel Yachts” and collectively with the Company, “Cozumel” or “we”) and
entered the business of refitting and reselling yachts for its own account and
carrying on yacht brokerage activities incidental to that business.  We do
not at this time refit yachts for other parties although we are considering
doing so, and we are no longer seeking to acquire any other business.  The executive offices of the Company are located at 24351 Pasto Road, Suite B,
Dana Point, California 92629.  Its telephone number is (949)
489-2400.  Yacht Refit Business  We purchase, refit or repair yachts and market them for resale. Our first and
main project is a Burger Aft cockpit motor yacht originally launched in 1965.
This yacht has an aluminum hull and superstructure, with an overall length of
74’. The Burger is being completely refit, with new propulsion, mechanical and
electrical systems and cosmetic renewal. Most of the basic structure has been
retained, but otherwise the Burger will be functionally a brand new boat. The
refit is expected to be completed 6 months from the time we obtain the remaining
funds at which time it will be marketed for sale.  The Burger Boat Company
is a well established brand of luxury yachts which is still in business and has
an excellent reputation. We do not have any relationship with Burger Boat
Company or any other manufacturer mentioned herein.  We have several other projects of lesser magnitude. We purchased a 60’ Nautical
sailboat at a U.S. Marshall’s auction in late 2005 which was repaired and
upgraded. We also purchased a 52’ Hatteras yacht at the U.S. Marshall’s auction
in late 2005. We have purchased two smaller sailboats for refit, one of which we
sold to our President for a nominal amount of cash during fiscal 2006 and for
services rendered.  The second sailboat, a Pacific Seacraft 20’, was
acquired in June 2006 as a salvage boat (it suffered minor hurricane damage from
Hurricane Katrina) and we completed its repair in October 2006. None of these
yachts have been sold to date.  Generally, in selecting yachts for refit, we try to choose those with no serious
structural problems from well regarded manufacturers. For example, although the
20’ sailboat mentioned above is a small yacht, it is extremely well built and
commands a premium in the used boat market. In our opinion there is no better
20’ sailboat commercially manufactured.  We try to buy for an attractive
price and generally hear of acquisition opportunities by word of
mouth. 2    Refit Operations  Refit operations are carried out at a Miami boatyard, where we rent
approximately 1,000 square feet of workshop space and the required boat slips.
We have a crew of 8-10 persons supervised by a project manager. Our crew
includes marine craftsmen but from time to time, specialty tradesmen such as
welders or engine mechanics are engaged for specific repair items.  South
Florida, including Miami, Fort Lauderdale and the surrounding cities is one of
the major yachting regions in the United States, with a complete range of
craftsmen and marine suppliers. However, the 2005 hurricane season severely
affected south Florida. Although none of our operations or assets suffered
damage, many yachts were damaged in 2005, leading to a shortage of tradesmen.
This shortage was alleviated by summer of 2006; however, a repeat of a hurricane
season like 2005 could result in another shortage. In early 2007, we suspended
refit operations for two reasons. First, because our public listing was delayed,
we were unable to obtain the required funding to complete the refit of the
Burger. Secondly, the owner of the boatyard determined to prohibit owner refit
work at the boatyard for larger boats. We have not yet found an alternative
boatyard for our activities and will not do so until we have sufficient funding.   Marketing  We market our yachts through yacht brokerage and co-brokerage agreements. We
have developed web sites at cozumelyachts . com and cozumelyachtbrokers . com.
To date we have not had sufficient funds to do so, but we intend in the future
to advertise our yachts in print media and at boat shows. We may employ
professional yacht brokers on a commission basis to market them as well.  Employees  The Company's only employee at the present time is its sole officer and
director, who will devote as much time as the Board of Directors determine is
necessary to carry out the affairs of the Company.  (See "Management").
Remaining consultants and craftsmen are paid as independent contractors.  Competition  Competition within the yacht repair and refitting industry is intense. We face competition at the local, regional, national and international levels. Our largest competitors for yacht refitting include several large boatyards in the southeastern U.S., but we also compete with innumerable independent persons who buy and fix up boats. We have tried to find a niche by emphasizingquality and by keeping our costs down.However, foreign repair facilities (Venezuela, for example) have much lower laborcosts and do not need to meet U.S. environmental standards.  To the extent that we are buying and selling the yachts for our own account, we compete with innumerable boat dealers and brokers and individual sellers, as well as new boat manufacturers. 3   Regulations  Certain materials used in boat manufacturing are toxic, flammable, corrosive or reactive and classified by state and federal governments as "hazardous materials". Control of hazardous materials is regulated by the U.S. Environmental Protection Agency and state environmental protection agencies. If it is ever determined that our operations have resulted in hazardous waste contamination, the costs of cleaning up those wastes could be substantial and could have a material adverse effect on our business, financial condition and results of operations. We cannot predict our future regulatory compliance costs with precision and we cannot be certain of any costs that we may be forced to incur in connection with our historical on-site or off-site waste disposal.  Certain states have required or are considering requiring a license to operate a recreational boat. These licensing requirements are not expected to be unduly restrictive. They may, however, discourage potential first-time buyers, which could, in turn, adversely affect our business. In addition, certain state and local governmental authorities are contemplating regulatory efforts to restrict boating activities on certain inland bodies of water. While the scope of these potential regulations is not yet known, their adoption and enforcement could have a material adverse effect on our business.  Effect of Fuel Prices and General Economy  Almost all higher end yachts are powered by diesel engines. A significant increase in the price or tax on the sale, or an interruption in the supply of diesel fuel on a regional, national or international basis could adversely affect our sales and operating results. At various times in the past, diesel or gasoline fuel has been difficult to obtain, and we cannot assure you that the supply of those fuels will not be interrupted. In 2007, fuel prices did increase substantially and, in conjunction with the real estate crisis in South Florida, the resale market for yachts has been severely affected. Until the market recovers, we will have a difficult time moving inventory.  Sales trends in the recreational boating industry are influenced by several factors, including general economic growth, consumer confidence, spending habits and household income and net worth levels. Interest rates and fuel prices also have a direct impact on boat sales, as well as demographic trends at the local, regional and national level. Competition from other leisure and recreational activities, such as vacation properties and travel, can also affect sales of recreational boats.  We target a narrow market of wealthy or very wealthy individuals who can afford yachts. We believe that sales of recreational power boats have grown steadily since 1971, except for the 1989 to 1992 time frame. During that four-year period, the effects of a recession, the imposition of a luxury tax, and other adverse political and economic events had a material adverse impact on sales of all boats, but particularly in the upper end of the segment including cruisers and luxury yachts.  We believe the upturn in the industry since 1992 has been fueled by the overall strength of the U.S. economy and the rapid growth in the wealth and number of consumers from the baby-boomer generation, as well as demand for boats from the estimated 35 million adult anglers in the U.S. Our target market is the 35 to 54 age group, which has more disposable income and overlaps with the baby-boomer population. 4   Item 2.  DESCRIPTION OF PROPERTY  The Company shares administrative space with its
sole officer.  The Company pays its own charges for long distance telephone
calls and other miscellaneous secretarial, photocopying and similar expenses.
The Company rented workshop space through 2006 and rents boat slips as needed on
a month-to-month basis at several boatyards in the Miami area. We have the use
of sales facilities provided by our President without charge in St. John, USVI
and on Antigua, WI to accommodate potential foreign purchasers.   Item 3.  LEGAL PROCEEDINGS  Not Applicable.  Item 4.  SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS  No matters were submitted to a vote of security
holders during the fourth quarter of the fiscal year ended June 30,
2005.   PART II   Item 5.  MARKET FOR REGISTRANT'S COMMON
EQUITY AND RELATED STOCK­HOLDER MATTERS  The Company's Common Stock has not traded.  As of June 30, 2005, there were
111 stockholders of record.  Item 6.     
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS  We have not yet enjoyed any revenues. As of June 30, 2005, we have expended
$505,862 for the acquisition of one yacht and its refit. All of our capital
needs have been supplied by advances from an officer and director or proceeds on
a convertible debenture that have been advanced by an affiliate of that officer
and director. The interest rate on the note is 8%, but due to the related party
nature of the note, the interest expense is forgiven and accounted for as
additional paid in capital. We estimate that the refit of the yacht will require
an additional $2 million over the next 2 years. We understand that this amount
is beyond the financial capability of the current funding source and we intend
to carry out a public or private offering of stock or debt as soon as the
Registrant can obtain a listing of its common stock. However, we have no
arrangement or understanding for any funding. The affiliate is under no legal
obligation to continue to supply funding. 5     In the years ended June 30, 2005 and 2004, we received dividend income from
invested funds of $7,342 and $621, respectively. The funds were invested
beginning in May 2004; therefore, the dividend income in fiscal 2004 was much
less.  Gain from sale of available for sale securities of $21,265 in 2005
will not reoccur because these funds have been expended as of year end and we
have no more securities available for sale.  As of June 30, 2005, we had cash on hand of $24,112. Our cash needs to complete
all projects is estimated to be $1,500,000. A party affiliated with a
shareholder has indicated that it can loan these funds to the Company, but is
under no legal obligation to do so. If we are unable to obtain sufficient
funding, we will not be able to complete projects and realize revenue upon their
sale. In the year ended June 30, 2005, our cash needs were met by the sale of
marketable securities of $212,812, dividend income of $7,342, related party
loans of $275,130 and advances from related parties of $51,573.  Information included in this report includes forward looking statements, which
can be identified by the use of forward-looking terminology such as may, expect,
anticipate, believe, estimate, or continue, or the negative thereof or other
variations thereon or comparable terminology. The statements in "Risk Factors"
and other statements and disclaimers in this report constitute cautionary
statements identifying important factors, including risks and uncertainties,
relating to the forward-looking statements that could cause actual results to
differ materially from those reflected in the forward-looking statements.  Since we have not yet generated any revenues, we are a development stage company
as that term is defined in paragraphs 8 and 9 of SFAS No. 7.  Our
activities to date have been limited to seeking capital; seeking supply
contracts and development of a business plan.  Our auditors have included
an explanatory paragraph in their report on our financial statements, relating
to the uncertainty of our business as a going concern, due to our lack of
operating history or current revenues, its nature as a start up business,
management's limited experience and limited funds.  We do not believe that
conventional financing, such as bank loans, is available to us due to these
factors.  We have no bank line of credit available to us.  Management
believes that it will be able to raise the required funds for operations from one or more future offerings, in order to
effect our business plan.  Our future operating results are subject to many facilities, including:  o     our success in completing refits and reselling
yachts;  o     our ability to attract and retain qualified
personnel;  o     the effects of rising fuel prices and general economic
conditions affecting the market for luxury yachts;  o     our ability to obtain additional financing; and  o     other risks which we identify in future filings with
the SEC.  Any or all of our forward looking statements in this annual report and in any
other public statements we make may turn out to be wrong. They can be affected
by inaccurate assumptions we might make or by known or unknown risks and
uncertainties. Consequently, no forward looking statement can be guaranteed. In
addition, we undertake no responsibility to update any forward-looking statement
to reflect events or circumstances which occur after the date of this
report. 6    Item 7.  FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA  The consolidated
financial statements of the Company required to be included in Item 7 are set
forth in the Financial Statements Index.  Item 8.     CHANGES IN AND
DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNT­ING AND FINANCIAL
DISCLOSURE  On September 14, 2005, the Company terminated its relationship with Pritchett, Siler & Hardy, P.C .
(“PSH”) the principal accountant previously engaged to audit the Company’s
financial statements.  The Company’s board of directors approved the
dismissal of  PSH. The audit reports of PSH on the Company’s financial
statements for the fiscal years ending June 30, 2004 and 2003 did not contain
any adverse opinion or disclaimer of opinion, nor was it qualified or modified
as to uncertainty, audit scope, or accounting principles, except such report was
modified to include an explanatory paragraph for a going concern uncertainty. In
connection with the audits of the fiscal years ending June 30, 2004 and 2003
including the subsequent interim periods since engagement through September 14,
2005, the date of termination, the Company had no disagreements with PSH with
respect to accounting or auditing issues of the type discussed in Item
304(a)(iv) of Regulation S-B.  Had there been any disagreements that were
not resolved to their satisfaction, such disagreements would have caused PSH to
make reference in connection with their opinion to the subject matter of the
disagreement. In addition, during that time there were no reportable events (as
defined in Item 304(a)(1)(iv) of Regulation S-B). During
the fiscal year ending June 30, 2004, including the subsequent interim periods
since engagement through September 14, 2005, the date of PSH’s termination, the
Company (or anyone on its behalf) did not consult with any other accounting firm
regarding any of the accounting or auditing concerns stated in Item 304(a)(2) of
Regulation S-B. Since there were no disagreements or reportable events (as
defined in Item 304(a)(2) of Regulation S-B), the Company did not consult any
other firm in respect to these matters during the time periods detailed herein. The
Company provided PSH with a copy of a Current Report on Form 8-K dated September
14, 2005. The Company requested that PSH furnish the Company with a letter to
the Securities and Exchange Commission stating whether PSH agreed with the above
statements. A copy of that letter dated September 16, 2005, is filed as an
Exhibit to the Form 8-K. In
February 2007, the Company engaged De Joya Griffith & Company, LLC as its
independent auditors.  Item 8A.  CONTROLS
AND PROCEDURES. ****
7    As of the end of the period covered by this report, we
carried out an evaluation, under the supervision and with the participation of
our management, including our Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of our disclosure and
procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)). 
Based upon that evaluation, our Chief Executive Officer and Chief Financial
Officer concluded that as of the end of the period covered by this Annual Report
on Form 10-KSB our disclosure controls and procedures were not effective to
enable us to accurately record, process, summarize and report certain
information required to be included in the Company’s periodic SEC filings within
the required time periods, and to accumulate and communicate to our management,
including the Chief Executive Officer and Chief Financial Officer, to allow
timely decisions regarding required disclosure. Specifically, the Company did
not request nor maintain copies of invoices from all vendors, and management
double booked some expenses advanced by a related party.  There
were no changes in our internal control over financial reporting that occurred
during the most recent fiscal quarter that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.  Item
8B.          OTHER INFORMATION.Not
Applicable.  PART III  Item 9.     DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a)
OF THE EXCHANGE ACT.  Directors and Executive Officers  The members of the Board of Directors of the Company serve until the next annual
meeting of stockholders, or until their successors have been elected.  The
officers serve at the pleasure of the Board of Directors.  Information as
to the director and executive officer of the Company is as follows.  Jehu Hand, age 51, has been President, Chief Financial Officer and Secretary of
the Company since its inception.  Mr. Hand has been engaged in corporate
and securities law practice and has been a sole practitioner since May 1994 when
Hand & Hand incorporated as a law corporation in May 1994.  From 1999
to June 2003, Mr. Hand was semi-retired, but began working again in June 2003 as
sole shareholder of Hand & Hand, a professional corporation.
  From January 1992 to December 1992 he was the Vice
President-Corporate Counsel and Secretary of Laser Medical Technology, Inc.,
which designs, manufactures and markets dental lasers and endodontics
equipment.  He was a director of Laser Medical from February 1992 to
February 1993.  From January to October 1992, Mr. Hand was Counsel to the
Law Firm of Lewis, D'Amato, Brisbois & Bisgaard.  From January 1991 to
January 1992, he was a shareholder of McKittrick, Jackson, DeMarco &
Peckenpaugh, a law corporation.   From January to December 1990, he
was a partner of Day, Campbell & Hand, and was an associate of its
predecessor law firm from July 1986 to December 1989.  From 1984 to June
1986, Mr. Hand was an associate attorney with Schwartz, Kelm, Warren &
Rubenstein in Columbus, Ohio.  Jehu Hand received a J.D.from New York University School of Law and a B.A.
from Brigham Young University. He is a registered principal (Series 7, 24 and
63) of Jackson, Kohle & Co., a broker-dealer and member of FINRA, and also
Jackson,  Kohle SE, a European broker dealer.Mr. Hand
was a director and president of Albion Aviation, Inc. from 2000 to March 2003,
and is the sole officer and director of Russian Athena, Inc.  He was the
Secretary of DanaPC.com from 2006 to January  2008 and he currently devotes
10 hours per week to Cozumel Corporation. In 2006, he was a director of
Worldwide Manufacturing Company USA, Inc. 8     Audit Committee  We do not have an audit committee.  The entire Board of Directors serve as
the audit  committee.  Because of the small size of the Company and
the risk attendant to a small public  company,  we are currently
unable to attract an audit committee financial expert to our Board of
Directors.  Code of
Ethics  We have not adopted a code of ethics which applies to the chief executive
officer or principal financial accounting officer, because of our level of
operations at this time. 9    Item 10. EXECUTIVE COMPENSATION  No executive officer or director received any compensation during any of the
last three fiscal years.  Directors currently receive no compensation for
their duties as directors. Beginning in July 2005, Mr. Hand will receive a
salary of $5,000 per month, which will be deferred until there is cash
available.  Item 11.   SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT  The following table sets forth information relating to the beneficial ownership
of Company common stock by those persons beneficially holding more than 5% of
the Company’s capital stock, by the Company's directors and executive officers,
and by all of the Company's directors and executive officers as a group. 
The address of each person is “care of” the Company.   Percentage Name
of                                
Number
of                            
of Outstanding Stockholder                           
Shares
Owned                        
Common Stock  Jehu
Hand(1)                               
800,000                                   
80.0%  Kimberly
Peterson                       
93,850                                   
  9.4%  All officers and directors as a group (1
person)                                  
800,000                                  
  80.0%  (1)  Mr. Hand controls a family limited
partnership which is the record holder of these shares.   Item 12.  CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS  Mr. Hand from time to time has advanced certain amounts for the Company. These
amounts are unsecured, due on demand and bear no interest. The amount
outstanding at June 30, 2005 was $49,523. 10     An investment fund controlled by Mr. Hand has loaned funds to the Company under
a Convertible Debenture. The funds bear interest at 8% per annum and are secured
by a lien on the assets of the Company. The amount outstanding with interest at
June 30, 2005 was $425,130.  PART IV   Item 13.   EXHIBITS AND REPORTS ON FORM
8-K  (a) Exhibits.  The following exhibits of the Company are included
herein.  Exhibit
No.              
Document Description  3.                
Charter and Bylaws  3.1.     Articles of Incorporation(1) 3.2      Bylaws(1)  10.               
Material Contracts  10.1 Convertible
Debenture. Filed herewith.  16. Changes in Accountants  16.1 Letter from Pritchett, Siler and Hardy, P.C.
Filed with our Current Report on Form 8-K dated September 14, 2005. (1)      Filed with the
Company's original Form 10-SB.  (b)                     
Reports on Form 8-K.  Not Applicable.   Item 14. Principal
Accountant Fees and Services.  Audit Fees  Our principal
accountants, De Joya Griffith & Company, LLC, billed us $7,000 for audit
fees and review of quarterly  filings for  the fiscal year ended June
30, 2005.  Less than 50% of the
hours expended by our auditors on the audit for the year ended June 30, 2005
were performed by persons’ other than De Joya Griffith & Company, LLC
permanent full time employees.  There were no funds paid
in audit related fees, tax fees and all other fees to such firm during the year
ended June 30, 2005. 11    Audit Committees
pre-approval policies and procedures.  We do not have an audit
committee.  Our engagement of De Joya Griffith & Company, LLC was
approved by the Board of Directors.  No services described in Item 9(e) (2)
through 9(e) (4) of Schedule 14A were performed by our auditors.    SIGNATURES  Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized on July 29,
2008.   COZUMEL CORPORATION   By:     /s/ Jehu
Hand Jehu Hand President  Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities on July 29, 2008.    By:     /s/ Jehu
Hand            
            President,
Chief Financial Officer Jehu
Hand                                                       
and Director (chief financial officer and accounting officer and duly authorized officer)          12                  REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  To the Board of Directors and Stockholders of Cozumel Corporation Dana Point, California  We have audited the accompanying balance sheet of
Cozumel Corporation (A Development Stage Company) as of June 30, 2005, and the
related statements of operations and other comprehensive income (loss),
stockholders’ equity (deficit), and cash flows from inception (April 20, 1994)
through June 30, 2005. These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these
financial statements based on our audit. We did not audit the financial
statements of Cozumel Corporation for the year ended June 30, 2004. Those
statements were audited by other auditors whose report has been furnished to us
and our opinion, in so far as it relates to the amounts included in the year
ended June 30, 2004, is based solely on the report of other auditors.  We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.  In our opinion, based
on our audit and the report of the other auditors, the financial
statements referred to above present fairly, in all material respects, the
financial position of Cozumel Corporation (A Development Stage Company) as of
June 30, 2005, and the results of its operations and cash flows from inception
(April 20, 1994) through June 30, 2005 in conformity with U.S. generally
accepted accounting principles.  The accompanying financial statements have been prepared
assuming the Company will continue as a going concern. As discussed in Note 7 to
the financial statements, the Company has suffered recurring losses from
operations, which raise substantial doubt about its ability to continue as a
going concern. Management’s plans in regard to these matters are also described
in Note 7. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.  De Joya Griffith & Company, LLC  /s/ De Joya Griffith & Company, LLC Henderson, Nevada June 19, 2008 
  2580 Anthem Village Drive, Henderson, NV  89052 Telephone (702) 588-5960  -  Facsimile (702)
588-5979 13          REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM   Board
of Directors COZUMEL
CORPORATION Dana
Point, California  We
have audited the accompanying statements of operations and other comprehensive
income (loss), stockholders' equity (deficit) and cash flows of Cozumel
Corporation [a development stage company] for the year ended June 30,
2004.  These financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these financial
statements based on our audit.  We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe that
our audit provides a reasonable basis for our opinion.  In
our opinion the financial statements referred to above present fairly, in all
material respects, the of results of operations and cash flows of Cozumel
Corporation [a development stage company] for the year ended June 30,
2004 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 7 to the financial
statements, the Company has incurred losses since its inception and has not yet
been successful in establishing profitable operations.  Further, the
Company has current liabilities in excess of current assets.  These factors
raise substantial doubt about the ability of the Company to continue as a going
concern.  Management’s plans in regards to these matters are also described
in Note 7.  The financial statements do not include any adjustments that
might result from the outcome of these uncertainties.    PRITCHETT,
SILER & HARDY, P.C.  Salt
Lake City, Utah August
29, 2004          14    COZUMEL CORPORATION AND SUBSIDIARY (A Development Stage
Company) CONSOLIDATED BALANCE
SHEET (Audited) As of June 30, 2005 ____________ ASSETS Cash and cash
equivalents                                                                                                                                  
 $                  
24,112 ___________ Total current
assets                                                                                                                                                 
24,112  Inventory                                                                                                                                             
       
                
505,862  Total
assets                                                                                                                                                                      $               
529,974 _____________  LIABILITIES AND STOCKHOLDERS' EQUITY   CURRENT LIABILITIES: Accounts
payable                                                                                                                                                  
 $                  
11,941 Advances due
to – related
party                                                                                                                                               
49,523 Note payable
– related
party                                                                                                                                                   
 425,130 ___________ Total current
liabilities                                                       
                    
                          
                               
             
 486,594 ___________  STOCKHOLDERS' EQUITY Preferred
stock, $.001 par value, 1,000,000 shares authorized; no shares issued and
outstanding                                                                                                                          
--  Common stock,
$.001 par value, 20,000,000 shares authorized; 1,000,000 shares issued and
outstanding                                                                                                         1,000  Additional
paid in
capital                                                                                                                                             
           
 51,344  Accumulated
deficit during the development
stage                                                                                                             
(8,964) ___________ Total stockholders’
equity                                                                                                                                                43,380 ___________ Total liabilities and stockholders’ equity
               
 $                
529,974 ____________   The accompanying notes are an
integral part of this financial statement.  15    COZUMEL CORPORATION AND SUBSIDIARY (A Development Stage
Company) CONSOLIDATED STATEMENTS OF
OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS) (Audited) For the Years ended
                      
From Inception June 30,
                         
(April 20, 1994) ______________________Through 2005                       
2004               
June 30,
2005 ____________            
___________              __________  REVENUE                                                                                             
      
$                      
--     
$                    
--     
$                  
--  EXPENSES: General and
administrative                                                             
  12,788         
549           
19,207  LOSS BEFORE OTHER INCOME (EXPENSE)(12,788)                      
(549)               
(19,207)  OTHER INCOME (EXPENSE) Gain on sale of available-for-sale
securities                                                 
      
 21,265                         
617                  
21,882 Dividend
income                                                                                              
         
 7,342                         
621                    
7,963 Interest expense – related
party                                                          
   
(18,149)     
(1,414)     
(19,563)  Total other income
(expense)                                                                         
         
10,458                       
(176)                  10,282 ____________              
___________            __________ LOSSBEFORE INCOME
TAXES                                                                     
       (2,330)                      
(725)                 (8,925)  CURRENT TAX
EXPENSE                                                                                      
       
--                           
39                       
39 ____________           
___________           
__________ NET
LOSS                                                                                         
 $              
(2,330)      $              
(764)       
$       (8,964) _______________________           
 __________ BASIC LOSS PER
COMMON SHARE$              
    (.00)       
$             
(.00)       
$           (.01) _______________________          
 __________ WEIGHTED AVERAGE NUMBER OF COMMON SHARES -
BASIC                                                          
 1,000,000         1,000,000            
1,000,000  NET
LOSS                                                                                                  $     
   
     (2,330)        
$      
    (764)      
  $       (8,964)  OTHER COMPREHENSIVE INCOME: Gain on sale of available-for-sale securities arising during the period                                                    
                       
                   
                 
        18,285                    3,597                 21,882  Less: reclassification adjustment for gains included in net
income                                   (21,265)    
 (617)        (21,882)  COMPREHENSIVE INCOME
(LOSS)                                                  $                (5,310)       $          
2,216        $
       (8,964)  The accompanying notes are an
integral part of these financial statements. 16  COZUMEL CORPORATION AND
SUBSIDIARY (A Development Stage
Company) CONSOLIDATED STATEMENT OF
STOCKHOLDERS' EQUITY (DEFICIT) From Inception (April 20, 1994)
through June 30, 2005 **(Audited)** DeficitAccumulated
TotalPreferred
Stock
Common
Stock
Additional
Other
During
the
Stockholders____________
_________
_____________
____________
Paid In
Comprehensive
Development
EquityShares
Amount
Shares
Amount
Capital
Income
Stage
(Deficit)__________
_________
___________
__________
__________
__________
__________
_________BALANCE,April
20, 1994
-
$           
  -
-
$             
-
$             
-
$      
             -
$             
-
$             
-Issuance
of 1,000,000        shares of commonstock
for cash of $1,015,     or $.001 pershare,
April 20, 1994
-
-
1,000,000
1,000
15
-
-
1,015Net
loss
-
-
-
-
-
-
(42)
(42)__________
_________
___________
__________
__________
__________
__________
_________BALANCE,June
30, 1994
-
-
1,000,000
1,000
15
-
(42)
973Net
loss
-
-
-
-
-
-
(338)
(338)__________
_________
___________
__________
__________
__________
__________
_________BALANCE,June
30, 1995
-
-
1,000,000
1,000
15
-
(380)
635Net
loss
-
-
-
-
-
-
(320)
(320)__________
_________
___________
__________
__________
__________
__________
_________BALANCE,June
30, 1996
-
-
1,000,000
1,000
15
-
(700)
315Net
loss
-
-
-
-
-
-
(314)
(314)__________
_________
___________
__________
__________
__________
__________
_________BALANCE,June
30, 1997
-
-
1,000,000
1,000
15
-
(1,014)
1Net
loss
-
-
-
-
-
-
(312)
(312)__________
_________
___________
__________
__________
__________
__________
_________BALANCE,June
30, 1998
-
-
1,000,000
1,000
15
-
(1,326)
(311)Net
loss
-
-
-
-
-
-
(790)
(790)__________
_________
___________
__________
__________
__________
__________
_________BALANCE,June
30, 1999
-
-
1,000,000
1,000
15
-
(2,116)
(1,101)                                                    The accompanying notes are an
integral part of this financial statement. 17 ****   Net
loss
-
-
-
-
-
-
(1,134)
(1,134)__________
__________
___________
__________
__________
__________
__________
__________BALANCE,June
30, 2000
-
-
1,000,000
1,000
15
-
(3,250)
(2,235)Net
loss
-
-
-
-
-
-
(947)
(947)__________
__________
___________
__________
__________
__________
__________
__________BALANCE,June
30, 2001
-
-
1,000,000
1,000
15
-
(4,197)
(3,182)Net
loss
-
-
-
-
-
-
(1,519)
(1,519)__________
__________
___________
__________
__________
__________
__________
__________BALANCE,June 30, 2002
-
-
1,000,000
1,000
15
-
(5,716)
(4,701)Net
loss
-
-
-
-
-
-
(154)
(154)__________
__________
___________
__________
__________
__________
__________
__________BALANCE,June 30, 2003
-
-
1,000,000
1,000
15
-
(5,870)
(4,855)Unrealized holding gain
-
-
-
-
-
2,980
-
2,980Accrued interest expense
forgiven byrelated party accounted
for ascontribution to
capital
-
-
-
-
1,414
-
-
1,414Net
loss
-
-
-
-
-
(764)
(764)
(764)__________
__________
___________
__________
__________
__________
__________
__________BALANCE,June 30, 2004
-
-
1,000,000
1,000
1,429
2,980
(6,634)
(1,225)Contribution to
Capital
-
-
-
-
49,915
-
-
49,915Realization of holding
loss





(2,980)

(2,980)Net
loss
-
-
-
-
-
-
(2,330)
(2,330)__________
__________
___________
__________
__________
__________
__________
__________BALANCE,June 30, 2005
-
$               
-
1,000,000
$     
1,000
$   
51,344
$                
-
$   
 (8,964)
$   
43,380_________
_________
__________
_________
_________
_________
_________
_________                                                  The accompanying notes are an
integral part of this financial statement.  18   COZUMEL CORPORATION AND
SUBSIDIARY (A Development Stage
Company) CONSOLIDATED STATEMENTS OF CASH
FLOWS (Audited) For
the                           
From Inception Years
ended                     April
20, 1994 June
30,
                               
Through _____________________                June
30, 2005 2005                       
2004 ____________           
___________                
__________ Cash Flows Provided by Operating
Activities: Net loss       
                                                                                                           
   $           
(2,330)          $     
(764)               
$      (8,964) Adjustments to reconcile net loss to
net cash used by operating
activities: Gain on sale
of available-for-sale
securities                                                              
   (21,265)               
  (617)                    
 (21,882) Forgiveness
of interest – related
party                                                                          
18,149                
1,414                       
  19,563 Changes in
assets and liabilities: Increase (decrease) in accounts
payable                                                             
 
 11,272                 
 (154)                      
  15,973 ____________         
 ___________               
__________ Net cash provided (used)
by operating
activities                                                           
5,826                  
 (121)                       
  4,690 ____________          
___________               
__________ Cash Flows Provided by Investing
Activities: Purchase of available-for-sale
securities                                                                     
  
(44,922)            
(157,217)                   
(202,139) Proceeds from sale of available-for-sale
securities                                                      
212,812                  12,973                       225,785 Purchase of
inventory                                                                                                    
(475,862)                        
--                     
(475,862) ____________            
___________                
 __________ Net cash used
by investing
activities                                                                      
(307,972)             
(144,244)                   
(452,216) ____________          
___________                  
 __________ Cash Flows Provided by Financing
Activities: Advances from related party48,533    -48,533 Repayment of advances due to related party(3,040)-(3,040) Proceeds from note payable - related party275,130150,000425,130 Proceeds from sale of common
stock                                                                                           
-                 
         
-                        
   1,015 ____________           
___________                 
 __________ Net cash
provided by financing
activities                                                              
 
320,623               
150,000                  
      471,638 ____________           
___________              
    __________ Net Increase in Cash18,477                 
 
5,635                         
  24,112 Cash at Beginning of Period5,635                         
 --                                   
-- ____________          
___________              
      __________ Cash at End of Period$              
24,112        
$         
5,635                $          
24,112 _______________________                
   __________ Supplemental Disclosures of Cash Flow
Information: Cash paid during the period
for: Interest                                                                                                           
 $--        
 $--                 
$-- Income
taxes                                                                                                   
$--         
$--                 
$--  Supplemental Schedule of Non-cash Investing and
Financing Activities: Forgiveness of debt- related
party                                      
      
               
  $19,915 
        
$1,414                    $21,344 Contribution of asset in lieu
of Inventory purchase and
prepayment of
expenses                                     $30,000           
$--         
         
$ 30,000  The accompanying notes are an integral part of these financial
statements.  19    COZUMEL CORPORATION AND SUBSIDIARY (A Development Stage Company) CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (Audited)  NOTE
1 - DESCRIPTION OF THE BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES  Organization -COZUMEL CORPORATION (“the Company”) was organized under
the laws of the State of Delaware on April 20, 1994 for the purpose of seeking
out business opportunities, including acquisitions.  The Company formed a
Florida subsidiary, Cozumel Yacht Brokers, Inc. in January 2005 and has entered
the business of buying, selling, remodeling and brokering the sale of yachts.
The financial statements present the consolidated financial position, results of
operations and cash flows for the consolidated entity. The Company has, at the
present time, not paid any dividends and any dividends that may be paid in the
future will depend upon the financial requirements of the Company and other
relevant factors.  The Company is currently a development stage company
reporting under the provisions of Statement of Financial Accounting Standard
("FASB") No. 7, "Accounting and Reporting for Development Stage
Enterprises."  Cash and Cash Equivalents -For purposes of the statement of cash flows, the Company
considers all highly liquid financial instruments purchased with a maturity of
three months or less to be cash equivalents.  Inventory -Inventories are stated at the lower of cost or market, cost being determined on the first-in, first-out method. At June 30, 2005, inventory includes one Burger 74’ motor yacht in process of refit.  Loss
Per Share - The Company computes net loss per share in accordance with SFAS
No. 128, “Earnings per Share” (SFAS 128) and SEC Staff Accounting Bulletin No.
98 (SAB 98).  Under the provisions of SFAS 128 and SAB 98, basic net loss
per share is computed by dividing the net loss available to common stockholders
for the period by the weighted average number of shares of common stock
outstanding during the period.  The calculation of diluted net loss per
share gives effect to common stock equivalents, however, potential common shares
are excluded if their effect is antidilutive.  For the years ended June 30,
2005 and 2004, no options and warrants were included in the computation of
diluted earnings per share because their effect would be antidilutive.  Fair Value -The carrying amounts reflected in the consolidated
balance sheet for cash, accounts payable and accrued expenses approximate the
respective fair values due to the short maturities of these items.  Accounting Estimates- The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosures of contingent assets and liabilities at the date of
the financial statements, and the reported amount of revenues and expenses
during the reported period.  Actual results could differ from those
estimated.  Reclassifications– Certain amounts in prior year financial
statements have been reclassified for comparative purposes to conform to
presentation in the current year financial statements.  New Accounting Pronouncements In December 2004, the FASB issued SFAS No. 153,
“Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29” (“SFAS No.
153”).  SFAS No. 153 is based on the principle that exchanges of
nonmonetary assets should be measured based on the fair value of the assets
exchanged. 20    COZUMEL CORPORATION AND SUBSIDIARY (A Development Stage Company) CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (Audited)   NOTE
1 - DESCRIPTION OF THE BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES (cont)   APB Opinion No. 29, “Accounting for Nonmonetary
Transactions”, provided an exception to its basic measurement principle (fair
value) for exchanges of similar productive assets.  Under APB Opinion No.
29, an exchange of a productive asset for a similar productive asset was based
on the recorded amount of the asset relinquished.  SFAS No. 153 eliminates
this exception and replaces it with an exception of exchanges of nonmonetary
assets that do not have commercial substance. SFAS No. 153 was applicable for
nonmonetary asset exchanges occurring in fiscal periods beginning after June 15,
2005. The implementation of SFAS 2005 is not expected to have any material
impact on the financial statements.  In May 2005, the FASB issued SFAS No. 154, “Accounting
Changes and Error Corrections, a replacement of APB No. 20 and FASB Statement
No. 3” (“SFAS No. 154”).  SFAS No. 154 requires retrospective application
to prior periods’ financial statements of a voluntary change in accounting
principles unless it is impracticable.  APB Opinion No. 20 “Accounting
Changes” previously required that most voluntary changes in accounting
principles be recognized by including in net income of the period of the change
the cumulative effect of changing to the new accounting principle.  This
Statement is effective for the Company as of January 1, 2006. The Company does
not believe that the adoption of SFAS No. 154 will have a material impact on its
financial statements.  In February 2006, the FASB issued Statement of Financial
Accounting Standards No. 155, “Accounting for Certain Hybrid Financial
Instruments” ("SFAS No. 155"), which amends Statement of Financial Accounting
Standards No. 133, Accounting for Derivative Instruments and Hedging Activities
("SFAS No. 133") and Statement of Financial Accounting Standards No. 140,
Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities ("SFAS No. 140").  SFAS No. 155 permits fair value measurement for any
hybrid financial instrument that contains an embedded derivative that otherwise
would require bifurcation, establishes a requirement to evaluate interests in
securitized financial assets to identify interests that are freestanding
derivatives or hybrid financial instruments containing embedded derivatives. The
Company will apply SFAS 155 for all financial instruments acquired, issued, or
subject to a re-measurement, occurring after our first fiscal year that begins
after September 15, 2006. Since the Company has not and does not intend to
acquire any hybrid financial instrument, the application of SFAS 155 will have
no impact on the Company.  In March 2006, the FASB issued SFAS No. 156, “Accounting
for Servicing of Financial Assets” (“SFAS 156”), which amends SFAS No. 140.
 SFAS No. 156 may be adopted as early as January 1, 2006 by calendar
year-end entities, provided that no interim financial statements have been
issued.  Those not choosing to early adopt are required to apply the
provisions as of the beginning of the first fiscal year that begins after
September 15, 2006 (e.g., January 1, 2007 for calendar year-end entities).
 The intention of the new statement is to simplify accounting for
separately recognized servicing assets and liabilities, such as those common
with mortgage securitization activities, as well as, to simplify efforts to
obtain hedge-like accounting.  SFAS No. 156 permits a servicer using
derivative financial instruments to report both the derivative financial
instrument and related servicing asset or liability by using a consistent
measurement attribute or fair value.  The Company does not service any
financial assets or liabilities and the adoption of SFAS No. 156 had no impact
on the Company’s consolidated financial position, results of operations or cash
flows. 21    COZUMEL CORPORATION AND SUBSIDIARY (A Development Stage Company) CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (Audited)  NOTE
1 - DESCRIPTION OF THE BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES (cont)   In December 2004, the FASB issued SFAS No. 123(R),
“Share-Based Payment,” which establishes standards for transactions in which an
entity exchanges its equity instruments for goods or services. This standard
replaces SFAS No. 123 and supersedes APB Opinion No. 25, “Accounting for
Stock-based compensation.” This standard requires a public entity to measure the
cost of employee services received in exchange for an award of equity
instruments based on the grant-date fair value of the award. This eliminates the
exception to account for such awards using the intrinsic method previously
allowable under APB Opinion No. 25. SFAS No. 123(R) will be effective for
interim or annual reporting periods beginning on or after June 15, 2005.
 The Company does not believe that the application of SFAS 123(R) will have
any material impact on the Company.  In June 2006, the Financial Accounting Standards Board
(FASB) issued FASB Interpretation No.  48, "Accounting for Uncertainty in
Income Taxes” - an interpretation of FASB Statement No. 109" (FIN 48), which
clarifies the accounting for uncertainty in tax positions.  This Interpretation requires that we recognize in our
financial statements the benefit of a tax position if that position is more
likely than not of being sustained on audit, based on the technical merits of
the position. The provisions of FIN 48 become effective as of the beginning of
our 2008 fiscal year, with the cumulative effect of the change in accounting
principle recorded as an adjustment to opening   retained earnings. We
are currently evaluating the impact that FIN 48 will have on our financial
statements.  In September 2006, the FASB issued Statement No. 157,
"Fair Value Measurements" (FAS 157), which defines fair value, establishes a
framework for measuring fair value, and expands disclosures about fair value
measurements. The provisions of FAS 157 become effective as of the beginning of
our 2009 fiscal year. We are currently evaluating the impact that FAS 157 will
have on our financial statements.  In September 2006, the FASB issued Statement No. 158,
"Employer's Accounting for Defined Benefit Pension and Other Postretirement
Plans” - an amendment of FASB Statements No. 87, 88, 106, and 132(R)" (FAS 158).
FAS 158 requires that employers recognize the funded status of their defined
benefit pension and other postretirement plans on the balance sheet and
recognize as a component of other comprehensive income, net of tax, the
plan-related gains or losses and prior service costs or credits that arise
during the period but are not recognized as components of net periodic benefit
cost. We do not believe this will impact our financial statements.  In September 2006, the Securities and Exchange
Commission issued Staff Accounting Bulletin No. 108, "Considering the Effects of
Prior Year Misstatements when Quantifying Misstatements in Current Year
Financial Statements" (SAB 108), which addresses how to quantify the effect of
financial statement errors. The provisions of SAB 108 become effective as of the
end of our 2007 fiscal year. We do not expect the adoption of SAB 108 to have a
significant impact on our financial statements.  In February 2007, the FASB issued Statement No. 159,
"The Fair Value Option for Financial Assets and Financial Liabilities, including
an amendment of FASB Statement No. 115" (FAS159). FAS 159 permits companies to
choose to measure many financial instruments and certain other items at fair
value that are not currently required to be measured at fair value and
establishes presentation and disclosure requirements designed to facilitate
comparisons between companies that choose different measurement attributes for
similar types of assets and liabilities. The provisions of FAS 159 become
effective as of the beginning of our 2009 fiscal year. We are currently
evaluating the impact that FAS 159 will have on our financial
statements. 22    COZUMEL CORPORATION AND SUBSIDIARY (A Development Stage Company) CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (Audited)  NOTE
1 - DESCRIPTION OF THE BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES (cont)  In December 2007, the FASB issued SFAS 160,
“Noncontrolling Interests in Consolidated Financial Statements, an Amendment of
ARB 51” (“SFAS 160”).  SFAS 160 establishes new accounting and
reporting standards for noncontrolling interests in a subsidiary and for the
deconsolidation of a subsidiary.  SFAS 160 will require entities to
classify noncontrolling interests as a component of stockholders’ equity and
will require subsequent changes in ownership interests in a subsidiary to be
accounted for as an equity transaction.  Additionally, SFAS 160 will
require entities to recognize a gain or loss upon the loss of control of a
subsidiary and to re-measure any ownership interest retained at fair value on
that date.  This statement also requires expandeddisclosures that clearly identify and distinguish
between the interests of the parent and the interests of the noncontrolling
owners.  SFAS 160 is effective on a prospective basis for
fiscal years, and interim periods within those fiscal years, beginning on or
after December 15, 2008, except for the presentation and disclosure
requirements, which are required to be applied retrospectively.  Early
adoption is not permitted.  In March 2008, the FASB issued SFAS No. 161,
“Disclosures about Derivative Instruments and Hedging Activities – an amendment
of FASB Statement No. 133,” (SFAS “161”) as amended and interpreted, which
requires enhanced disclosures about an entity’s derivative and hedging
activities and thereby improves the transparency of financial reporting.
Disclosing the fair values of derivative instruments and their gains and losses
in a tabular format provides a more complete picture of the location in an
entity’s financial statements of both the derivative positions existing at
period end and the effect of using derivatives during the reporting period.
Entities are required to provide enhanced disclosures about (a) how and why an
entity uses derivative instruments, (b) how derivative instruments and related
hedged items are accounted for under Statement 133 and its related
interpretations, and (c) how derivative instruments and related hedged items
affect an entity’s financial position, financial performance, and cash flows.
SFAS No. 161 is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008. Early adoption is
permitted.  In May 2008, the Financial Accounting Standards Board
(“FASB”) issued SFAS No. 163, “Accounting for Financial Guarantee Insurance
Contracts – An interpretation of FASB Statement No. 60”.  SFAS 163 requires
that an insurance enterprise recognize a claim liability prior to an event of
default when there is evidence that credit deterioration has occurred in an
insured financial obligation. It also clarifies how Statement 60 applies to
financial guarantee insurance contracts, including the recognition and
measurement to be used to account for premium revenue and claim liabilities, and
requires expanded disclosures about financial guarantee insurance contracts. It
is effective for financial statements issued for fiscal years beginning after
December 15, 2008, except for some disclosures about the insurance enterprise’s
risk-management activities. SFAS 163 requires that disclosures about the
risk-management activities of the insurance enterprise be effective for the
first period beginning after issuance. Except for those disclosures, earlier
application is not permitted.  The adoption of this statement is not
expected to have a material effect on the Company's future reported financial
position or results of operations.  23    COZUMEL CORPORATION AND SUBSIDIARY (A Development Stage Company) CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (Audited)  NOTE
2 - AVAILABLE-FOR-SALE SECURITIES  The amortized cost, gross unrealized gains and losses,
and estimated fair value of available-for-sale securities by major security type
are as follows:  June
30,                               
   June 30, 2005                                      
   2004 Publicly-traded equity securities Amortized
cost                                                  
$                          
--               
$                
144,861 Gross unrealized
gains                                                                  
--                                      
2,980 Gross unrealized
losses                                   
--               
--  Estimated Fair
Value                                           
$                          
--               
$                
147,841  The Company uses the average cost method to determine
the cost of securities sold.  Proceeds from sales of available-for-sale
securities and the resulting gross realized gains and losses are as
follows:  For the Year Ended June 30, 2005                                       
2004  Proceeds from
sales                                            
$                
212,812           
$                
12,973  Gross realized
gains                                            
$         
         35,392
          
$                     
617 Gross realized
losses                                          
(14,127)           
--  Net realized gain (loss) on
sales                       
$                  
21,265           
$                     
617   NOTE
3 - NOTE PAYABLE RELATED PARTY  In May 2004, the Company issued a $150,000 note payable
to an entity related to a shareholder of the Company The conversion price for
the Debentures in effect on any Conversion Date shall be the lesser of (a) 
$0.01 (the “Fixed Conversion Price”) and (b) one hundred percent (100%) of the
average of the three (3) lowest closing bid prices per share of the Common Stock
during the forty (40) Trading Days immediately preceding the Conversion Date
(the “Floating Conversion Price”); provided, however, that the aggregate maximum
number of shares of Common Stock that the First Debenture and Second Debenture
may be converted into shall be Three Million (3,000,000) shares (the “Maximum
Conversion”); and further provided, however, that upon the Maximum Conversion,
the Company may, at its option (a) increase the Maximum Conversion
or redeem the unconverted amount of the Debentures in whole or in part at
one hundred twenty five percent (125%) of the unconverted amount of such
Debentures being redeemed plus accrued interest thereon. For purposes of
determining the closing bid price on any day, reference shall be to the closing
bid price for a share of Common Stock on such date on the OTCBB (or such other
exchange, market, or other system that the Common Stock is then traded on), as
reported on Bloomberg, L.P. (or similar organization or agency succeeding to its
functions of reporting prices). The note is due on demand and accrues interest
at 8% per annum.  During the year ended June 30, 2005 and 2004,
respectively, interest expense was $18,149 and $1,414.  During the year
ended June 30, 2005 and 2004, respectively, the related party forgave accrued
interest of $18,149 and $1,414.  Due to the related party nature of the
forgiveness, the Company accounted for it as a capital contribution. The Company
has determined the convertible debenture to not have a beneficial conversion
feature, therefore, no beneficial conversion feature has been recorded as of
June 30, 2005. 24    COZUMEL CORPORATION AND SUBSIDIARY (A Development Stage Company) CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (Audited)   NOTE
4 - INCOME TAXES  At June 30, 2005 and 2004, the Company had a federal
operating loss carryforward of approximately $8,900 and $6,600, respectively,
which expires in varying amounts between 2005 and 2024.  Components of net deferred tax assets, including a
valuation allowance, are as follows at June 30:  2005

2004Deferred tax assets:Net operating loss carryforward

$     
        3,137

$     
    2,322Total deferred tax
assets

(3,137)

(2,322)Less: Valuation Allowance

--

--Net Deferred Tax Assets

$              
    --

$             
      --
   The valuation allowance for deferred tax assets as of
June 30, 2005 and 2004 was $3,137 and $2,322, respectively.  In assessing the recovery of the deferred
tax assets, management considers whether it is more likely than not that some
portion or all of the deferred tax assets will not be realized.  The
ultimate realization of deferred tax assets is dependent upon the generation of
future taxable income in the periods in which those temporary differences become
deductible.  Management considers the scheduled reversals of future
deferred tax assets, projected future taxable income, and tax planning
strategies in making this assessment.  As a result, management determined
it was more likely than not the deferred tax assets would not be realized as of
June 30, 2005 and 2004 and, accordingly, recorded a full valuation
allowance.  Reconciliation between the statutory rate and the
effective tax rate is as follows at June 30:  2005

2004Federal statutory tax rate

(35.0)%

(35.0)%State taxes, net of federal benefit

(8.7)%

(8.7)%Change in valuation allowance

43.7
%

43.7 %Effective tax rate

0.0
%

0.0 %
    25   COZUMEL CORPORATION AND SUBSIDIARY (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS (Audited)  NOTE
5 - STOCKHOLDERS’ EQUITY (DEFICIT)  Preferred Stock- The Company has authorized 1,000,000 shares of
preferred stock, $.001 par value, with such rights, preferences and designations
and to be issued in such series as determined by the Board of Directors. No
shares are issued and outstanding at June 30, 2005.  Common Stock-
The Company has authorized 20,000,000 shares of common stock with a par value of
$.001.  On April 20, 1994, in connection with its organization, the Company
issued 1,000,000 shares of its previously authorized, but unissued common
stock.  The shares were issued for cash of $1,015 (or $.001 per
share).  1994 Stock Option Plan -On April 20, 1994, the Company adopted the 1994 Stock
Option Plan.  The plan provides for the granting of awards of up to
2,000,000 shares of common stock to officers, directors, employees, advisors,
and employees of other companies that do business with the Company as
non-qualified and qualified stock options.  The Stock Option Committee of
the Board of Directors determines the option price, which cannot be less than
the fair market value at the date of the grant or 110% of the fair market value
if the recipient of the grant holds 10% or more of the Company’s common
stock.  The price per share of shares subject to a Non-Qualified option
cannot be less than 85% of the fair market value.  Options granted under the plan will typically expire ten
years from the date of the grant (five years if the recipient of the grant holds
10% or more of the Company’s common stock on the date of the grant) or three
months after termination of employment.  As of June 30, 2005, no options
have been granted.  NOTE
6 - RELATED PARTY TRANSACTIONS  Advances -During the years ended June 30, 2005 and 2004, a former
officer/shareholder of the Company directly paid expenses totaling $49,523 and
$4,032 on behalf of the Company.  No interest is being accrued on the
advances.  Note Payable -The Company has a note payable to an entity related to a
shareholder of the Company (see note 3 – “Note payable Related
Party”).  Management Compensation -For the year ended June 30, 2005 and 2004, the Company
did not pay any compensation to any officer or director of the
Company.  Office Space- The Company has not had a need to rent office
space. An officer/shareholder of the Company is allowing the Company to use his
offices as a mailing address, as needed, at no expense to the
Company.  NOTE
7 - GOING CONCERN  The accompanying financial statements have been prepared
in conformity with generally accepted accounting principles, which contemplate
continuation of the Company as a going concern.  However, the Company has
incurred losses since its inception and has not yet been successful in
establishing profitable operations.  The Company has an accumulated deficit
of $8,963, and a working capital deficit of $462,481 as of June 30, 2005. These
factors raise substantial doubt about the ability of the Company to continue as
a going concern.  In this regard, management is proposing to raise any
necessary additional funds not provided by operations through loans or through
additional sales of its common stock.  There is no assurance that the
Company will be successful in raising this additional capital or achieving
profitable operations.  The financial statements do not include any
adjustmentsthat might result from the
outcome of these uncertainties. 26     COZUMEL CORPORATION AND SUBSIDIARY (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS (Audited)   NOTE 9 – SUBSEQUENT EVENTS  An officer and director
advanced an additional $10,657 and $0 in the years ended June 30, 2006 and 2007,
respectively.  A party related to the
officer and director continued to advance funds to the Company at 8% interest.
 Such additional advances were $1,327,000 as of June 30, 2006 and $375,696
in the year ended June 30, 2007.  The Company purchased
three more yachts subsequent to June 30, 2005. In June 2006, the Company sold a
yacht to our officer and director. As consideration, the Company reduced $55,000
in accrued liabilities owed to this officer and director and $93,000 was
accounted for as a prepayment towards this individual’s monthly compensation of
$5,000 per month. The total value of this transaction totaled $148,000, which is
the Company’s historical cost basis of this yacht.               27