UNITED STATES SECURITIES
AND EXCHANGE COMMISSION WASHINGTON, D.C.
20549 FORM 10-K  [x] Annual
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended
June 30, 2008 [ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 For the transition period
from
 to Commission File Number
0-27835  COZUMEL
CORPORATION (Exact name of registrant
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
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 filed reports pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act:  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 ]  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
__     Smaller reporting company _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 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, 2008 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, 2008:
 Common Stock, $.001 Par Value - 1,000,000 shares  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.   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. 2   Marketing  We
market our yachts through yacht brokerage and co-brokerage agreements. We have
 a web site at cozumelyachts.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
emphasizing quality and by keeping our costs down.  However, foreign repair
facilities (Venezuela, for example) have much lower labor costs 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. 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. 3   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 and 2008, 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. Currently the industry
is in a severe downturn, and we do not know when the industry will recover.    Item 1A. RISK FACTORS  Investors should review the following risk factors which apply
specifically to the Company.  We have
no cash to complete our projects  We lack approximately $400,000 cash in order to finish the refit
of the Burger yacht. We have no plans or sources of capital to fund this refit.
All cash to date for our projects has been loaned by a related party. Until such
time as we obtain more cash, we will not be able to finish this project and sell
it.  The
current economy and fuel prices have caused a down market in the yacht industry,
so we are unable to sell our inventory. .  For the past two years, the market for new and used yachts has
declined due to the worsening economic conditions in the USA. The lower and mid
markets (combined, less than $10 million sale price) have been adversely
effected by the increases in fuel prices.  In the industry, inventory
levels are high. Until such time as an economic turnaround occurs and fuel
prices moderate, we will likely be unable to realize any sale of our inventory
or will be forced to sell at significant losses. This will likely be a matter of
years and not months.  Lack of
full time personnel and lack of funds means Company is at a standstill.  Our management devotes only part time to the business of the
Company. We have no full time employees. Until we have found personnel and have
funds to recommence our refit, the Company is unable to further its business
plan. 4   Item
1B. UNRESOLVED STAFF COMMENTS  None.  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, 2008.  PART II   Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCK­HOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES  The
Company's Common Stock has not traded.  As of June 30, 2008, there were 111
stockholders of record.  Sales of Unregistered Securities -  Not
Applicable.   Report of Offering of Securities and Use of Proceeds
Therefrom.  -  not applicable  Company repurchases of common stock during the year ended June
30, 2008.  There were no Company repurchases of common stock during the year
ended June 30, 2008.  5   Equity Compensation Plans  We have no equity compensation plans. Securities and Exchange Commission Rule 15g Our Companys shares are covered by Rule 15g of the Securities and
Exchange Act of 1934, as amended that imposes additional sales practice
requirements on broker/dealers who sell such securities to persons other than
established customers and accredited investors (generally institutions with
assets in excess of $5,000,000 or individuals with net worth in excess of
$1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their
spouses). For transactions covered by the Rule, the broker/dealer must make a
special suitability determination for the purchase and have received the
purchasers written agreement to the transaction prior to the sale.
Consequently, the Rule may affect the ability of broker/dealers to sell our
securities and also may affect your ability to sell your shares in the secondary
market. Section 15(g) of the Exchange Act also imposes additional sales
practice requirements on broker/dealers who sell penny securities. These rules
require a one-page summary of certain essential items. The items include the
risk of investing in penny stocks in both public offerings and secondary
marketing; terms important in understanding of the function of the penny stock
market, such as bid and offer quotes, a dealers spread and broker/dealer
compensation; the broker/dealer compensation, the broker/dealers duties to its
customers, including the disclosures required by any other penny stock
disclosure rules; the customers rights and remedies in causes of fraud in penny
stock transactions; and, the NASDs toll free telephone number and the central
number of the North American Administrators Association, for information on the
disciplinary history of broker/dealers and their associated persons. Change of Control.  There have been no changes of control.  Item 6. SELECTED FINANCIAL DATA.  We
are not required to supply this information because we are a smaller reporting
company. 6   Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATIONS  We have
not yet enjoyed any revenues. As of June 30, 2008, we have expended $2,045,231
for the acquisition of four yachts and their 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. The refit is complete on three yachts and we
estimate that the refit of the remaining yacht will require an additional
$400,000. 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.
 An additional yacht which we refitted was transferred to our officer in
June 2006 at its cost of $154,157, to repay accrued compensation of $55,000 to
this person and to furnish a credit against his future compensation, which
credit was wholly utilized in the year ended June  30, 2008.  In the
years ended June 30, 2008 and 2007, we received dividend income from invested
funds of $0 and $13, respectively.  As of
June 30, 2008, we had a cash overdraft of $141.  Our cash needs to complete
all projects is estimated to be $400,000. A party affiliated with a shareholder
has indicated that it can loan only a portion of 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, 2008, our cash needs were met by related party
loans of $33,617.  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. 7   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.  Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.  We have
no risk sensitive market instruments that would be reportable under this
item.  Item 7.  FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA  The
consolidated financial statements of the Company required to be included in Item
7 are set forth following the signature page hereof.  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. 8  On September 8, 2008, Cozumel Corporation (the Company)
terminated its relationship with De Joya Griffith & Company LLC the
principal accountant previously engaged to audit the Companys financial
statements.  The Companys board of directors approved the dismissal of
 De Joya Griffith & Company LLC. The audit reports of PSH on  the
Companys financial statements for the fiscal year ending June 30, 2005 and
 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 audit of the fiscal year ending June
30, 2005 including the subsequent interim periods since engagement through
September 8, 2008, the date of termination, the Company had no disagreements
with De Joya Griffith & Company LLC with respect to accounting or auditing
issues of the type discussed in Item 304(a)(iv) of Regulation S-K, except as set
forth in the following paragraph.  Had there been any disagreements that
were not resolved to their satisfaction, such disagreements would have caused De
Joya Griffith & Company LLC 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-K), except as set forth in the following paragraphs. As set
forth in Item 8A of the Annual Report on Form 10-KSB for the fiscal year ended
 June 30, 2005,  respectively,  the  Company  and
 De Joya Griffith & Company LLC identified significant
 deficiencies and material  weaknesses that existed in the design or
operation of the Company's  internal controls over financial
 reporting and such items are  incorporated  herein by
 reference.  The Company has authorized De Joya Griffith & Company
LLC to respond fully to any inquiries  by  The Blackwing Group LLC LLC
 regarding  the  significant deficiencies and material weaknesses
in internal control set forth in the Annual Report on Form 10-KSB.  During the fiscal year ending June 30, 2005, including the
subsequent interim periods since engagement through September 18, 2008, the date
of De Joya Griffith & Company LLC 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-K. The
Company did not consult any other firm in respect to these matters during the
time periods detailed herein. The Company provided De Joya Griffith & Company LLC with a
copy of the Form 8-K. The Company requested that De Joya Griffith & Company
LLC 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 26, 2005 was filed as an Exhibit to the Form 8-K. On September 8, 2008 the Registrant engaged The Blackwing Group,
LLC as its new independent auditor.  Prior to the engagement of The
Blackwing Group, LLC,  the Registrant did not consult with The Blackwing
Group, LLC  on the application of accounting principles to any specific
transaction nor the type of audit opinion that might be rendered on the
Registrant's financial statements. 9   Item
9A. CONTROLS
AND PROCEDURES.  Evaluation
of Disclosure Controls and Procedures  Our
management, with the participation of our Chief Executive Officer and Chief
Financial Officer, has evaluated the effectiveness of our disclosure controls
and procedures as of June 30, 2008. Based on this evaluation, our management has
concluded that our disclosure controls and procedures are not effective to
ensure that information required to be disclosed in our reports filed or
submitted under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the SEC's rules and forms.  Internal Control over Financial Reporting  Our
managements evaluation did not identify any change in our internal control over
financial reporting that occurred during the fiscal year ended June 30, 2008
that has materially affected or is reasonably likely to materially affect our
internal control over such reporting.  The
term "internal control over financial reporting" is defined as a process
designed by, or under the supervision of, the registrant's principal executive
and principal financial officers, or persons performing similar functions, and
effected by the registrant's Board of Directors, management and other personnel,
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles and includes those policies and
procedures that:  1.  Pertain to the maintenance of records that in
reasonable detail accurately and fairly reflect the transactions and
dispositions of the assets of the registrant;  2.  Provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and
expenditures of the registrant are being made only in accordance with
authorizations of management and directors of the registrant; and  3.  Provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, or use or disposition of the
registrant's assets that could have a material effect on the financial
statements.  Managements Report on Internal Control over Financial
Reporting  Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting. Under the supervision and with the
participation of our management, including our Chief Executive Officer and Chief
Financial Officer, we conducted an evaluation of the effectiveness of our
internal control over financial reporting as of June 30, 2008 using the criteria
established in Internal ControlIntegrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). A material weakness
is a deficiency, or combination of deficiencies, in internal control over
financial reporting, such that there is a reasonable possibility that a material
misstatement of the Companys annual or interim financial statements will not be
prevented or detected on a timely basis. In its assessment of the effectiveness
of internal control over financial reporting as of June 30, 2008, we determined
that the following deficiencies constituted a material weakness, as described
below. 10   1. Certain entity level controls establishing a tone at the top
were considered material weaknesses. The Company has no audit committee. There
is no policy on fraud and no code of ethics at this time.  A
whistleblower policy is not necessary given the small size of the
organization. 2. Management override of existing controls is possible given the
small size of the organization and lack of personnel. 3. There is no system in place to review and monitor internal control
over financial reporting. The Company maintains an insufficient complement of
personnel to carry out ongoing monitoring responsibilities and ensure effective
internal control over financial reporting.  Management is currently evaluating remediation plans for the above
control deficiencies.  Accordingly, the Company concluded that these control deficiencies
resulted in a reasonable possibility that a material misstatement of the annual
or interim financial statements will not be prevented or detected on a timely
basis by the companys internal controls.  As a
result of the material weaknesses described above, management has concluded that
the Company did not maintain effective internal control over financial reporting
as of June 30, 2008 based on criteria established in Internal ControlIntegrated
Framework issued by COSO.  This
annual report does not include an attestation report of the Companys registered
public accounting firm regarding internal control over financial reporting.
Managements report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the Securities and Exchange
Commission that permit the Company to provide only managements report in this
Annual Report.  Item 9B. OTHER INFORMATION.Not Applicable. 11   PART III  Item 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE.  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 52, 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.  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.  Item 11. EXECUTIVE
COMPENSATION  Mr.
Hand was accrued compensation of $5,000 per month commencing on July 1, 2005. Of
this amount, $55,000 was satisfied in June 2006 by the transfer of inventory to
Mr. Hand at cost. In the month of June 2006 $5,000 was credited from a related
party receivable of $99,157 as of the transfer. This related party receivable
was substantially utilized in the year ended June 30, 2008, and the accounts
payable related party as of June 30, 2008  payable included $25,000 in
accrued compensation to Mr. Hand. See Certain Transactions. 12   Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS  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, AND DIRECTOR INDEPENDENCE  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, 2008 and 2007 was $79,534 and $54,534, respectively; all
of the increase from 2007 to 2008 represents accrued compensation.
  In June 2006, the Company transferred a yacht held in inventory to
Mr. Hand at its cost of $154,197.  This amount was credited against Mr.
Hands compensation of $5,000 per month for the months of July 2005 to May 2006,
inclusive, and the remainder of $99,157 was accounted for as a non-interest
bearing advance to Mr. Hand, to be amortized against his monthly compensation.
As of June 30, 2008 and 2007, the amount of this advance was $0, $36,532,
respectively, which includes expenses paid by the Company and Mr. Hands behalf
in 2007 of $2,375.  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 at June 30, 2008
and 2007 was $2,166,260 and $2,132,643, respectively. The interest has been
forgiven by the holder and classified as contributed capital. 13   Item
14. Principal Accountant Fees and Services.  Audit
Fees  Our
accountants, The Blackwing Group, LLC, billed us $12,000 for audit fees and
review of quarterly filings for the fiscal years ended June 30, 2006, 2007 and
2008; these fees were paid in fiscal 2009.  Less
than 50% of the hours expended by our auditors on the audit for the years ended
June 30, 2006, 2007 and 2008 were performed by persons other than The Blackwing
Group, 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 years ended June 30, 2006, 2007 or 2008.  Our
former 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; these fees were paid in fiscal 2008. An additional $8,000 was
billed in 2008 for the 2005 audit.  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. No fees were paid to auditors in 2006
or 2007.  Audit
Committees pre-approval policies and procedures.  We do not have an
audit committee.  Our engagement of The Blackwing Group, 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.       14    PART IV   Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES  (b) The
following financial statements are filed herewith Report
of Independent Certified Public Accounting Firm Consolidated Balance Sheet as of June 30, 2008 Consolidated Statements of Income and Comprehensive Income (Loss)
for the years ended June 30, 2008 and 2007 and the period Inception to June 30,
2008 Consolidated Statement of Stockholders Equity (Deficit) from
Inception to June 30, 2008 Consolidated Statement of Cash Flows for the years ended June 30,
2008 and 2007 and the period Inception to June 30, 2008 Notes
to Consolidated Financial Statements  No
financial statement schedules are required to be filed.  (b) 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. 16.2 Letter from De Joya Griffith & Company LLC. Filed with
our Current Report on Form 8-K/ A dated September 8, 2008.  Exhibit 31. Certification of the Chief Executive and Financial Officer
pursuant to Rule 13a-14 of the Securities and Exchange Act of 1934 as amended,
as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2003. Filed
herewith.  Exhibit 32, Certification of the Chief Executive and Financial Officer
pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2003. Filed herewith. --------------------------------------------------------------------------  (1)
     Filed with the Company's original Form 10-SB.  (b) Reports on Form 8-K.  Not
Applicable. 15    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 October
14, 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 October 14, 2008.    By: /s/ Jehu Hand President, Chief Financial Officer Jehu Hand and Director (chief financial officer and accounting officer and duly authorized officer)        16      THE BLACKWING GROUP, LLC 18921G E VALLEY VIEW PARKWAY #325 INDEPENDENCE, MO 64055 816-813-0098  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 as of June 30,
2008 and 2007, and the related statements of operations, stockholders equity
(deficit), and cash flows for the periods ended June 30, 2008 and 2007.
 These financial statements are the responsibility of the Companys
management.  Our responsibility is to express an opinion on these financial
statements based on our audits.  We
conducted our 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.  The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Companys internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, 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, such financial statements present fairly, in all material respects, the
financial position of Cozumel Corporation (A Developmental Stage Company) as of
June 30, 2008, and the results of its operations and its cash flows for the
periods ended June 30, 2008 and 2007 in conformity with U.S. generally accepted
accounting principles.  The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 6 to the financial
statements, the Company has faced recurring losses from operations, which raise
substantial doubt about its ability to continue as a going concern. Management's
plans regarding those matters also are described in Note 6. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty. [jun08kcozfinal002.gif] The Blackwing Group,
LLC Issuing Office:
Independence, MO October 12, 2008 17     COZUMEL
CORPORATION AND SUBSIDIARY (A Development Stage Company) CONSOLIDATED BALANCE SHEET JUNE 30, 2008 As of June 30, 2008 ____________ ASSETS Cash and
cash equivalents $ -- Prepaid
expenses 5,800  Total
current assets 5,800  Inventory 2,045,438 Other asset
 advance to related party 3,134  Total assets $ 2,054,372  LIABILITIES AND STOCKHOLDERS' EQUITY   CURRENT LIABILITIES: Cash
overdraft $ 141 Accounts
payable 13,183 Advances due
to  related party 79,534 Note payable
 related party 2,166,260  Total
current liabilities 2,258,977  STOCKHOLDERS' EQUITY (Note 4) Preferred stock, $.001 par value,
1,000,000 shares authorized;
-0-  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 480,935  Accumulated
deficit during the development stage (686,681)  Total
stockholders equity (204,746)  Total liabilities and
stockholders equity $ 2,054,372           The accompanying notes are an integral part
of these financial statements. 18  COZUMEL CORPORATION AND
SUBSIDIARY (A Development Stage Company) CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE PERIODS ENDED JUNE 30, 2008 AND
2007 For the Years ended From Inception June 30, (April 20,
1994) ______________________ Through 2008 2007 June 30, 2008 ____________ ___________ __________  REVENUE $ -- $ -- $ --  EXPENSES: General and
administrative 78,555 99,398 (267,387)  LOSS BEFORE OTHER INCOME
(EXPENSE) (75,555) (99,398) (267,387)  OTHER INCOME (EXPENSE) Gain on sale
of available-for-sale securities -- -- 21,882 Dividend
income -- 13 8,019 Interest
expense  related party (171,648) (159,212) (449,155)  Total other income
(expense) (171,648) (159,199) (419,254)  LOSS BEFORE PROVISION FOR
INCOME TAXES (250,203) (258,597) (686,641)  PROVISION FOR INCOME TAXES (See
Note 3) -- -- 39  NET INCOME (LOSS) AFTER PROVISION FOR INCOME TAXES $ (250,203) $ (258,597) $ (686,681)  PER SHARE INFORMATION:  NET INCOME (LOSS) PER SHARE - 1,000,000
SHARES ISSUED $ (.25) $ (.26) $ (.69)  BASIC WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 1,000,000 1,000,000 1,000,000  DILUTED WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 1,000,000 1,000,000 1,000,000  The accompanying notes are an integral part
of these financial statements. 19     COZUMEL
CORPORATION AND SUBSIDIARY (A Development Stage
Company) CONSOLIDATED
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) From Inception
(April 20, 1994) through June 30, 2008 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. 20    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)
$    43,380Contribution
to Capital
-
-
-
-
98,732
-
-
98,732Net
loss
-
-
-
-
-
-
(168,917)
(168,917)__________
__________
___________
__________
__________
__________
__________
__________BALANCE,June 30, 2006
-
$
               -
1,000,000
$      1,000
$  150,575
$
                -
$ 177,880
$  (26,805)Contribution
to Capital
-
-
-
-
159,212
-
-
159,212Net
Capital loss
-
-
-
-
-
-
(258,597)
(258,597)__________
__________
___________
__________
__________
__________
__________
__________BALANCE,June 30, 2007
-
$
               -
1,000,000
$      1,000
$  309,287
$
                -
$ (436,477)
$ (126,190)__________
__________
___________
__________
__________
__________
__________
__________Contribution
to Capital
-
-
-
-
171,648
-
-
-Net
Capital loss
-
-
-
-
-
-
(250,203)
(250,203)__________
__________
___________
__________
__________
__________
__________
__________BALANCE,June 30, 2008
-
$
               -
1,000,000
$      1,000
$  480,935
$
                -
$ (686,681)
$ (204,746)_________
_________
__________
_________
_________
_________
_________
_________  The accompanying notes
are an integral part of this financial statement. 21     COZUMEL
CORPORATION AND SUBSIDIARY (A Development Stage Company) CONSOLIDATED STATEMENTS OF CASH
FLOWS FOR THE PERIODS ENDED JUNE 30, 2008 AND
2007 For the From Inception Years
ended April 20, 1994 June 30, Through _____________________ June 30,
2008 2008 2007 ____________ ___________ __________ Cash Flows From Operating Activities: Net loss $ (250,203) $ (258,597) $ (686,681) Adjustments to reconcile net loss to
net cash used by operating activities: (Increase) decrease in: Inventory (27,790) (352,807) (2,045,438) Prepaid
expenses 3,000 (8,799) (5,800) Related
party advances 33,398 57,625 (3,134) Increase (decrease) in: Accounts
payable 9,991 2,649 13,183  Net cash
provided (used) by operating activities (231,604) (559,930) (2,727,870)  Cash Flows From Investing Activities: Gain on sale
of available-for-sale securities -- -- (21,882) Forgiveness
of interest  related party 171,648 159,212 479,156 Purchase of
available-for-sale securities -- -- (202,139) Proceeds
from sale of available-for-sale securities -- -- 225,785  Net cash
provided (used) by investing activities 171,648 159,212 480,920  Cash Flows From Financing Activities: Cash
deficit 141 -- 141 Advances
from related party 25,000 -- 137,574 Repayment of
advances due to related party -- -- (58,040) Proceeds
from note payable - related party 33,616 377,702 2,166,260 Proceeds from sale of common
stock -- 1,015  Net cash
 (used) provided by financing activities 58,757 377,702 2,246,950  Net Increase (Decrease)
 in Cash (1,199) (23,156) -- Cash at Beginning of Period 1,199 24,715 --  Cash at End of Period $ -- $ 1,199 $ --  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 $ 171,648 $ 159,212 $ 479,156 Asset contribution of asset in lieu
of inventory
purchase $ -- $ -- $ 30,000 The accompanying notes are an integral part
of these financial statements. 22  COZUMEL CORPORATION AND
SUBSIDIARY (A Development Stage
Company) NOTES TO THE FINANCIAL
STATEMENTS FOR THE PERIODS ENDING
JUNE 30, 2008 AND 2007   A summary of
significant accounting policies of Cozumel Corporation (A Development Stage
Company) (the Company) is presented to assist in understanding the Companys
financial statements. The accounting policies presented in these footnotes
conform to accounting principles generally accepted in the United States of
America and have been consistently applied in the preparation of the
accompanying financial statements. These financial statements and notes are
representations of the Companys management who are responsible for their
integrity and objectivity. The Company has not realized revenues from its
planned principal business purpose and is considered to be in its development
state in accordance with SFAS 7, Accounting and Reporting by Development
State Companys.   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.  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, 2008, inventory includes one
Burger 74 motor yacht in process of refit and three smaller yachts whose refits
have been completed.  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.  Reclassifications  Certain amounts in prior year
financial statements have been reclassified for comparative purposes to conform
to presentation in the current year financial statements.  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.  23   COZUMEL CORPORATION AND
SUBSIDIARY (A Development Stage
Company) NOTES TO THE FINANCIAL
STATEMENTS FOR THE PERIODS ENDING
JUNE 30, 2008 AND 2007   NOTE 1 - DESCRIPTION OF THE BUSINESS,
HISTORY AND SUMMARY OF SIGNIFICANT
POLICIES (cont)  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.  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  24    COZUMEL CORPORATION AND SUBSIDIARY (A Development Stage
Company) NOTES TO THE FINANCIAL
STATEMENTS FOR THE PERIODS ENDING
JUNE 30, 2008 AND 2007  NOTE 1 - DESCRIPTION OF THE
BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT
POLICIES (cont)  New Accounting
Pronouncements (continued) 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.  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 25     COZUMEL CORPORATION AND SUBSIDIARY (A Development Stage
Company) NOTES TO THE
 FINANCIAL STATEMENTS FOR THE PERIODS ENDING
JUNE 30, 2008 AND 2007  NOTE 1 - DESCRIPTION OF THE BUSINESS,
HISTORY AND SUMMARY OF SIGNIFICANT
POLICIES (cont)  New Accounting
Pronouncements (continued) 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.  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 issued Statement of Financial Accounting
Standards No. 162, The Hierarchy of Generally Accepted Accounting Principles
(SFAS No. 162). This Statement identifies the sources of accounting principles
and the framework for selecting the principles to be used in the preparation of
financial statements of nongovernmental entities that are presented in
conformity with generally accepted accounting principles (GAAP) in the United
States (the GAAP hierarchy). The sources of accounting principles that are
generally accepted are categorized in descending order of authority as follows:
a. FASB Statements of Financial Accounting Standards and Interpretations, FASB
Statement 133 Implementation Issues, FASB Staff Positions, and American
Institute of Certified Public Accountants (AICPA) Accounting Research Bulletins
and Accounting Principles Board Opinions that are not superseded by actions of
the FASB b. FASB Technical Bulletins and, if cleared by the FASB, AICPA Industry
Audit and Accounting Guides and Statements  26    COZUMEL CORPORATION AND SUBSIDIARY (A Development Stage
Company) NOTES TO THE FINANCIAL
STATEMENTS FOR THE PERIODS ENDING
JUNE 30, 2008 AND 2007  New Accounting
Pronouncements (continued) of Position c. AICPA
Accounting Standards Executive Committee Practice Bulletins that have been
cleared by the FASB, consensus positions of the FASB Emerging Issues Task Force
(EITF), and the Topics discussed in Appendix D of EITF Abstracts(EITF
D-Topics) d. Implementation guides (Q&As) published by the FASB staff, AICPA
Accounting Interpretations, AICPA Industry Audit and Accounting Guides and
Statements of Position not cleared by the FASB, and practices that are widely
recognized and prevalent either generally or in the industry.  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.  NOTE 2 - 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, 2008 and 2007, respectively, interest expense was $171,648
and $160,522.  During the years ended June 30, 2008 and 2007, respectively,
the related party forgave accrued interest of $171,648 and $160,522.  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, 2008.   27    COZUMEL CORPORATION AND SUBSIDIARY (A Development Stage
Company) NOTES TO THE FINANCIAL
STATEMENTS FOR THE PERIODS ENDING
JUNE 30, 2008 AND 2007   NOTE 3 - INCOME TAXES  At June 30, 2008 and
2007, the Company had a federal operating loss carryforward of approximately
$686,681 and $437,772, respectively, which expires in varying amounts between
2008 and 2027.  Components of net
deferred tax assets, including a valuation allowance, are as follows at June
30:  2008

2007Deferred tax assets:Net operating loss carryforward

$
         231,775

$
         153,220Total deferred tax assets(231,775)

(153,220)Less: Valuation Allowance

--

--Net Deferred Tax
Assets

$
                  --

$
                   --  The valuation allowance
for deferred tax assets as of June 30, 2008 and 2007 was $231,775 and $153,220,
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, 2008 and 2007 and, accordingly,
recorded a full valuation allowance.  Reconciliation between
the statutory rate and the effective tax rate is as follows at June 30:  2008

2007Federal 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
%  NOTE 4 - 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, 2008.  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). 28  COZUMEL CORPORATION AND
SUBSIDIARY (A Development Stage
Company) NOTES TO THE FINANCIAL
STATEMENTS FOR THE PERIODS ENDING
JUNE 30, 2008 AND 2007  NOTE 4 - STOCKHOLDERS
EQUITY (DEFICIT) (continued)  1994 Stock Option
Plan -On April 20, 1994, the Company adopted the 1994 Stock Option Plan.
 The plan expired in 2004.  NOTE 5 - RELATED PARTY
TRANSACTIONS  Advances -During the years ended June 30, 2008 and 2007, a former officer/shareholder
of the Company directly paid expenses totaling $0 and $0 on behalf of the
Company.  No interest is being accrued on the advances.  In the years
ended June 30, 2008 and 2007, the Company directly paid $1,602 and $2,375 on
behalf of this officer. These amounts were added to the related party advances
account.  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, 2008 and 2007, the Company
accrued $5,000 a month in compensation to the officer/director of the Company.
 These amounts were first netted against the advances to related party
($60,000 in 2007 and $35,000 in 2008) and $25,000 in 2008 was attributed to
accounts payable related party.  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 6 - 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 $686,681, and a working capital deficit of
$2,253,177 as of June 30, 2008. 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 adjustments that might result from the outcome of these
uncertainties.  29