10QSB 1 cdc10q.htm 10QSB for CDC

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

FORM 10-QSB

[x]	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2005

[ ]	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from _______________ to _______________

Commission File Number 333-104647

COMMERCRE DEVELOPMENT CORPORATION, LTD.
(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)

MARYLAND	33-0843696
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)	(I.R.S. EMPLOYER IDENTIFICATION NO.)

8880 RIO SAN DIEGO DRIVE, 8^TH FLOOR
SAN DEIGO, CALIFORNIA 92108
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

619-209-6035
(ISSUER’S TELEPHONE NUMBER)

The total number of shares outstanding of the issuer’s common stock, par value $.001, as of March 31, 2004 is 21,365,500.

Transitional Small Business Disclosure Format: Yes [ ] No |X|

TABLE OF CONTENTS


PART I FINANCIAL INFORMATION
ITEM 1 Financial Statements (unaudited)				3
Condensed Consolidated Balance Sheets -March 31, 2005 and
December 31, 2004				3
Condensed Consolidated Statements of Losses -Three Months Ended
March 31, 2005 and 2004 and for the Period May 13, 1998 (Date of
Inception) through March 31, 2005				4
Condensed Consolidated Statements of Deficiency in Stockholders' Equity
for the Period May 13, 1998 (Date of Inception) through March 31, 2005				5
Condensed Consolidated Statements of Cash Flows - Three Months Ended
March 31, 2005 and 2004 and for the Period May 13, 1998 (Date of
Inception) through March 31, 2005				6
ITEM 2 Management's Discussion and Analysis of Financial Conditions And Results
of Operations				7
ITEM 3 Controls and Procedures				9
PART II OTHER INFORMATION
ITEM 1 Legal proceedings				9
ITEM 2 Changes in securities and use of proceeds				9
ITEM 3 Defaults upon senior securities				9
ITEM 4 Submission of matters to a vote of security holders				10
ITEM 5 Other information				10
ITEM 6 Exhibits				10
SIGNATURES				10

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

COMMERCE DEVELOPMENT CORPORATION, LTD.
(A DEVELOPMENT STAGE COMPANY)
CONSDENSED COMPARATIVE CONSOLIDATED BALANCE SHEET

	(Unaudited) March 31, 2005			December 31, 2004
ASSETS
Current Assets:
Cash and Cash Equivalents	$	324		$	867

Total Current Assets		324			867
Property, Plant and Equipment		6,550			6,550
Less: Accumulated Depreciation		2,729			2,495

		3,821			4,055
	$	4,145		$	4,922

LIABILITIES AND (DEFICIENCY IN) STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable and Accrued Liabilities	$	36,321		$	36,321
Shareholder Advances		26,512			26,500

Total Current Liabilities		62,833			62,821
Commitments and Contingencies		--			--
Common Stock, Par Value $0.001: 300,000,000 shares authorized;
21,365,500 shares issued and outstanding at March 31,
2005 and December 31, 2004, respectively		21,366			21,366
Additional-Paid-In Capital		481,017			481,017
Common Stock Subscription		--			--
Accumulated Deficit		(561,070	)		(560,281	)

Total (Deficiency in) Stockholders' Equity		(58,688	)		(57,899	)
	$	4,145		$	4,922

COMMERCE DEVELOPMENT CORPORATION, LTD.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF LOSSES
(UNAUDITED)

	For The Three Months Ended March 31, 2005			For The Three Months Ended March 31, 2004			For the Period May 13, 1998 (Date of Inception) to March 31, 2005
Operating Expenses:
General and Administrative Expenses		555			2,675			608,376
Depreciation and Amortization		234			234			26,726

Total Operating Expenses		789			2,909			635,102
Other Income (Expenses)	$	--		$	--			74,032
Income Tax Expense		--			--			--
Net Loss	$	(789	)	$	(2,909	)		(561,070	)
Income/(Loss) Per Common Share	$	(0.00	)	$	(0.00	)	$	(0.06	)
(Basic and Assuming Dilution)
Weighted Average Common
Shares Outstanding		21,365,000			21,165,000			9,214,418

COMMERCE DEVELOPMENT CORPORATION, LTD.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF DEFICIENCY IN STOCKHOLDERS’ EQUITY
FOR THE PERIOD MAY 13, 1998 (DATE OF INCEPTION) THROUGH MARCH 31, 2005
(UNAUDITED)

		Stock Amount		Additional Paid-In Capital		Stock Subscription Payable			Deficit Accumulated During Development Stage			Total
Shares issued at date of inception (May 13,1998) to parent company	2,000,000	$	2,000	$	--	$	--		$	--		$	2,000
Net income (loss)	--		--		--		--			(35,202	)		(35,202	)
Net transfer with Majestic	--		--		35,432		--			--			35,432

Balance at December 31, 1998	2,000,000	$	2,000	$	35,432	$	--		$	(35,202	)	$	2,230
Net income (loss)	--		--		--		--			(70,727	)		(70,727	)
Net transfer with Majestic	--		--		33,266		--			--			33,266

Balance at December 31, 1999	2,000,000	$	2,000	$	68,698	$	--		$	(105,929	)	$	(35,231	)
Net income (loss)	--		--		--		--			(178,138	)		(178,138	)
Net transfer with Majestic	--		--		56,056		--			--			56,056

Balance at December 31, 2000	2,000,000	$	2,000	$	124,754	$	--		$	(284,067	)	$	(157,313	)
Net income (loss)	--		--		--		--			2,711			2,711
Net transfer with Majestic	--		--		37,287		--			--			37,287

Balance at December 31, 2001	2,000,000	$	2,000	$	162,041	$	--		$	(281,356	)	$	(117,315	)
Shares issued to consultants in May 2002 in exchange for services rendered at $0.06 per share	715,000		715		42,185		--			--			42,900
Shares issued to employees and consultants in September 2002 in exchange for services rendered
at $0.06 per share	17,300,000		17,300		86,500		--			--			103,800
Shares issued in September 2002 in connection with acquisition of USM Financial Solutions, Inc.,
valued at $0.006 per share	800,000		800		4,000		--			--			4,800
Common stock subscription	--		--		--		87,250			--			87,250
Net income (loss)	--		--		--		--			(126,043	)		(126,043	)
Net transfer with Majestc	--		--		6,591		--			--			6,591

Balance at December 31, 2002	20,815,000	$	20,815	$	301,317	$	87,250		$	(407,399	)	$	1,983
Shares issued to sophisticated investors in February 2003 for cash at $0.50 per share	176,000		176		87,824		--			--			88,000
Common stock issued in February 2003 at $0.50 per share for common stock subscription
proceeds received in December 2002	174,500		175		87,075		(87,250	)		--			--
Net Income (loss)	--		--		--		--			(131,520	)		(131,520	)

Balance at December 31, 2003	21,165,500	$	21,166	$	476,216	$	--		$	(538,919	)	$	(41,537	)
Common Stock issued for services rendered at $0.025 SH in Apr 2004	200,000	$	200	$	4,801	$	--		$	--		$	5,001
Net Income (loss)	--		--		--		--			(21,362	)		(21,362	)

Balance at December 31, 2004	21,365,500		21,366		481,017		--			(560,281	)		(57,899	)
Net Income (loss)	--		--		--		--			(789	)		(789	)

Balance at March 31, 2005	21,365,500		21,366		481,017		--			(561,070	)		(58,688	)

COMMERCE DEVELOPMENT CORPORATION, LTD.
(A DEVELOPMENT STAGE COMPANY)
CONSDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

	For The Three Months Ended March 31,						For the Period May 13, 1998 (Date of Inception) through
	2005			2004			March 31, 2005
Cash flows from operating activities:
Net income (loss) for the period	$	(789	)	$	(2,909	)	$	(561,070	)
Adjustments to reconcile net loss
to net cash provided by (used in) operating activities:
Common stock issued in exchange for services rendered		--			--			151,700
Adjustment for common stock issued to Majestic, in connection with stock
splits in March and August 2002		2,000
Adjustments for expenses previously paid by Majestic on the Company's behalf		--			--			168,632
Common stock issued in connection with acquisition of USM Financial		--			--			4,800
Extingushment of debt to Majestic		--			--			(107,419	)
Depreciation and amortization		234			234			26,725
Loss from disposal of assets		--			--			212,089
Increase (decrease) in:
Cash disbursed in excess of available fund		--			--			--
Accounts payable and accrued liabilities		--			2,437			36,319

Net cash provided by (used in) operating activities		(555	)		(239	)		(66,223	)
Cash flows from investing activities:
Acquisition of property, plant, and equipment		--			--			(242,634	)
Cash flows from financing activities:
Proceeds from sale of common stock and stock subscription, net of costs		--			--			175,250
Proceeds from common stock subscription		--			--
Proceeds from (repayment to) shareholders loans		12			--			26,512
Due to related parties, net		--			--			107,419

Net cash provided by financing activities		12			--			309,181
Net increase (decrease) in cash and equivalents		(543	)		(239	)		324
Cash and cash equivalents at beginning of period		867			1,969			--

Cash and cash equivalents at end of period	$	324		$	1,730		$	324

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for taxes	$	--		$	--		$	--
Cash paid during the period for interest		--			--			--
Adjustment for common stock issued to Majestic, in
connection with stock splits in March and August 2002		--			--			2,000
Common stock issued for services rendered		--			--			151,700
Acquisition:
Assets acquired, net		--			--			--
Acquisition costs		--			--			4,800
Liabilities assumed, net		--			--			--
Common stock issued		--			--			(4,800	)

Net cash paid for acquisition	$	--		$	--		$	--

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

The following discussion and analysis is provided to increase the understanding of, and should be read in conjunction with, the Financial Statements of the Company and Notes thereto included elsewhere in this Report. Historical results and percentage relationships among any amounts in these financial statements are not necessarily indicative of trends in operating results for any future period. The statements, which are not historical facts contained in this Report, including this Plan of Operations, and Notes to the Financial Statements, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based on currently available operating, financial and competitive information, and are subject to various risks and uncertainties. Future events and the Company’s actual results may differ materially from the results reflected in these forward-looking statements. Factors that might cause such a difference include, but are not limited to, dependence on existing and future key strategic and strategic end-user customers, limited ability to establish new strategic relationships, ability to sustain and manage growth, variability of operating results, the Company’s expansion and development of new service lines, marketing and other business development initiatives, the commencement of new engagements, competition in the industry, general economic conditions, dependence on key personnel, the ability to attract, hire and retain personnel who possess the technical skills and experience necessary to meet the service requirements of its clients, the potential liability with respect to actions taken by its existing and past employees, risks associated with international sales, and other risks described herein and in the Company’s other SEC filings.

The safe harbors of forward-looking statements provided by Section 21E of the Exchange Act are unavailable to issuers of penny stock. As we issued securities at a price below $5.00 per share, our shares are considered penny stock and such safe harbors set forth under the Reform Act are unavailable to us.

Overview

We were incorporated as a Maryland corporation on May 13, 1998 with the name of Majestic Financial, Ltd. On April 29, 2002, we changed our name to Commerce Development Corporation, Ltd. to reflect the change in the Company’s planned operations.

Strategic Business Planning

We are currently focusing on developing a strategic business planning business.

The purpose of Strategic Business Planning is to help businesses and associations improve their prospects for success by enabling them to better target the applications of their scarce resources: time, effort, and money; in other words, accomplishing more with the resources they have.

Results of operations

COMPARISON OF THE THREE MONTHS ENDED MARCH 31, 2005 TO THE THREE MONTHS ENDED MARCH 31, 2004

For the three month period ended March 31, 2005, we incurred a net loss of ($310) compared to a net loss of $(2,909) for the same period ended March 31, 2004.

Revenues. There was no revenue generated for the three months ended March 31, 2005 and 2004. We are a development stage company and we are in the process of developing and seeking business opportunities as described above.

Costs and Expenses. General and administrative expenses were $555 for the three months ended March 31, 2005, compared to $2,909 for the same period ended March 31, 2004. The decrease is primarily the result of the professional fees paid in connection with preparation and filings for the Form for Registration of Securities of Small Business Issuers in 2004 which were substantially less in 2005. Depreciation expense for the three — month period ended March 31, 2005 and 2004 amounted $234 and $234, respectively.

Liquidity and Capital Resources

We are a development stage company. At March 31, 2005 we had an accumulated deficit of $561,070.

As of March 31, 2005, we had cash on hand of approximately $324. This amount will not be sufficient to satisfy our operating requirements through the next 12 months as we will have expenses such as those related to office rent. Our president, Mr. Andrew Mercer, has orally agreed to fund these expenses as a loan with no interest or due date, although he is under no obligation to do so. If he does not fund these expenses, we will be unable to implement our business plan. Further, to satisfy our operating requirements through March 31, 2006, we estimate that we will need an additional $680,000. If we do not secure this additional debt or equity financing, we will be unable to develop our business plan. We currently have one client and have no commitment for additional debt or equity financing. We have no plan in place that will eliminate this risk.

If we do not raise this entire amount, we would cease our attempts to implement our business plan, go out of business and not become a shell company to be used as a vehicle for a reverse acquisition.

We intend to raise additional funds from an offering of our stock in the future. We have not taken any steps to effect this offering. The offering may not occur, or if it occurs, may not generate the required funding. We may also consider securing debt financing. We may not generate operating cash flow or raise other equity or debt financing sufficient to fund this amount. If we don’t raise or generate these funds, the implementation of our short-term business plan will be delayed or eliminated.

Our ability to continue as a going concern is dependent on our ability to raise funds to implement our planned development; however we may not be able to raise sufficient funds to do so. Our independent auditors have indicated that there is substantial doubt about our ability to continue as a going concern over the next twelve months. Our poor financial condition could inhibit our ability to achieve our business plan. Because we are currently operating at a substantial loss with no operating history and very limited revenues, an investor cannot determine if we will ever become profitable.

The effect of inflation on our revenue and operating results was not significant. Our operations are located primarily in North America and there are no seasonal aspects that would have a material effect on the Company’s financial condition or results of operations.

Item 3. Controls and Procedures

The Corporation maintains disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the specified time periods. As of the end of the period covered by this report, the Corporation’s Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the Corporation’s disclosure controls and procedures. Based on the evaluation, which disclosed no significant deficiencies or material weaknesses, the Corporation’s Chief Executive Officer and Chief Financial Officer concluded that the Corporation’s disclosure controls and procedures are effective as of the end of the period covered by this report. There were no changes in the Corporation’s internal control over financial reporting that occurred during the Corporation’s most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

None

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3. Defaults upon Senior Securities.

None

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

None

Item 5. Other Information.

None

Item 6. Exhibits

Exhibit Number Name and/or Identification of Exhibit

3	Articles of Incorporation & By-Laws

(a)

Articles of Incorporation of the Company.*

(b)

By-Laws of the Company.*

31	Certification

32	Certification

* Incorporated by reference to the exhibits to the Company’s Form for Registration of Securities of Small Business Issuers on Form SB-2, and amendments thereto, previously filed with the Commission.

Signature

Pursuant to the requirements 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.

DATE: May 19, 2005

Commerce Development Corporation, Ltd.

BY: /S/ Andrew Mercer
——————————————
Andrew Mercer
Principal Executive Officer
Principal Financial and Accounting Officer