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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   ----------

                                   FORM 10-KSB

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

                  For the fiscal year ended: December 31, 2005

                         Commission File Number: 0-2616

                                   ----------

                         CONSUMERS FINANCIAL CORPORATION
                 (Name of Small Business Issuer in Its charter)

                PENNSYLVANIA                            23-1666392
       (State or Other Jurisdiction of               (I.R.S. Employer
       Incorporation or Organization)               Identification No.)

     132 Spruce Street, Cedarhurst, NY                     11516
  (Address of Principal Executive Offices)              (Zip Code)

                                 (516) 792-0900
                (Issuer's Telephone Number, including Area Code)

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

                                      None

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

                    Common Stock, ($0.001 par value; voting)

         8.5 % Preferred Stock, Series A; ($1.00 par value; non-voting)

      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 a
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes |_| No |x|

      Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. |_|

      The Issuer's revenues for the most recent fiscal year ended December 31,
2005 were $183,025. The aggregate market value of the voting and non-voting
common equity held by non-affiliates of the registrant on March 22, 2007 based
upon the average bid and ask price of the common stock on the OTC Bulletin Board
for such date, was $224,169. The number of shares of the Registrant's common
stock issued and outstanding on March 22, 2007, was 54,675,311 (post-split).

      Transitional Small Business Disclosure Format. Yes |_| No |x|

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                                TABLE OF CONTENTS

                                     PART I

Item 1.   Description of Business                                              1
Item 2.   Description of Property                                              2
Item 3.   Legal Proceedings                                                    3
Item 4.   Submission of Matters to a Vote of Security Holders                  5

                                     PART II

Item 5.   Market for Common Equity and Related Stockholder Matters             5
Item 6.   Management's Discussion and Analysis or Plan of Operation            7
Item 7.   Financial Statements                                               F-1
Item 8.   Changes In and Disagreements With Accountants on Accounting and
            Financial Disclosure                                              13
Item 8A.  Controls and Procedures                                             14
Item 8B.  Other Information                                                   15

                                    PART III

Item 9.   Directors, Executive Officers, Promoters and Control Persons;
          Compliance With Section 16(a) of the Exchange Act                   15
Item 10.  Executive Compensation                                              16
Item 11.  Security Ownership of Certain Beneficial Owners and Management
            Related Stockholder Matters                                       19
Item 12.  Certain Relationships and Related Transactions                      19
Item 13.  Exhibits                                                            20
Item 14.  Principal Accountant Fees and Services                              21



                              CAUTIONARY STATEMENT

      Some of the statements contained in this Form 10-KSB for Consumers
Financial Corporation and Subsidiaries ("the Company") discuss future
expectations, contain projections of results of operation or financial condition
or state other "forward-looking" information. These statements are subject to
known and unknown risks, uncertainties, and other factors that could cause the
actual results to differ materially from those contemplated by the statements.
The forward-looking information is based on various factors and is derived using
numerous assumptions. Important factors that may cause actual results to differ
from projections include, for example:

      o     the success or failure of management's efforts to implement their
            business strategy;

      o     the ability of the Company to raise sufficient capital to meet
            operating requirements;

      o     the effect of changing economic conditions;

      o     the ability of the Company to attract and retain quality employees;
            and

      o     other risks which may be described in future filings with the SEC.

      Words such as "anticipates," "expects," "intends," "plans," "believes,"
"seeks," "estimates," and variations of such words and similar expressions are
intended to identify such forward-looking statements. These statements are not
guarantees of future performance and are subject to certain risks, uncertainties
and assumptions that are difficult to predict. Therefore, actual results and
outcomes may differ materially from what is expressed or forecasted in any such
forward-looking statements. Such risks and uncertainties include those set forth
herein under "Risk Factors" as well as those noted in the documents incorporated
herein by reference. Unless required by law, the Company undertakes no
obligation to update publicly any forward-looking statements, whether as a
result of new information, future events or otherwise.



                                     PART I

ITEM 1. BUSINESS

                                     GENERAL

      Consumers Financial Corporation (the "Company") was formed in 1966 as 20th
Century Corporation (a Pennsylvania corporation) and adopted its present name in
1980. The Company was an insurance holding company which, until late 1997, was a
leading provider, through its subsidiaries, of credit life and credit disability
insurance in the states of Pennsylvania, Delaware, Maryland, Nebraska, Ohio and
Virginia. In connection with its credit insurance operations, the Company also
marketed, as an agent, an automobile extended service warranty product. The
Company operated through various wholly-owned subsidiaries since it was formed;
however, as of December 31, 2002, all of these subsidiaries have either been
sold or liquidated and dissolved. From 1992 through 1997, the Company also sold
all of its in-force insurance policies to various third party insurers.

      On March 24, 1998, the Company's shareholders approved a Plan of
Liquidation and Dissolution (the "Plan of Liquidation"), pursuant to which the
Company would be liquidated and dissolved. The Plan of Liquidation permitted the
Board of Directors to continue to consider other alternatives to liquidating the
Company if such alternatives were deemed by the Board to be in the best interest
of the Company and its shareholders. It became apparent to the Board during 2001
that the common shareholders would not receive any distribution under the Plan
of Liquidation, and the preferred shareholders would receive less than the full
liquidation value of their shares. Consequently, the Board concluded that
selling the Company for its value as a "public company shell" was a better
alternative for the common and preferred shareholders than liquidating the
Company. Accordingly, in August 2001, the Company sent request for proposal
letters to several investor groups that had expressed an interest in acquiring
the Company, and also issued a press release soliciting similar offers. In
October 2001, the Board of directors met to consider three offers which were
received, one of which was from CFC Partners, Ltd. ("CFC Partners"). Following
its review of each offer, the Board determined that the offer from CFC Partners
was the best offer. In February 2002, the Company and CFC Partners entered into
an option agreement (the "Option Agreement") which permitted CFC Partners to
acquire a 51.2% interest in the Company's common stock for $108,000, or $.04 per
common share. The purchase price was deposited into an escrow account held by
the Company in March 2002.

      The option held by CFC Partners was exercisable within 15 business days
following the completion by the Company of a tender offer to its preferred
shareholders. The completion of the tender offer was, in turn, dependent on the
sale of the Company's remaining insurance subsidiary, since substantially all of
the Company's assets were held by the subsidiary and state insurance laws would
not permit the withdrawal of those assets. In June 2002, the Company completed
the sale of the insurance subsidiary, and in August 2002, the Company purchased
377,288 shares of preferred stock at $4.40 per preferred share plus accrued
dividends, representing 83.4% of the then total shares outstanding, from those
preferred shareholders who elected to tender their shares.

      On August 28, 2002, CFC Partners exercised its option to acquire a
majority of the outstanding common shares of the Company. Accordingly, on that
date, the Board of Directors terminated the Plan of Liquidation and authorized
the issuance of 2,700,000 shares of common stock to CFC Partners. In accordance
with the Option Agreement with CFC Partners, the Company deposited the sum of
$331,434 into an escrow account, such amount representing the tender price of
$4.40 per preferred share multiplied by the 75,326 preferred shares not tendered
at that time.

                                       1


      On May 8, 2003, Vaughn Partners LLC ("Vaughn"), an Illinois limited
liability company in which the Company owns a 37.5% interest, acquired a
garden-type apartment complex located in Springfield, Illinois for a purchase
price of $5,440,940. The purchase price was comprised of (i) a $4,650,000
interest only bank loan secured by a first mortgage lien on the property payable
in two years, (ii) a $1,200,000 second mortgage on the property with principal
amounts of $500,000 due six months from acquisition and $700,000 due twelve
months from acquisition, (iii) a $100,000 interest-free loan made by a private
investor due in full on June 13, 2003 and which accrues interest at an annual
rate of 18% beyond its due date, and (iv) $200,000 in cash which was contributed
by third party investors to Vaughn. Vaughn is currently in default on the second
mortgage and on the $100,000 private investor loan. As a result of the default
under the second mortgage, the second mortgagee has the right to, among other
rights, sell the property, collect all rental income from the property and
exclude Vaughn from the proceeds thereof. As a result of the default under the
$100,000 loan, Vaughn is liable for accrued interest from June 15, 2003 at an
annual rate of 18% plus all costs and fees incurred by the lender in collecting
the amounts due under the note. The Company has no obligations under or
guarantees of these notes and the Company's financial risk is limited to its
investment in Vaughn, which is carried at zero value, with the exception of a
reserve in the amount of $200,000 which was created in order to absorb any
liabilities arising from the Vaughn partnership.

      Effective as of October 31, 2003, the Company approved an amended
operating agreement whereby Spartan would transfer to the Company 24.22% of its
interest in Vaughn in consideration for issuance by the Company of 250,000
shares of common stock. This amended operating agreement memorializing this
arrangement was not executed by members of Vaughn Partners holding 5% of the
membership interests and the 250,000 shares of common stock were not issued.
This amended operating agreement has therefore not and will not be ratified.

      The 37.5% equity interest in Vaughn is being accounted for under the
equity method in the Company's financial statements at December 31, 2003.

      On January 29, 2004, the Company, pursuant to approval by shareholders at
a special meeting held in August 2003, filed an amendment to its Articles of
Incorporation increasing its authorized capital shares to 50 million; 40 million
in common shares and 10 million in preferred shares.

      On January 1, 2004, the Company re-entered the development stage, whereby
the Company began to reformulate its business plan, and sought to accumulate the
financing and strategic alliances necessary to implement its plan. As of
December 31, 2004 Company remains in the development stage, as principal
operations have not materially commenced. Currently, the Company is actively
seeking out new business ventures and opportunities. The Company is seeking to
expand its operations into the real estate, construction management, medical
technologies and insurance industries, through an aggressive acquisition
strategy.

                                       2


      In August 2005 the Company issued 4,000,000 shares of Series B preferred
stock as consideration for the acquisition of G.S. Woodmere, Inc., a medical
billing company. The Company is currently working with its G.S. Woodmere
subsidiary to increase the efficiency and profitability of the medical billing
operations.

                               PLAN OF OPERATIONS

      As discussed above, the Company intends to initially expand into the real
estate, construction management, insurance agent and medical technology
industries through a combination of strategic alliances, mergers or
consolidations, or acquisitions.

      With regard to the medical technology business, the Company plans to
develop, own and operate positron emission tomography ("PET") imaging centers
initially in the New York area and then in other regional locations. The Company
has formed a 55% owned subsidiary, P.E.T Centers of America LLC, and through
this subsidiary, has initiated some business arrangements, but none of
significant consequence to date. In September the Company, through its
subsidiary, had signed a lease for a PET center in Suffolk County, New York, but
subsequently the lease terminated. The Company received a letter from the
landlord dated November 11, 2003 claiming that the Company and the subsidiary
are liable to the landlord for all costs and expenses incurred in connection
with enforcing the lease provisions as well as liquidated damages provided for
in the lease (the present value of the lease payments discounted at 6%). The
Company has received no further communications from the landlord in connection
with its demand. The Company has accrued $355,676 associated with this
terminated lease.

      During April, 2003, the Company entered into a Memorandum of Understanding
with Mariculture Systems, Inc. ("Mariculture") whereby the Company would acquire
60% of the outstanding shares of Mariculture in exchange for the Company's
management and financial expertise. Mariculture designs, builds and operates
aquaculture farms used for raising certain species of fish for the consumer
market. Although not aggressively pursued by either party to date, and still
requiring appropriate due diligence review and board approvals, this memorandum
has no expiration date and neither party has expressed an intent to terminate
it.

      During February 2004, the Company entered into a Memorandum of
Understanding with a privately-held corporation located in Connecticut with the
intent of a possible business combination either directly with the Company,
through a subsidiary of the Company or with a public shell available to the
Company. The Company is in the preliminary investigative stages of its customary
due diligence and this combination is subject to certain conditions precedent
that are material to the transaction and whose outcome in subject to material
uncertainty at the present time.

      The Company intends to move forward with its due diligence in this
transaction pursuant to this memorandum.

      On February 28 2005 and amended on April 4, 2005, the Company entered into
an Investment Exchange Agreement ("the Agreement") with Cross Capital Fund, LLC
("the Fund"). According to the terms of the Agreement, the Company made a
capital contribution of 4,000,000 Series D convertible preferred shares to the
Fund and the Company received from the Fund an Investor Membership Interest in
the amount of $4,000,000. In addition, the Company agreed to pay to the Fund a
monthly maintenance fee of $10,000.

                                       3


                                   COMPETITION

      Each of the industry segments in which the Company intends to operate is
highly competitive. Many of the Company's potential competitors have
significantly greater financial, technical, sales, marketing and other resources
as well as greater name recognition and a larger customer base than the Company.
While the Company believes it can successfully compete in selected niche markets
in each of its intended industry segments, there is no assurance that the
Company will be able to develop sufficient revenues and cash flows from these
businesses to operate profitably and compete effectively with other companies.

                              EMPLOYEES AND AGENTS

      As of December 31, 2005, the Company had only one full-time employee, who
also acts as the sole officer of the Company. Jack I. Ehrenhaus, the Company's
President, chairman, and chief executive officer, currently receives cash or
stock compensation from the Company in his capacity as officer and employee. Mr.
Shalom Maidenbaum, who was the Company's Vice President, resigned as an officer
and director of the Company during the 4th Quarter of 2003. Mr. Donald Hommell
was terminated by a majority vote as officer and director of the Company in
November, 2004.

      The Company maintained insurance coverage against employee dishonesty,
theft, forgery and alteration of checks and similar items until October 2003.
Although the Company is in the process of obtaining new coverage, there can be
no assurance that the Company will be able to obtain such coverage or that it
will not experience uninsured losses.

ITEM 2. PROPERTIES

      The Company leased approximately 400 square feet of office space, on a
month-to-month basis, at 1525 Cedar Cliff Drive, Camp Hill, Pennsylvania until
October 31, 2003. The monthly rent for this space was $400. The Company leases
an additional 800 square feet of office space in Cedarhurst, New York under a
lease that expired on December 31, 2003 and is now on a month-to-month basis.
The monthly rent for this space is $850 per month. Until December 31, 2002, the
Company also leased approximately 1,100 square feet of warehouse space for the
storage of its records. The monthly rent for this space was approximately $650.
The Company terminated this lease as of December 31, 2002 and effective January
1, 2003, entered into a month-to-month lease for approximately 550 square feet
at a monthly rent of $325. The Company's office and warehouse space are adequate
for its current needs

ITEM 3. LEGAL PROCEEDINGS

Life of the South

The Company was in arbitration against its co-defendant, Life of the South, from
a previously settled claim. Life of the South was seeking to recover from the
Company its share of the settlement totaling $17,500, its unreimbursed fees of
$27,825 plus interest, attorney fees and cost of arbitration from the Company.
During the year ended December 31, 2004 the case was decided in favor of the
Company, and the Company was granted an award of $18,952, and Life of the
South's claim was denied in its entirety.

                                       4


Securities and Exchange Commission Investigation

In addition, the Company has been party to subsequent legal disputes, notably
with respect to a Securities and Exchange Commission investigation that was
settled in October 2004. This investigation was initiated with respect to the
Company's dismissal of its certified auditor of record, Marcum & Kliegman, LLC.
The Company received notification from the SEC Division of Enforcement on
October 14, 2004 that a settlement offer was being submitted to the Commission.
The terms of the proposed settlement would stipulate that the Company violated
Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-13
thereunder. Further, the Commission would not pursue any actions against Messrs.
Ehrenhaus or Hommel. Through the date of this report, the Company has not
received notification as to whether the Commission has accepted the terms of
this proposed settlement.

Robert Half International

On July 25, 2005, Robert Half International ("RHI"), a professional staffing
agency, filed a claim against the Company in which RHI seeks $46,855 ("the
award"), from the Company, being the purported value of services performed by
RHI on behalf of the Company. The Company is currently in the process of
attempting to negotiate a settlement with RHI for an amount less than the full
award amount. If such negotiations are unsuccessful, the Company will ultimately
be forced to pay to RHI the full award amount.

Gold Op Holdings

During the 2004 and 2005 calendar years, the Company issued an aggregate total
of 6,400,000 post-split common shares ("the shares") to Gold Op Holdings, Inc.
in exchange for a promissory note totaling $1,000,000 ("the Note"). In July
2005, the Company had not received any payments on the Note, and elected to
issue a demand letter for the return of the shares. The Company received not
response to the demand letter. In July 2005, a summons and complaint was served
on Gold Op Holdings, Inc., to enforce the note, and or return the shares.
Through the date of this report the Company has received on response from Gold
Op, and the Company intends to seed a summary judgment against Gold Op.

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

      In October of 2003, Mr. Donald J. Hommel was dismissed with cause as
President and Chief Executive Officer of the Company by a majority vote of the
shareholders. Mr. Hommel was replaced in these positions by Mr. Jack I.
Ehrenhaus in October, 2003.

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

      Consumers Financial Corporation common stock was traded on the NASDAQ
National Market System with a ticker symbol of CFIN until June 1, 1998 when it
was de-listed by NASDAQ for non-compliance with NASDAQ's market value of public
float requirements. The Company's Convertible Preferred Stock, Series A, was
also traded on the NASDAQ National Market System until March 16, 1998, when it
was also delisted by NASDAQ for non-compliance with the public float requirement
of a minimum of 750,000 shares. Since the shareholders of the Company approved
the Plan of Liquidation on March 24, 1998, the Company did not appeal the
delisting decision for either the common or preferred stock, nor did it take any
steps to come into compliance with the new rules or attempt to seek inclusion on
the NASDAQ Small Cap Market. The Company is currently delisted to the Pink
Sheets as a result of its untimely filing of it 3rd Quarter Report on Form
10-QSB.

                                       5


      Quarterly high and low bid prices for the Company's common stock, based on
information provided by The National Association of Securities Dealers ("NASD")
through the NASD OTC Bulletin Board, are presented below. Such prices do not
reflect prices in actual transactions and exclude retail mark-ups and mark-downs
and broker commissions.



                1st      2nd      3rd      4th      1st      2nd      3rd      4th
              Quarter  Quarter  Quarter  Quarter  Quarter  Quarter  Quarter  Quarter
                2005    2005     2005      2005     2004     2004     2004     2004
              -------  -------  -------  -------  -------  -------  -------  -------
                                                       
Common Stock

High            0.55     0.45     0.50     0.40     1.10     0.80     1.30     1.10

Low             0.10     0.10     0.05     0.05     0.50     0.30     0.50     0.20


      As of December 31, 2005, there were approximately 6,446 shareholders of
record who collectively held 3,793,159 common shares and 18 shareholders of
record of the Convertible Preferred Stock, Series A, who held 72,226 shares. In
addition, there were approximately two shareholders of record who collectively
held 4,000,000 shares of Series D preferred stock. The number of shareholders
presented above excludes individual participants in securities positions
listings.

      Dividends on both the Company's common stock and Convertible Preferred
Stock Series A are declared by the Board of Directors. No common stock dividends
have been paid since 1994. The payment of dividends on the common stock in the
future, if any, will be subordinate to the preferred stock, must comply with the
provisions of the Pennsylvania Business Corporation Law and will be determined
by the Board of Directors. In addition, the payment of such dividends will
depend on the Company's financial condition, results of operations, capital
requirements and such other factors as the Board of Directors deems relevant.
Dividends on the preferred stock are paid quarterly on the first day of January,
April, July and October at an annual rate of $.85 per share. The dividends
payable, collectively totaling $58,198, due on January 1, April 1, July 1 and
October 1, 2003 have not been declared or paid by the Company. In addition, the
dividends payable on January 1, April 1, July 1 and October 1, 2005 also has not
been declared or paid by the Company. The aggregate dividends in arrears for all
quarters equals $74,205. When the Company is in arrears as to dividends or
sinking fund appropriations for the preferred stock, dividends to holders of the
Company's common stock as well as purchases, redemptions or acquisitions by the
Company of its common stock are restricted. Since the Company is in default with
respect to the payment of preferred dividends and the aggregate amount of the
deficiency is equal to at least four quarterly dividends, the holders of the
preferred stock are entitled, only while such arrears exists, to elect two
additional members to the then existing Board of Directors. The preferred
shareholders have not elected these two additional directors as of this date.

                                       6


      In the event of a liquidation of the Company, the holders of the preferred
stock are entitled to receive $10 per share plus all unpaid and accrued
dividends prior to any distribution to be made to the holders of common stock.

      The difference between the fair value of the preferred stock at the date
of issue and the mandatory redemption value is being recorded through periodic
accretions with an offsetting charge to the deficit. Such accretions totaled
$3,453 and $4,134 for the years ended December 31, 2005 and 2004, respectively.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS

      The following table summarizes certain information contained in or derived
from the Consolidated Financial Statements and the Notes thereto.



                                                             Years Ended December 31,
                                          -------------------------------------------------------------
                                             2005          2004         2003        2002       2001
                                          -----------  -----------  -----------  ---------  -----------
                                                                             
Selling, general and
  administrative expenses                 $ 4,717,845  $ 1,241,271  $ 3,212,949  $ 527,805  $   869,196
Other income (loss)                           (25,670)      22,550       16,813    584,589      268,369
Income (Loss) before income taxes          (4,560,490)  (1,218,721)  (3,196,136)    56,784     (600,827)
Income taxes                                       --           --           --         --           --
Net Income (Loss)                          (4,560,490)  (1,218,721)  (3,196,136)    56,784     (600,827)
Other comprehensive income (loss)                  --           --           --    (54,702)      27,539
Comprehensive income (loss)               $(4,560,490) $(1,218,721) $(3,196,136) $   2,082  $  (573,288)
Per share data (a):
Basic and diluted loss per
  common share                            $     (0.17) $     (0.47) $     (3.38) $   (0.80) $     (3.90)
Weighted average number of common
  shares outstanding                       27,335,373    2,575,076      946,372    350,124      257,770
Total assets                              $    39,912  $    64,838  $   348,616  $ 597,766  $ 2,832,651
Redeemable preferred stock                    682,033      678,582      675,129    739,949    4,428,381
Shareholders' deficiency                   (1,494,262)  (1,309,656)  (1,295,819)  (196,485)  (2,079,119)
Cash dividends declared per common share         NONE         NONE         NONE       NONE         NONE


                                       7


(a) The per share data presented above has not been adjusted to reflect the
effect of a one-for-ten reverse common stock split approved by the Company's
common shareholders on March 15, 2003 but has yet to be effected by the Company.
See Note 11 of the Notes to Consolidated Financial Statements appearing
elsewhere in this Form 10-K.

                                    OVERVIEW

      At the Special Meeting of Shareholders held on March 24, 1998, the
Company's preferred and common shareholders approved the sale of the Company's
credit insurance and related products business, which comprised the Company's
only remaining business operation. In connection with the sale of its inforce
credit insurance business, the Company also sold its credit insurance customer
accounts and one of its life insurance subsidiaries.

      On August 28, 2002, the Board of Directors appointed Donald J. Hommel, the
president of CFC Partners as a Director of the Company to fill an existing
vacancy on the Board. Following such appointment, the Company's officers
resigned as planned and the Board elected Mr. Hommel as the Company's President
and Chief Executive Officer. In addition, James C. Robertson and John E.
Groninger, who had been Directors of the Company for more than 30 years, also
resigned as planned.

      On October 17, 2002, the Board of Directors appointed Shalom S.
Maindenbaum, Esq., as a Director of the Company to fill an existing vacancy on
the Board. In addition, the Directors elected Mr. Hommel as the Company's
Treasurer and Mr. Maidenbaum as the Company's Vice President and Secretary. On
March 13, 2003, the Board of Directors appointed William T. Konczynin as an
additional Director to fill an existing vacancy and Chairman of the Audit
Committee. Jack I. Ehrenhaus was appointed as Chairman of the Board in April
2003 and has served as the Company's Chief Operating Officer effective January
1, 2003

      As a result of the approval of the Plan of Liquidation, the Company
adopted a liquidation basis of accounting in its financial statements for the
period from March 25, 1998 to August 28, 2002. Under this basis of accounting,
assets were stated at their estimated net realizable values and liabilities were
stated at their anticipated settlement amounts. As a result of the transaction
with CFC Partners and the related termination of the Plan of Liquidation,
effective August 29. 2002, the Company re-adopted accounting principles
applicable to going concern entities. Furthermore, as discussed elsewhere in
this Form 10-K, the Company has restated its liquidation-basis financial
statements for prior periods to conform such statements to the current
presentation.

      At December 31, 2004, Vaughn operated a garden-type apartment complex in
Springfield, Illinois as its sole operation. The Company intends to acquire
additional real estate operations exclusive of Vaughn and to establish
majority-owned operating subsidiaries to accommodate these acquisitions in the
future.

      At December 31, 2004 the Company had no business operations and its
revenue and expenses during the previous five years have been non-operating in
nature.

                                       8


      At December 31, 2004 the Company's shareholders' deficiency totaled
$1,925,819, as compared with a shareholders' deficiency of $1,295,819 at
December 31, 2003.

      For the year ended December 31, 2004 the Company's net loss was $1,278,616
as compared with a net loss of $3,752,404 for the year ended December 31, 2003.

      Dividends to preferred shareholders totaled $-0- and $-0- in 2004 and
2003, respectively.

                              RESULTS OF OPERATIONS

      YEAR ENDED DECEMBER 31, 2005

      For the year ended December 31, 2005, the Company reported a net loss of
$4,560,490 as compared with a loss of $1,218,721 for 2004. In 2005, the Company
incurred an expense of $1,500,000 pertaining to a loss on the Company's stock
subscription receivable, $1,994,000 impairment loss pertaining to the Company's
investment in G.S. Woodmere, $505,188 in officer compensation and other
consulting expenses paid for by the issuance of shares of common stock, and
approximately $717,367 in additional selling, general and administrative
expenses against a nominal amount of non-operating income. During the same
period in 2004, the Company reported a net loss of $1,218,721 primarily as a
result of $457,938 in salaries and wages, and $535,320 in other general and
administrative expenses.

                               FINANCIAL CONDITION

      CAPITAL RESOURCES

            Other than as described below, the Company currently has no material
commitments for any capital expenditures. However, if the Company develops
certain planned strategic alliances or identifies a target company to be merged
or otherwise combined with the Company, the Company's plans regarding capital
expenditures and related commitments are likely to change.

            During the year ended December 31, 2005, the Company's cash and cash
equivalents decreased by $13,034 to $1,973, principally due to the general and
administrative expenses incurred during the year, partially offset by cash
receipts of $100,000 from notes payable. The Company has no ability to pay any
additional expenses until it either develops new revenue sources or obtains
financing.

      LIQUIDITY

            In connection with the acquisition of the Company by CFC Partners,
substantially all of the Company's remaining liquid assets were used to complete
a tender offer to the preferred shareholders in August 2002. At December 31,
2003, the Company had a bank overdraft of $7,242. Furthermore, as of that date,
the Company had no significant business operations, sources of operating
revenues and cash flows. From that time the only significant sources of capital
for the Company were through debt and equity financing. The Company is currently
pursuing various business opportunities, including strategic alliances as well
as the merger or combination of existing businesses with the Company, in order
to develop revenue streams and increase positive cash flow. The Company's
management is initially focusing on joint ventures with, or acquisitions of,
companies in the real estate, construction management and medical technology
segments. However, there are no assurances that the Company's effort in this
regard will be successful.

                                       9


            As indicated above, the Company currently has no ability to pay any
significant additional expenses until it either develops new revenue sources or
obtains financing. Without new revenues and/or immediate financing, management's
efforts to develop the Company's real estate, construction and medical
technology businesses are not likely to succeed.

            During the year ended December 31, 2005, the Company's operating
activities used $88,382 in cash, as compared to $81,924 in the 2004 calendar
year. The Company had cash on had totaling $1,973 at December 31, 2005.

      GOING CONCERN AND MANAGEMENT PLANS

                  The accompanying consolidated financial statements have been
      prepared assuming that the Company will continue as a going concern.
      However, at December 31, 2005 the Company had current assets of $15,274,
      current liabilities of $852,141, a shareholders' deficit of $1,494,262 and
      was delinquent in its payment to several of its existing creditors. These
      matters raise substantial doubt about the Company's ability to continue as
      a going concern.

                  The Company is currently pursuing various business
      opportunities for the Company, including strategic alliances, as well as
      the merger or combination of existing businesses within the Company. The
      new management of the Company is initially focusing on joint ventures
      with, or acquisitions of, companies in the real estate, construction
      management and medical technology sectors as well as the direct purchase
      of income-producing real estate. Furthermore, the Company has finalized an
      Investment Exchange Agreement with Cross Capital Fund, which management
      anticipates will be the source of future capital inflows in the form of
      dividends. However, there is no assurance that the Company's efforts in
      this regard will be successful. In fact, given the Company's current cash
      position, without new revenues and/or immediate financing, the Company's
      efforts to develop the above-referenced businesses are not likely to
      succeed.

            The Company's ability to continue as a going concern is dependent on
      its success in developing new cash revenue sources or, alternatively, in
      obtaining short-term financing while its businesses are being developed.
      There are no assurances that such financing can be obtained or, if
      available, be obtained at terms acceptable to the Company. To the extent
      that such financing is equity based, this may result in dilution to the
      existing shareholders.

            The consolidated financial statements presented herein do not
      include any adjustments that might result from the outcome of this
      uncertainty.

      REDEEMABLE PREFERRED STOCK

            On August 23, 2002, the Company completed a tender offer to all of
      its preferred shareholders, pursuant to which it purchased 377,288 shares
      representing 83.4% of the shares then outstanding, at $4.40 per share plus
      accrued dividends. The tender offer was completed in conjunction with and
      was a condition of the Option Agreement by CFC Partners. Since all of the
      Company's remaining assets would have been distributed to the preferred
      shareholders if the Company had been liquidated, the Board of Directors
      believed that the exercise of the option, and the related termination of
      the Plan of Liquidation, should not take place until the preferred
      shareholders had been given a chance to exchange their shares for cash.

                                       10


            The terms of the redeemable preferred stock require the Company,
      when and as appropriated by the Board out of funds legally available for
      that purpose, to make annual payments to a sinking fund. Such payments
      were to have commenced on July 1, 1998. The preferred stock terms also
      provide that any purchase of preferred shares by the Company will reduce
      the sinking fund requirements by an amount equal to the redemption value,
      $10 per share, of the shares acquired. As a result of the Company's
      purchases of preferred stock in the open market and in the tender offer
      described above, no sinking fund payment for the preferred stock is due
      until July 1, 2006. However, in connection with the exercise of the option
      by CFC partners, the Company deposited $331,434 into a bank escrow account
      for the benefit of the remaining preferred shareholders.

            The redeemable preferred stock is redeemable at the option of the
      Company at any time, in whole or in part, for a redemption price of $10
      per share plus all unpaid and accrued dividends.

            Dividends at an annual rate of $.85 per share are cumulative from
      the original issue date of the preferred stock. Dividends are payable
      quarterly on January 1, April1, July 1 and October1 of each year. The
      dividends payable on January 1, 2004 and for all four quarters of 2003
      have not been declared or paid by the Company. Dividends in arrears for
      the five quarters total $74,205, $60,783 of which relate to the four
      quarterly dividends for 2003. When the Company is in arrears as to
      dividends or sinking fund appropriations for the preferred stock,
      dividends to holders of the Company's common stock as well as purchases,
      redemptions or acquisitions by the Company of shares of the Company's
      common stock are restricted. Since the Company is in default with respect
      to the payment of preferred dividends and the aggregate amount of the
      deficiency is equal to at least four quarterly dividends, the holders of
      the preferred stock are entitled, only while such arrearage exists, to
      elect two additional members to the then existing Board of Directors. The
      preferred shareholders have not elected these two additional directors as
      of this date.

            In the event of a liquidation of the Company, the holders of the
      preferred stock are entitled to receive $10 per share plus all unpaid and
      accrued dividends prior to any distribution to be made to the holders of
      common stock.

            The difference between the fair value of the preferred stock at the
      date of issue and the mandatory redemption value is being recorded through
      periodic accretions with an offsetting charge to the deficit. Such
      accretions totaled $3,011 and $3,453 for the years ended December 31, 2005
      and 2004, respectively.

                                       11


      CRITICAL ACCOUNTING POLICIES

            The Company prepares its consolidated financial statements in
      conformity with accounting principles generally accepted in the United
      States of America. The preparation of these financial statements requires
      management to make estimates and assumptions that affect the reported
      amounts of assets and liabilities and disclosure of contingent assets and
      liabilities at the date of the financial statements, and the reported
      amounts of revenues and expenses during the reporting period. Actual
      results could differ from those estimates.

            In December 2001, the Securities and Exchange Commission ("SEC")
      requested that all registrants list their critical accounting policies in
      Item 7. Management's Discussion and Analysis of Financial Condition and
      Results of Operations of their Form 10-K. The SEC defined a critical
      accounting policy as one that is important to the portrayal of the
      company's financial condition and results of operations and requires
      management's subjective or complex judgments. Accordingly, the Company has
      described its critical accounting policies below:

            DEFERRED TAX VALUATION ALLOWANCE

            Periodically, management reviews the adequacy of its deferred tax
      valuation allowance. This review entails estimating: the Company's future
      taxable income through fiscal 2005. A reduction in the valuation allowance
      can result in a decrease in the Company's income tax expense. Conversely,
      an increase in the valuation allowance can lead the Company to report its
      income tax at a higher rate. Since future results may differ materially
      from those estimates, the Company's estimate of the amount of deferred tax
      assets that will be ultimately realized could differ materially.

      CONTRACTUAL OBLIGATIONS

            The Company has no long-term contractual obligations or guarantees.
      All leases are on a month-to-month basis and the Company has not entered
      into any off balance sheet transactions. The Company's exposure as a 47.5%
      partner of Vaughn is limited to the loss of its investment in Vaughn,
      which is carried at zero. The Company is not liable, directly or
      indirectly, for any of the obligations of Vaughn. All of the obligations
      of the Company are unsecured.

                                       12


ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                                                                            Page
                                                                            ----

Report of Independent Registered Accounting Firm                             F-2

Report of Independent Accountants                                            F-3

Consolidated Balance Sheet as of December 31, 2005                           F-4

Consolidated Statements of Operations for the years ended December 31,
  2005 and 2004, and from inception of the development stage on
  January 1, 2003 through December 31, 2005                                  F-5

Consoldated Statements of Shareholders' Deficiency for the years ended
  December 31, 2005 and 2004                                                 F-6

Consolidated Statements of Cash Flows for the the years ended December
  31, 2005 and 2004, and from inception of the development stage on
  January 1, 2003 through December 31, 2005                                  F-7

Notes to Consolidated Financial Statements                                  F-11

                                      F-1


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors
Consumers Financial Corporation and Subsidiaries
(A Development Stage Company)
Cedarhurst, New York

                                      F-2


[Insert audit report here]


                                      F-3



                     CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
                                Consolidated Balance Sheet

                                                                    December 31,
                                                                        2005
                                                                   -------------
                             ASSETS

CURRENT ASSETS
  Cash                                                             $      1,973
  Prepaid expenses, current portion                                      13,301
                                                                   ------------
         Total Current Assets                                            15,274
                                                                   ------------
FIXED ASSETS, NET (Note 5)                                                1,356
                                                                   ------------
OTHER ASSETS
  Prepaid expenses, non-current portion                                  23,282
                                                                   ------------
      Total Other Assets                                                 23,282
                                                                   ------------
      TOTAL ASSETS                                                 $     39,912
                                                                   ============

         LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
  Accounts payable and accrued expenses                            $    614,789
  Notes payable (Note 16)                                               210,000
  Notes payable - related parties (Note 17)                              27,352
                                                                   ------------
         Total Current Liabilities                                      852,141
                                                                   ------------
REDEEMABLE PREFERRED STOCK
  Preferred stock, 10,000,000 shares authorized, 68,376 shares
    issued and outstanding                                              682,033
                                                                   ------------
STOCKHOLDERS' EQUITY (DEFICIT)
  Preferred stock, Class D; 4,000,000 shares authorized at $0.01
    par value; 4,000,000 and -0- shares issued and outstanding           40,000
  Common stock, $0.01 par value, 40,000,000 shares authorized,
    54,675,311 shares issued and outstanding                            546,753
  Additional paid-in capital                                         18,303,203
  Treasury stock, preferred                                             (18,070)
  Stock receivable                                                   (2,242,969)
  Deficit accumulated prior to the development stage                 (9,188,118)
  Deficit accumulated during the development stage                   (8,935,061)
                                                                   ------------
      Total Stockholders' Equity (Deficit)                           (1,494,262)
                                                                   ------------
      TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND
        STOCKHOLDERS' EQUITY (DEFICIT)                             $     39,912
                                                                   ============

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

                                      F-4


            CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
                Consolidated Statements of Operations



                                                                             From Inception
                                                                                 of the
                                                                               Development
                                                                                 Stage
                                                                              On January 1,
                                          For the years ended December 31,    2003, Through
                                          --------------------------------    December 31,
                                                 2005           2004              2005
                                              -----------   -----------      --------------
                                                                     
REVENUES                                      $   183,025   $        --       $   183,025

EXPENSES
  General and administrative                      717,367       535,320         1,846,143
  Bad debt expense                                     --        84,375           111,875
  Impairment of goodwill                        1,994,000            --         1,994,000
  Salaries and wages                              505,188       457,938         3,516,524
  Depreciation                                      1,290           982             3,171
  Stock subscription bad debt                   1,500,000       162,656         1,662,656
                                              -----------   -----------       -----------
    Total Expenses                              4,717,845     1,241,271         9,134,369
                                              -----------   -----------       -----------
LOSS FROM OPERATIONS                           (4,534,820)   (1,241,271)       (8,951,344)

OTHER INCOME (EXPENSES)
  Interest income                                      --         1,848             4,309
  Interest expense                                (25,670)      (17,808)          (49,126)
  Gain on extinguishment of debt                       --        36,023            56,023
  Other income                                         --         2,487             2,487
                                              -----------   -----------       -----------
    Total Other Income (Expenses)                 (25,670)       22,550            13,693
                                              -----------   -----------       -----------
    Net Loss                                  $(4,560,490)  $(1,218,721)       (8,937,651)
                                              ===========   ===========       ===========
PER SHARE DATA:
  Basic loss per common share (Note 12)       $     (0.17)  $     (0.47)
                                              ===========   ===========
  Weighted average number of common
    shares outstanding                         27,335,373     2,575,076
                                              ===========   ===========


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

                                      F-5


                CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
            Consolidated Statements of Stockholders' Equity (Deficit)



                                                                                Treasury Stock,
                                Common Stock     Preferred Stock   Additional      Preferred     Deferred
                             ------------------  ---------------    Paid-In    ----------------   Compen-    Stock     Accumulated
                               Shares    Amount   Shares  Amount    Capital    Shares   Amount    sation   Receivable    Deficit
                             ---------  -------   ------  ------  -----------  ------  --------  --------  ----------  -----------
                                                                                         
Balance at inception of the
  development stage on
  January 1, 2003              527,678  $ 5,277      --     $--   $ 8,986,356      --  $     --  $     --      $--     $        --
Common stock issued for
  services rendered             35,300      353      --      --       137,957      --        --        --       --              --
Redemption of preferred
  stock                             --       --      --      --            --  (2,600)   (6,760)       --       --          18,813
Common stock issued for
  services rendered             14,000      140      --      --        18,060      --        --        --       --              --
Redemption of preferred
  stock                             --       --      --      --            --    (785)   (2,041)       --       --           5,691
Common shares issued for
  investments to related
  party                        122,727    1,227      --      --       268,773      --        --        --       --              --
Common shares issued for
  services rendred by
  officers                     600,000    6,000      --      --     1,260,000      --        --        --       --              --
Common shares issued as
  bonuses for officers         391,304    3,913      --      --       876,521      --        --        --       --              --
Common shares issued for
  services rendered              9,200       92      --      --        22,908      --        --        --       --              --
Redemption of preferred
  stock                             --       --      --      --            --  (3,565)   (9,269)       --       --          25,841
Common shares issued for
  cash                          20,800      208      --      --        25,792      --        --        --       --              --
Common shares issued for
  services rendered             33,000      330      --      --        85,470      --        --   (85,800)      --              --
Common shares issued for
  services rendered              1,064       11      --      --         2,435      --        --        --       --              --
Accretion of difference
  between carrying value
  and mandatory redemption
  value of preferred stock          --       --              --            --      --        --        --       --          (3,595)
Net loss for the year ended
  December 31, 2003                 --       --      --      --            --      --        --        --       --      (3,196,136)
                             ---------  -------     ---     ---   -----------  ------  --------  --------      ---     -----------
Balance, December 31, 2003   1,755,073  $17,551      --      --   $11,684,272  (6,950) $(18,070) $(85,800)     $--     $(3,149,386)
                             ---------  -------     ---     ---   -----------  ------  --------  --------      ---     -----------


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

                                      F-6


                CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
      Consolidated Statements of Stockholders' Equity (Deficit) (Continued)



                                                   Preferred                   Treasury Stock,
                                Common Stock         Stock        Additional     Preferred      Deferred
                             ------------------  --------------    Paid-In    ----------------   Compen-     Stock     Accumulated
                               Shares    Amount  Shares  Amount    Capital    Shares   Amount    sation    Receivable    Deficit
                             ---------  -------  ------  ------  -----------  ------  --------  --------  -----------  -----------
                                                                                         
Balance, December 31, 2003   1,755,073  $17,551     --    $--    $11,684,272  (6,950) $(18,070) $(85,800) $        --  $(3,149,386)
Common shares issued to
  officers for accrued
  salary                       638,076    6,381     --     --        312,857      --        --    85,800           --           --
Common shares issued for
  subscription receivable      800,000    8,000     --     --        992,000      --        --        --   (1,000,000)          --
Decrease in subscription
  receivable due to
  decrease in market value
  of shares                         --       --     --     --       (428,571)     --        --        --      428,571           --
Common shares issued as
  additional consideration
  on subscription
  receivable                   600,000    6,000     --     --        422,571      --        --        --     (428,571)          --
Decrease in subscription
  receivable due to
  decrease in market value
  of shares                         --       --     --     --       (510,000)     --        --        --      510,000           --
Impairment of subscription
  receivable based upon
  uncertainty of collection         --       --     --     --             --      --        --        --      247,031           --
Accretion of difference
  between carrying value
  and mandatory redempton
  value of preferred stock          --       --     --     --             --      --        --        --           --       (3,453)
Net loss for the year ended
  December 31, 2004                 --       --     --     --             --      --        --        --           --   (1,218,721)
                             ---------  -------    ---    ---    -----------  ------  --------  --------  -----------  -----------
Balance, December 31, 2004   3,793,149   37,932     --     --     12,473,129  (6,950)  (18,070)       --     (242,969)  (4,371,560)
Common shares issued as
  additional consideration
  on subscriptons
  receivable at $0.30 per
  share                      5,000,000   50,000     --     --      1,450,000      --        --         --   (1,500,000)          --
Impairment of subscription
  receivable due to
  decrease in market value
  of shares                         --       --     --     --             --      --        --         --    1,500,000           --
                             ---------  -------    ---    ---    -----------  ------  --------    -------  -----------  -----------
Balance forward              8,793,149  $87,932     --     --    $13,923,129  (6,950) $(18,070)   $    --  $  (242,969) $(4,371,560)
                             ---------  -------    ---    ---    -----------  ------  --------    -------  -----------  -----------


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

                                      F-7


                CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
      Consolidated Statements of Stockholders' Equity (Deficit) (Continued)



                                                                                Treasury Stock,
                             Common Stock       Preferred Stock    Additional      Preferred     Deferred
                        --------------------  ------------------    Paid-In    ----------------   Compen-     Stock     Accumulated
                          Shares     Amount     Shares    Amount    Capital    Shares   Amount    sation    Receivable     Deficit
                        ----------  --------  ---------  -------  -----------  ------  --------  --------  -----------  -----------
                                                                                          
Balance forward          8,793,149  $ 87,932         --  $    --  $13,923,129  (6,950) $(18,070)   $--     $  (242,969) $(4,371,560)
Common shares
  cancelled               (500,000)   (5,000)        --       --        5,000      --        --     --              --           --
Common shares issued
  for services
  rendered                 481,621     4,816         --       --      139,670      --        --     --              --           --
Common shares issued
  to Company officer
  as payment on
  accrued wages         45,900,541   459,005         --       --      275,404      --        --     --              --           --
Preferred shares
  issued in
  acquisition of
  investment                    --        --  4,000,000   40,000    3,960,000      --        --     --      (2,000,000)          --
Accretion of
  difference between
  carrying value and
  mandatory redempton
  value of preferred
  stock                         --        --         --       --           --      --        --     --              --       (3,011)
Net loss for the year
  ended December 31,
  2006                          --        --         --       --           --      --        --     --              --   (4,560,490)
                        ----------  --------  ---------  -------  -----------  ------  --------    ---     -----------  -----------
Balance, December 31,
  2004                  54,675,311  $546,753  4,000,000   40,000  $18,303,203  (6,950) $(18,070)   $--     $(2,242,969) $(8,935,061)
                        ==========  ========  =========  =======  ===========  ======  ========    ===     ===========  ===========


Deficit accumulated prior to the development stage   $ (9,188,118)
Deficit accumulated during the development stage       (8,935,061)
                                                     ------------
Total accumulated deficit                            $(18,123,179)
                                                     ============

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

                                      F-8


                CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows



                                                                                              From Inception
                                                                                                  of the
                                                                                               Development
                                                                                                  Stage
                                                                                              On January 1,
                                                           For the years ended December 31,   2003, Through
                                                           -------------------------------      December 31,
                                                               2005             2004              2005
                                                           -------------   ---------------    --------------
                                                                                     
CASH FLOWS FROM OPERATING
ACTIVITIES

  Net loss                                                 $(4,560,490)     $(1,218,721)      $(8,937,651)
  Adjustments to reconcile net loss to net cash used by
    operating activities:
  Common stock issued for services                             144,486          319,037         3,061,913
  Depreciation                                                   1,290              982             3,161
  Impairment of goodwill                                     1,994,000               --         1,994,000
  Bad debt expense                                           1,500,000          247,031         1,747,031
  Change in operating assets and liabilities:
  Change in prepaid expenses                                    12,183           13,302            (6,162)
  Change in restricted cash                                         --          284,401           296,154
  Change in other assets                                            --               --            87,363
  Change in deferred compensation                                   --           85,800            85,800
  Change in accounts payable and
    accrued expenses                                           820,149          186,244         1,294,385
                                                           -----------      -----------       -----------
      Net Cash Used in Operating Activities                    (88,382)         (81,924)         (374,006)
                                                           -----------      -----------       -----------
CASH FLOWS FROM INVESTING
 ACTIVITIES

  Purchase of fixed assets                                      (1,581)              --            (4,517)
                                                           -----------      -----------       -----------
      Net Cash Used In Operating Activities                     (1,581)              --            (4,517)
                                                           -----------      -----------       -----------
CASH FLOWS FROM FINANCING
  ACTIVITIES

  Purchase of redeemable preferred stock                            --               --           (18,070)
  Change in bank overdraft                                          --           (4,786)            2,456
  Proceeds from notes payable                                  100,000           95,000           215,000
  Payments on notes payable                                         --           (5,000)           (5,000)
  Proceeds from notes payable - related                          9,929           64,123           112,858
  Payments on notes payable - related                          (33,000)         (52,506)         (118,506)
  Common stock issued for cash                                      --               --            26,000
                                                           -----------      -----------       -----------
    Net Cash Provided By Financing Activities                   76,929           96,831           214,738
                                                           -----------      -----------       -----------

INCREASE (DECREASE) IN CASH                                $   (13,034)     $    14,907       $  (163,785)

CASH AT BEGINNING OF PERIOD                                $    15,007      $       100       $   165,758
                                                           -----------      -----------       -----------
CASH AT END OF YEAR                                        $     1,973      $    15,007       $     1,973
                                                           ===========      ===========       ===========


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

                                      F-9


                CONSUMERS FINANCIAL CORPORATION AND SUBSIDIARIES
                Consolidated Statements of Cash Flows (Continued)



                                                                                              From Inception
                                                                                                 of the
                                                                                               Development
                                                                                                 Stage
                                                                                               On January 1,
                                                           For the years ended December 31,    2003, Through
                                                           --------------------------------    December 31,
                                                               2005             2004               2005
                                                           -------------   ----------------   --------------
                                                                                       
SUPPLIMENTAL SCHEDULE OF CASH FLOW ACTIVITIES:

Cash Paid For:

  Income taxes                                                $     --         $     --         $       --
  Interest                                                    $     --         $     --         $       --

Schedule of Non-Cash Financing Activities:

  Common stock issued for services                            $144,486         $319,037         $2,917,628
  Common stock issued for deferred compensation               $     --         $     --         $   85,800


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

                                      F-10




             CONSUMERS FINANCIAL CORPORATION, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                                December 31, 2005

NOTE 1 - OVERVIEW, GOING CONCERN, AND MANAGEMENTS' PLANS

Business Overview

From 1998 through February 2002, the Company had no significant business
operations, and its activity consisted principally of investment income on its
remaining assets and other administrative expenses. In March 1998, the Company's
shareholders approved a Plan of Liquidation and Dissolution (the "Plan of
Liquidation") pursuant to which the Company began liquidating its remaining
assets and paying-down or providing for all of its liabilities. However, in
February 2002, the Company entered into an option agreement with CFC Partners,
Ltd., a New York investor group ("CFC Partners"), pursuant to which CFC Partners
obtained a majority interest in the Company's common stock. In August 2002 (See
Note 3), the option was exercised and 270,000 new common shares (post-split),
representing approximately 51.2% of the then total outstanding shares of common
stock, were issued by the Company to CFC Partners. As a result of the
acquisition of the Company, the Plan of Liquidation was discontinued.
Immediately prior to the transaction with CFC Partners, the Company disbursed a
substantial portion of its remaining assets to its preferred shareholders in
connection with a tender offer to those shareholders.

From the time of its acquisition by CFC Partners through December 31, 2005, the
Company has been actively seeking out new business ventures and opportunities.
The Company is currently seeking to expand its operations into the real estate,
construction management, medical technologies and insurance industries, through
an aggressive acquisition strategy.

Going Concern and Managements' Plans

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. However, at December 31,
2005, the Company's current liabilities of $852,141 exceeded its current assets
by $836,867. Additionally, the Company had an accumulated deficit of $18,123,179
and was delinquent in its payments on certain accounts payable and other
liabilities. These matters raise substantial doubt about the Company's ability
to continue as a going concern.

The Company is currently pursuing various business opportunities and strategic
alliances, in addition to seeking out operating entities with the intent to
merge with or acquire these entities. Currently, the Company is focusing on
joint ventures with or acquisitions of companies in the medical technology and
real estate industries. However, there is no assurance that the Company's
efforts in this regard will be successful. In fact, given the Company's current
cash position, without new revenues and/or immediate financing, the Company's
efforts to develop the above-referenced businesses are not likely to succeed.

The Company's ability to continue as a going concern is dependent on its success
in developing new cash revenue sources or, alternatively, in obtaining
short-term financing while its businesses are being developed. There are no
assurances that such financing can be obtained or, if available, be obtained at
terms acceptable to the Company. To the extent that such financing is
equity-based, this may result in dilution to the existing shareholders.

The consolidated financial statements presented herein do not include any
adjustments that might result from the outcome of this uncertainty.

                                      F-11


             CONSUMERS FINANCIAL CORPORATION, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                                December 31, 2005

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of Consumers
Financial Corporation and its former wholly-owned subsidiary, Consumers Life
Insurance Company ("Consumers Life") until June 19, 2002 when Consumers Life was
sold. The consolidated financial statements include the Company's wholly-owned
subsidiary, Consumers Management Group, and its 55% owned subsidiary, P.E.T.
Centers of America, LLC. Neither of these subsidiaries had any operations during
the periods presented. In addition, the consolidated financial statements
include another of the Company's wholly-owned subsidiaries, GS Woodmere Group,
Inc. which was acquired in August, 2005. All material inter-company balances and
transactions have been eliminated in consolidation.

Cash and Cash Equivalents

The Company considers all short-term investments with an original maturity of
three months or less when purchased to be cash equivalents.

Income Taxes

The Company accounts for income taxes using the liability method, which requires
the determination of deferred tax assets and liabilities based on the
differences between the financial and tax bases of assets and liabilities using
enacted tax rates in effect for the year in which the differences are expected
to reverse. Deferred tax assets are adjusted by a valuation allowance, if, based
on the weight of available evidence, it is more likely than not that some
portion of, or all of the deferred tax assets, will not be realized.

Fixed Assets

Fixed assets are stated at cost. Maintenance and repairs are charged to expenses
as incurred; costs of major additions and betterments are capitalized. When
equipment and fixtures are sold or otherwise disposed of, the cost and related
accumulated depreciation are eliminated from the accounts and any resulting gain
or loss is reflected in the Consolidated Statement of Operations.

Depreciation and Amortization

Depreciation of fixed assets is computed using the straight-line method at rates
adequate to allocate the cost of applicable assets over their expected useful
lives of three to five years.

Use of Estimates in the Financial Statements

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from these estimates.

                                      F-12


             CONSUMERS FINANCIAL CORPORATION, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                                December 31, 2005

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Reclassifications

Certain accounts in the prior years' consolidated financial statements have been
reclassified for comparative purposes to conform with the presentation in the
current year consolidated financial statements. These reclassifications have no
effect on previously reported income.

Net Loss Per Share

Basic Income (Loss) Per Share is computed by dividing income (loss) available to
common shareholders by the weighted-average number of common shares outstanding
for the period. Diluted EPS is based on the weighted-average number of shares of
common stock and common stock equivalents outstanding at year-end.

Stock-Based Compensation

In October 1995, the Financial Accounting Standards Board "(FASB") issued
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("SFAS 123"). SFAS 123 prescribes accounting and reporting
standards for all stock-based compensation plans, including employee stock
options, restricted stock, employee stock purchase plans and stock appreciation
rights. SFAS 123 requires compensation expense to be recorded (i) using the new
fair value method or (ii) using the existing accounting rules prescribed by
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees" ("APB 25") and related interpretations with pro forma disclosure of
what net income and earnings per share would have been had the Company adopted
the new fair value method. The Company intends to continue to account for its
stock based compensation plans in accordance with the provisions of APB 25.

On December 31, 2002, the FASB issued Statement of Financial Accounting
Standards No. 148, "Accounting for Stock-Based Compensation-Transition and
Disclosure" ("SFAS 148"). SFAS 148 amends SFAS 123 to provide an alternative
method of transition to SFAS 123's fair value method of accounting for stock
based employee compensation. SFAS 148 also amends the disclosure provisions of
SFAS 123 and Accounting Principles Board Opinion No. 28, "Interim Financial
Reporting" ("APB 28"), to require disclosure in summary of significant
accounting policies of the effects of an entity's accounting policy with respect
to stock based employee compensation on reported net income and earnings per
share in annual and interim financial statements. While the statement does not
amend SFAS 123 to require companies to account for employee stock options using
the fair value method, the disclosure provisions of SFAS 123 are applicable to
all companies with stock based employee compensation, regardless of whether they
account for that compensation using the fair value method of SFAS 123 or the
intrinsic value method of APB 25. The adoption of SFAS 148 did not have an
impact on net income or pro forma net income applying the fair value method as
the Company did not have compensatory stock options or warrants for the years
ended December 31, 2005 and 2004.

In December 2004, the FASB issued Statement of Financial Accounting Standards
No. 123R, which addresses accounting for employee stock options. Statement 123R
requires that the cost of all employee stock options, as well as other
equity-based compensation arrangements, be reflected in the financial statements
based on the estimated fair value of the awards. The adoption of SFAS 123R did
not have a material impact on the Company's consolidated financial statements
for the year ended December 31, 2005.

                                      F-13


             CONSUMERS FINANCIAL CORPORATION, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                                December 31, 2005

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

New Accounting Pronouncements

In May 2003, the FASB issued Statement of Financial Accounting Standards No.
150, "Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity" (SFAS 150"). SFAS 150 addresses certain financial
instruments that, under previous guidance, could be accounted for as equity, but
now must be classified as liabilities in statements of financial position. These
financial instruments include: (i) mandatory redeemable financial instruments,
(ii) obligations to repurchase the issuer's equity shares by transferring
assets, and (iii) obligations to issue a variable number of shares. SFAS 150 is
generally effective for all financial instruments entered into or modified after
May 31, 2003, and otherwise effective at the first interim period beginning
after June 15, 2003. The adoption of the effective provisions of SFAS 150 did
not have any impact on the Company's consolidated financial position or
Statement of Operations.

In January 2003, and revised in December 2003, the FASB issued FASB
Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46").
This interpretation of Accounting Research Bulletin No. 51, "Consolidated
Financial Statements," addresses consolidation by business enterprises of
variable interest entities, which possess certain characteristics. FIN 46
requires that if a business enterprise has a controlling financial interest in a
variable interest entity, the assets, liabilities, and results of the activities
of the variable interest entity must be included in the consolidated financial
statements with those of the business enterprise. FIN 46 applies immediately to
variable interest entities created after January 31, 2003 and to variable
interest entities in which an enterprise obtains an interest after that date.
The consolidation requirements apply to older entities in the first fiscal year
or interim period after June 15, 2003. The adoption of the effective provisions
of Interpretation 46 did not have any impact on the Company's consolidated
financial position or statement of operations

NOTE 3 - ACQUISITION OF THE COMPANY

On August 28, 2002, CFC Partners, pursuant to an Option Agreement, exercised its
option to acquire 270,000 shares (post-split) of the Company's common stock. The
option price of $108,000 had previously been deposited by CFC Partners into an
escrow account held by the Company. The newly issued shares represented
approximately 51.2% of the then outstanding common stock of the Company.

At the August 28, 2002 meeting of the Board of Directors, Donald J. Hommel, the
then-President of CFC Partners, was appointed as a Director of the Company to
fill an existing vacancy on the Board. Following this appointment, the Company's
officers resigned as planned and the Board elected Mr. Hommel as the Company's
President and Chief Executive Officer. In addition, the Company's two Directors,
other than Mr. Hommel, also resigned as planned. In October 2002, at a
subsequent meeting of the Board of Directors, Mr. Shalom S. Maidenbaum was
appointed to fill an existing vacancy and officers were elected. In March 2003,
William Konczynin was appointed as an additional director and Chairman of the
Audit Committee, and in April 2003, Jack Ehrenhaus was appointed as Chairman of
the Board and Chief Operating Officer, effective January 1, 2003. Mr. Hommel was
terminated by the Company' in November, 2004, and Mr. Ehrenhaus was elected to
be the Company's sole officer. Both Mr. Maidenbaum and and Mr. Koncynin resigned
their positions as members of the Company's Board of Directors in 2005.

In connection with the issuance of the new shares to CFC Partners, the Board of
Directors also terminated the Plan of Liquidation. The Board had previously
determined that selling the Company for its value as a "public company shell"
was a better alternative for the shareholders than the Plan of Liquidation, in
as much as the common shareholders were not expected to receive any distribution
in a liquidation of the Company. The preferred shareholders were given an
opportunity to exchange their shares for cash in a tender offer completed by the
Company on August 23, 2002.

                                      F-14


             CONSUMERS FINANCIAL CORPORATION, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                                December 31, 2005

NOTE 3 - ACQUISITION OF THE COMPANY (Continued)

The new management of the Company is currently pursuing various business
opportunities for the Company. Management's efforts have initially been focused
on joint ventures with, or acquisition of, companies in the real estate,
construction management and medical technology sectors as well as the direct
purchase of income-producing real estate.

NOTE 4 - PROPERTY AND EQUIPMENT

As of December 31, 2005, the Company's fixed assets consisted of the following:

Property & equipment:
  Data processing equipment and software   $ 56,070
Less: accumulated depreciation              (54,714)
                                           --------
      Balance                              $  1,356
                                           ========

Depreciation expense was $1,290 and $982 and for the years ended December 31,
2005, and 2004, respectively.

NOTE 5 - COMMITMENTS AND CONTINGENCIES

Rental expense in 2005 and 2004 was approximately $14,000 and $11,050,
respectively. All leases currently in effect are on a month-to-month basis.

NOTE 6 - REDEEMABLE PREFERRED STOCK

On August 23, 2002, the Company completed a tender offer to all of the preferred
shareholders, pursuant to which it purchased 377,288 shares (approximately 83.4%
of the shares outstanding) at $4.40 per share plus accrued dividends. The tender
offer was completed in conjunction with and was a condition to the exercise of
the option by CFC Partners (See Note 4). Since all of the Company's remaining
assets would have been distributed to the holders of the preferred stock if the
Company had been liquidated, the Board of Directors believed that the exercise
of the option (and the related termination of the Plan of Liquidation) should
not take place until the preferred shareholders had been given a chance to
exchange their shares for cash.

The terms of the preferred stock require the Company, when and as appropriated
by the Board out of funds legally available for that purpose, to make annual
payments to a sinking fund. Such payments were to have commenced on July 1,
1998. The preferred stock terms also provide that any purchase of preferred
shares by the Company will reduce the sinking fund requirements by an amount
equal to the redemption value ($10 per share) of the shares acquired. As a
result of the Company's purchases of preferred stock in the open market and in
the tender offer described above, no sinking fund payment for the preferred
stock is due until July 1, 2006. However, in connection with the exercise of the
option by CFC Partners, the Company deposited $331,434 into a bank escrow
account for the benefit of the remaining preferred shareholders. The redeemable
preferred stock is redeemable at the option of the Company at any time, as a
whole or in part, for a redemption price of $10 per share plus all unpaid and
accrued dividends.

                                      F-15


             CONSUMERS FINANCIAL CORPORATION, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                                December 31, 2005

NOTE 6 - REDEEMABLE PREFERRED STOCK (Continued)

Dividends at an annual rate of $0.85 per share are cumulative from the date of
original issue of the preferred stock. Dividends are payable quarterly on the
first day of January, April, July and October. The dividends payable on January
1, April 1, July 1 and October 1, 2003 have not been declared or paid by the
Company. In addition, the dividend payable at January 1, 2004 has also not been
declared or paid by the Company. Dividends in arrears for the five quarters as
of January 1, 2004 total $74,205, $58,198 of which relates to the four quarters
of 2003.

When the Company is in arrears as to preferred dividends or sinking fund
appropriations for the preferred stock, dividends to holders of the Company's
common stock as well as purchases, redemptions or acquisitions by the Company of
shares of the Company's common stock are restricted. Since the Company is in
default with respect to the payment of preferred dividends and the aggregate
amount of the deficiency is equal to at least four quarterly dividends, the
holders of the preferred stock are entitled, only while such arrearage exists,
to elect two additional members to the then existing Board of Directors. The
preferred shareholders have not elected these two additional directors as of
this date.

In event of a liquidation of the Company, the holders of the preferred stock are
entitled to receive $10 per share plus all unpaid and accrued dividends prior to
any distribution to be made to the holders of common stock.

The preferred stock is convertible at any time, unless previously redeemed, into
shares of common stock at the rate of 0.1482 shares of common stock (post-split)
for each share of preferred stock (equivalent to a conversion price of $6.75 per
share).

The difference between the fair value of the preferred stock at the date of
issue and the redemption value is being recorded through periodic accretions,
using the interest method, with an offsetting charge to the deficit. Such
accretions totaled $3,011 and $3,452, in the years ended December 31, 2005 and
2004, respectively.

NOTE 7 - INCOME TAXES

Deferred taxes are provided on a liability method whereby deferred tax assets
are recognized for deductible temporary differences and operating loss and tax
credit carryforwards and deferred tax liabilities are recognized for taxable
temporary differences. Temporary differences are the differences between the
reported amounts of assets and liabilities and their tax bases. Deferred tax
assets are reduced by a valuation allowance when, in the opinion of management,
it is more likely than not that some portion or all of the deferred tax assets
will not be realized. Deferred tax assets and liabilities are adjusted for the
effects of changes in tax laws and rates on the date of enactment.

Net deferred tax assets consist of the following components as of December 31,
2005 and 2004:

                             2005          2004
                         -----------   -----------
Deferred tax assets:
  NOL carryover          $ 2,977,608   $ 2,618,027
  Accrued expenses                --       156,548
Valuation allowance       (2,977,608)   (2,774,575)
                         -----------   -----------
Net deferred tax asset   $        --   $        --
                         ===========   ===========

                                      F-16


             CONSUMERS FINANCIAL CORPORATION, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                                December 31, 2005

NOTE 7 - INCOME TAXES (Continued)

The income tax provision differs from the amount of income tax determined by
applying the U.S. federal and state income tax rates of 39% to pretax income
from continuing operations for the years ended December 31, 2005 and 2004 due to
the following:

                                           2005          2004
                                       ------------   ---------
Book loss                              $ (1,778,591)  $(500,415)
Impairment of goodwill                      777,660          --
Stock subscription bad debt                 585,000          --
Stock for services / options expense         56,350     124,424
Valuation allowance                         359,581     375,991
                                       ------------   ---------
                                       $         --   $      --
                                       ============   =========

At December 31, 2005, the Company had net operating loss carryforwards of
approximately $739,000 that may be offset against future taxable income from the
year 2005 through 2025. No tax benefit has been reported in the December 31,
2005 financial statements since the potential tax benefit is offset by a
valuation allowance of the same amount.

Due to the change in ownership provisions of the Tax Reform Act of 1986, net
operating loss carryforwards for Federal income tax reporting purposes are
subject to annual limitations. Should a change in ownership occur, net operating
loss carryforwards may be limited as to use in future years.

NOTE 8 - ISSUANCES OF COMMON STOCK

During the year ended December 31, 2005, the Company issued 5,000,000 shares of
common stock to an unrelated entity as additional consideration for certain
services to be performed. The Company also issued an additional 481,621 common
shares for services rendered during the period. In October 2005 the Company
issued 45,900,541 common shares to an officer, as payment for wages accrued over
the past several years.

The Company also issued 4,000,000 Series D preferred shares as payment for the
acquisition of 100% of the outstanding common stock of GS Woodmere, Inc.

NOTE 9 - LOSS PER SHARE

The following table set forth the computation of basic and diluted loss per
share data:

                                          Years ended December 31,
                                         -------------------------
                                            2005          2004
                                         -----------   -----------
Net loss - numerator                     $(4,560,490)  $(1,218,721)
Denominator for basic loss per share -
  weighted average shares (post-split)    27,335,373     2,575,076
                                         -----------   -----------
Basic loss per common share              $     (0.17)  $     (0.47)
                                         ===========   ===========

The redeemable preferred stock is convertible at any time, unless previously
redeemed, into shares of common stock at the rate of 0.1482 shares of common
stock (post-split) for each share of preferred stock (equivalent to a conversion
price of $6.75 per share). None of the common shares contingently issuable upon
the conversion of the preferred stock have been included in the computation of
diluted per share information as the effects would be anti-dilutive.

                                      F-17


             CONSUMERS FINANCIAL CORPORATION, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                                December 31, 2005

NOTE 10 - EXECUTIVE EMPLOYMENT AGREEMENTS

On September 1, 2003, the Company entered into employment agreements Donald J.
Hommel as President and Chief Executive Officer and Jack I. Ehrenhaus as
Chairman and Chief Operating Officer. Each agreement provided for annual
compensation of $225,000 in base salary with annual increases of 10% and annual
bonuses as determined by the Board, which can range up to twice the amount of
the base salary but in no event will the bonus be less than 50% of the base
salary. Each officer is also entitled to an automobile allowance of $750 per
month and reimbursement of all business expenses. The term of each employment
agreement is ten years. If the Company terminates either officer without cause
prior to the term, the officer is entitled to a severance payment equal to his
salary for the remainder of the ten year term or two years' salary, whichever is
greater. If there is a material change in the Company that causes a substantial
reduction in the officer's duties, or a liquidation, transfer of assets or
merger and the Company is not the surviving entity, the officer is entitled to a
severance payment. Each officer also agreed that if the Company has a cash flow
shortfall, the officer will take stock in lieu of cash at a 20% discount to the
stock price at the payment date. In October of 2004, Mr. Hommel was dismissed
with cause from his positions with the Company by a majority vote of the
shareholders. Mr. Hommel's employment agreement was thus rendered void, and the
Company had not further obligations to Mr. Hommel relating to this employment
agreement. As of December 31, 2005, Mr. Ehrenhaus is the sole officer of the
Company, and his Employment Agreement has remained in full effect.

NOTE 11 - RELATED PARTY TRANSACTIONS

During 2004 and 2005, the Company received unsecured loans from a Company
officer to meet operating costs. These loans, from the Company's CEO, bear no
interest and have no specific repayment terms. During the 2005 fiscal year the
Company borrowed $3,929 from the CEO, and made payments on the loan totaling
$33,000. As of December 31, 2005 and 2004, the balance on the Company's
unsecured loan from Mr. Ehrenhaus, including accrued interest, totaled $26,352,
and 50,423, respectively.

NOTE 12 - LEGAL PROCEEDINGS

Robert Half International

On July 25, 2005, Robert Half International ("RHI"), a professional staffing
agency, filed a claim against the Company in which RHI seeks $46,855 ("the
award"), from the Company, being the purported value of services performed by
RHI on behalf of the Company. The Company is currently in the process of
attempting to negotiate a settlement with RHI for an amount less than the full
award amount. If such negotiations are unsuccessful, the Company will ultimately
be forced to pay to RHI the full award amount.

Gold Op Holdings

During the 2004 and 2005 calendar years, the Company issued an aggregate total
of 6,400,000 post-split common shares ("the shares") to Gold Op Holdings, Inc.
in exchange for a promissory note totaling $1,000,000 ("the Note"). In July
2005, the Company had not received any payments on the Note, and elected to
issue a demand letter for the return of the shares. The Company received no
response to the demand letter. In July 2005, a summons and complaint was served
on Gold Op Holdings, Inc., to enforce the note, and or return the shares.
Through the date of this report the Company has received no response from Gold
Op, and the Company intends to seed a summary judgment against Gold Op.

                                      F-18


             CONSUMERS FINANCIAL CORPORATION, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                                December 31, 2005

NOTE 13 - NOTES PAYABLE

Notes payable consist of the following at December 31, 2005:

Note payable to unrelated individual, accrues interest
  at 8.0% per annum, unsecured, currently in default     $ 40,000

Note payable to unrelated individual, accrues interest
  at 10.0% per annum, unsecured, currently in default    $ 50,000

Note payable to unrelated entity, accrues interest
  at 8.0% per annum, unsecured, currently in default     $100,000

Note payable to unrelated individual, accrues interest
  at 8.0% per annum, unsecured, currently in default     $ 20,000
                                                         --------
    Total Notes Payable                                  $210,000
                                                         ========

At December 31, 2005, the Company was in default three of its four notes
payable. The note holders have not initiated any legal actions against the
Company to collect the outstanding balances. Accrued interest on notes payable
at December 31, 2004 was $23,490

                                      F-19


ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

            As of September 18, 2003, Stambaugh Ness, PC resigned as the
      principal independent accountants for the Company.

            The report of Stambaugh Ness, PC on the financial statements for the
      years ended December 31, 2002 and 2001 contained no adverse opinion or
      disclaimer of opinion, and were not qualified or modified as to scope or
      accounting principles. Although the financial statements audited by
      Stambaugh Ness, PC for the year ended December 31, 2002 contained an
      explanatory paragraph pertaining to the Company's ability to continue as a
      going concern, such financial statements did not contain an adjustment
      that might result from the uncertainty stated therein. In addition, during
      the Company's years ended December 31, 2002 and 2001 and through September
      18, 2003, there were no disagreements with Stambaugh Ness, PC on any
      matters of accounting principles or practices, financial statement
      disclosure or auditing scope or procedures; which disagreements, if not
      resolved to the satisfaction of Stambaugh Ness, PC would have caused that
      firm to make reference in connection with its report to the subject matter
      of the disagreements or a reportable event.

            As of September 23, 2003, the Board of Directors of the Company
      approved the appointment of Marcum & Kliegman LLP as the Company's new
      principal independent accountants commencing with the interim financial
      statement review for the third quarter ending September 30, 2003 and the
      audit for the year ending December 31, 2003.

            During the years ended December 31, 2002 and 2001 and until
      September 23, 2003, Marcum & Kliegman LLP had not been engaged by the
      Company as an independent accountant to audit the financial statements of
      the Company or any of its subsidiaries, nor had it been consulted
      regarding the application of accounting principles to any specified
      transaction, either completed or proposed, or the type of audit opinion
      that might be rendered on the Company's financial statements, or any
      matter that was the subject of a disagreement or reportable event
      identified in response to paragraph (a) (1) (iv) of Item 304, as those
      terms are used in Item 304 (a) (1) (iv) of Regulation S-K and the related
      instructions to Item 304 of Regulation S-K.

            The Company requested that Stambaugh Ness, PC furnish it with a
      letter addressed to the Securities and Exchange Commission stating whether
      or not it agrees with the above statements. A copy of such letter from
      Stambaugh Ness, PC is filed as an Exhibit on Form 8-K filed with the
      Securities and Exchange Commission on September 25, 2003.

                                       13


            In 2004 the accounting firm of Marcum & Kleigman resigned as the
      Company's auditors of record. HJ & Associates, LLC was appointed to
      replace Marcum & Kleigman in August, 2004.

ITEM 8A. CONTROLS AND PROCEDURES

      A) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

            As of the end of the period covered by this report, the Company
      conducted an evaluation, under the supervision and with the participation
      of the principal executive officer and principal financial officer, of the
      Company's disclosure controls and procedures (as defined in Rules
      13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the
      "Exchange Act")). Based on this evaluation, the principal executive
      officer and principal financial officer have concluded that the Company's
      disclosure controls and procedures are effective to ensure that
      information required to be disclosed by the Company in reports that it
      files or submits under the Exchange Act is recorded, processed, summarized
      and reported within the time periods specified in Securities and Exchange
      Commission's rules and forms.

CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING

            Internal controls over financial reporting consists of control
      processes designed to provide assurance regarding the reliability of
      financial reporting and preparation of our financial statements in
      accordance with accounting principles generally accepted in the United
      States of America. To the extent that components of our internal controls
      over financial reporting are included in our disclosure controls, they are
      included in the scope of the evaluation by our chief executive officer and
      chief financial officer referenced above. There have been no significant
      changes in the Company's internal controls over financial reporting during
      the Company's most recently completed fiscal quarter that have materially
      affected, or are reasonably likely to materially affect, the Company's
      internal controls over financial reporting.

            Our independent auditors have reported to our management certain
      matters involving internal controls that our independent auditors
      considered to be reportable conditions, and a material weakness, under
      standards established by the American Institute of Certified Public
      Accountants. The reportable conditions and material weaknesses relate to
      the December 31, 2003 financial close process and absence of appropriate
      reviews and approvals of transactions and accounting entries. Certain
      adjustments were identified in the annual audit process, related to the
      recording of stock-based compensation, prepaid expenses, accrued expenses,
      preferred stock and accounting for an equity method investment. The
      adjustments related to these matters were made by the Company in
      connection with the preparation of the audited financial statements for
      the year ended December 31, 2003.

      B) CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

      There have been no significant changes in internal controls over financial
      reporting that occurred during the fiscal period covered by this report
      that have materially affected, or are reasonably likely to materially
      affect, the registrant's internal control over financial reporting.

                                       14


ITEM 8B. OTHER INFORMATION

            None.

                                    PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Historically, the Board of Directors of the Company was divided into three (3)
groups, with the directors in each group serving terms of three (3) years.
However, due to the Directors' decision in 1996 to merge, sell or otherwise
dispose of the Company or its assets, the eventual approval by the shareholders
of the Plan of Liquidation in 1998 and the acquisition of a 51.2% interest in
the Company by CFC Partners, Ltd. on August 28, 2002, there had been no election
of Directors since 1995. On August 28, 2002 the Board of Directors appointed
Donald J. Hommel, the president of CFC Partners, as a Director of the Company to
fill an existing vacancy on the Board. Following such appointment, James C.
Robertson and John E. Groninger, who had been Directors of the Company for more
than 30 years, resigned as planned. Mr. Hommel was terminated by a majority vote
as president and director in October 2004, and was replaced by Jack. I
Ehrenhaus.

      On October 17, 2002 the Board of Directors appointed Shalom S. Maidenbaum,
Esq. as a Director of the Company to fill an existing vacancy on the Board, and
on March 13, 2003, the Board of Directors appointed William T. Konczynin as an
additional Director and Chairman of the Audit Committee to fill an existing
vacancy. Mr. Jack I. Ehrenhaus was elected as Chairman of the Board in April
2003.

      The table below sets forth the period for which the current Directors have
served as Directors of the Company, their principal occupation or employment for
the last five (5) years, and their other major affiliations and age as of March
22, 2007

Name
(Age)              Principal Occupation for the Past Five Years, Office
Director Since     (if any) Held, Director in the Company
-----------------  ----------------------------------------------------
Jack I. Ehrenhaus  President and Founder, NAIS Corporation
(58)               Chairman, President, Chief Executive Officer,
2003               Principal Accounting Officer

      None of our directors holds any directorships in companies with a class of
securities registered pursuant to Section 12 of the Securities Exchange Act or
subject to the requirements of Section 15(d) of such Act or any company
registered as an investment company under the Investment Company Act of 1940, as
amended.

                                       15


      Our directors are appointed for a one-year term to hold office until the
next annual general meeting of our shareholders or until removed from office in
accordance with our bylaws. Our officers are appointed by our Board of Directors
and hold office until removed by the Board.

      The following information is provided as of March 22, 2007 for each
executive officer of the Company. The executive officers are appointed annually
by the Board of Directors and serve at the discretion of the Board.

NAME                AGE  OFFICE
------------------  ---  -----------------------
Jack  I. Ehrenhaus  58   Chief Operating Officer

      Ehrenhaus was appointed and Chief Operating Officer in April 2003,
commencing January 1, 2003, and appointed as President and Chief Executive
Officer in October, 2004. Mr. Maidenbaum was appointed Vice President and
Secretary of the Company in October 2002 and resigned as an officer of the
Company during the 4th quarter of 2003.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

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

CODE OF ETHICS

      At December 31, 2005, the Company had not yet adopted a Code of Ethics for
its Executive Officer and Directors. This delay has been a result of the
restructuring of the Company after its emergence its Plan of Liquidation coupled
with the focus of management on raising capital and implementation of a business
plan of action to preserve and increase its value to its common shareholders.

      The Board of Directors of the Company is in the process of reviewing a
Code of Ethics and anticipates its adoption and implementation during the 2006
calendar year.

ITEM 10. EXECUTIVE COMPENSATION

      The following table sets forth information regarding the annual
compensation for services in all capacities to the Company for the years ended
December 31, 2005 and 2004, of the Chief Executive Officer and the Chief
Operating Officer whose annual compensation exceeded $100,000 and who were
serving as executive officers at the end of the fiscal year ended December 31,
2005.

                                       16


                           SUMMARY COMPENSATION TABLE

                                                   OTHER
NAME AND POSITION                                  ANNUAL
COMPENSATION        YEAR   SALARY       BONUS   COMPENSATION  OTHER
------------------  ----  --------    --------  ------------  -----
Jack I. Ehrenhaus   2005  $236,250(5) $268,938      $-0-       $-0-
  Chairman and      2004  $236,250(5) $112,500      $-0-       $-0-
  Chief Operating
  Officer

Donald J. Hommel    2005  $    -0-    $    -0-      $-0-       $-0-
  Former Chairman,
  President and     2004  $174,375(2) $    -0-      $-0-       $-0-
  Chief Executive
  Officer

(1)   Mr. Ehrenhaus was named as Chairman of the board of Directors and Chief
      Operating Officer of the Company effective January 1, 2003, and President
      and Chief Executive Officer of the Company starting in October, 2004.

(2)   Represents payment of accrued salaries through the issuance of an
      aggregate of 638,076 post-split shares of common stock.

(3)   Mr. Ehrenhaus and Mr. Hommel each accepted stock in lieu of cash
      compensation for services performed in 2003 at a value of $0.06 per share.
      The 154,080 (post-split) shares for each of Mr. Hommel and Mr. Ehrenhaus
      were issued in 2004

(4)   Mr. Hommel was appointed to the Board of Directors, President and Chief
      Executive Officer of the Company on August 28, 2002, and resigned these
      positions in October, 2004. Mr. Hommel received no compensation for his
      services as Chief Executive Officer in 2002.

(5)   At December 31, 2005, a portion of the salary earned by Mr. Ehrenhaus
      remained unpaid. The Company recorded accrued salary payable to Mr.
      Ehrenhaus of $3,328.

      On September 1, 2003, the Company entered into employment agreements with
both Donald J. Hommel, President and Chief Executive Officer and Jack I.
Ehrenhaus, Chairman and Chief Operating Officer, of the Company. Each agreement
provides for annual compensation of $225,000 in base salary with annual
increases of 10% and annual bonuses as determined by the Board, which can range
up to twice the amount of the base salary but in no event will the bonus be less
than 50% of the base salary. Each officer is also entitled to an automobile
allowance of $750 per month and reimbursement of all business expenses. The term
of each employment agreement is ten years. If the Company terminates either
officer without cause prior to the term, the officer is entitled to a severance
payment equal to his salary for the remainder of the ten year term or two years'
salary, whichever is greater. If there is a material change in the Company that
causes a substantial reduction in the officer's duties, a liquidation or
transfer of assets, or merger and the Company is not the surviving entity, the
officer is entitled to a severance payment. In October of 2003, Mr. Donald J.
Hommel was dismissed with cause as President and Chief Executive Officer of the
Company by a majority vote of the shareholders. Mr. Hommel was replaced in these
positions by Mr. Jack I. Ehrenhaus in October, 2003.

                                       17


                      OPTION/SAR GRANTS IN LAST FISCAL YEAR

      No stock options or stock appreciation rights were granted by the Company
to the named executives officers in 2005.

              AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR
                      AND FISCAL YEAR-END OPTIONS/SAR TABLE

      At December 31, 2004, the Company had no stock options or stock
appreciation rights outstanding. Furthermore, the Company has no current plans
to grant any options or stock appreciation rights.

                        REPORT ON EXECUTIVE COMPENSATION

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

      The Company's Board of Directors has the exclusive authority to establish
the level of base salary payable to the Chief Executive Officer ("CEO") and
certain other executive officers of the Company and to administer the Company's
equity incentive plans. The Board of Directors does not maintain a Compensation
Committee as the employments agreements executed in 2003 will determine the
individual bonus programs to be in effect for the CEO and certain executive
officers each fiscal year. Participants in deliberations of the Company's Board
of Directors concerning executive compensation were Donald J. Hommel, Jack I.
Ehrenhaus, Shalom S. Maidenbaum and William T. Konczynin.

GENERAL COMPENSATION PHILOSOPHY

      Historically, the compensation policy of the Company is to offer the
Company's executive officers competitive opportunities based upon the overall
Company performance, their individual contribution to the financial success of
the Company and their personal performance. It is the Board's objective to have
a meaningful portion of each executive officer's compensation contingent upon
the performance of the Company, as well as the individual contribution of each
officer.

                                       18


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following table sets forth, as of October 1, 2005, the beneficial
ownership of the Company's Common Stock, the only class of voting securities
outstanding, (i) by any person or group known by the Company to beneficially own
more than 5% of the outstanding Common Stock, (ii) by each Director and
executive officer and (iii) by all Directors and executive officers as a group.
Unless otherwise indicated, the holders of the shares shown in the table have
sole voting and investment power with respect to such shares.

                                                           AMOUNT
                                                          NATURE OF  PERCENT
                                                         BENEFICIAL     OF
TITLE OF CLASS    NAME AND ADDRESS OF BENEFICIAL OWNER   OWNERSHIP    CLASS
--------------  ---------------------------------------  ----------  -------
                        PRINCIPAL SHAREHOLDERS:

Common          CFC Partners, Ltd.
                132 Spruce Street, Cedarhurst, NY 11516     392,727     0.72

Common          Donald J. Hommel
                132 Spruce Street, Cedarhurst, NY 11516     649,732     1.12

Common          Jack I. Ehrenhaus
                132 Spruce Street, Cedarhurst, NY 11516  46,550,273    85.14

                      DIRECTORS AND EXECUTIVE OFFICERS:

                      Directors and Executive Officers:

Common          Jack I. Ehrenhaus
                132 Spruce Street, Cedarhurst, NY 11516  46,550,273    85.14

Common          All Directors and Officers and
                Principal Beneficial
                Shareholders as a group                  46,550,273    85.14

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS.

The Company has no compensation plans.

CHANGE OF CONTROL

Other than the right of the preferred shareholders to appoint two directors to
the board, there are no other arrangements,  known to the Company, including any
pledge by any person of securities of the Company, the operation of which may at
a subsequent date result in a change in control of the Company.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      During the years ended December 31, 2005 and 2004, there has not been, nor
is there currently proposed, any transaction or series of similar transactions
to which the Company, or any of its subsidiaries was or is to be a party in
which the amount involved exceeded or will exceed $60,000 and in which any
director, executive officer, security holder known to the Company to own more
than 5% of the Company's common stock or any member of the immediate family of
any of the foregoing persons had or will have a direct or indirect material
interest, other than the compensation agreements, issuance of shares to CFC, and
other arrangements, which are described above where required.

                                       19


ITEM 13. EXHIBITS

a)    Listing of Documents filed:

      1.    Financial Statements (included in Part II of this Report):

            Report of Independent Public Accountants - HJ & Associates, LLC
            Report of Independent Public Accountants - Moore & Associates, LLP
            Consolidated Balance Sheet - December 31, 2005
            Consolidated Statements of Operations and Comprehensive Income - For
            the years ended December 31, 2005, and 2004
            Consolidated Statements of Shareholders' Deficiency - For the years
            ended December 31, 2005 and 2004
            Consolidated Statements of Cash Flows - For the years ended December
            31, 2005 and 2004
            Notes to Consolidated Financial Statements

2.    Financial Statement Schedules (included in Part IV of this Report):

      Schedules other than those listed above have been omitted because they are
not required, not applicable or the required information is set forth in the
financial statements or notes thereto.

3.    Exhibits:

      (2)   Plan of acquisition, reorganization, arrangement, liquidation or
            succession (1)
      (3)   Articles of incorporation and by-laws (i)
      (4)   Instruments defining the rights of security holders, including
            indentures (i)
      (9)   Voting trust agreements (ii)
      (10)  Material contracts (ii)
      (11)  Statement re: computation of per share earnings (ii)
      (12)  Statement re: computation of ratios (ii)
      (13)  Annual report to security holders (ii)
      (16)  Letter re: change in certifying accountants (i)
      (18)  Letter re: change in accounting principles (ii)
      (21)  Subsidiaries of the registrant (iii)
      (22)  Published report regarding matters submitted to a vote of security
            holders (i)
      (23)  Consents of experts and counsel (ii)
      (24)  Power of attorney (ii)
      (31.1) Certification of Chief Executive Officer (Section 302 of
            Sarbanes-Oxley Act) (iii)
      (31.2) Certification of Chief Financial Officer (Section 302 of
            Sarbanes-Oxley Act) (iii)
      (32.1) Certification of Chief Executive Officer (Section 906 of
            Sarbanes-Oxley Act) (iv)
      (32.2) Certification of Chief Financial Officer (Section 906 of
            Sarbanes-Oxley Act) (iv)

                                       20


      (i)   Information or document provided in previous filing with the
            Commission
      (ii)  Information or document not applicable to registrant
      (iii) Information or document included as exhibit to this Form 10-K
      (iv)  Document furnished with this Form 10-K

b)    Reports on Form 8-K:

      No reports on Form 8-K were filed by the Company during the quarter ended
December 31, 2005.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

      Marcum & Kliegman LLP ("M&K") audited the Company's financial statements
for fiscal 2003; the fees billed for professional services by M&K were as
follows: Audit Fees--$100,000; Audit related fees $-0-; Tax Fees (for
preparation of federal and state income tax returns) $-0- and All Other Fees of
$-0-. The policy of the Audit Committee is that it must approve in advance all
services (audit and non-audit) to be rendered by the Company's independent
auditors. The Board of Directors established the Audit Committee during 2003
with the appointment of Mr. Konczynin to the Board of directors. For at least
two years prior to that, the Board of Directors did not have an Audit Committee.
The engagement of M&K for the audit for fiscal 2003 was approved in advance by
the Audit Committee.

      HJ & Associates, LLC ("HJ") audited the Company's financial statements for
fiscal 2003; the fees billed for professional services by HJ for 2003 were as
follows: Audit Fees--$100,000; Tax Fees (for preparation of federal and state
income tax returns $-0-; and All Other Fees of $-0-. The engagement of HJ for
the audit services for fiscal 2003 and 2004 was approved in advance by the Board
of Directors.

      Moore & Associates, LLP ("Moore") audited the Company's financial
statements for fiscal 2004; the fees billed for professional services by Moore
for 2004 were as follows: Audit Fees--$10,000; Tax Fees (for preparation of
federal and state income tax returns) $-0-; and All Other Fees of $-0-. The
engagement of Moore for the audit services for fiscal 2005 was approved in
advance by the Board of Directors.

                                       21


                                   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.

CONSUMERS FINANCIAL CORPORATION

By: /s/ Jack I. Ehrenhaus
    ------------------------
    Jack I. Ehrenhaus
      President, Chairman of the Board, Chief Executive Officer, Principal
      Accounting Officer

Date: March 22, 2007


                                   SIGNATURES

      Pursuant to the requirements of the Securities Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated:



Signature              Title                                            Date
---------------------  -----------------------------------------------  --------------
                                                                  
/s/ Jack I. Ehrenhaus  President, Chairman of the Board, Chief
Jack I. Ehrenhaus      Executive Officer, Principal Accounting Officer  March 22, 2007


                                       22