**U.S.
      SECURITIES AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549





**Form
      10-KSB**





(Mark
      One)





**x ANNUAL
      REPORT
      UNDER SECTION 13 OR 15(d)**


**OF
      THE SECURITIES EXCHANGE ACT OF 1934**





For
      the
      fiscal year ended: December 31, 2005





**o TRANSITION
      REPORT
      UNDER SECTION 13 OR 15(d)**


**OF
      THE SECURITIES EXCHANGE ACT OF 1934**





For
      the
      transition period from ______________ to ______________




*Commission
      File Number 000-* *30144*


_____________________________________________




**Morlex,
      Inc.**





(Exact
      name of registrant as specified in its charter)





_______________________________________________




Colorado
            84-1028977(State
                or other jurisdiction of
            (I.R.S.
                Employerincorporation
                or organization)
            Identification
                No.)




c/o
                Resource Management Partners, Inc.1690
                Washington AvenueBohemia,
                NY
            11716(Address
                of principal executive offices)
            (zip
                code)





Registrant’s
                telephone number, including area
                code:(631)
                738-0047





_______________________________________________





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 per share





(Title
      of
      Class)




















Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months
      (or for such shorter period that the registrant was required to file such
      reports), and (2) has been subject to such filing requirements for the past
      90
      days. Yes **x** No
**o**.





Check
      whether the issuer is a shell company (as defined in Rule 12b-2 of the Exchange
      Act). Yes **x** No
**o**.





Indicate
      by check mark if there is no disclosure of delinquent filers in response to
      Item
      405 of Regulation S-K (§229.405 of this chapter) contained herein, 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. **x**





Indicate
      by check mark whether the registrant is an accelerated filer (as defined in
      Rule
      12b-2 of the Act).


Yes **o**
      No **x**.





As
      of
      June 20, 2006, there were 1,151,765  shares
      of
      common stock outstanding.





**DOCUMENTS
      INCORPORATED BY REFERENCE:**





**None**








**FORWARD-LOOKING
      STATEMENTS**





Certain
      statements made in this Annual Report on Form 10-KSB are “forward-looking
      statements” (within the meaning of the Private Securities Litigation Reform Act
      of 1995) regarding the plans and objectives of management for future operations.
      Such statements involve known and unknown risks, uncertainties and other factors
      that may cause actual results, performance or achievements of Morlex, Inc.
      (the
“Company”) to be materially different from any future results, performance or
      achievements expressed or implied by such forward-looking statements. The
      forward-looking statements included herein are based on current expectations
      that involve numerous risks and uncertainties. The Company's plans and
      objectives are based, in part, on assumptions involving the continued expansion
      of business. Assumptions relating to the foregoing involve judgments with
      respect to, among other things, future economic, competitive and market
      conditions and future business decisions, all of which are difficult or
      impossible to predict accurately and many of which are beyond the control of
      the
      Company. Although the Company believes its assumptions underlying the
      forward-looking statements are reasonable, any of the assumptions could prove
      inaccurate and, therefore, there can be no assurance the forward-looking
      statements included in this Report will prove to be accurate. In light of the
      significant uncertainties inherent in the forward-looking statements included
      herein, the inclusion of such information should not be regarded as a
      representation by the Company or any other person that the objectives and plans
      of the Company will be achieved.




2








**PART
      I**





**Item
      1. Business.**





**Introduction**




Morlex,
      Inc. (“we”, “us”, “our”, the “Company” or the “Registrant”) was incorporated in
      the State of Colorado on April 23, 1986, as what is commonly known as a blind
      pool. In January 1987, the Company, in a stock-for-stock exchange, acquired
      America OnLine, Inc. ("AOL#1"), a then wholly owned subsidiary of InfoSource
      Information Service, Inc. The Company changed its name from Morlex, Inc. to
      America Online, Inc. on July 17, 1987. AOL #1 was never affiliated with the
      well-known company of the same name. Since the termination of the business
      of
      the former AOL#1, the Company has been, and is currently, seeking the
      acquisition of, or merger with, an existing company. The Company has had no
      active business and no employees since 1994, and is currently considered a
      development stage company.





On
      March
      25, 2003, the Company’s board of directors (the “Board of Directors”) determined
      it was in the best interest of the Company to cease its reporting obligations
      under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). On
      March 28, 2003, the Company filed a Form 15 with the Securities and Exchange
      Commission (the “SEC”), thereby deregistering the Company's securities under the
      Exchange Act.





On
      December 30, 2005, the Company filed a registration statement on Form 10-SB,
      which was thereafter amended on January 27, 2006. Since the effectiveness of
      its
      registration statement, the Company has begun efforts in consummating a business
      combination.





The
      Company, based on proposed business activities, is a "blank check" company.
      The
      SEC defines those companies as "any development stage company that is issuing
      a
      penny stock, within the meaning of Section 3 (a)(51) of the Exchange Act, and
      that has no specific business plan or purpose, or has indicated that its
      business plan is to merge with an unidentified company or companies." Many
      states have enacted statutes, rules and regulations limiting the sale of
      securities of "blank check" companies in their respective jurisdictions. The
      Company, as defined in Rule 12b-2 under the Exchange, also is a “shell company,”
defined as a company with no or nominal assets (other than cash) and no or
      nominal operations. Management does not intend to undertake any efforts to
      cause
      a market to develop in our securities, either debt or equity, until we have
      successfully concluded a business combination. The Company intends to comply
      with the periodic reporting requirements of the Exchange Act for so long as
      we
      are subject to those requirements.





The
      Company’s principal business objective for the next 12 months and beyond such
      time will be to achieve long-term growth potential through a combination with
      a
      business rather than immediate, short-term earnings.





**Competition**





Currently,
      our primary goal is the acquisition of a target company or business seeking
      the
      perceived advantages of being a publicly held corporation, and the Company
      faces
      vast competition from other shell companies with the same objectives. The
      Company is in a highly competitive market for a small number of business
      opportunities which could reduce the likelihood of consummating a successful
      business combination. A large number of established and well-financed entities,
      including small public companies and venture capital firms, are active in
      mergers and acquisitions of companies that may be desirable target candidates
      for us. Nearly all these entities have significantly greater financial
      resources, technical expertise and managerial capabilities than we do;
      consequently, we will be at a competitive disadvantage in identifying possible
      business opportunities and successfully completing a business combination.
      These
      competitive factors may reduce the likelihood of our identifying and
      consummating a successful business combination.





3


**Employees**





The
      Company currently has no employees.





**RISK
      FACTORS**





**An
      investment in our securities is highly speculative and subject to numerous
      and
      substantial risks. These risks include those set forth below and elsewhere
      in
      this Form 10-KSB. Readers are encouraged to review these risks carefully before
      making any investment decision.**





**Our
      business is difficult to evaluate because we have a limited operating
      history.**





As
      the
      Company has no operations, activity or revenue and only minimal assets since
      1994, there is a risk that we will be unable to continue as a going concern
      and
      consummate a business combination. We will, in all likelihood, sustain operating
      expenses without corresponding revenue, at least until the consummation of
      a
      business combination. This may result in our incurring a net operating loss
      that
      will increase continuously until we can consummate a business combination with
      a
      profitable business opportunity. We cannot assure you that we can identify
      a
      suitable business opportunity and consummate a business
      combination.





**There
      is competition for those private companies suitable for a merger transaction
      of
      the type contemplated by management.**





We
      are in
      a
      highly competitive market for a small number of business opportunities which
      could reduce the likelihood of consummating a successful business combination.
      We will be an insignificant participant in the business of seeking mergers
      with,
      joint ventures with and acquisitions of small private and public entities.
      A
      large number of established and well-financed entities, including small public
      companies and venture capital firms, are active in mergers and acquisitions
      of
      companies that may be desirable target candidates for us. Nearly all these
      entities have significantly greater financial resources, technical expertise
      and
      managerial capabilities than we do; consequently, we will be at a competitive
      disadvantage in identifying possible business opportunities and successfully
      completing a business combination. These competitive factors may reduce the
      likelihood of our identifying and consummating a successful business
      combination.





**Future
      success is highly dependent on the ability of management to locate and attract
      a
      suitable acquisition.**





The
      nature of our operations is highly speculative and there is a consequent risk
      of
      loss of your investment. The success of our plan of operation will depend to
      a
      great extent on the operations, financial condition and management of an
      identified business opportunity. W e
      cannot
      assure you that we will be successful in locating candidates with established
      operating histories. In the event we complete a business combination with a
      privately held company, the success of our operations may be dependent upon
      management of the successor firm or venture partner firm and numerous other
      factors beyond our control.





**Management
      intends to devote only a limited amount of time to seeking a target company
      which may adversely impact our ability to identify a suitable acquisition
      candidate and consummate a business combination.**




While
      seeking a business combination, management anticipates devoting no more than
      a
      few hours per week to the Company's affairs. Our sole officer has not entered
      into a written employment agreement with us and is not expected to do so in
      the
      foreseeable future. This limited commitment may adversely impact our ability
      to
      identify and consummate a successful business combination.





4


**The
      time and cost of preparing a private company to become a public reporting
      company may preclude us from entering into and consummating a merger or
      acquisition with the most attractive private companies.**





Target
      companies that fail to comply with SEC reporting requirements may delay or
      preclude acquisition. Sections 13 and 15(d) of the Exchange Act require
      reporting companies to provide certain information about significant
      acquisitions, including certified financial statements for the company acquired,
      covering one, two, or three years, depending on the relative size of the
      acquisition. The time and additional costs that may be incurred by some target
      entities to prepare these statements may significantly delay or essentially
      preclude consummation of an acquisition. Otherwise suitable acquisition
      prospects that do not have or are unable to obtain the required audited
      statements may be inappropriate for acquisition so long as the reporting
      requirements of the Exchange Act are applicable.





**The
      Company may be subject to further government regulation which would adversely
      affect our operations.**





Although
      we will be subject to the reporting requirements under the Exchange Act,
      management believes we will not be subject to regulation under the Investment
      Company Act of 1940, as amended (the “Investment Company Act”), since we will
      not be engaged in the business of investing or trading in securities. If we
      engage in business combinations which result in our holding passive investment
      interests in a number of entities, we could be subject to regulation under
      the
      Investment Company Act. If so, we would be required to register as an investment
      company and could be expected to incur significant registration and compliance
      costs. We have obtained no formal determination from the Securities and Exchange
      Commission as to our status under the Investment Company Act and, consequently,
      violation of the Investment Company Act could subject us to material adverse
      consequences.





**Any
      potential acquisition or merger with a foreign company may subject us to
      additional risks.**





If
      we
      enter into a business combination with a foreign concern, we will be subject
      to
      risks inherent in business operations outside of the United States. These risks
      include, for example, currency fluctuations, regulatory problems, punitive
      tariffs, unstable local tax policies, trade embargoes, risks related to shipment
      of raw materials and finished goods across national borders and cultural and
      language differences. Foreign economies may differ favorably or unfavorably
      from
      the United States economy in growth of gross national product, rate of
      inflation, market development, rate of savings, and capital investment, resource
      self-sufficiency and balance of payments positions, and in other
      respects.





**There
      is currently no trading market for our Common Stock, and liquidity of Shares
      of
      our Common Stock is limited.**





The
      Shares are not registered under the securities laws of any state or other
      jurisdiction, and accordingly there is no public trading market for our Common
      Stock. Further, no public trading market is expected to develop in the
      foreseeable future unless and until the Company completes a business combination
      with an operating business and the Company thereafter files a registration
      statement under the Securities Act. Therefore, outstanding shares of our Common
      Stock cannot be offered, sold, pledged or otherwise transferred unless
      subsequently registered pursuant to, or exempt from registration under, the
      Securities Act and any other applicable federal or state securities laws or
      regulations. **S** hares
      of
      our Common Stock cannot be sold under the exemptions from registration provided
      by Rule 144 under or Section 4(1) of the Securities Act, in accordance with
      the
      letter from Richard K. Wulff, Chief of the Office of Small Business Policy
      of
      the Securities and Exchange Commission’s Division of Corporation Finance, to Ken
      Worm of NASD Regulation, dated January 21, 2000. This letter provides that
      certain private transfers of the Shares also may be prohibited without
      registration under federal securities laws. Compliance with the criteria for
      securing exemptions under federal securities laws and the securities laws of
      the
      various states is extremely complex, especially in respect of those exemptions
      affording flexibility and the elimination of trading restrictions in respect
      of
      securities received in exempt transactions and subsequently disposed of without
      registration under the Securities Act or state securities laws. We are, however,
      obligated to register the shares of Common Stock included in the Units under
      certain circumstances.





5


**We
      have never paid dividends on our Common Stock.**





We
      have
      never paid dividends on our Common Stock and do not presently intend to pay
      any
      dividends in the foreseeable future. We anticipate that any funds available
      for
      payment of dividends will be re-invested into the Company to further its
      business strategy.





**Our
      business will have no revenue unless and until we merge with or acquire an
      operating business.**





We
      are a
      development stage company and have no revenue from operations. We may not
      realize any revenue unless and until we successfully merge with or acquire
      an
      operating business.





**The
      Company intends to issue more shares in a merger or acquisition, which will
      result in substantial dilution.**





Our
      certificate of incorporation authorizes the issuance of a maximum of
      1,000,000,000 shares of common stock and zero shares of preferred stock.
      Any merger or acquisition effected by us may result in the issuance of
      additional securities without stockholder approval and may result in substantial
      dilution in the percentage of our common stock held by our then existing
      stockholders. Moreover, the common stock issued in any such merger or
      acquisition transaction may be valued on an arbitrary or non-arm’s-length basis
      by our management, resulting in an additional reduction in the percentage of
      common stock held by our then existing stockholders. Our Board
      of
      Directors has the power to issue any or all of such authorized but unissued
      shares without stockholder approval. To the extent that additional shares of
      common stock are issued in connection with a business combination or otherwise,
      dilution to the interests of our stockholders will occur and the rights of
      the
      holders of common stock might be materially adversely affected.





**Our
      stockholders may engage in a transaction to cause the Company to repurchase
      their shares of common stock.**





In
      order
      to provide an interest in the Company to a third party, our stockholders may
      choose to cause the Company to sell Company securities to third parties, with
      the proceeds of such sale being utilized by the Company to repurchase shares
      of
      common stock held by the stockholders. As a result of such transaction, our
      management, principal stockholders and Board of Directors may change.





**The
      Company has conducted no market research or identification of business
      opportunities, which may affect our ability to identify a business to merge
      with
      or acquire.**





The
      Company has neither conducted nor have others made available to us results
      of
      market research concerning prospective business opportunities. Therefore, we
      have no assurances that market demand exists for a merger or acquisition as
      contemplated by us. It may be expected that any such target business or
      transaction will present such a level of risk that conventional private or
      public offerings of securities or conventional bank financing will not be
      available. There is no assurance that we will be able to acquire a business
      opportunity on terms favorable to us. Decisions as to
      which
      business opportunity to participate in will be unilaterally made by our
      management, which may act without the consent, vote or approval of our
      stockholders.





6


**Because
      we may seek to complete a business combination through a “reverse merger”,
      following such a transaction we may not be able to attract the attention of
      major brokerage firms.**




Additional
      risks may exist since we will assist a privately held business to become public
      through a “reverse merger.” Securities analysts of major brokerage firms may not
      provide coverage of our Company since there is no incentive to brokerage firms
      to recommend the purchase of our common stock. No assurance can be given that
      brokerage firms will want to conduct any secondary offerings on behalf of our
      post-merger company in the future.





**We
      cannot assure you that following a business combination with an operating
      business, our common stock will be listed on NASDAQ or any other securities
      exchange.**





Following
      a business combination, we may seek the listing of our common stock on NASDAQ
      or
      the American Stock Exchange. However, we cannot assure you that following such
      a
      transaction, we will be able to meet the initial listing standards of either
      of
      those or any other stock exchange, or that we will be able to maintain a listing
      of our common stock on either of those or any other stock exchange. After
      completing a business combination, until our common stock is listed on the
      NASDAQ or another stock exchange, we expect that our common stock would be
      eligible to trade on the OTC Bulletin Board, another over-the-counter quotation
      system, or on the “pink sheets,” where our stockholders may find it more
      difficult to dispose of shares or obtain accurate quotations as to the market
      value of our common stock. In addition, we would be subject to an SEC rule
      that,
      if it failed to meet the criteria set forth in such rule, imposes various
      practice requirements on broker-dealers who sell securities governed by the
      rule
      to persons other than established customers and accredited investors.
      Consequently, such rule may deter broker-dealers from recommending or selling
      our common stock, which may further affect its liquidity. This would also make
      it more difficult for us to raise additional capital following a business
      combination.





**Item
      2. Property.**





The
      Company neither rents nor owns any properties. The Company currently has no
      policy with respect to investments or interests in real estate, real estate
      mortgages or securities of, or interests in, persons primarily engaged in real
      estate activities.





**Item
      3. Legal Proceedings.**





The
      Company is not party to any legal proceedings nor is it aware of any
      investigation, claim or demand made on the Company that may reasonably result
      in
      any legal proceedings.





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





None.




7








**PART
      II**





**Item
      5. Market for Common Equity, Related Stockholder Matters and Issuer Purchases
      of
      Equity Securities.**





**Common
      Stock**





The
      Company is authorized by its Certificate of Incorporation to issue an aggregate
      of 1,000,000,000 shares of common stock, par value $.001 per share (the "Common
      Stock"). As of the date hereof, 1,151,765 shares of Common Stock are issued
      and
      outstanding, and there are 273 holders of record of the Common Stock. The Common
      Stock is not listed on a publicly-traded market.





**Preferred
      Stock**





The
      Company is not authorized to issue any preferred stock.





**Dividend
      Policy**





The
      Company has not declared or paid any cash dividends on its common stock and
      does
      not intend to declare or pay any cash dividend in the foreseeable future. The
      payment of dividends, if any, is within the discretion of the Board of Directors
      and will depend on the Company’s earnings, if any, its capital requirements and
      financial condition and such other factors as the Board of Directors may
      consider.





**Recent
      Sales of Unregistered Securities**





The
      Company has had no recent sales of unregistered securities. All securities
      issued by the Company, including those previously issued, have not been
      registered under the Securities Act and cannot be sold or otherwise transferred
      without an effective registration or an exemption therefrom, but may not be
      sold
      pursuant to the exemptions provided by Section 4(1) of the Securities Act or
      Rule 144 under the Securities Act, in accordance with the letter from Richard
      K.
      Wulff, Chief
      of
      the Office of Small Business Policy of the Securities and Exchange Commission’s
      Division of Corporation Finance ,
      to Ken
      Worm of NASD Regulation, Inc., dated January 21, 2000.





**Item
      6. Management’s Discussion and Analysis or Plan of
      Operation.**




**Plan
      of Operation**





The
      Company has not realized any revenue from operations for the fiscal year ended
      December 31, 2005, and its plan of operation for the next twelve months shall
      be
      to locate suitable acquisition or merger candidates. The Company may need
      additional cash advances from stockholders to pay for operating expenses until
      the Company consummates the merger with a privately-held company. Although
      it is
      currently anticipated that the Company can satisfy its cash requirements with
      additional cash advances, if needed, for at least the next twelve months, the
      Company can provide no assurance that it can continue to satisfy its cash
      requirements for such period.





**Results
      of Operations**





The
      Company has not conducted any active operations for the fiscal year ended
      December 31, 2005, except for its efforts to locate suitable acquisition or
      merger transactions. No revenue has been generated by the Company during such
      period, and it is unlikely the Company will have any revenue unless it is able
      to consummate or effect an acquisition of, or merger with, an operating company,
      of which there can be no assurance.




8











**Item
      7. Financial Statements.**







**INDEX
      TO FINANCIAL STATEMENTS**










**Page(s)**Report
                of Independent Registered Public Accounting Firm
            F-2Financial
                Statements:Balance
                Sheets as of December 31, 2005 and 2004
            F-3Statements
                of Operations for the Cumulative Period During the DevelopmentStage
                (January 1, 2000 to December 31, 2005) and for the Years
                EndedDecember
                31, 2005 and 2004
            F-4Statement
                of Changes in Shareholders’ Equity (Deficit) for the Period fromInception
                (January 1, 2000) to December 31, 2005
            F-5Statements
                of Cash Flows for the Cumulative Period During the DevelopmentStage
                (January 1, 2000 to December 31, 2005) and for the Years
                EndedDecember
                31, 2005 and 2004
            F-6Notes
                to Financial Statements
            F-7
                - F-8







F-1











**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**








To
      the
      Shareholders


Morlex,
      Inc.


Bohemia,
      New York








We
      have
      audited the accompanying balance sheets of Morlex, Inc., a development stage
      company, as of December 31, 2005 and 2004, and the related statements of
      operations, changes in shareholders’ equity (deficit) and cash flows for the
      years then ended and for the cumulative period (January 1, 2000 to December
      31,
      2005) during the development stage. These financial statements are the
      responsibility of the Company’s management. Our responsibility is to express an
      opinion on these financial statements based on our audits.





We
      conducted our audits in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audits to obtain reasonable assurance about whether the
      financial statements are free of material misstatement. The Company is not
      required to have, nor were we engaged to perform, an audit of its internal
      control over financial reporting. Our audits included consideration of internal
      control over financial reporting as a basis for designing audit procedures
      that
      are appropriate in the circumstances, but not for the purpose of expressing
      an
      opinion on the effectiveness of the Company’s internal control over financial
      reporting. Accordingly, we express no such opinion. An audit also includes
      examining, on a test basis, evidence supporting the amounts and disclosures
      in
      the financial statements, assessing the accounting principles used and
      significant estimates made by management, as well as evaluating the overall
      financial statement presentation. We believe that our audits provide a
      reasonable basis for our
      opinion.





In
      our
      opinion, the financial statements referred to above, present fairly, in all
      material respects, the financial position of Morlex, Inc., a development stage
      company, as of December 31, 2005 and 2004, and the results of its operations,
      changes in shareholders’ equity (deficit) and its cash flows for the years then
      ended and for the cumulative period (January 1, 2000 to December 31, 2005)
      during the development stage, in conformity with accounting principles generally
      accepted in the United States of America.





The
      accompanying financial statements have been prepared assuming that the Company
      will continue as a going concern. As discussed in Note 1 to the financial
      statements, the Company has suffered recurring losses and has a net capital
      deficiency that raise substantial doubt about its ability to continue as a
      going
      concern. Management’s plans in regard to this matter are also described in
      Note 1. The financial statements do not include any adjustments that might
      result from the outcome of this uncertainty.














/s/ Lazar Levine & Felix LLP**LAZAR LEVINE & FELIX
              LLP**





New
      York,
      New York


April
      24,
      2006




F-2





**MORLEX,
      INC.**


**(A
      Development Stage Company)**


**BALANCE
      SHEETS**





December
                31,**2005**
            
            2004-**ASSETS
                -****CURRENT
                ASSETS:**Cash
            
            **$**
            **91**
            
            $
            2,291**TOTAL
                ASSETS**
            
            **$**
            **91**
            
            $
            2,291**-
                LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) -****CURRENT
                LIABILITIES:**Accrued
                expenses
            
            **$**
            **15,388**
            
            $
            500**TOTAL
                CURRENT LIABILITIES**
            
            
            **15,388**
            
            
            500**COMMITMENTS
                AND CONTINGENCIES****SHAREHOLDERS’
                EQUITY (DEFICIT):**Common
                stock, $.001 par value; 1,000,000,000 shares authorized, 971,765
                shares
                issued and outstanding in 2005 and 2004
            
            
            **972**
            
            
            972Additional
                paid-in capital
            
            
            **399,798**
            
            
            393,798Accumulated
                deficit
            
            
            **(341,027**
            **)**
            
            (341,027
            )Deficit
                accumulated during the development stage
            
            
            **(74,818**
            **)**
            
            (51,730
            )Treasury
                stock, at par - 221,605 shares
            
            
            **(222**
            **)**
            
            (222
            )**(15,297**
            **)**
            
            1,791**TOTAL
                LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)**
            
            **$**
            **91**
            
            $
            2,291








See
      accompanying notes to financial statements.





F-3


**MORLEX,
      INC.**


**(A
      Development Stage Company)**


**STATEMENTS
      OF OPERATIONS**







**Cumulative
                During the Development Stage**
              **(January
                1, 2000 to December 31,**
            
            December
                31,**2005)**
            
            2005
            
            2004**REVENUES**
            
            **$**
            **-**
            
            $
            -
            
            $
            -**COSTS
                AND EXPENSES:**Professional
                fees
            
            
            **62,678**
            
            
            22,120
            
            
            500Filing
                fees
            
            
            **10,873**
            
            
            846
            
            
            -Other
                expenses
            
            
            **1,267**
            
            
            122
            
            
            120**74,818**
            
            
            23,088
            
            
            620**NET
                LOSS**
            
            **$**
            **(74,818**
            **)**
            $
            (23,088
            )
            $
            (620
            )**LOSS
                PER SHARE - BASIC AND DILUTED**
            
            
            
            
            $
            (.03
            )
            $
            -**WEIGHTED
                AVERAGE NUMBER OF COMMON SHARES OUTSTANDING**
            
            
            
            
            
            750,160
            
            
            750,160





See
      accompanying notes to financial statements.





F-4


**MORLEX,
      INC.**


**(A
      Development Stage Company)**


**STATEMENT
      OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)**





**Shares**
            
            **Common
                stock**
            
            **Additional
                Paid-In Capital**
            
            **Accumulated
                Deficit**
            
            **Deficit
                Accumulated During the Development Stage**
            
            **Treasury
                stock**
            
            **Total
                Shareholders Equity (Deficit)**Balance
                at January 1, 2000
            
            
            971,765
            
            $
            972
            
            $
            341,898
            
            $
            (341,027
            )
            $
            -
            
            $
            (222
            )
            $
            1,621Capital
                contributed
            
            
            -
            
            
            -
            
            
            16,500
            
            
            -
            
            
            -
            
            
            -
            
            
            16,500Net
                loss for the year ended December 31, 2000
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (18,938
            )
            
            -
            
            
            (18,938
            )Balance
                at December 31, 2000
            
            
            971,765
            
            
            972
            
            
            358,398
            
            
            (341,027
            )
            
            (18,938
            )
            
            (222
            )
            
            (817
            )Capital
                contributed
            
            
            -
            
            
            -
            
            
            12,400
            
            
            -
            
            
            -
            
            
            -
            
            
            12,400Net
                loss for the year ended December 31, 2001
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (12,938
            )
            
            -
            
            
            (12,938
            )Balance
                at December 31, 2001
            
            
            971,765
            
            
            972
            
            
            370,798
            
            
            (341,027
            )
            
            (31,876
            )
            
            (222
            )
            
            (1,355
            )Capital
                contributed
            
            
            -
            
            
            -
            
            
            13,000
            
            
            -
            
            
            -
            
            
            -
            
            
            13,000Net
                loss for the year ended December 31, 2002
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (16,406
            )
            
            -
            
            
            (16,406
            )Balance
                at December 31, 2002
            
            
            971,765
            
            
            972
            
            
            383,798
            
            
            (341,027
            )
            
            (48,282
            )
            
            (222
            )
            
            (4,761
            )Capital
                contributed
            
            
            -
            
            
            -
            
            
            10,000
            
            
            -
            
            
            -
            
            
            -
            
            
            10,000Net
                loss for the year ended December 31, 2003
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (2,828
            )
            
            -
            
            
            (2,828
            )Balance
                at December 31, 2003
            
            
            971,765
            
            
            972
            
            
            393,798
            
            
            (341,027
            )
            
            (51,110
            )
            
            (222
            )
            
            2,411Net
                loss for the year ended December 31, 2004
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (620
            )
            
            -
            
            
            (620
            )**Balance
                at December 31, 2004**
            
            
            **971,765**
            
            
            **972**
            
            
            **393,798**
            
            
            **(341,027**
            **)**
            
            **(51,730**
            **)**
            
            **(222**
            **)**
            
            **1,791****Capital
                contributed**
            
            
            **-**
            
            
            **-**
            
            
            **6,000**
            
            
            **-**
            
            
            **-**
            
            
            **-**
            
            
            **6,000****Net
                loss for the year ended December 31, 2005**
            
            
            **-**
            
            
            **-**
            
            
            **-**
            
            
            **-**
            
            
            **(23,088**
            **)**
            
            **-**
            
            
            **(23,088**
            **)****Balance
                at December 31, 2005**
            
            
            **971,765**
            
            **$**
            **972**
            
            **$**
            **399,798**
            
            **$**
            **(341,027**
            **)**
            **$**
            **(74,818**
            **)**
            **$**
            **(222**
            **)**
            **$**
            **(15,297**
            **)**





See
      accompanying notes to financial statements.




F-5





**MORLEX,
      INC.**


**(A
      Development Stage Company)**


**STATEMENTS
      OF CASH FLOWS**











**Cumulative
                During the Development Stage**
              **(January
                1, 2000**
              **to**
              **December
                31,**
            
            For
                the year ended December 31,**2005)**
            
            2005
            
            2004**CASH
                FLOWS FROM OPERATING ACTIVITIES:**Net
                loss
            
            **$**
            **(74,818**
            **)**
            $
            (23,088
            )
            $
            (620
            )**Increase
                in accrued expenses**
            
            
            **13,908**
            
            
            14,888
            
            
            -Net
                cash used by operating activities
            
            
            **(60,910**
            **)**
            
            (8,200
            )
            
            (620
            )**CASH
                FLOWS FROM FINANCING ACTIVITIES:**Capital
                contributed
            
            
            **57,900**
            
            
            6,000
            
            
            -**Net
                cash provided by financing activities**
            
            
            **57,900**
            
            
            6,000
            
            
            -**NET
                DECREASE IN CASH**
            
            
            **(3,010**
            **)**
            
            (2,200
            )
            
            (620
            )Cash
                at beginning of period
            
            
            **3,101**
            
            
            2,291
            
            
            2,911**CASH
                AT END OF PERIOD**
            
            **$**
            **91**
            
            $
            91
            
            $
            2,291





See
      accompanying notes to financial statements.




F-6


**MORLEX,
      INC.**


**(A
      Development Stage Company)**


**NOTES
      TO FINANCIAL STATEMENTS**


**DECEMBER
      31, 2005 AND 2004**





**NOTE
              1 -**
            **DESCRIPTION
                OF COMPANY:**





Morlex,
      Inc., the Company, was incorporated under the laws of the State of Colorado
      on
      April 23, 1986. The primary activity of the Company was to seek merger or
      acquisition candidates. In January 1987, the Company, in a stock-for-stock
      exchange acquired America OnLine, Inc., a then wholly-owned subsidiary of Info
      Source Information Service, Inc. The Company simultaneously changed its name
      to
      America OnLine, Inc. (“AOL #1”). AOL #1 was never affiliated with the well-known
      company of the same name. On December 28, 1992, the Company terminated the
      business of AOL #1 and has had no active business operations since. On May
      15,
      1998, the name of the Company was changed back to Morlex, Inc. The Company
      is
      currently seeking potential business opportunities.





As
      shown
      in the financial statements, the Company has incurred net losses and has an
      accumulated deficit of $415,845 at December 31, 2005. It is management’s
      assertion that these circumstances may hinder the Company’s ability to continue
      as a going concern. Historically, management has been able to raise funds from
      shareholders’ contributions and/or shareholders’ loans for the Company’s short
      term needs. There is no certainty that such funds will be available in the
      future as and when needed.





In
      accordance with Statement of Financial Accounting Standards No. 7, the Company
      is being treated as a development stage company since January 1, 2000, the
      date
      the Company began devoting substantially all of their efforts to establish
      a new
      business.





**NOTE
              2 -**
            **SUMMARY
                OF SIGNIFICANT ACCOUNTING
                POLICIES:**





The
      Company’s accounting policies are in accordance with accounting principles
      generally accepted in the United States of America. Outlined below are those
      policies considered particularly significant.





***(a)***
            ***Use
                of Estimates:***





In
      preparing financial statements in accordance with accounting principles
      generally accepted in the United States of America, management makes certain
      estimates and assumptions, where applicable, that affect the reported amounts
      of
      assets and liabilities and disclosures of contingent assets and liabilities
      at
      the date of the financial statements, as well as the reported amounts of
      revenues and expenses during the reporting period. While actual results could
      differ from those estimates, management does not expect such variances, if
      any,
      to have a material effect on the financial statements..





***(b)***
            ***Net
                Loss Per Common
                Share:***





Basic
      and
      diluted loss per share is calculated by dividing net income available to common
      stockholders by the weighted average number of common shares outstanding during
      the year. There are no potentially dilutive securities outstanding as of
      December 31, 2005 and 2004.





***(c)***
            ***Fair
                Value:***





The
      carrying value of accrued expenses approximates fair value due to the short-term
      nature of the liability.




F-7





**MORLEX,
      INC.**


**(A
      Development Stage Company)**


**NOTES
      TO FINANCIAL STATEMENTS**


**DECEMBER
      31, 2005 AND 2004**











**NOTE
              3 -**
            **SHAREHOLDERS’
                EQUITY:**





On
      December 5, 2000, the shareholders of the Company, approved a reverse stock
      split whereby each issued and outstanding share of common stock, was converted
      into 0.001927029 of a share of common stock. Shareholders’ equity was
      retroactively restated to give recognition to the reverse stock split by
      reclassifying from common stock to additional paid-in capital the par value
      of
      the number of shares that were eliminated as a result of the reverse stock
      split. In addition, all references in the financial statements and notes to
      the
      number of shares and per share amounts, reflect this reverse stock
      split.





On
      March
      3, 2003, the Company filed a Form 15 which terminated the registration of the
      Company’s common stock under the Securities Exchange Act of 1934 (“Exchange
      Act”).  On January 27, 2006, a new registration statement was filed to once
      again register the Company’s common stock under the Exchange Act.  The Form
      10-SB filing became effective March 1, 2006.





During
      the years 2005, 2003, 2002, 2001 and 2000, the Company received capital
      contributions of $6,000, $10,000, $13,000 $12,400 and $16,500, respectively
      from
      its officers.








**NOTE
              4 -**
            **INCOME
                TAXES**





The
      Company has a net operating loss carryforward of approximately $130,000 which
      begins to expire in 2010. However, the Company’s ability to utilize such losses
      to offset future taxable income is subject to various limitations imposed by
      the
      rules and regulations of the Internal Revenue Service. A portion of the
      Company’s net operating losses are limited each year to offset future taxable
      income, if any, due to the change of ownership in the Company’s outstanding
      shares of common stock. Accordingly, no deferred tax asset has been reflected
      due to the fact that it is not likely to be utilized at the current
      time.








**NOTE
              5 -**
            **SUBSEQUENT
                EVENTS**





On
      March
      8, 2006, under written consent of the sole member of the Board of Directors,
      a
      principal shareholder and the company’s sole officer and another principal
      shareholder each were offered to purchase 90,000 shares of the company’s common
      stock, par value $.001, under the Common Stock Purchase Agreement for an
      aggregated total of $18,000.







F-8





**Item
      8. Changes in and Disagreements with Accountants on Accounting and Financial
      Disclosure.**





None.




**Item
      8A. Controls and Procedures.**





The
      Company’s management is responsible for establishing and maintaining a system of
      disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e)
      under the Exchange Act) that is designed to ensure that information required
      to
      be disclosed by the Company in the reports that the Company files or submits
      under the Exchange Act is recorded, processed, summarized and reported, within
      the time periods specified in the Commission’s rules and forms. Disclosure
      controls and procedures include, without limitation, controls and procedures
      designed to ensure that information required to be disclosed by an issuer in
      the
      reports that it files or submits under the Exchange Act is accumulated and
      communicated to the issuer’s management, including its principal executive
      officer or officers and principal financial officer or officers, or persons
      performing similar functions, as appropriate to allow timely decisions regarding
      required disclosure.





In
      accordance with Exchange Act Rules 13a-15 and 15d-15, an evaluation was
      completed under the supervision and with the participation of the Company’s
      management, including the Company’s principal executive officer who is also the
      principal financial officer, of the effectiveness of the design and operation
      of
      the Company’s disclosure controls and procedures as of the end of the period
      covered by this Annual Report. Based on that evaluation, the Company’s Principal
      Executive Officer who is also the Principal Financial Officer concluded that
      the
      Company’s disclosure controls and procedures are effective, to provide
      reasonable assurance that information required to be disclosed in the Company’s
      reports filed or submitted under the Exchange Act is recorded, processed,
      summarized, and reported within the time periods specified in the Commission’s
      rules and forms. There have been no changes to the Company’s internal controls
      over financial reporting that occurred during our last fiscal quarter of the
      year ended December 31, 2005, that materially affected, or were reasonably
      likely to materially affect, our internal controls over financial
      reporting.





**Item
      8B. Other Information.**





None.




**Part
      III**





**Item
      9. Directors and Executive Officers of the Registrant.**





(a)
      Identification of Directors and Executive Officers. The following table sets
      forth certain information regarding the Company’s directors and executive
      officers for the fiscal year ended December 31, 2005:





**Name**
            **Age**
            **Position**
            **Term**Donald
                Barrick
            37
            President,
                Secretary, Treasurer and Director
            April
                9, 2003 thru Present




9





**Donald
      Barrick** ,
      37.
      Donald W. Barrick is President, co-founder and principal shareholder of Resource
      Management Partners, Inc., a Bohemia, NY based finance company serving small
      to
      mid-sized companies. Mr. Barrick helped found the company in April 2000.
      Resource Management Partners, Inc. represents banks in servicing bank loans
      and
      provides escrow services with respect to such loans. Prior to April 2000, Mr.
      Barrick had been Chief Financial Officer of CTA Industries, Inc. (formerly
      American Rockwool Acquisition Corp.) since its inception in 1996. During that
      period, Mr. Barrick was also a Vice President with Branin Investments, Inc.,
      a
      merchant banking firm in New York and equity sponsor of CTA Industries. Mr.
      Barrick received a Bachelor of Science in finance from the Cornell University
      School of Hotel Administration in 1991.





The
      term
      of office of each director expires at the Company's annual meeting of
      stockholders or until their successors are duly elected and qualified. Directors
      are not compensated for serving as such. Officers serve at the discretion of
      the
      Company’s Board of Directors.





(b)
      Significant Employees. None.




(c)
      Family Relationships. None.





(d)
      Involvement in Certain Legal Proceedings. There have been no events under any
      bankruptcy act, no criminal proceedings and no judgments, injunctions, orders
      or
      decrees material to the evaluation of the ability and integrity of any director,
      executive officer, promoter or control person of Registrant during the past
      five
      years.




(e)
      The
      Board of Directors acts as the Audit Committee and the Board has no separate
      committees. The Company does not have a qualified financial expert at this
      time
      because it has not been able to hire a qualified candidate. Further, the Company
      believes that it has inadequate financial resources at this time to hire such
      an
      expert. The Company intends to continue to search for a qualified individual
      for
      hire.





**COMPLIANCE
      WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934**





Section 16(a)
      of the Exchange Act requires the Company’s directors and officers, and persons
      who beneficially own more than 10% of a registered class of the Company’s equity
      securities, to file reports of beneficial ownership and changes in beneficial
      ownership of the Company’s securities with the SEC of Forms 3, 4 and 5.
      Officers, directors and greater than 10% stockholders are required by SEC
      regulation to furnish the Company with copies of all Section 16(a) forms
      they file.





Based
      solely on the Company’s review of the copies of the forms received by it during
      the period from May 26, 2005 (inception) to December 31, 2005 and written
      representations that no other reports were required, the Company believes that
      no person who, at any time during such fiscal year, was a director, officer
      or
      beneficial owner of more than 10% of the Company’s common stock failed to comply
      with all Section 16(a) filing requirements during such fiscal
      year.





**CODE
      OF ETHICS**


We
      have
      not adopted a Code of Business Conduct and Ethics that applies to our principal
      executive officer, principal financial officer, principal accounting officer
      or
      controller, or persons performing similar functions in that our sole officer
      and
      director serves in all the above capacities.




10


**Item
      10. Executive Compensation.**





The
      following table sets forth the cash compensation paid by the Company to its
      President and all other executive officers for services rendered during the
      fiscal year ended December 31, 2005.





Name
                and Position
            Year
            Other
                CompensationDonald
                Barrick, President, Secretary, Treasurer and Director
            2005
            None





**Director
      Compensation**





We
      do not
      currently pay any cash fees to our directors, but we pay directors' expenses
      in
      attending board meetings. During the year ended December 31, 2005 no director
      expenses were reimbursed.





**Employment
      Agreements**





The
      Company is not a party to any employment agreements.





**Item
      11. Security Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters.**





The
      following tables set forth certain information as of June 2, 2006, regarding
      (i)
      each person known by the Company to be the beneficial owner of more than 5%
      of
      the outstanding shares of Common Stock, (ii) each director, nominee and
      executive officer of the Company and (iii) all officers and directors as a
      group.





Name
                and Address
            **Amount
                and Nature of Beneficial Ownership**
            **Percentage
                of Class**Donald
                Barrick (1)
              c/o
                Resource Management Partners, Inc.
              1690
                Washington Avenue
              Bohemia,
                NY 11716
            433,962
            37.7%Michelle
                Kaplan
              c/o
                Resource Management Partners, Inc.
              1690
                Washington Avenue
              Bohemia,
                NY 11716
            433,962
            37.7%All
                Directors and Officers as a Group
              (1
                individual)
            433,962
            37.7%





(1)
            Mr.
                Barrick is the President, Secretary, Treasurer and sole director
                of the
                Company.







11





**Item
      12. Certain Relationships and Related Transactions.**





Except
      as
      otherwise indicated herein, there have been no related party transactions,
      or
      any other transactions or relationships required to be disclosed pursuant to
      Item 404 of Regulation S-B.





**Item
      13. Exhibits and Reports on Form 8-K.**





Index
      to
      Exhibits





Exhibit  Description


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






*3.1
            
            Registrant’s
                Certificate of Incorporation**3.2
            
            Registrant’s Amended and Restated
              By-Laws***3.3
            
            Articles of Amendment to the Articles
              of
              Incorporation31.1
            
            Certification of the Company’s Principal
              Executive Officer and Principal Financial Officer pursuant to Section
              302
              of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Annual
              Report on Form 10-KSB for the year ended December 31, 200532.1
            
            Certification
                of the Company’s Principal Executive Officer and Principal FinancialOfficer
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                theSarbanes
                Oxley Act of 2002.*
            Filed
                  as an exhibit to the Company's registration statement on Form 10-SB/A,
                  as
                  filedwith
                  the Securities and Exchange Commission on January 27, 2006, and
                  incorporatedherein
                  by this reference.**
            Filed
                as an exhibit to the Company's annual report on Form 10-KSB, as filedwith
                the Securities and Exchange Commission on March 29, 2001, and incorporatedherein
                by this reference.***
            Filed
                as an exhibit to the Company's registration statement on Form 10-SB/A,
                as
                filedwith
                the Securities and Exchange Commission on June 14, 1999, and incorporatedherein
                by this reference.(b)
            Reports on Form 8-K.
              None.





12





**Item
      14. Principal Accountant Fees and Services**





Lazar,
      Levine & Felix, LLP (“Lazar Levine”) is the Company's independent registered
      public accounting firm.





AUDIT
      FEES





The
      aggregate fees billed by Lazar Levine for professional services rendered for
      the
      audit of our annual financial statements and review of financial statements
      included in our Form 10-KSB or services that are normally provided in connection
      with statutory and regulatory filings were $10,000 for fiscal year ended
      December 31, 2005.





AUDIT-RELATED
      FEES





There
      were no Lazar Levine fees billed for assurance and related services related
      to
      the audit or review of the Company’s financial statements for the year ended
      December 31, 2005 and 2004.





TAX
      FEES





There
      were no Lazar Levine fees billed for professional services for tax compliance,
      tax advice, and tax planning for the years ended December 31, 2005 and 2004.





ALL
      OTHER
      FEES





There
      were no Lazar Levine fees billed for other products and services the years
      ended
      December 31, 2005 and 2004.




13





**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.







**MORLEX, INC.**Dated: June 20, 2006
            By: /s/
              Donald BarrickDonald BarrickPresident, Secretary,
              Director




14