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

                                   FORM 10-KSB
(Mark One)

[x]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

     For the fiscal year ended       December 31, 2004
                                     -----------------

[]TRANSITION REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
     ACT OF 1934

        For the transition period from ________ to __________

                Commission File Number       0-28475
                                            ----------

                            Merilus, Inc.
              --------------------------------------------------
              (Exact name of registrant as specified in charter)

        Nevada                                      87-0635270
------------------------------                 -------------------------
State or other jurisdiction of                 (I.R.S. Employer I.D. No.)
incorporation or organization

10776 Wyngate Park Drive, P.O. Box 95625, South Jordan, Utah      84095
--------------------------------------------------------------- ---------
(Address of principal executive offices)                        (Zip Code)

Issuer's telephone number, including area code: (801) 253-6604
                                               ---------------
Securities registered pursuant to section 12(b) of the Act:

Title of each class                 Name of each exchange on which registered
        None                                             N/A
------------------                  -----------------------------------------

Securities registered pursuant to section 12(g) of the Act:

                    Common Stock, par value $0.001 per share
                    ----------------------------------------
                                (Title of class)

  Check whether the Issuer (1) filed all reports required to be filed by section
13 or 15(d) of the Exchange Act during the past 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.
(1) Yes [ ] No [X] (2) Yes[X] No [ ]

  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. [ ]

Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act).  Yes [X] No [ ]

  State issuer's revenues for its most recent fiscal year: $-0-

  State the aggregate market value of the voting stock held by nonaffiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days: The Company's common stock has very limited trading with a nominal price
of $0.003 per share or $13,306 value for non-affiliated stock.

  As of November 30, 2005, the Registrant had 11,170,804 shares of common stock
issued and outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

     List hereunder the following documents if incorporated by reference and
the part of the Form 10-KSB (e.g., part I, part II, etc.) into which the
document is incorporated:  (1) Any annual report to security holders; (2) Any
proxy or other information statement; and (3) Any prospectus filed pursuant to
rule 424(b) or (c) under the Securities Act of 1933:  NONE




<PAGE>



                                     PART I

                      ITEM 1. DESCRIPTION OF BUSINESS

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
-------------------------------------------------

     This periodic report contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 with respect to
the financial condition, results of operations, business strategies, operating
efficiencies or synergies, competitive positions, growth opportunities for
existing products, plans and objectives of management. Statements in this
periodic report that are not historical facts are hereby identified as
"forward-looking statements."

BUSINESS
--------

     The Company was incorporated in Nevada in May 1985. The Company's initial
business endeavors were not successful and in December 2000, the Company entered
into an agreement to acquire Merilus Technologies, Inc. ("MTI"), a British
Columbia, Canada corporation. As part of the acquisition, the Company raised
funds through a private placement which were loaned to MTI. MTI later was forced
to file for bankruptcy protection and was liquidated under the laws of Canada.
Since the liquidation of MTI, the Company has had no operations and is currently
seeking an acquisition or merger to bring an operating entity into the Company.
The Company does not propose to restrict its search for a business opportunity
to any particular industry or geographical area and may, therefore, engage in
essentially any business in any industry. The Company has unrestricted
discretion in seeking and participating in a business opportunity, subject to
the availability of such opportunities, economic conditions, and other factors.

     The selection of a business opportunity in which to participate is complex
and risky. Additionally, as the Company has only limited resources, it may be
difficult to find good opportunities. There can be no assurance that the Company
will be able to identify and acquire any business opportunity which will
ultimately prove to be beneficial to the Company and its shareholders. The
Company will select any potential business opportunity based on management's
business judgment.

     The activities of the Company are subject to several significant risks
which arise primarily as a result of the fact that the Company has no specific
business and may acquire or participate in a business opportunity based on the
decision of management which potentially could act without the consent, vote, or
approval of the Company's shareholders. The risks faced by the Company are
further increased as a result of its lack of resources and its inability to
provide a prospective business opportunity with significant capital.

                  ITEM 2. DESCRIPTION OF PROPERTIES

     The Company does not maintain an administrative office but utilizes the
mailing post office box of the Company's president, Denny Nestripke. Without
current operations, the Company does not believe it is necessary to have an
office.

                        ITEM 3. LEGAL PROCEEDINGS

     None.

                                        2
<PAGE>



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

     No matters were submitted to a vote of shareholders of the Company during
the fourth quarter of the fiscal year ended December 31, 2004.

                                PART II

     ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The Company's Common Stock is traded on the Pink Sheets with very limited
trading volume. Set forth below are the high and low bid prices for the
Company's Common Stock, for the respective quarters. Although the Company's
common stock is quoted on the Pink Sheets, it has traded sporadically with no
real volume. Consequently, the information provided below may not be indicative
of the Company's common stock price under different conditions.

Quarter Ended             High Bid        Low Bid
-------------             --------        -------
December 2004              $0.001          $0.001
September 2004             $0.001          $0.001
June 2004                  $0.001          $0.001
March 2004                 $0.001          $0.001

     At November 29, 2005, the bid and asked price for the Company's Common
Stock was $0.003 and $0.006, respectively. All prices listed herein reflect
inter-dealer prices, without retail mark-up, mark-down or commissions and may
not represent actual transactions.


     Since its inception, the Company has not paid any dividends on its Common
Stock, and the Company does not anticipate that it will pay dividends in the
foreseeable future. At November 30, 2005, the Company had approximately 39
shareholders based on the shareholders of record on the Company's transfer agent
list.

     ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

OVERVIEW
--------

     Since the termination of the operations of MTI, the Company has not been
engaged in any business operations. The Company has been unable to locate
another business opportunity and currently has no material operations.

     Management of the Company believes the best chance to obtain value for the
shareholders is to seek a merger or acquisition with an existing business. At
this time, management has been unable to locate any potential mergers or
acquisitions.

     The investigation of specific business opportunities and the negotiation,
drafting, and execution of relevant agreements, disclosure documents, and other
instruments may require substantial management time and attention and will
require the Company to incur costs for payment of accountants, attorneys, and
others. The Company does not have the financial resources to pay such cost but
will rely on existing shareholders to pay such cost. Mr. Nestripke is currently
providing his services without remuneration; however, it is


                                        3

<PAGE>



expected that if an agreement or acquisition is reached that Mr. Nestripke will
receive some form of compensation at such time. If a decision is made not to
participate in or complete the acquisition of a specific business opportunity,
the costs incurred in a related investigation will not be recoverable. Further,
even if an agreement is reached for the participation in a specific business
opportunity by way of investment or otherwise, the failure to consummate the
particular transaction may result in the loss to the Company of all related
costs incurred.

     Currently, management is not able to determine the time or resources that
will be necessary to locate and acquire or merge with a business prospect. There
is no assurance that the Company will be able to acquire an interest in any such
prospects, products or opportunities that may exist or that any activity of the
Company, regardless of the completion of any transaction, will be profitable.

     If and when the Company locates a business opportunity, management of the
Company will give consideration to the dollar amount of that entity's profitable
operations and the adequacy of its working capital in determining the terms and
conditions under which the Company would consummate such an acquisition.
Potential business opportunities, no matter which form they may take, will most
likely result in substantial dilution for the Company's shareholders due to the
issuance of stock to acquire such an opportunity.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

     As of December 31, 2004, the Company had no assets and liabilities of
$2,723. A shareholder of the Company paid such existing liabilities and was
given a promissory note to cover the advances on behalf of the Company. Expenses
incurred in 2005 represent only incidental ongoing expenses primarily associated
with maintaining its corporate status and maintaining the Company's reporting
obligations to the Securities and Exchange Commission. Current management and
shareholders indicate a willingness to help support the Company's ongoing
expenses.

     For the twelve months ended December 31, 2004, the Company had $2,598 in
expenses related to maintaining its corporate status. Management anticipates
expenses to increase as the Company updates its filings and completes additional
auditing and accounting work.

     The Company generated no revenue in 2004 and it is unlikely that any
revenue will be generated until the Company locates a business opportunity with
which to acquire or merge. Management of the Company will be investigating
various business opportunities. These efforts may cost the Company not only out
of pocket expenses for its management but also expenses associated with legal
and accounting costs. There can be no guarantee that the Company will receive
any benefits from the efforts of management to locate business opportunities.
The Company's financial statements contain a going concern opinion on the
Company's ability to continue in business.

     Management does not anticipate employing any employees in the future until
a merger or acquisition can be accomplished. Management will continue to rely on
outside consultants to assist in its corporate filing requirements.

                                        4

<PAGE>



RESULTS OF OPERATIONS
---------------------

     The Company has not had any revenue since inception. The Company continues
to suffer a small loss related to maintaining its corporate status and reporting
obligations.

                     ITEM 7.  FINANCIAL STATEMENTS

     The financial statements of the Company are set forth immediately following
the signature page to this Form 10-KSB.


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


     The Company has had no disagreements with its certified public accountants
with respect to accounting practices or procedures or financial disclosure. The
Company hired a new public accountant to audit the 2004 financial statements who
was located closer to the Company's new president. There were no disagreements
with the prior auditors but since no auditor was used for several years, the
Company felt a new auditor closer to the current location was preferable to the
auditors used before.

                   ITEM 8A.  CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures. We believe our disclosure
controls and procedures (as defined in Sections 13a-14c and 15d- 14c of the
Securities Exchange Act of 1934, as amended) are adequate, based on our
evaluation of such disclosure controls and procedures within 90 days of this
filing.

(b) Changes in internal controls. There were no significant changes in our
internal controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation.

                   ITEM 8B.  OTHER INFORMATION

None
                                PART III


     ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL
         PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT


     The following table sets forth as of December 1, 2005, the name, age, and
position of each executive officer and director and the term of office of each
director of the Company.

   Name           Age      Position       Director of Officer Since
   ----           ---      --------       -------------------------
Denny Nestripke   58        President and           2005
                            Director

     Set forth below is certain biographical information regarding the Company's
executive officer and director.

     Denny W. Nestripke, 58, has been employed as a certified public accountant
for his own CPA firm since December of 2004. Prior to that time he attended the
University of Utah, completing a Master of Family Ecology degree.

                                        5

<PAGE>



He also received a Bachelor of Science degree in accounting from the University
of Utah in 1977. Between 1996 and 1998 Mr. Nestripke was self- employed as a
financial consultant and between 1989 and 1995 he was the controller for Magnum
Petroleum, Inc., a public oil and gas exploration and development company listed
on the American Stock Exchange.

     Except as indicated below, to the knowledge of management, during the past
five years, no present or former director, or executive officer of the Company:

     (1)filed a petition under the federal bankruptcy laws or any state
insolvency law, nor had a receiver, fiscal agent or similar officer appointed by
a court for the business or property of such person, or any partnership in which
he was a general partner at or within two years before the time of such filing,
or any corporation or business association of which he was an executive officer
at or within two years before the time of such filing;

     (2)was convicted in a criminal proceeding or named subject of a pending
criminal proceeding (excluding traffic violations and other minor offenses);

     (3)was the subject of any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining him from or otherwise limiting, the
following activities:

          (i) acting as a futures commission merchant, introducing broker,
commodity trading advisor, commodity pool operator, floor broker, leverage
transaction merchant, associated person of any of the foregoing, or as an
investment advisor, underwriter, broker or dealer in securities, or as an
affiliate person, director or employee of any investment company, or engaging in
or continuing any conduct or practice in connection with such activity;

          (ii) engaging in any type of business practice; or

         (iii)engaging in any activity in connection with the purchase or sale
of any security or commodity or in connection with any violation of federal or
state securities laws or federal commodities laws;

     (4) was the subject of any order, judgment, or decree, not subsequently
reversed, suspended, or vacated, of any federal or state authority barring,
suspending, or otherwise limiting for more than 60 days the right of such person
to engage in any activity described above under this Item, or to be associated
with persons engaged in any such activity;

     (5) was found by a court of competent jurisdiction in a civil action or by
the Securities and Exchange Commission to have violated any federal or state
securities law, and the judgment in such civil action or finding by the
Securities and Exchange Commission has not been subsequently reversed,
suspended, or vacated.

     (6) was found by a court of competent jurisdiction in a civil action or by
the Commodity Futures Trading Commission to have violated any federal
commodities law, and the judgment in such civil action or finding by the
Commodity Futures Trading Commission has not been subsequently reversed,
suspended or vacated.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

     The Company is not aware of any late reports filed by officers, directors
and ten percent shareholders.

                                        6


<PAGE>



                   ITEM 10.  EXECUTIVE COMPENSATION

                       SUMMARY COMPENSATION TABLE

     The following tables set forth certain summary information concerning the
compensation paid or accrued for each of the Company's last three completed
fiscal years to the Company's or its principal subsidiaries' chief executive
officer and each of its other executive officers that received compensation in
excess of $100,000 during such period (as determined at December 31, 2004, the
end of the Company's last completed fiscal year):

<TABLE>
<CAPTION>
                                                  Long Term Compensation
                                                  ----------------------
                     Annual Compensation              Awards         Payouts
                                            Other      Restricted
Name and                                   Annual      Stock     Options LTIP     All other
Principal Position Year  Salary  Bonus($) Compensation Awards   /SARs   Payout  Compensation
------------------ ----  ------  -------- ------------ ------   ------- ------  ------------
<S>              <C>     <C>    <C>      <C>          <C>      <C>     <C>     <C>
Denny Nestripke     2004   $-0-     -0-       -0-         -0-      -0-     -0-       -0-
President and CEO
                    2003    -0-     -0-       -0-         -0-      -0-     -0-       -0-

                    2002    -0-     -0-       -0-         -0-      -0-     -0-       -0-
-----------------
</TABLE>

     Cash Compensation

     There was no cash compensation paid to any director or executive officer of
the Company during the fiscal years ended December 31, 2005, 2004, and 2003.

     Bonuses and Deferred Compensation

      None.

     Compensation Pursuant to Plans.

      None.

     Pension Table

      None.

     Other Compensation

      None.

     Compensation of Directors.

      None.


                                        7
<PAGE>



     Termination of Employment and Change of Control Arrangement

     There are no compensatory plans or arrangements, including payments to be
received from the Company, with respect to any person named in Cash Compensation
set out above which would in any way result in payments to any such person
because of his resignation, retirement, or other termination of such person's
employment with the Company or its subsidiaries, or any change in control of the
Company, or a change in the person's responsibilities following a changing in
control of the Company.

   ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    The following table sets forth as of November 30, 2005, the name and the
number of shares of the Company's Common Stock, par value $0.001 per share, held
of record or beneficially by each person who held of record, or was known by the
Company to own beneficially, more than 5% of the 11,170,804 issued and
outstanding shares of the Company's Common Stock, and the name and shareholdings
of each director and of all officers and directors as a group.

Title
 of          Name of            Amount and Nature of     Percentage
Class    Beneficial Owner       Beneficial Ownership(1)   of Class
-----    ----------------       --------------------     ----------
Common   Micvic, LLC               6,735,600                60.3%
         4764 South 900 East
         Salt Lake City, Utah

OFFICERS, DIRECTORS AND NOMINEES:

Common   Denny Nestripke                   -0-             -0-
         All Officers
         and Directors
         as a Group (1 person)             -0-             -0-

(1) Indirect and Direct ownership are referenced by an "I" or "D", respectively.
All shares owned directly are owned beneficially and of record and such
shareholder has sole voting, investment, and dispositive power, unless otherwise
noted.

          ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

                   TRANSACTIONS WITH MANAGEMENT AND OTHERS.

     During the fiscal year ended December 31, 2004, there were no material
transactions, or series of similar transactions, since the beginning of the
Company's last fiscal year, or any currently proposed transactions, or series of
similar transactions, to which the Company was or is to be party, in which the
amount involved exceeds $60,000, and in which any director or executive officer,
or any security holder who is known by the Company to own of record or
beneficially more than 5% of any class of the Company's common stock, or any
member of the immediate family of any of the foregoing persons, has an interest.

     INDEBTEDNESS OF MANAGEMENT

     Except as set forth above, there were no material transactions, or series
of similar transactions, since the beginning of the Company's last fiscal

                                        8

<PAGE>



year, or any currently proposed transactions, or series of similar transactions,
to which the Company was or is to be a party, in which the amount involved
exceeds $60,000 and in which any director or executive officer, or any security
holder who is known to the Company to own of record or beneficially more than 5%
of any class of the Company's common stock, or any member of the immediate
family of any of the foregoing persons, has an interest.

     TRANSACTIONS WITH PROMOTERS

     There have been no transactions between the Company and promoters during
the last fiscal year.

             ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

  (a)(1)FINANCIAL STATEMENTS. The following financial statements are included in
this report:

Title of Document                                                  Page
-----------------                                                  ----

Report of Independent Registered Public Accounting Firm             F-1

Balance Sheet                                                       F-2

Statements of Operations                                            F-3

Statements of Stockholders' Equity (Deficit)                        F-4

Statements of Cash Flows                                            F-5

Notes to Financial Statements                                     F-6-8

 (a)(2)FINANCIAL STATEMENT SCHEDULES.  The following financial statement
schedules are included as part of this report:

     None.

 (a)(3)EXHIBITS. The following exhibits are included as part of this report:

              SEC
Exhibit     Reference
Number       Number     Title of Document           Location
-------     ---------   -----------------           -------------
Item 3      Articles of Incorporation and Bylaws

 3.01           3       Articles of Incorporation     Incorporated
                                                      by reference*

 3.02           3       Amended Articles of
                        Incorporation                 Incorporated
                                                      by reference**

 3.03           3       Amended Articles of
                        Incorporation                 Incorporated
                                                      by reference***

 3.04           3       Bylaws                        Incorporated
                                                      by reference*

                                        9

<PAGE>



Item 4      Instruments Defining the Rights of Security Holders
-------     ---------------------------------------------------
 4.01           4       Specimen Stock Certificate    Incorporated
                                                      by reference*

31.01          31       CEO certification Pursuant
                           to 18 USC Section 1350, as
                         adopted pursuant to Section 302
                        of Sarbanes-Oxley Act of 2002    This Filing

31.02          31       CFO certification Pursuant
                           to 18 USC Section 1350, as
                         adopted pursuant to Section 302
                        of Sarbanes-Oxley Act of 2002    This Filing

32.01           32      CEO Certification pursuant to
                        section 906                      This Filing

32.02           32      CFO Certification pursuant to
                        Section 906                      This Filing


* Incorporated by reference from the Company's registration statement on Form
10-SB filed with the Commission, SEC file no.000-28475.

** Incorporated by reference from the Company's definitive 14C filed on July 31,
2000, with the Commission, SEC file no.000-28475.

*** Incorporated by reference from the Company's definitive 14C filed on January
9, 2001, with the Commission, SEC file no.000-28475.



         ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
        Information required by Item 9(e) of Schedule 14A

1) Audit Fees - The aggregate fees incurred for the last two fiscal years for
professional services rendered by our principal accountant for the audit of our
annual financial statements and review of our quarterly financial statements is
approximately $1,400 for the year ending December 31, 2004.

2) Audit-Related Fees - $-0-. 3) Tax Fees. -0- 4) All Other Fees. -0-. 5) Not
applicable. 6) Not Applicable.


                                       10

<PAGE>


                                   SIGNATURES

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

                                  Merilus, Inc.


Date: December 1, 2005          By: Denny W. Nestripke, President and Director
                                (Principal Executive Officer)




                                       11



<PAGE>



                                  MERILUS, INC.
                          (A Development Stage Company)


                                CONTENTS


                                                                   PAGE


Report of Independent Registered Public Accounting Firm             F-1

Balance Sheet                                                       F-2

Statements of Operations                                            F-3

Statement of Stockholders' Equity (Deficit)                         F-4-5

Statements of Cash Flows                                            F-6

Notes to Financial Statements                                       F-7




                                       12

<PAGE>



                                      Smith
                                        &
                                     Company

           A Professional Corporation of Certified Public Accountants


          REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Officers and Directors
Merilus, Inc.
Salt Lake City, Utah

We have audited the accompanying balance sheet of Merilus, Inc. (a Nevada
development stage corporation) as of December 31, 2004, and the related
statements of operations, stockholders' deficit, and cash flows for the years
ended December 31, 2004 and 2003. 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 audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
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 Merilus, Inc. as of December
31, 2004, and the results of its operations, stockholders' deficit, and its cash
flows for the years ended December 31, 2004 and 2003, in conformity with
accounting principles generally accepted in the United States of America.

The accompanying financial statements referred to above have been prepared
assuming that the Company will continue as a going concern. As discussed in Note
1 to the financial statements, the Company is in the development stage, and has
no established source of revenue to sustain operations. These factors raise
substantial doubt that the Company will be able to continue as a going concern.
The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.


                                     /s/ Smith &
                                     Company


                                   Certified Public Accountants
Salt Lake City, Utah
November 15, 2005


         4764 South 900 East, Suite 1 o Salt Lake City, Utah 84117-4977
              Telephone: (801) 281-4700 o Facsimile: (801) 281-4701
                        E-mail: smithcocpa@earthlink.net
          Members: American Institute of Certified Public Accountants o
                Utah Association of Certified Public Accountants

                                       F-1
<PAGE>




                                  Merilus, Inc.
                       ( a development stage enterprise )
                                  Balance Sheet

<TABLE>
<CAPTION>
                                                                                               December 31,
                                                                                                   2004
                                                                                             ----------------

ASSETS:
<S>                                                                                          <C>
Current Assets:                                                                              $              -
                                                                                             ----------------

             Total Assets                                                                    $              -
                                                                                             ================


LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
       Accounts payable                                                                      $          2,723

             Total Liabilities                                                                          2,723
                                                                                             ----------------

Stockholders' Deficit
       Preferred Stock - $1.00 par value, 1 share authorized, 0 share issued and outstanding                -
       Common Stock - $0.001 par value, 100,000,000 shares authorized, 11,170,804 issued and
       outstanding                                                                                     11,171
       Additional paid-in capital                                                                   3,200,082
       Deficit accumulated during the development stage                                           (3,213,976)

             Total Stockholders' Deficit                                                              (2,723)
                                                                                             ----------------

             Total Liabilities and Stockholders' Deficit                                     $              -
                                                                                             ================
</TABLE>


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

                                      F-2


<PAGE>





                                  Merilus, Inc.
                       ( a development stage enterprise )
                            Statements of Operations

<TABLE>
<CAPTION>
                                                                                                              From the date
                                                                                                               of inception
                                                                                                              (May 7, 1985)
                                                             For the years ended                                 through
                                                   December 31,              December 31,                     December 31,
                                                       2004                      2003                             2004
                                               --------------------     ----------------------             -------------------
<S>                                            <C>                      <C>                                <C>
Revenue                                        $                  -     $                    -             $                 -
                                               --------------------     ----------------------             -------------------

Expenses                                                     (2,598)                      (125)                     (3,213,976)
                                               --------------------     ----------------------             -------------------

Net Loss                                       $             (2,598)    $                 (125)            $        (3,213,976)
                                               ====================     ======================             ===================


Net loss per share of common stock             $               0.00     $                 0.00             $             (0.54)
                                               ====================     ======================             ===================


Weighted average number of common shares
outstanding                                              11,170,804                 11,170,804                       5,984,161
                                               ====================     ======================             ===================
</TABLE>





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

                                      F-3


<PAGE>

                                  Merilus, Inc.
                       ( a development stage enterprise )
                  Statements of Stockholders' Equity (Deficit)
       From the date of inception (May 7, 1985) through December 31, 2004

<TABLE>
<CAPTION>
                                 Preferred        Common         Preferred        Common        Paid in          Accumulated
                                  Shares          Shares           Stock          Stock         Capital            Deficit
                                -----------   --------------    ------------   -----------     ------------     --------------
<S>                             <C>           <C>               <C>            <C>             <C>              <C>
BALANCE, May 7, 1985
 - date of inception                      0                0    $          -   $         -     $          -     $            -
Common Stock issued for
 cash through December 1991
 ($0.006 / share)                                  3,750,000                         3,750           18,750

Common Stock issued for
 cash through December 1992
 ($0.005 / share)                                  1,000,000                         1,000            4,000

Common Stock issued for
 cash through December 1999
 ($0.009 / share)                                  2,000,000                         2,000           15,500

Net Operating Loss from the
 date of inception through
 December 1999                                                                                                         (45,500)
                                -----------   --------------    ------------   -----------     ------------     --------------

BALANCE, December 1999                    0        6,750,000    $          -   $     6,750     $     38,250     $      (45,500)
                                -----------   --------------    ------------   -----------     ------------     --------------

Issuance and exercise of
 warrants for the purchase
 of common stock, November
 2000 ($1.00 / share)                              2,000,000                         2,000        1,998,000

Issuance of preferred stock
 in trust in contemplation
 of acquiring shares of
 Merilus Technologies, Inc.,
 December 2000 (Note 2)                   1                                1                             (1)

Net Operating Loss for the
 year ended December 2000                                                                                               (7,775)
                                -----------   --------------    ------------   -----------     ------------     --------------

BALANCE, December 2000                    1        8,750,000    $          1   $     8,750     $  2,036,249     $      (53,275)
                                -----------   --------------    ------------   -----------     ------------     --------------

Shares of common stock
 issued for cash June 2001
 ($1.00 / share - Note 2)                            600,000                           600          599,400

Shares of common stock
 issued for cash November
 2001 ($0.85 / share - Note 2)                       182,504                           183          154,945

Shares of common stock
 issued for legal services,
 November 2001 ($0.85 /
 share - Note 2)                                      35,000                            35           29,715

Shares of common stock
 issued for cash December
 2001 ($0.50 / share -
 Note 2)                                             750,000                           750          374,250

Issuance of shares of
 common stock pursuant
 to an exchange agreement
 December 2001 ($0.001 /
 share - Note 2)                                     828,300                           828             (828)

Issuance of shares of
 common stock for services
 rendered, December 2001
 ($0.25 / share - Note 2)                             25,000                            25            6,350

Termination of trust
 agreement (Note 2)                      (1)                              (1)                             1

Net Operating Loss for the
 year ended December 2001
 (Note 2)                                                                                                           (3,157,978)
                                -----------   --------------    ------------   -----------     ------------     --------------
</TABLE>

                                      F-4
<PAGE>



                                  Merilus, Inc.
                       ( a development stage enterprise )
            Statements of Stockholders' Equity (Deficit) (continued)
       From the date of inception (May 7, 1985) through December 31, 2004



<TABLE>
<CAPTION>
                                 Preferred        Common         Preferred        Common        Paid in          Accumulated
                                  Shares          Shares           Stock          Stock         Capital            Deficit
                                -----------   --------------    ------------   -----------     ------------     --------------
<S>                             <C>           <C>               <C>            <C>             <C>              <C>
BALANCE, December 2001                    0       11,170,804    $          -   $    11,171     $  3,200,082     $   (3,211,253)
                                -----------   --------------    ------------   -----------     ------------     --------------
Net Operating Loss for
 the year ended December 2002                                                                                                -
                                -----------   --------------    ------------   -----------     ------------     --------------

BALANCE, December 2002                    0       11,170,804    $          -   $    11,171     $  3,200,082     $   (3,211,253)
                                -----------   --------------    ------------   -----------     ------------     --------------
Net Operating Loss for the
 year ended December 2003                                                                                                 (125)
                                -----------   --------------    ------------   -----------     ------------     --------------

BALANCE, December 2003                    0       11,170,804    $          -   $    11,171     $  3,200,082     $   (3,211,378)
                                -----------   --------------    ------------   -----------     ------------     --------------
Net Operating Loss for the
 year ended December 2004                                                                                               (2,598)
                                -----------   --------------    ------------   -----------     ------------     --------------

BALANCE, December 2004                    0       11,170,804    $          -   $    11,171     $  3,200,082     $   (3,213,976)
                                ===========   ==============    ============   ===========     ============     ==============
</TABLE>




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

                                      F-5



<PAGE>





                                  Merilus, Inc.
                       ( a development stage enterprise )
                            Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                        From the date
                                                                                         of inception
                                                                                        (May 7, 1985)
                                                           For the years ended             through
                                                December 31,         December 31,       December 31,
                                                    2004                 2003               2004
                                              ---------------      ---------------     --------------

OPERATING ACTIVITIES:
<S>                                           <C>                  <C>                 <C>
Net loss from operations                      $        (2,598)     $          (125)    $      (55,998)
Adjustment to reconcile net loss to
  net cash position
    Accounts payable                                    2,598                  125              2,723
    Common stock issued for services                                                           36,125
                                              ---------------      ---------------     --------------

    Net cash used for operating activities                  -                    -            (17,150)
                                              ---------------      ---------------     --------------

INVESTING ACTIVITIES:
Investment in Merilus
 Technologies, Inc. (Note 2)                                -                    -         (3,157,978)
                                              ---------------      ---------------     --------------

    Net cash used for investing activities                  -                    -         (3,157,978)
                                              ---------------      ---------------     --------------

FIANCING ACTIVITIES:
Proceeds from issuance of common stock                      -                    -          3,175,128
                                              ---------------      ---------------     --------------

    Net cash provided from financing
      activities                                            -                    -          3,175,128
                                              ---------------      ---------------     --------------

Net cash position at start of period                        -                    -                  -
                                              ---------------      ---------------     --------------

Net cash position at end of period            $             -      $             -     $            -
                                              ===============      ===============     ==============
</TABLE>


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


                                      F-6


<PAGE>



                                  Merilus, Inc.
                       ( a development stage enterprise )
                          Notes to Financial Statements

Note 1: Summary of Significant Accounting Policies

Development stage enterprise

Merilus, Inc. (the "Company") was incorporated under the laws of the State of
Nevada on May 7, 1985. The Company is considered a development stage enterprise
as defined in SFAS 7 because since its inception, it has not commenced
operations that have resulted in significant revenue and the Company's efforts
have been devoted primarily to activities related to raising capital and
attempting to acquire an operating entity.

The nature of the development stage activities in which the Company has been
engaged include the forward split of its outstanding shares of common stock on a
basis of 200 for 1 in 1999 and the filing of a Form 10-SB with the United States
Securities and Exchange Commission (SEC). This action was undertaken in order to
become a publicly traded "shell" corporation, seeking to acquire an existing
business. During the year 2000, the Company again forward split its common stock
on a basis of 10 for 1 and amended its articles of incorporation to authorize
the issuance of a preferred class of stock. The financial statements of the
Company retroactively reflect the effects of both of these forward splits.

During the year 2000 the Company filed a definitive information statement
pursuant to Section 14c of the Securities Act of 1934, to disclose that it had
entered into a reorganization agreement ("Agreement") with the intent to acquire
all of the issued and outstanding shares of Merilus Technologies, Inc. ("MTI").
MTI, a British Columbia corporation, was also a development stage enterprise.
During 2001 the Company attempted to complete the terms of the Agreement;
however, MTI filed for bankruptcy in 2003 and the acquisition of MTI was never
consummated as contemplated. The Company continues to operate as a development
stage enterprise seeking to raise capital and attempting to acquire an operating
entity. (See Note 2)

Use of estimates

These financial statements are prepared in conformity with accounting principles
generally accepted in the United States of America and require management make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities. The use of
estimates and assumptions may also affect the reported amounts of revenues and
expenses. Actual results could differ from those estimates or assumptions.

Net loss per share of common stock

The loss per share of common stock is computed by dividing the net loss during
the period presented by the weighted average number of shares outstanding during
that same period. For the period from the date of inception through December 31,
2004, the weighted number of shares is represented by cumulating the number of
shares outstanding at the end of each year since the Company's inception and
dividing that number by the number of years (20) since the Company's inception.

Income taxes

The Company has not had any income in prior periods and therefore, no income
taxes have been paid. Management has determined that future taxable income may
not be allowed to offset prior losses and therefore has not established a
deferred tax asset.

Revenue recognition

The Company has not had any realizable sources of revenue and consequently, has
not established a policy for the recognition of revenue.

                                      F-7
<PAGE>




New accounting pronouncements

In May 2004, the Emerging Issues Task Force of the FASB came to a consensus
regarding EITF 02-14 "Whether an Investor Should Apply the Equity Method of
Accounting to Investments Other Than Common Stock". The consensus of the task
force is that the equity method of accounting is to be used for investments in
common stock or in-substance common stock, effective for reporting periods
beginning after September 15, 2004. The Company currently has no equity
investments, and therefore no impact will be made on the financial statements of
the Company.

In November 2004, the FASB issued Statement No. 151, "Inventory Costs". This
Statement requires that items such as idle facility expense, excessive spoilage,
double freight, and rehandling costs be recognized as current period charges and
that allocation of fixed production overheads to the costs of conversion be
based on the normal capacity of the production facilities. The statement is
effective for fiscal periods beginning after June 15, 2005. The Company believes
that Statement No. 151 will have no significant impact on the financial
statements.

In December 2004, the FASB issued Statement No. 153, "Exchange of Non-Monetary
Assets". This Statement confirms that exchanges of non-monetary assets are to be
measured based on the fair value of the assets exchanged, except for exchanges
of non-monetary assets that do not have commercial substance. Those transactions
are to be measured at entity specific values. The Company has recorded
transactions in its common stock in accordance with this statement.

In December 2004, the FASB issued SFAS No. 123 (revised 2004), "Share-Based
Payment," which amends SFAS No. 123, "Accounting for Stock-Based Compensation".
This Statement, as revised, requires public entities to measure the cost of
employee services received in exchange for an award of equity instruments based
on the grant-date fair value of the award. The cost will be recognized over the
period during which an employee is required to provide service in exchange for
the award. No compensation cost is recognized for equity instruments for which
employees do not render the requisite service. The effective date for the
Company is the first reporting period beginning after December 15, 2005.
Management believes that the application of SFAS No. 123 (revised 2004) may have
an adverse effect on future results of operations, if the Company should choose
to compensate any future employees with equity instruments of the Company.

In May 2005, the FASB issued SFAS No. 154 "Accounting Changes and Error
Corrections - a replacement of APB Opinion No. 20 and FASB Statement No. 3".This
Statement replaces APB Opinion No. 20, Accounting Changes, and FASB Statement
No. 3, Reporting Accounting Changes in Interim Financial Statements, and changes
the requirements for the accounting for and reporting of a change in accounting
principle. This Statement applies to all voluntary changes in accounting
principle. It also applies to changes required by an accounting pronouncement in
the unusual instance that the pronouncement does not include specific transition
provisions. When a pronouncement includes specific transition provisions, those
provisions should be followed. The effective date for the Company is for fiscal
years beginning after December 15, 2005. The Company believes that Statement No.
154 will have no significant impact on the financial statements.

Note 2: Reorganization Agreement

During the year 2000 and in contemplation of entering into the Agreement for the
purpose of acquiring all of the issued and outstanding shares of MTI, the
Company issued warrants for the purchase of 2,000,000 shares of its common stock
at an exercise price of $1.00 per share. Upon entering into the Agreement the
warrants were exercised and the Company received $2,000,000, which was given to
MTI in the form of notes receivable. Pursuant to the Agreement a trust was
established into which the Company issued 1 share of preferred stock that
represented 3,767,500 "exchangeable shares" of the Company's common stock. Upon
surrender by MTI shareholders of their MTI stock, the Company would issue its
common stock to the MTI shareholder. By end of the year 2001, the Company had
issued 828,300 shares of its common stock, which represented approximately 22%
of the exchangeable shares. Subsequent to this

                                      F-8
<PAGE>


issuance, no further shares of the Company's common stock were issued to MTI
shareholders pursuant to the Agreement and the Company cancelled the preferred
share that had been issued. The 828,300 shares that were issued were valued on
the Company's financial statements at par value.

During the year 2001, the Company conducted its operations as though it had
acquired MTI even though its control of MTI was only through the Agreement and
the officers and directors that were elected pursuant thereto. During this year
the Company issued shares of its common stock for the benefit of MTI in the
following amounts: 60,000 shares for services rendered valued at the approximate
fair market value at the time of issuance of $36,125 (per share price ranging
between $0.25 and $1.00); and 1,532,504 shares for cash valued at the cash
consideration received (per share price ranging between $0.25 and $1.00).

During 2003 MTI filed for bankruptcy in British Columbia, Canada, listing the
Company as an unsecured creditor in the amount of $3,550,294. The Company has
not collected any amounts from the bankruptcy proceedings and does not
anticipate the collection of any amounts.

Note 3: Net Loss from Operations

During 2003, the Company incurred a loss of $125 as a result of filing fees
required to be paid to the state of Nevada. During 2004, the Company also
incurred a loss of $125 as a result of filing fees required to be paid to the
state of Nevada and $2,473 as reinstatement fees required to be paid to the
Company's stock transfer agent. During 2005, a shareholder of the Company
satisfied these obligations without receiving any consideration from the Company
and the $2,723 was recorded as "paid in capital".

Note 4: Contingent Liabilities

To the extent that the Company was a party to any financial transactions that
were not discharged through MTI's bankruptcy proceedings, including the
obligations associated with the issuance of the one share of preferred stock, or
that may not have been listed as part of MTI's bankruptcy, the Company may have
contingent liabilities. To the best of management's knowledge and belief the
financial statements accurately reflect the financial position of the Company as
of the dates presented and no contingent liabilities exist.

                                      F-9