UNITED STATES
                       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 ACT OF 1934

For the fiscal year ended December 31, 2005 or
                          -----------------

[]   TRANSITION REPORT UNDER 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.
                 (Name of small business issuer in its charter)

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

P. O. Box 95625, South Jordan, Utah 84095 (Address of principal executive
offices) (Zip Code)

Issuer's telephone number (801) 253-6604

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

Title of each class                 Name of each exchange on which registered
None                                Not Applicable

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

         Common Stock, par value $0.001 per share

         Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities 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 [ ]

         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B 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. $ 0.00
                                                                  ------

         State the aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the price at which the
common equity was sold, or the average bid and asked price of such common
equity, as of a specific date within the past 60 days: The registrant's common
stock has had limited trading volume. On January 13, 2006 the average bid and
asked price of the common stock was $0.02, resulting in an aggregate market
value of $110,880 for non-affiliated stock.

         State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: As of February 2, 2006, the
registrant had 11,920,804 shares of common stock issued and outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

     If the following documents are incorporated by reference,  briefly describe
them and identify 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 information statement, and (3) any prospectus filed pursuant to
Rule 424(b) or (c) of the Securities Act of 1933 ("Securities  Act"). The listed
documents should be clearly described for identification purposes: None

<PAGE>



                                     PART I

Item 1. Description of Business

Merilus, Inc. ("Company") was incorporated in Nevada in May 1985 and its initial
business endeavors were not successful. 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 with
the intent to acquire all of the issued and outstanding shares of Merilus
Technologies, Inc. ("MTI"), a British Columbia, Canada corporation. The Company
had issued warrants for the purchase of 2,000,000 shares of its common stock at
an exercise price of $1.00 per share and upon entering into the reorganization
agreement, the warrants were exercised and the Company received $2,000,000,
which was given to MTI in exchange for notes receivable. Terms of the
reorganization agreement included the establishment of a trust 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. Prior to the completion of the terms of the reorganization agreement,
MTI filed for bankruptcy protection and was liquidated under the laws of Canada.
The acquisition of MTI by the Company was never consummated as contemplated.

Subsequently, the Company has had no revenue producing operations and is
considered a development stage enterprise. The Company is currently seeking an
acquisition or merger with an operating entity and has received loans from a
shareholder, issued shares of its common stock, and may raise capital through
the issuance of its common stock to further these efforts. The Company does not
propose to restrict its search for a business opportunity to any particular
industry or geographical area and may, therefore, seek such business opportunity
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 and the Company has only limited resources that it may use to find good
business 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 activities of the Company are subject to several significant risks that
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. The Company will select a potential business opportunity
based on management's business judgment and 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. See Item 6(a) Plan of Operations in this report.


                                        2
<PAGE>


Item 2. Description of Property

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

Item 3. Legal Proceedings

None.

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

No matters were submitted to a vote of shareholders of the Company during the
fourth quarter of the fiscal year ended December 31, 2005.

                                     PART II

Item 5. Market for Common Equity and Related Stockholder Matters

Market information - The principal market for the Company's common stock is the
Pink Sheets. The following high and low bid prices for the Company's Common
Stock is based on over-the-counter quotations that reflect inter-dealer prices,
without retail mark-up, mark-down or commissions, and may not necessarily
represent actual transactions. Furthermore, the Company's common stock has
traded sporadically and in small 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, 2005             $0.006           $0.003
September, 2005            $0.003           $0.003
June, 2005                 $0.003           $0.001
March, 2005                $0.001           $0.001

December, 2004             $0.001           $0.001
September, 2004            $0.001           $0.001
June, 2004                 $0.001           $0.001
March, 2004                $0.001           $0.001

Holders - At January 17, 2005, the Company had approximately 40 shareholders of
record based on information obtained from the Company's transfer agent.

Dividends - 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.

Item 6. Management's Discussion and Analysis or Plan of Operations

Special Note Regarding Forward-Looking Statements

This annual report contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 with respect to
the Plan of Operations provided below, including information regarding the
Company's financial condition, results of operations, business strategies,
operating efficiencies or synergies, competitive positions, growth
opportunities, plans and objectives of management. The statements made as part
of the Plan of Operations that are not historical facts are hereby identified as
"forward-looking statements."


                                        3
<PAGE>


a) Plan of Operations

Overview:

The Company has not had revenues from operations in each of the last two fiscal
years and is considered a development stage enterprise. The Company's current
operations have consisted of taking such action, as management believes
necessary, to prepare to seek an acquisition or merger with an operating entity.
The Company has obtained loans from a shareholder and has issued shares of its
common stock to its president for services rendered. The Company may also issue
shares of its common stock to raise equity capital. A shareholder of the Company
has financed the Company's current operations, which have consisted primarily of
maintaining in good standing the Company's corporate status and in fulfilling
its filing requirements with the Securities and Exchange Commission, including
the audit of its financial statements. Beyond the financial arrangements herein,
the Company has not entered into a definitive agreement with this shareholder,
or anyone else, regarding the receipt of future funds to meet its capital
requirements. However, management anticipates that whatever reasonable financial
requirements may be necessary to further its plan of operations, this
shareholder will continue to provide such financial resources to the Company as
needed during the next twelve months.

Nevertheless, the Company's financial statements contained in this report have
been prepared assuming that the Company will continue as a going concern. As
discussed in the footnotes to the financial statements and elsewhere in this
report, the Company is in the development stage and has not established any
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.

A major shareholder of the Company has paid on behalf of the Company certain
costs and on December 14, 2005 the Company signed a promissory note payable to
the shareholder in the amount of $4,593.50. Subsequently, the Company
established a bank account and received a $4,000 cash advance and a commitment
of an additional $5,000 from the shareholder, for which the Company signed an
additional promissory note. The terms of these promissory notes require that
repayment be made in full with accrued interest at a rate of six percent per
annum the earlier of December 31, 2006 or within five days of the merger or
acquisition between the Company and another corporation or entity that has
operations.

In 2005, Denny W. Nestripke accepted the position of the Company's sole officer
and director. Mr. Nestripke has not received any financial remuneration for his
services and it is not anticipated that any financial remuneration will be paid
to Mr. Nestripke. However, during the 4th quarter of 2005, the Company accrued a
liability payable to Mr. Nestripke in the amount of $1,500 and an additional
amount of $750 was earned during January of 2006. During February of 2006 Mr.
Nestripke received 750,000 shares of the Company's common stock valued at
$0.003, the prevailing market price during the period that the $2,250 was
earned. The services that Mr. Nestripke provided were largely related to the
preparation of financial statements, the preparation and review of filings being
made with the United States Securities and Exchange Commission, other regulatory
filings (such as tax returns), and the performance of other duties associated
with the Company's plan of operations.


                                        4
<PAGE>


Risks associated with the plan of operations:

In its search for a business opportunity, management anticipates that the
Company will incur additional costs for legal and accounting fees to locate and
complete a merger or acquisition. Other than previously discussed, the Company
does not have any revenue producing activities whereby it can meet these
financial requirements and anticipates that its cash position by the end of the
first quarter of 2006 will be minimal. On December 31, 2005, the Company's
obligations exceeded its cash position by $10,151 and the Company may further
obligate itself as it pursues its plan of operations. There can be no assurance
that the Company will receive any benefits from the efforts of management to
locate business opportunities.

The Company does not propose to restrict its search for a business opportunity
to any particular industry or geographical area and may, therefore, attempt to
acquire 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. Consequently, if
and when a business opportunity is selected, such business opportunity may not
be in an industry that is following general business trends.

The selection of a business opportunity in which to participate is complex and
risky. Additionally, the Company has only limited resources and this fact may
make it more 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. At the present time, only Mr. Nestripke
serves in management and allowing only one individual to exercise his business
judgment in the selection of a business opportunity for the Company presents a
significant risk to the Company's shareholders. The Company may acquire or
participate in a business opportunity based on the decision of management that
potentially could act without the consent, vote, or approval of the Company's
shareholders.

Since its inception, the Company has not generated any revenue and it is
unlikely that any revenue will be generated until such time as the Company
locates a business opportunity to acquire or with which it can merge. However,
the Company is not restricting its search to those business opportunities that
have profitable operations. Even though a business opportunity is acquired that
has revenues or gross income, there is no assurance that profitable operations
or net income will result therefrom. Consequently, even though the Company may
be successful in acquiring a business opportunity, such acquisition does not
assume that a profitable business opportunity is being acquired or that
shareholders will benefit through an increase in the market price of the
Company's common stock.

The acquisition of a business opportunity, no matter what form it may take, will
almost assuredly result in substantial dilution for the Company's current
shareholders. Inasmuch as the Company only has its equity securities (its common
and preferred stock) as a source to provide consideration for the acquisition of
a business opportunity, the Company's issuance of a substantial portion of its
authorized but unissued common stock is the most likely method for the Company
to consummate an acquisition. The issuance of any shares of the Company's common
stock will dilute the ownership percentage that current shareholders have in the
Company.


                                        5
<PAGE>


The Company does not intend to employ anyone in the future, unless its present
business operations were to change. Mr. Nestripke does not have a contract to
remain with the Company over any certain time period and may resign his position
prior to the time that a business opportunity is located and/or business
reorganization takes place. The common stock issued to Mr. Nestripke is for
services rendered through the filing of this report.

At the present time, management does not believe it is necessary for the Company
to have an administrative office and utilizes the mailing post office box of the
Company's president for business correspondence. The Company intends to
reimburse management for any out of pocket costs other than those associated
with maintaining the post office box.

c) Off-balance sheet arrangements.

The Company does not have any off-balance sheet arrangements and it is not
anticipated that the Company will enter into any off-balance sheet arrangements.

Item 7. Financial Statements

The Company's financial statements are presented 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 principal independent accountants
with respect to accounting practices or procedures or financial disclosure. The
Company filed a Form 8-K report dated January 2, 2006 to announce the
appointment of Child, Van Wagoner & Bradshaw, PLLC as successor principal
independent accountants to Smith & Company, which changed its legal form of
operation. None of the items of Item 304(b) of Regulation SB are applicable to
the event.

Item 8A. Controls and Procedures

(a) Evaluation of disclosure controls and procedures. Management believes that
the 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
its evaluation of such disclosure controls and procedures within 90 days of this
filing.

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

Item 8B. Other Information

None


                                        6
<PAGE>

                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
                     With Section 16(a) of the Exchange Act

The following table sets forth the name, age, and position of each executive
officer and director and the term of office.

                                                                     Director or
Name                       Age      Position                     Officer Since
------------------         ---      ---------------------        -------------
Denny W. Nestripke         58       President, Secretary,
                                    Treasurer, Director             2005

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. During the years 2001 through 2004, Mr.
Nestripke attended the University of Utah, completing a Master of Science
degree. He also received a Bachelor of Science degree in accounting from the
University of Utah in 1977.

To the knowledge of management, during the past five years, no present or former
director, or executive officer of the Company:

(1) Has 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 or she was a general partner at or within two years before the time of such
filing, or any corporation or business association of which he or she 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;

         (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.


                                        7
<PAGE>


(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.

Code of Ethics

The Company has established a Code of Ethics that is applicable during its
development stage and during the period of time that the Company is seeking to
acquire a business opportunity. The Code of Ethics is given in Exhibit 14.

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, 2005, the
end of the Company's last completed fiscal year):


<TABLE>
<CAPTION>
Name and                   Annual Compensation                Long Term Compensation
Principal Position         Year    Salary   Bonus    Other    Stock    Options/SARs     LTIP     Other
------------------         ----    ------   -----    -----    -----    ------------     ----     -----
<S>                        <C>     <C>      <C>      <C>      <C>      <C>              <C>      <C>
Denny W. Nestripke
President, CEO             2005     $1,500  $-0-     $-0-     -0-      -0-              -0-      -0-
                           2004     $-0-    $-0-     $-0-     -0-      -0-              -0-      -0-
                           2003     $-0-    $-0-     $-0-     -0-      -0-              -0-      -0-
</TABLE>

Cash Compensation - No cash compensation was 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

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 change in
control of the Company.


                                        8
<PAGE>


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

The following table sets forth as of February 1, 2006, 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 11,920,804 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.

<TABLE>
<CAPTION>
                                                     Amount and Nature of
Title of Class    Name of Beneficial Owner           Beneficial Ownership (1)           Percent of Class
--------------    ------------------------           ------------------------           ----------------
<S>               <C>                                 <C>                                 <C>
Common            Micvic, LLC                         6,735,600 shares                    56.5%
                  4764 South 900 East
                  Salt Lake City, UT
Common            Denny W. Nestripke                    750,000 shares                     6.3%
                  10776 Wyngate Park Drive
                  South Jordan, UT

                  Name of Officer, Director          Amount and Nature of
Title of Class    and Nominee                        Beneficial Ownership (1)           Percent of Class
--------------    -----------                        ------------------------           ----------------

Common            Denny W. Nestripke                    750,000 shares                     6.3%

Common            All Officers and Directors
                  as a Group                            750,000 shares                     6.3%
</TABLE>

(1) All shares are owned directly, beneficially and of record; and each
shareholder has sole voting, investment, and dispositive power, unless otherwise
noted.

ITEM 12. Certain Relationships and Related Transactions

Transactions with management and others

A shareholder of the Company paid, on behalf of the Company, certain costs and
on December 14, 2005 the Company signed a promissory note payable to the
shareholder in the amount of $4,594. Subsequently, the Company has received
additional cash advances from the shareholder. As of the date of this report,
the Company has received a combined total of $8,594 from the shareholder and a
commitment to receive an additional $5,000, and has signed promissory notes in
consideration thereof. The terms of these promissory notes require that
repayment be made in full with accrued interest at a rate of six percent per
annum the earlier of December 31, 2006 or within five days of the merger or
acquisition between the Company and another corporation or entity that has
operations.

The Company's sole officer and director since October of 2005, Denny W.
Nestripke, received 750,000 shares of the Company's common stock valued at
$0.003 (the prevailing market price during the period of his service), for
services rendered through the filing of this report. The services provided by
Mr. Nestripke were largely related to the preparation of financial statements,
the preparation and review of filings being made with the United States
Securities and Exchange Commission, other regulatory filings (such as tax
returns), and the performance of other duties associated with the Company's plan
of operations (see Item 6 of this report).


                                        9
<PAGE>

ITEM 13. Exhibits

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' (Deficit)                         F-4
Statements of Cash Flows                                      F-5
Notes to Financial Statements                                 F-6-8

Financial Statement Schedules - There are no financial statement schedules
included as part of this report

Exhibits - The following exhibits are included as part of this report:

Reference    Exhibit
Number       Number    Title of Document                            Location

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*

4.01         4         Specimen Stock Certificate                Incorporated
                                                                 by reference*

10.01        10        Promissory Note dated December 14, 2005   This Filing

10.02        10        Promissory Note dated January 31, 2006    This Filing

14.01        14        Code of Ethics                            This Filing

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.

                                       10
<PAGE>


Item 14. Principal Accountant Fees and Services

(1) Audit Fees - The aggregate fees billed in each of the last two fiscal years
for professional services rendered by the Company's principal accountant for the
audit of the annual financial statements and review of financial statements
included in the Form 10-QSB or services that are normally provided by the
accountant in connection with statutory and regulatory filings or engagements
for those fiscal years are: $1,600 for 2005 and $1,400 for 2004

(2) Audit-Related Fees - The aggregate fees billed in each of the last two
fiscal years for assurance and related services by the Company's principal
accountant that are reasonably related to the performance of the audit or review
of the financial statements and are not reported in (1) Audit Fees: $0 for 2005
and $0 for 2004

(3) Tax Fees - The aggregate fees billed in each of the last two fiscal years
for professional services rendered by the Company's principal accountant for tax
compliance, tax advice, and tax planning: $0 for 2005 and $0 for 2004

(4) All Other Fees - The aggregate fees billed in each of the last two fiscal
years for products and services provided by the Company's principal accountant,
other than the services reported in (1) Audit Fees; (2) Audit-Related Fees; and
(3) Tax Fees: $0 for 2005 and $0 for 2004

(5) The Company does not have an audit committee

(6) Not Applicable

                                   SIGNATURES

         In accordance with section 13 or 15(d) of the Exchange Act, the
registrant caused this report to by signed on its behalf by the undersigned,
thereunto duly authorized.

                     Merilus, Inc.

                     By: /s/  Denny W. Nestripke
                        -------------------------------------------------------
                     Denny W. Nestripke, Principal Executive, Financial Officer
                                         and Director

                     Date: February 9, 2006
                           ------------------

         In accordance with the Exchange Act, this report has been signed below
by the following person on behalf of the registrant and in the capacities and on
the dates indicated.

                      By: /s/  Denny W. Nestripke
                          ------------------------------------------------------
                      Denny W. Nestripke, Principal Executive, Financial Officer
                                          and Director

                      Date: February 9, 2006
                            -----------------

                                       11

<PAGE>

             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 enterprise) as of December 31, 2005, and the related
statements of operations, stockholders' deficit, and cash flows for the years
ended December 31, 2005 and 2004. 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, 2005, and the results of its operations, stockholders' deficit, and its cash
flows for the years ended December 31, 2005 and 2004, 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/ Child, Van Wagoner & Bradshaw, PLLC

                                         Certified Public Accountants
Salt Lake City, Utah
January 28, 2006 except for Note 6 which is dated February 9, 2006


          Kaysville Office                           Salt Lake Office
1284 West Flint Meadow Drive, Suite "D"      4764 South 900 East, Suite 1
Kaysville, Utah 84037-9590                   Salt Lake City, Utah 84117-4977
(801) 927-1337 o  Fax: (801)927-1344         (801)281-4700 o  Fax: (801)281-4701
                                 www.cpaone.net
                                    Members:
               Utah Association of Certified Public Accountants o
               American Institute of Certified Public Accountants
                    Public Company Accounting Oversight Board

                                       F-1

<PAGE>


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

<TABLE>
<CAPTION>
                                                                                         December 31,
                                                                                             2005
                                                                                    ------------------------
ASSETS:
Current Assets:
<S>                                                                                 <C>
        Cash in Bank                                                                $                  3,998
                                                                                    ------------------------

             Total Assets                                                           $                  3,998
                                                                                    ========================


LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
        Accounts payable                                                            $                  4,043
        Payable to officer and shareholder                                                            10,106

                                                                                    ------------------------
             Total Liabilities                                                                        14,149
                                                                                    ------------------------

Stockholders' Equity (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
          shares issued and outstanding                                                               11,171
        Additional paid-in capital                                                                 3,200,457
        Deficit accumulated during the development stage                                          (3,221,779)

                                                                                    ------------------------
             Total Stockholders' Equity (Deficit)                                                    (10,151)
                                                                                    ------------------------

             Total Liabilities and Stockholders' Equity (Deficit)                   $                  3,998
                                                                                    ========================

</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,
                                          2005                       2004                        2005
                                 ------------------------   ------------------------    -----------------------
<S>                              <C>                        <C>                         <C>
Revenue                          $                      -   $                      -    $                     -
                                 ------------------------   ------------------------    -----------------------

Expenses                                           (7,803)                    (2,598)                (3,221,779)
                                 ------------------------   ------------------------    -----------------------

Net Loss                         $                 (7,803)  $                 (2,598)   $            (3,221,779)
                                 ========================   ========================    =======================


Net loss per share of common
stock                            $                  (0.00)  $                  (0.00)   $                 (0.52)
                                 ========================   ========================    =======================


Weighted average number of
common shares outstanding                      11,170,804                 11,170,804                  6,231,144
                                 ========================   ========================    =======================
</TABLE>






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

                                       F-3

<PAGE>
                                  Merilus, Inc.
                       ( a development stage enterprise )
                                  Statements of
                             Stockholders' (Deficit)
                           From the date of inception
                     (May 7, 1985) through December 31, 2005

<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 31, 1999                                                                                      (45,500)
                                           ----------    ------------    ----------    -----------    -----------     ------------
BALANCE, December 31, 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 31, 2000                                                                                                         (7,775)
                                           ----------    ------------    ----------    -----------    -----------     ------------
BALANCE, December 31, 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 31, 2001 (Note 2)                                                                                            (3,157,978)
                                           ----------    ------------    ----------    -----------    -----------     ------------
BALANCE, December 31, 2001                          0      11,170,804             -         11,171      3,200,082       (3,211,253)
                                           ----------    ------------    ----------    -----------    -----------     ------------
Net Operating Loss for the year
  ended December 31, 2002                                                                                                        -
                                           ----------    ------------    ----------    -----------    -----------     ------------
BALANCE, December 31, 2002                         0       11,170,804             -         11,171      3,200,082       (3,211,253)
                                           ----------    ------------    ----------    -----------    -----------     ------------
Net Operating Loss for the year
  ended December 31, 2003                                                                                                     (125)
                                           ----------    ------------    ----------    -----------    -----------     ------------
BALANCE, December 31, 2003                         0       11,170,804             -         11,171      3,200,082       (3,211,378)
                                           ----------    ------------    ----------    -----------    -----------     ------------
Net Operating Loss for the year
  ended December 31, 2004                                                                                                   (2,598)
                                           ----------    ------------    ----------    -----------    -----------     ------------
BALANCE, December 31, 2004                         0       11,170,804             -         11,171      3,200,082       (3,213,976)
                                           ----------    ------------    ----------    -----------    -----------     ------------
Payment of accounts payable
  by shareholder                                                                                              375
Net Operating Loss for the year
  ended December 31, 2005                                                                                                   (7,803)
                                           ----------    ------------    ----------    -----------    -----------     ------------

BALANCE, December 31, 2005                         0      11,170,804     $        -    $    11,171    $ 3,200,457     $ (3,221,779)
                                           ==========    ============    ==========    ===========    ===========     ============
</TABLE>
              The accompanying notes are an integral part of these
                              financial statements.

                                       F-4

<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,
                                               2005                     2004                     2005
                                       ---------------------    ---------------------     --------------------
OPERATING ACTIVITIES:
<S>                                    <C>                      <C>                       <C>
Net loss from operations               $              (7,803)   $              (2,598)    $            (63,801)
Adjustment to reconcile net loss to
net cash position
     Accounts payable                                  1,320                    2,598                    4,043
     Payable to officer                                1,500                        -                    1,500
     Common stock issued for
     services                                              -                        -                   36,125
                                       ---------------------    ---------------------     --------------------
             Net cash used for
             operating activities                     (4,983)                       -                  (22,133)
                                       ---------------------    ---------------------     --------------------

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
Donation of capital                                      375                        -                      375
Cash advances from shareholder                         4,000                        -                    4,000
Notes and accrued interest payable
to shareholder                                         4,606                        -                    4,606
                                       ---------------------    ---------------------     --------------------
             Net cash provided from
             financing activities                      8,981                        -                3,184,109
                                       ---------------------    ---------------------     --------------------
Net cash position at start of period                       -                        -                        -
                                       ---------------------    ---------------------     --------------------

Net cash position at end of period     $               3,998    $                   -     $              3,998
                                       =====================    =====================     ====================
</TABLE>


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

                                       F-5
<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. Since its inception, the Company has not commenced
operations that have resulted in significant revenue and is therefore considered
a development stage enterprise as defined in SFAS 7. The Company's activities
have been devoted primarily to raising capital and attempting to acquire an
operating entity.

During 1999 the Company's development stage activities included the forward
split of its outstanding shares of common stock on a basis of 200 for 1 and the
filing of a Form 10-SB with the United States Securities and Exchange
Commission. 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 also 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, the acquisition of MTI was never consummated as contemplated and in
2003 MTI filed for bankruptcy. The Company continues to operate as a development
stage enterprise seeking to raising capital and attempting to acquire an
operating entity. (See Note 2)

Going concern

These financial statements have been prepared in contemplation of the Company
continuing as a going concern. However, the Company has not had revenues from
operations in each of the last two fiscal years, is considered a development
stage enterprise as defined by SFAS 7 and is seeking an acquisition or merger
with an operating entity. The Company's ability to meet its ongoing financial
requirements has been dependent on loans from a shareholder and management's
willingness to serve the Company without monetary remuneration. The Company
assumes that this arrangement will continue during the next 12 months; however,
no assurance thereof can be given. A change in these circumstances would have a
material adverse effect on the Company's plan of operations. (See Note 5)

Use of estimates

These financial statements are prepared in conformity with accounting principles
generally accepted in the United States of America and require that 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,
2005, 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 (21) since the Company's inception.

                                      F-6
<PAGE>


Income taxes

The Company has not had any income in prior periods and therefore, no income
taxes have been paid. Management is of the opinion 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.

New accounting pronouncements

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 SFAS, 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. This SFAS will be effective for
the Company at 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 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 SFAS 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 SFAS applies to all voluntary changes in accounting principle
and 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. This SFAS will be effective for the Company for
fiscal years beginning after December 15, 2005. The Company believes that this
SFAS will have no significant impact on its 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 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 ($0.001).

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).



                                      F-7

<PAGE>


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 2004, the Company incurred a loss of $2,598, comprised of $125 in filing
fees and $2,473 in fees to the Company's stock transfer agent. During 2005, the
Company incurred a loss of $7,803, comprised of $227 in filing fees and other
costs, $745 in fees to the Company's stock transfer agent, $5,318 for legal and
audit fees, $1,500 in management fees, and $13 in accrued interest on a note
payable to a stockholder.

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.

Note 5: Related Party Transactions

During the fourth quarter of 2005, a shareholder of the Company paid $4,593 of
the Company's obligations and advanced $4,000 in cash to the Company. The
Company has signed promissory notes due on or before December 31, 2006, in the
amount $8,593 including a commitment to receive an additional $5,000. The terms
of the promissory notes require that repayment be made in full with accrued
interest at the rate of 6% per annum, the earlier of December 31, 2006 or within
five days of the merger or acquisition between the Company and another
corporation or entity that has operations. At December 31, 2005 the Company had
accrued interest in the amount of $13 on these notes. At December 31, 2005 the
Company has accrued a $1,500 liability to its President for management fees.

Note 6: Subsequent Events

During February 2006 the Company issued 750,000 shares of common stock to its
President in consideration of services rendered valued at $2,250, which amount
approximated the market value at year-end. Of this amount, $1,500 was accrued at
December 31, 2005 as a payable to officer.


                                      F-8