##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  Form 10-K
 (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    May 31, 2006ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          
    toCommission file number:
    000-50973   CELEBRATE EXPRESS,
    INC.
 (Exact name of registrant as
    specified in its charter)
  Washington

91-1644428(State or other jurisdiction
    of

(I.R.S. Employerincorporation or
    organization)

Identification No.)   11220 -
    120th Avenue
    NE, Kirkland, Washington 98033
 (Address of principal executive
    offices)
  Registrants telephone number, including area code:
 (425) 250-1061
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, $0.001 par value

The Nasdaq Stock Market, Inc.   o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
   o o þ
  Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE




---



##### 



CELEBRATE
    EXPRESS, INC.
  ANNUAL
    REPORT ON
    FORM 10-K
  TABLE OF CONTENTS
  PagePART
    IItem 1

Business


3Item 1A

Risk
    Factors


11Item 1B

Unresolved Staff
    Comments


23Item 2

Properties


23Item 3

Legal
    Proceedings


23Item 4

Submission of
    Matters to a Vote of Security Holders


23PART
    IIItem 5

Market for
    Registrants Common Equity and Related Stockholder
    Matters


23Item 6

Selected Financial
    Data


25Item 7

Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


26Item 7A

Quantitative and
    Qualitative Disclosures About Market Risk


34Item 8

Financial
    Statements and Supplementary Data


35Item 9

Changes In and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


53Item 9A

Controls and
    Procedures


53Item 9B

Other
    Information


53PART
    IIIItem 10

Directors and
    Executive Officers of the Registrant


53Item 11

Executive
    Compensation


53Item 12

Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters


54Item 13

Certain
    Relationships and Related Transactions


54Item 14

Principal
    Accountant Fees and Services


54PART
    IVItem 15

Exhibits and
    Financial Statement Schedules


54Signatures


56EXHIBIT 10.9EXHIBIT 10.14EXHIBIT 23.1EXHIBIT 23.2EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2   2




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##### Table of Contents



PART I  Item 1.
    Business.  This report contains forward-looking statements that involve
    many risks and uncertainties. These statements relate to future
    events and our future performance that are based on current
    expectations, estimates, forecasts and projections about the
    industry in which we operate and the beliefs and assumptions of
    our management. In some cases, you can identify forward-looking
    statements by terms such as would,
    could, may, will,
    should, expect, intend,
    plan, anticipate, believe,
    estimate, predict,
    potential, targets, seek, or
    continue, the negative of these terms or other
    variations of such terms. In addition, any statements that refer
    to projections of our future financial performance, our
    anticipated growth and trends in our business and other
    characterizations of future events or circumstances, are
    forward-looking statements. These statements are only
    predictions based upon assumptions made that are believed to be
    reasonable at the time, and are subject to risk and
    uncertainties. Therefore, actual events or results may differ
    materially and adversely from those expressed in any
    forward-looking statement. In evaluating these statements, you
    should specifically consider the risks described under
    Item 1A Risk Factors and elsewhere in this
    report. These factors may cause our actual results to differ
    materially from any forward-looking statements. Except as
    required by law, we undertake no obligation to publicly update
    or revise any forward-looking statements, whether as a result of
    new information, future events or otherwise.
  Overview
    dress-up
      Our
    Approach
  direct-to-consumer
 3




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Broad
    Merchandising Assortment
  third-party
  Comprehensive
    Product Information
    Detailed Online Information.
  Knowledgeable Online and Phone Sales Staff.
    Convenient
    Shopping Environment
   4




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Product
    Availability and Customization
      Rapid
    Time to Market
      Our
    Growth Strategy
    Build
    Brand Awareness and Expand Our Customer Base
    Continue
    to Add New Brands
    Increase
    Sales Per Customer
   5




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Expand
    Our Product Offerings
    Our
    Brands and Product Offerings
    Birthday
    Express
      Costume
    Express
  dress-up
  Storybook
    Heirlooms
    Product
    Development and Sourcing
     6




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Marketing
    and Customer Acquisition
      Online Marketing and Promotion.
  
    Email Marketing
    Search Marketing
    Affiliates Program  Offline Marketing and Promotion.
  Customer
    Support
    Online Customer Support. easy-to-navigate
  Customer Support Center.
 7




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Fulfillment
    and Shipping
    pick-to-light pick-to-light
    Technology
    Systems
       8




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Competition
        Intellectual
    Property
       9




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Government
    Regulation
         10




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Employees
    Item 1A.
    Risk
    Factors.  Factors
    That May Affect Future Operating Results
  You should carefully consider the risks described below
    together with all of the other information included in this
    report. If any of the following risks actually occurs, our
    business, financial condition or results of operations could
    suffer. In that case, the trading price of our common stock
    could decline and you may lose all or part of your
    investment.
  We
    achieved annual net income for the first time during our fiscal
    year ended May 31, 2004 and we cannot assure you that we
    will continue to operate profitably.
    
    expand into new product categories;
    continue with our marketing efforts to build our brand names;
    expand our customer base;
    upgrade our operational and financial systems, procedures and
    controls;
    invest in and upgrade our distribution center; and
    retain existing personnel and hire additional personnel,
    including senior leadership.  and/or
  If we
    do not successfully expand sales into other product categories
    beyond party goods, we may not be able to achieve our desired
    revenue growth.
   11




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
    improve the efficiency of our distribution center;
    successfully design, produce and market new products;
    identify and introduce new product categories;
    maintain our gross margins with respect to new product
    categories;
    provide a satisfactory mix of merchandise that is responsive to
    the needs of our customers;
    broaden consumer awareness of our existing and future brands;
    manage our selling, marketing and fulfillment costs; and
    manage our dual-channel direct marketing model.    Our
    evaluation of strategic alternatives may negatively impact
    business operations and our assets.
    
    exploration of strategic alternatives may distract management
    and disrupt operations, which could have a material adverse
    effect on our operating results;
    we may not be able to successfully achieve the benefits of any
    strategic alternative undertaken by us;
    the process of exploring strategic alternatives may be time
    consuming and expensive and may result in the loss of business
    opportunities; and
    perceived uncertainties as to our future direction may result in
    increased difficulties in recruiting and retaining employees,
    particularly senior management.    The
    loss of our senior management or other key personnel could harm
    our current and future operations and prospects.
   12




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Failure
    to successfully manage our fulfillment and distribution
    operations could cause us to incur increased costs or lose
    customers.
      We
    must compete with other party goods retailers and mass
    merchandisers on the selection, quality and price of our
    products, and failure to do so successfully could negatively
    affect our stock price.
    Childrens
    tastes change and are often difficult to predict, and any
    failure by us to correctly identify and react appropriately to
    these changing preferences could hurt our sales and gross
    margins and render a portion of our inventory
    obsolete.
   13




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If we
    fail to promote and maintain our brands effectively, we may not
    be able to compete successfully with better-known
    competitors.
    If we
    do not successfully maintain and expand our customer and
    prospect databases our sales volume could suffer and our
    marketing costs could increase.
    Our
    operating results could suffer if we are unable to successfully
    manage the costs of our catalog operations or if our catalogs
    fail to produce sales at satisfactory levels.
    
    effective management of costs associated with the production and
    distribution of our catalogs;
    achievement of adequate response rates to our mailings;
    displaying a mix of merchandise in our catalogs that is
    attractive to our customers; and
    timely delivery of catalog mailings to our customers.   14




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Increased
    product returns, or a failure by us to accurately predict the
    level of product returns, could harm our business.
    We may
    not be able to compete successfully against current and future
    competitors.
      We
    depend on search engines to attract customers to our websites,
    and losing these customers would adversely affect our revenues
    and financial results.
    Because
    we do not have long-term contracts for third-party products, we
    may not have continued access to popular products.
   15




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third-party
  If we
    are unable to maintain or acquire licenses to intellectual
    property, we may have fewer proprietary products and our sales
    may decline.
    Because
    we do not have long-term contracts with our suppliers, we may
    not have continued access to necessary materials and our sales
    may suffer.
    Our
    reliance on smaller or independent vendors and suppliers and
    manufacturers located abroad exposes us to various risks
    including disruption in product supply.
    
    work stoppages;
    transportation delays and interruptions;
    political instability;
    foreign currency fluctuations;
    changing economic conditions;
    an increased likelihood of counterfeit, knock-off or gray market
    goods;
    product liability claims;
    expropriation, nationalization, imposition of tariffs, import
    and export controls and other non-tariff barriers, including
    quotas and restrictions on the transfer of funds;
    environmental regulation; and
    other changes in governmental policies. 16




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We may
    face product liability claims that are costly and create adverse
    publicity.
    Failure
    of third parties to deliver our products efficiently and in a
    timely manner could cause us to lose customers.
    Fluctuations
    in commodity prices may increase our operating costs and make
    our expenses difficult to predict.
    We
    will consider acquisitions as part of our growth strategy, and
    failure to adequately evaluate or integrate any acquisitions
    could harm our business.
    
    problems assimilating the purchased products or business
    operations;
    problems maintaining uniform standards, procedures, controls and
    policies;
    unanticipated costs associated with the acquisition, including
    accounting charges and transaction expenses;
    diversion of managements attention from our existing
    brands;
    adverse effects on existing business relationships with
    suppliers and customers; 17




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
    risks associated with entering product categories in which we
    have no or limited prior experience; and
    potential loss of key employees of acquired organizations.  day-to-day
  The
    favorable impact of the income tax benefit in 2004 affects the
    comparability of our results, and utilization of our deferred
    tax assets is dependent on future taxable income.
    Our
    business involves the extensive use of intellectual property,
    and related claims against us could be costly or force us to
    abandon popular products.
    If the
    protection of our trademarks and proprietary rights is
    inadequate, our brands and reputation could be impaired and we
    could lose customers.
   18




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If we
    cannot maintain and protect our existing domain names or acquire
    suitable new domain names as needed, we may not be able to
    successfully build our brands.
    Capacity
    constraints, systems failures or security breaches could prevent
    access to our websites, which could lower our sales and harm our
    reputation.
    denial-of-service
  If we
    are unable to provide satisfactory telephone-based customer
    support, we could lose customers.
   19




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Temporary
    or permanent disruption at our fulfillment facility could
    prevent timely shipment of customer orders and hurt our
    sales.
    
    a failure to maintain or renew our existing lease agreement;
    a power, telecommunications or other systems failure;
    an employee strike or other labor stoppage;
    terrorist attacks, acts of war or break-ins;
    a disruption in the transportation infrastructure including air
    traffic and roads; or
    fire, flood, hurricane or other disaster.  back-up
  We may
    incur significant costs or experience product availability
    delays in complying with regulations applicable to the sale of
    our manufactured products.
    If use
    of the Internet, particularly with respect to online commerce,
    does not continue to increase as rapidly as we anticipate, our
    sales may not grow to desired levels.
      
    actual or perceived lack of security of information or privacy
    protection; 20




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
    possible disruptions, computer viruses or other damage to the
    Internet servers or to users computers; and
    excessive governmental regulation.    Risks
    related to the Internet, including security and reliability
    issues, are largely outside our control and may hurt our
    reputation or sales.
    Government
    regulation of database use in direct marketing and Internet and
    online commerce is evolving. Unfavorable changes in these
    regulations could substantially harm our business and results of
    operations.
    Our
    failure to protect confidential information of our customers and
    our network against security breaches could damage our
    reputation and brands and subject us to legal
    liability.
    Our
    failure to address risks associated with credit card fraud could
    damage our reputation and brands.
   21




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Our
    sales may decrease if we are required to collect taxes on
    purchases.
      Failure
    to rapidly respond to technological change could result in our
    services or systems becoming obsolete.
    Future
    sales of our common stock may depress our stock
    price.
  Rule 10b5-1
 22




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We
    will need to implement additional finance and accounting
    systems, procedures and controls as we grow our business and
    organization and to satisfy new reporting
    requirements.
    Item 1B.
    Unresolved
    Staff Comments.    Item 2.
    Properties.    Item 3.
    Legal
    Proceedings.    Item 4.
    Submission
    of Matters to a Vote of Security Holders.   PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities.  Market
    for Registrants Common Equity
    Form S-1
 23




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High


LowFiscal Year 2006:First Quarter

$
15.20


$
11.50Second Quarter

$
14.50


$
12.19Third Quarter

$
15.39


$
11.00Fourth Quarter

$
13.80


$
11.43Fiscal year 2005:Period from October 20, 2004
    through November 30, 2004

$
18.75


$
16.06Third Quarter

$
22.19


$
18.00Fourth Quarter

$
20.00


$
11.49     Securities
    Authorized for Issuance Under Equity Compensation
    Plans
  Form 10-K
  Use of
    Proceeds
  Form S-1 No. 333-117459)
   24




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Item 6.
    Selected
    Financial Data.  Form 10-K.
  Form 10-K. Form 10-K.
  Fiscal Year Ended May 31,2006


2005


2004


2003


2002(In thousands, except share and per share data)Statement of Operations
    Data:Net sales

$
87,016


$
69,138


$
51,939


$
37,811


$
29,914Cost of sales


44,244



33,987



26,574



19,483



14,235Gross margin


42,772



35,151



25,365



18,328



15,679Operating expensesFulfillment


11,617



8,039



6,627



5,371



5,957Selling and marketing


22,076



16,787



12,834



9,913



8,523General and administrative


8,476



6,482



4,636



4,112



3,852Asset impairment(1)


















1,388Severance and related costs(3)


1,179















Total operating expenses


43,348



31,308



24,097



19,396



19,720Income (loss) from operations


(576
)


3,843



1,268



(1,068
)


(4,041
)Other income (expense), net


1,231



131



(788
)


(521
)


(225
)Net income (loss) before income
    taxes


655



3,974



480



(1,589
)


(4,266
)Income tax benefit (expense)(2)


(250
)


(1,489
)


9,013







Net income (loss)


405



2,485



9,493



(1,589
)


(4,266
)Accretion to preferred stock
    redemption value






(102
)


(266
)


(265
)


(196
)Net income (loss) available for
    common shareholders

$
405


$
2,383


$
9,227


$
(1,854
)

$
(4,462
)Net income (loss) per share:Basic

$
0.05


$
0.46


$
6.39


$
(1.34
)

$
(3.23
)Diluted

$
0.05


$
0.35


$
1.85


$
(1.34
)

$
(3.23
)     (1)
    
    In our fiscal year ended May 31, 2002, we recorded an asset
    impairment charge of $1,388 related to our enterprise software.(2)
    
    In our fiscal year ended May 31, 2004, we recorded a net
    income tax benefit of $9,013 primarily as a result of the
    reversal of a valuation allowance on our deferred tax assets.(3)
    
    In our fiscal year ended May 31, 2006, we recorded
    severance and related costs of $1,179 related to the termination
    of certain officers of the corporation in July 2005.  25




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May 31,2006


2005


2004


2003


2002(In thousands)Balance Sheet Data:Cash and cash equivalents

$
31,327


$
30,769


$
2,243


$
1,672


$
331Working capital


37,373



38,076



6,041



2,733



458Total assets


57,200



53,057



20,482



8,988



7,789Long-term debt, less current
    portion










4,953



2,807



35Mandatorily redeemable convertible
    preferred stock










28,044



27,212



26,925Mandatorily redeemable convertible
    preferred stock warrants










1,056



1,622



1,201Total shareholders equity
    (deficit)


50,077



48,000



(18,084
)


(27,515
)


(25,697
)   Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  Form 10-K. Form 10-K,
  Overview
    dress-up
   26




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pick-to-light
    Significant
    Events
      Fiscal
    Year
   27




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Results
    of Operations
    Fiscal Year Ended May 31,2006


2005


2004Statement of Operations
    Data:Net sales


100.0
%


100.0
%


100.0
%Cost of sales


50.9



49.2



51.2Gross margin


49.1



50.8



48.8Operating expensesFulfillment


13.3



11.6



12.8Selling and marketing


25.4



24.3



24.7General and administrative


9.7



9.4



8.9Severance and related expenses


1.4







Total operating expenses


49.8



45.3



46.4Income from operations


(0.6
)


5.5



2.4Other income (expense), net


1.4



0.2



(1.5
)Net income (loss) before income
    taxes


0.8



5.7



0.9Income tax benefit (expense)


(0.3
)


(2.1
)


17.4Net income


0.5
%


3.6
%


18.3
%   Additional
    Operating Data
    Fiscal Year Ended May 31,2006


2005


2004(In thousands, exceptnet sales per order data)Additional Operating
    Data:Total number of customers in our
    database


2,841



2,280



1,866Percentage of sales from repeat
    customers


46
%


51
%


47
%Number of orders shipped


1,060



851



666Net sales per order

$
82.12


$
81.27


$
78.02   Comparison
    of Fiscal Years Ended May 31, 2006 and May 31,
    2005
  Net
    Sales
   28




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Gross
    Margin
    Fulfillment
    Selling
    and Marketing
    General
    and Administrative
   29




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##### Table of Contents



Severance
    and Related Costs
    Other
    Income (Expense), Net
    Income
    Taxes
      Comparison
    of Fiscal Years Ended May 31, 2005 and May 31,
    2004
  Net
    Sales
   30




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Gross
    Margin
    Fulfillment
    Selling
    and Marketing
    General
    and Administrative
    Other
    Income (Expense), Net
    Income
    Taxes
    Liquidity
    and Capital Resources
   31




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Payments Due by PeriodTotal


Less Than 1 Year


1-3 Years


3-5 Years(In thousands)Description of Contractual
    Obligations:Capital lease obligations

$



$



$



$
Operating lease obligations

$
1,558


$
792


$
766


$
Total

$
1,558


$
792


$
766


$
   Critical
    Accounting Policies
    Revenue
    Recognition
    Income
    Taxes
   32




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Stock-based
    compensation
  Accounting for Stock Issued to
    Employees
        Inventories
    New
    accounting pronouncements
  Share-Based Payment
    (SFAS No. 123R).
 33




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Accounting for Uncertainty in Income Taxes  an
    interpretation of FASB Statement No. 109 Accounting for Income Taxes.
 Item 7A.  Quantitative
    and Qualitative Disclosures About Market Risk.  Interest
    Rate Risk
    Foreign
    Currency Risk
   34




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Item 8.
    Financial
    Statements and Supplementary Data.  CELEBRATE
    EXPRESS, INC.
  Index to
    Financial Statements
  PageReport of Grant
    Thornton LLP, Independent Registered Public Accounting
    Firm


36Report of
    Deloitte & Touche LLP, Independent Registered Public
    Accounting Firm


37Balance Sheets as
    of May 31, 2006 and 2005


38Statement of
    Operations For the Years Ended May 31, 2006, 2005, and
    2004


39Statement of
    Shareholders Equity (Deficit) For the Years Ended
    May 31, 2006, 2005 and 2004


40Statement of Cash
    Flows For the Years Ended May 31, 2006, 2005 and
    2004


41Notes to Financial
    Statements


42  35




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Report
    of Independent Registered Public Accounting Firm           
    36




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REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM            DELOITTE &
    TOUCHE LLP
  
  37




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##### Table of Contents



CELEBRATE
    EXPRESS, INC.
  BALANCE
    SHEETS
  May 31, 2006


May 31, 2005ASSETSCurrent assets:Cash and cash equivalents

$
31,326,804


$
30,768,694Accounts receivable


338,772



213,365Inventories


8,333,503



8,396,006Prepaid expenses


4,097,548



3,461,381Deferred income taxes


399,627



292,852Total current assets


44,496,254



43,132,298Fixed assets, net


4,662,439



2,517,352Deferred income taxes


7,939,639



7,230,551Other assets, net


101,892



176,633Total assets

$
57,200,224


$
53,056,834LIABILITIES AND
    SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable

$
3,151,082


$
2,968,546Accrued liabilities


3,971,903



2,070,800Current portion of long-term debt
    and capital leases






17,102Total current liabilities


7,122,985



5,056,448Commitments and contingencies (see
    notes)






Shareholders equity:Common stock, $0.001 par
    value and additional
    paid-in-capital 
    authorized, 10,000,000 shares; issued and outstanding,
    7,785,899 shares at May 31, 2006;
    7,522,712 shares at May 31, 2005


65,495,253



64,336,626Unearned stock-based compensation


(213,206
)


(726,206
)Accumulated deficit


(15,204,808
)


(15,610,034
)Total shareholders equity


50,077,239



48,000,386Total liabilities and
    shareholders equity

$
57,200,224


$
53,056,834  38




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##### Table of Contents



CELEBRATE
    EXPRESS, INC.
  STATEMENTS
    OF OPERATIONS
 Years Ended May 31, 2006, 2005 and 2004
  2006


2005


2004Net sales

$
87,016,029


$
69,138,081


$
51,938,500Cost of sales


44,243,944



33,987,083



26,573,914Gross margin


42,772,085



35,150,998



25,364,586Operating expenses:Fulfillment


11,617,406



8,039,145



6,627,020Selling and marketing


22,075,784



16,787,231



12,833,675General and administrative


8,476,068



6,481,551



4,636,440Severance and related expenses


1,178,978







Total operating expenses


43,348,236



31,307,927



24,097,135Income (loss) from operations


(576,151
)


3,843,071



1,267,451Other income (expense), net;Interest income (expense), net


1,230,755



131,036



(787,683
)Net income before income taxes


654,604



3,974,107



479,768Income tax (expense) benefit


(249,378
)


(1,489,259
)


9,012,662Net income


405,226



2,484,848



9,492,430Accretion to preferred stock
    redemption value






(102,271
)


(265,902
)Net income available for common
    shareholders

$
405,226


$
2,382,577


$
9,226,528Net income per share:Basic

$
0.05


$
0.46


$
6.39Diluted

$
0.05


$
0.35


$
1.85Weighted average shares
    outstanding:Basic


7,671,733



5,152,155



1,444,964Diluted


7,939,638



7,027,002



5,127,377  39




---



##### Table of Contents



CELEBRATE
    EXPRESS, INC.
  STATEMENT
    OF SHAREHOLDERS EQUITY (DEFICIT)
 Years Ended May 31, 2006, 2005 and 2004
  ContributedCommon Stock and Additional


Capital-Common








TotalPaid-in-Capital


Stock


Unearned


Accumulated


ShareholdersShares


Amount


Warrants


Compensation


Deficit


Equity (Deficit)BALANCE  May 31,
    2003


1,389,762


$
1,390


$
70,455


$
0


$
(27,587,312
)

$
(27,515,467
)Exercise of common stock options


46,607



12,735















12,735Exercise of common stock warrants


198,996



73,460



(70,455
)










3,005Unearned stock-based compensation






1,056,856







(1,056,856
)






Amortization of stock-based
    compensation














122,506







122,506Issuance of common stock warrants










66,803











66,803Accretion of preferred stock
    discount






(265,902
)














(265,902
)Net Income


















9,492,430



9,492,430BALANCE  May 31,
    2004


1,635,365


$
878,539


$
66,803


$
(934,350
)

$
(18,094,882
)

$
(18,083,890
)Exercise of common stock options


120,102



81,511















81,511Accretion of preferred stock
    discount






(102,271
)














(102,271
)Issuance of common stock in
    connection with employee stock purchase plan


7,945



104,715















104,715Conversion of mandatorily
    redeemable convertible preferred stock


3,138,175



28,146,053















28,146,053Conversion of mandatorily
    redeemable convertible preferred stock warrants










199,439











199,439Proceeds from issuance of common
    stock, net of offering costs


2,465,651



34,011,674















34,011,674Exercise of preferred stock warrants


146,766



856,905















856,905Exercise of common stock warrants


8,708



272,234



(266,242
)










5,992Unearned stock-based compensation






191,822







(191,822
)






Cancellation of stock options






(104,556
)






104,556







Amortization of stock-based
    compensation














295,410







295,410Net Income


















2,484,848



2,484,848BALANCE  May 31,
    2005


7,522,712


$
64,336,626


$
0


$
(726,206
)

$
(15,610,034
)

$
48,000,386Exercise of common stock options


255,678



386,988















386,988Issuance of common stock in
    connection with employee stock purchase plan


7,509



85,809















85,809Cancellation of stock options






(354,668
)






354,668







Tax effect of stock option exercises






1,020,132















1,020,132Amortization of stock-based
    compensation














158,332







158,332Restricted stock grant






20,366















20,366Net income


















405,226



405,226BALANCE  May 31,
    2006


7,785,899


$
65,495,253






$
(213,206
)

$
(15,204,808
)

$
50,077,239  40




---



##### Table of Contents



CELEBRATE
    EXPRESS, INC.
  STATEMENT
    OF CASH FLOWS
 Years Ended May 31, 2006, 2005 and 2004
  2006


2005


2004Cash flows from operating
    activities:Net income

$
405,226


$
2,484,848


$
9,492,430Adjustments to reconcile net income
    to net cash provided by operating activities:Deferred income taxes


204,269



1,489,259



(9,012,662
)Depreciation and amortization


1,505,695



709,485



743,331Non-cash compensation
    expense  stock options


178,698



295,410



122,506Amortization of deferred financing
    costs






23,958



Accretion of debt discount






70,012



301,504Changes in operating assets and
    liabilities:Accounts receivable


(125,407
)


(44,766
)


(29,789
)Inventories


62,503



(2,469,719
)


(1,807,468
)Prepaid expenses and other assets


(626,166
)


(1,510,803
)


(251,832
)Accounts payable


182,536



(61,871
)


1,167,191Accrued liabilities


1,901,103



623,567



432,763Net cash provided by operating
    activities


3,688,457



1,609,380



1,157,974Cash flows from investing
    activities:Payments for purchases of fixed
    assets


(3,586,042
)


(2,247,324
)


(563,972
)Purchase of marketable securities






(61,050,000
)


Maturities of marketable securities






8,950,000



Sale of marketable securities






52,100,000



Net cash used in investing
    activities


(3,586,042
)


(2,247,324
)


(563,972
)Cash flows from financing
    activities:Principal payments on capital lease
    obligations


(17,102
)


(34,562
)


(39,008
)Borrowings on notes payable










1,666,666Principal payments on notes payable






(5,000,000
)


(1,666,666
)Net proceeds from sale of common
    stock, net of issuance costs






34,011,674



Issuance of mandatorily redeemable
    convertible preferred stock  net of issuance costs










721Proceeds from shares issued under
    the employee stock purchase plan


85,809



104,715



Proceeds from exercise of stock
    options


386,988



81,511



15,740Net cash provided by / (used in)
    financing activities


455,695



29,163,338



(22,547
)Net increase in cash and cash
    equivalents


558,110



28,525,394



571,455Cash and cash equivalents:Beginning of year


30,768,694



2,243,300



1,671,845End of year

$
31,326,804


$
30,768,694


$
2,243,300Supplemental disclosures of cash
    flow information:Cash paid for interest

$
445


$
213,707


$
489,294Supplemental disclosures of noncash
    financing activities:Conversion of mandatorily
    redeemable convertible preferred stock and preferred stock
    warrants





$
28,345,492



Net exercise of common stock
    warrants





$
272,234



Net exercise of preferred stock
    warrants





$
856,905



Cancellation of unvested stock
    options

$
354,668


$
104,556



Accretion of preferred stock
    discounts





$
102,271


$
265,902Tax effect of stock option exercises

$
1,020,132







  41




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##### Table of Contents



CELEBRATE
    EXPRESS, INC.
  Notes
    to Consolidated Financial Statements
  1.
    Organization
    of Business and Summary of Significant Accounting
    Policies  Description of Business
  Basis of Presentation
  Use of Estimates
  Reclassifications
  Concentrations of Risk
    Segments Disclosure about Segments of an Enterprise and
    Related Information
  Cash and Cash Equivalents
  Inventories first-in
 42




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##### Table of Contents



CELEBRATE
    EXPRESS, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
     May 31,2006


2005Finished goods

$
7,986,237


$
7,877,486Raw materials


347,267



518,520$
8,333,503


$
8,396,006     Prepaid Expenses
  Fixed Assets
  Capitalized Software Accounting for
    Costs of Computer Software Developed for Internal
    Use.
  Long-Lived Assets
  Fair Value of Financial Instruments
  Revenue Recognition
  Cost of Sales
  Shipping and Handling Charges
 43




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##### Table of Contents



CELEBRATE
    EXPRESS, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   Advertising
  Income Taxes
  Stock-Based Compensation Accounting for Stock Issued to Employees
  Accounting for Stock-Based Compensation
  Year Ended May 31,2006


2005


2004Net income available for common
    shareholders, as reported

$
405,226


$
2,382,577


$
9,226,528Add: Stock-based employee
    compensation expense, as reported


178,698



295,410



80,854Deduct: Stock-based employee
    compensation expense determined under the
    fair-value-based
    method


(444,766
)


(634,610
)


(85,424
)Pro forma net income (loss)
    available for common shareholders  basic

$
139,158


$
2,043,377


$
9,221,958Add: Accretion to preferred stock
    redemption value






102,271



265,902Pro Forma net income (loss)
    available for common shareholders  diluted

$
139,158


$
2,145,648


$
9,487,860Total weighted average shares
    outstanding in computing pro forma net income per shareBasic


7,671,733



5,152,155



1,444,964Diluted


7,945,135



6,892,204



5,038,997Net income (loss) per share:Basic  as reported

$
0.05


$
0.46


$
6.39Diluted  as reported

$
0.05


$
0.35


$
1.85Basic 
    SFAS No. 123 pro forma

$
0.02


$
0.40


$
6.38Diluted 
    SFAS No. 123 pro forma

$
0.02


$
0.31


$
1.88  44




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##### Table of Contents



CELEBRATE
    EXPRESS, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
     Year Ended May 31,2006

2005

2004Expected dividend rate

0%

0%

0%Expected volatility

49.2%-60.7%

60.3%-110.0%

0%Expected lives (years)

1-6.1 years

3-4 years

4 yearsRisk-free interest rate

3.83%-5.03%

4.10%-4.73%

3.83%-4.30%   New Accounting Pronouncements  Share-Based Payment
    (SFAS No. 123R).
    Accounting for Uncertainty in Income Taxes  an
    interpretation of FASB Statement No. 109 Accounting for Income Taxes.
  2.
    Initial
    Public Offering    1-for-1.51
   45




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##### Table of Contents



CELEBRATE
    EXPRESS, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
   3.
    Fixed
    Assets    2006


2005Equipment

$
4,195,958


$
3,749,885Computers and software


5,788,135



5,087,342Furniture and fixtures


2,739,402



712,303Leasehold improvements


1,096,050



1,009,70713,819,546



10,559,237Accumulated depreciation


(9,157,107
)


(8,041,885
)$
4,662,439


$
2,517,352     4.
    Income
    Taxes    Years Ended May 31,2006


2005


2004Current income tax expense

$
45,109Deferred income tax expense

$
204,269


$
1,489,259


$
209,999Change in valuation allowance










(9,222,661
)Total income tax expense (benefit)

$
249,378


$
1,489,259


$
(9,012,662
)     2006


2005


2004Federal income tax expense
    (benefit) at statutory rate

$
222,566



34.0
%

$
1,351,196



34.0
%

$
163,121



34.0%Permanent differences &
    other


9,933



1.5
%


91,547



2.3
%


46,878



9.8%State income taxes, net of federal
    effect


9,320



1.4
%


46,516



1.2
%






0.0%Stock compensation


7,559



1.2
%






0.0
%






0.0%Change in valuation allowance






0.0
%






0.0
%


(9,222,661
)


(1922.3
)%Income tax expense (benefit)

$
249,378



38.1
%

$
1,489,259



37.5
%

$
(9,012,662
)


(1878.5
)%  46




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##### Table of Contents



CELEBRATE
    EXPRESS, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
     2006


2005Deferred tax assets:Current:Reserves and allowances

$
289,557


$
233,276Accrued vacation & other


110,070



59,576Noncurrent:Net operating loss carryforwards


7,419,469



6,787,825Excess of book over tax
    depreciation


517,888



414,988Other assets


2,282



27,738Net deferred tax asset

$
8,339,266


$
7,523,403       5.
    Commitments
    and Contingencies    Operating Leases2007

$
792,3892008


514,9082009


250,427$
1,557,724   Contingencies
 47




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##### Table of Contents



CELEBRATE
    EXPRESS, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    6.
    Income
    Per Share    2006


2005


2004Net income available for common
    shareholders  basic

$
405,226


$
2,382,577


$
9,226,528Add: Accretion to preferred stock
    redemption value






102,271



265,902Net income available for common
    shareholders  diluted

$
405,226


$
2,484,848


$
9,492,430Weighted average common shares
    outstanding


7,671,733



5,152,155



1,444,964Basic net income per share

$
0.05


$
0.46


$
6.39Common share equivalents:Dilutive effect of common stock
    options


267,906



579,514



300,457Dilutive effect of common and
    preferred stock warrants






65,856



256,412Dilutive effect of mandatorily
    redeemable convertible preferred stock






1,229,477



3,125,544Weighted average common shares and
    common share equivalents


7,939,639



7,027,002



5,127,377Diluted net income per share

$
0.05


$
0.35


$
1.85     Year Ended May 31,2006


2005


2004Restricted stock


2,643







Common stock options


194,030



23,589



79,291196,673



23,589



79,291   7.
    Stock
    Option Plan   48




---



##### Table of Contents



CELEBRATE
    EXPRESS, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
         2006


2005


2004Weighted-





Weighted-





Weighted-Average





Average





AverageExercise





Exercise





ExerciseShares


Price


Shares


Price


Shares


PriceNumber of shares under option:Outstanding  beginning
    of year


757,584


$
4.86



702,588


$
1.36



522,972


$
1.68Granted


209,556



13.47



288,055



14.36



306,303



0.82Exercised


(255,677
)


1.51



(120,103
)


0.68



(46,608
)


0.27Cancelled or expired


(199,203
)


6.45



(112,956
)


11.87



(80,079
)


2.02Outstanding  end of year


512,260



9.33



757,584



4.86



702,588



1.36Exercisable  end of year


256,864



5.88



395,331



2.35



366,334



1.91     Weighted-AverageRemainingNumber


Contractual Life


NumberRange of Exercise Prices

Outstanding


(In Years)


Exercisable$ 0.33 - 0.53


137,613



5.37



125,8521.66 - 1.72


23,134



7.75



14,5847.55


29,092



3.23



29,09211.91-14.72


284,675



9.07



67,27316.06 -18.75


37,746



6.95



20,063512,260







256,864      49




---



##### Table of Contents



CELEBRATE
    EXPRESS, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
       Years Ended May 31,2006


2005


2004Cost of sales

$
20,973


$
20,112


$
8,191Fulfillment


21,854



19,608



3,268Selling and marketing


62,458



183,868



95,571General and administrative


73,413



71,822



15,476$
178,698


$
295,410


$
122,506   8.
    Employee
    Stock Purchase Plan        9.
    Employee
    Benefit Plan    10.
    Subsequent
    Events   50




---



##### Table of Contents



CELEBRATE
    EXPRESS, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    11.
    Quarterly
    Financial Data (Unaudited)    2006 Quarter Ended


TotalAug. 31


Nov. 30


Feb. 28


May 31


2006 YTD(In thousands, except per share amounts)Net sales

$
17,928


$
26,129


$
18,786


$
24,173


$
87,016Cost of sales


8,917



13,113



9,788



12,426



44,244Gross margin


9,011



13,016



8,998



11,747



42,772Operating expenses:Fulfillment


2,310



2,857



3,001



3,449



11,617Selling and marketing


4,022



6,403



4,927



6,724



22,076General and administrative


1,820



2,247



2,008



2,401



8,476Severance and related expenses(1)






1,179











1,179Total operating expenses


8,152



12,686



9,936



12,574



43,348Income (loss) from operations


859



330



(938
)


(827
)


(576
)Other income, net:Interest income, net


242



304



323



362



1,231Net income (loss) before income
    taxes


1,101



634



(615
)


(465
)


655Income tax benefit (expense)


(401
)


(207
)


217



141



(250
)Net income (loss)


700



427



(398
)


(324
)


405Accretion to preferred stock
    redemption value


















Net income (loss) available for
    common shareholders

$
700


$
427


$
(398
)

$
(324
)


405Net income (loss) per share:Basic

$
0.09


$
0.06


$
(0.05
)

$
(0.04
)

$
0.05Diluted

$
0.09


$
0.05


$
(0.05
)

$
(0.04
)

$
0.05     (1)
    
    In our second quarter ended November 30, 2005, we recorded
    severance and related costs of $1,179 related to the termination
    of certain officers of the corporation in July 2005.  51




---



##### Table of Contents



CELEBRATE
    EXPRESS, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  2005 Quarter Ended


TotalAug. 31


Nov. 30


Feb. 28


May 31


2005 YTD(In thousands, except per share amounts)Net sales

$
14,523


$
18,770


$
16,304


$
19,541


$
69,138Cost of sales


7,361



9,303



7,885



9,438



33,987Gross margin


7,162



9,467



8,419



10,103



35,151Operating expenses:Fulfillment


1,821



1,945



1,982



2,291



8,039Selling and marketing


3,392



4,579



4,220



4,596



16,787General and administrative


1,431



1,719



1,561



1,771



6,482Total operating expenses


6,644



8,243



7,763



8,658



31,308Income from operations


518



1,224



656



1,445



3,843Other income (expense), net:Interest income (expense), net


(111
)


(144
)


172



214



131Net income before income taxes


407



1,080



828



1,659



3,974Income tax expense


(166
)


(395
)


(307
)


(621
)


(1,489
)Net income


241



685



521



1,038



2,485Accretion to preferred stock
    redemption value


(66
)


(36
)










(102
)Net income available for common
    shareholders

$
175


$
649


$
521


$
1,038


$
2,383Net income per share:Basic

$
0.11


$
0.16


$
0.07


$
0.14


$
0.46Diluted

$
0.05


$
0.11


$
0.07


$
0.13


$
0.35  52




---



##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure.    Item 9A.
    Controls
    and Procedures.       Item 9B.Other
    Information.   PART III    Item 10.
    Directors
    and Executive Officers of the Registrant.    Compliance with Section 16(a) of the Exchange
    Act.
  Code of Ethics. th
  Item 11.
    Executive
    Compensation.   53




---



##### Table of Contents



Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters.    Item 13.
    Certain
    Relationships and Related Transactions.    Item 14.
    Principal
    Accountant Fees and Services.   PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules.        3
.1(1)

Amended and Restated Articles of
    Incorporation of Celebrate Express, Inc.3
.2(1)

Amended and Restated Bylaws of
    Celebrate Express, Inc.3
.3(2)

Amendments to Sections 2.1,
    2.2 and 3.3 of the Amended and Restated Bylaws of Celebrate
    Express, Inc.3
.4(3)

Amendments to Sections 3.9
    and 11.1 of the Amended and Restated Bylaws of Celebrate
    Express, Inc.4
.1(1)

Specimen Common Stock Certificate4
.2(1)

Amended and Restated
    Investors Rights Agreement dated November 15, 2001,
    by and among the Company and the investors named therein4
.3(4)

Preferred Shares Rights
    Agreement, dated July 25, 20054
.4(4)

Form of Preferred
    Shares Rights Certificate10
.1(1)*

Form of Indemnity Agreement
    entered into by the Registrant and each of its directors and
    executive officers10
.2(1)*

2004 Amended and Restated Equity
    Incentive Plan and forms of agreements thereunder10
.3(1)*

Employee Stock Purchase Plan10
.4(1)

Lease agreement between Registrant
    and Highwoods Realty Limited Partnership dated November 12,
    199910
.5(1)

First Amendment to Lease between
    Registrant and Highwoods Realty Limited Partnership dated
    June 14, 200410
.6(5)

Second Amendment to Lease
    Agreement between the Company and Highwoods Realty Limited
    Partnership, dated as of December 15, 200410
.7(1)

Lease agreement between Registrant
    and Queen Investment Company dated October 1, 200310
.8(1)

Lease Amendment No. 1 between
    Registrant and Queen Investment Company dated March 3, 200410
.9

Lease agreement between Registrant
    and Queen Investment Company dated June 8, 200610
.10(6)*

Severance Agreement with Dina
    Alhadeff, effective as of October 17, 200510
.11(6)*

Severance Agreement with Lori
    Liddle, effective as of October 17, 200510
.12(7)*

Separation and Consulting
    Agreement with Mike Jewell, dated February 15, 2006 54




---



##### Table of Contents



10
.13(8)*

Separation and Consulting
    Agreement with Louis Usarzewicz, dated March 10, 200610
.14*

Employment Agreement with Kevin
    Green, dated May 10, 200623
.1

Consent of Grant Thornton LLP,
    Independent Registered Public Accounting Firm23
.2

Consent of Deloitte &
    Touche LLP, Independent Registered Public Accounting Firm31
.1

Rule 13a-14(a)
    Certification (CEO)31
.2

Rule 13a-14(a)
    Certification (CFO)32
.1

Section 1350 Certification
    (CEO)32
.2

Section 1350 Certification
    (CFO)     (1)
    
    Incorporated by reference to Registrants Registration
    Statement on
    Form S-1
    (File
    No. 333-117459),
    as amended, initially filed with the Securities and Exchange
    Commission on July 16, 2004.(2)
    
    Incorporated by reference to Registrants Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    July 11, 2006.(3)
    
    Incorporated by reference to Registrants Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    July 20, 2006.(4)
    
    Incorporated by reference to Registrants Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    July 25, 2006.(5)
    
    Incorporated by reference to Registrants Quarterly Report
    on
    Form 10-Q
    filed with the Securities & Exchange Commission on
    April 14, 2005.(6)
    
    Incorporated by reference to Registrants Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    October 21, 2005.(7)
    
    Incorporated by reference to Registrants Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    February 21, 2006.(8)
    
    Incorporated by reference to Registrants Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    March 15, 2006.*
    
    Management compensatory plans, contract or arrangement required
    to be filed as exhibits to this report. 55




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##### Table of Contents



SIGNATURES    CELEBRATE EXPRESS,
    INC.Date: August 28, 2006

By:

/s/  Kevin A. GreenKevin A. GreenPresident and Chief Executive
    OfficerDate: August 28, 2006

By:

/s/  Darin L. WhiteDarin L. WhiteVice President, Finance   POWER OF
    ATTORNEY
  attorneys-in-fact, Form 10-K, attorneys-in-fact,
    Signature

Title

Date/s/  Kevin
    A. GreenKevin
    A. Green

President and Chief Executive
    Officer (Principal Executive Officer)

August 28, 2006/s/  Darin
    L. WhiteDarin
    L. White

Vice President, Finance and
    Secretary (Principal Financial and Accounting Officer)

August 28, 2006/s/  Keith
    CrandellKeith
    Crandell

Director

August 28, 2006/s/  Estelle
    DeMuesyEstelle
    DeMuesy

Director

August 28, 2006/s/  Donald
    R. HughesDonald
    R. Hughes

Director

August 28, 2006/s/  Jean
    ReynoldsJean
    Reynolds

Director

August 28, 2006 56




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##### Table of Contents



Signature

Title

DateStephen
    Roseman

DirectorKenneth
    A. Shubin Stein

Director/s/  Ronald
    A. WeinsteinRonald
    A. Weinstein

Director

August 28, 2006  57




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##### Table of Contents



EXHIBIT INDEX
  Exhibit No.

Description3
.1(1)

Amended and Restated Articles of
    Incorporation of Celebrate Express, Inc.3
.2(1)

Amended and Restated Bylaws of
    Celebrate Express, Inc.3
.3(2)

Amendments to Sections 2.1,
    2.2 and 3.3 of the Amended and Restated Bylaws of Celebrate
    Express, Inc.3
.4(3)

Amendments to Sections 3.9
    and 11.1 of the Amended and Restated Bylaws of Celebrate
    Express, Inc.4
.1(1)

Specimen Common Stock Certificate4
.2(1)

Amended and Restated
    Investors Rights Agreement dated November 15, 2001,
    by and among the Company and the investors named therein4
.3(4)

Preferred Shares Rights
    Agreement, dated July 25, 20054
.4(4)

Form of Preferred
    Shares Rights Certificate10
.1(1)*

Form of Indemnity Agreement
    entered into by the Registrant and each of its directors and
    executive officers10
.2(1)*

2004 Amended and Restated Equity
    Incentive Plan and forms of agreements thereunder10
.3(1)*

Employee Stock Purchase Plan10
.4(1)

Lease agreement between Registrant
    and Highwoods Realty Limited Partnership dated November 12,
    199910
.5(1)

First Amendment to Lease between
    Registrant and Highwoods Realty Limited Partnership dated
    June 14, 200410
.6(5)

Second Amendment to Lease
    Agreement between the Company and Highwoods Realty Limited
    Partnership, dated as of December 15, 200410
.7(1)

Lease agreement between Registrant
    and Queen Investment Company dated October 1, 200310
.8(1)

Lease Amendment No. 1 between
    Registrant and Queen Investment Company dated March 3, 200410
.9

Lease agreement between Registrant
    and Queen Investment Company dated June 8, 200610
.10(6)*

Severance Agreement with Dina
    Alhadeff, effective as of October 17, 200510
.11(6)*

Severance Agreement with Lori
    Liddle, effective as of October 17, 200510
.12(7)*

Separation and Consulting
    Agreement with Mike Jewell, dated February 15, 200610
.13(8)*

Separation and Consulting
    Agreement with Louis Usarzewicz, dated March 10, 200610
.14*

Employment Agreement with Kevin
    Green, dated May 10, 200623
.1

Consent of Grant Thornton LLP,
    Independent Registered Public Accounting Firm23
.2

Consent of Deloitte &
    Touche LLP, Independent Registered Public Accounting Firm31
.1

Rule 13a-14(a)
    Certification (CEO)31
.2

Rule 13a-14(a)
    Certification (CFO)32
.1

Section 1350 Certification
    (CEO)32
.2

Section 1350 Certification
    (CFO)     (1)
    
    Incorporated by reference to Registrants Registration
    Statement on
    Form S-1
    (File
    No. 333-117459),
    as amended, initially filed with the Securities and Exchange
    Commission on July 16, 2004.(2)
    
    Incorporated by reference to Registrants Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    July 11, 2006.(3)
    
    Incorporated by reference to Registrants Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    July 20, 2006.(4)
    
    Incorporated by reference to Registrants Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    July 25, 2006.(5)
    
    Incorporated by reference to Registrants Quarterly Report
    on
    Form 10-Q
    filed with the Securities & Exchange Commission on
    April 14, 2005.(6)
    
    Incorporated by reference to Registrants Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    October 21, 2005(7)
    
    Incorporated by reference to Registrants Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    February 21, 2006(8)
    
    Incorporated by reference to Registrants Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    March 15, 2006*
    
    Management compensatory plans, contract or arrangement required
    to be filed as exhibits to this report.