FUNITED 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 EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2006

 ̈  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  For the transition period from _______________ to ______________

Commission file number: 000-31154

Nevada Classic Thoroughbreds, Inc.
    (Name of small business issuer in its charter)

Nevada
        86-1007952(State or other jurisdiction of incorporation
            or organization)
        (I.R.S. EIN)705 North 110th Place,Mesa,AZ
        85207(Address of principal executive offices)
        (Zip Code)


Issuer's telephone number:(480) 890-0678

Securities registered under Section 12(b) of the Exchange Act:None

Securities registered under 12(g) of the Exchange Act:Common Stock
    (Title of Class)

Ranch Preferred Stock
    (Title of Class)

Horse Preferred Stock
(Title of Class)

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

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

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 specified date within the past 60 days. (See definition of affiliate in Rule 12b-2 of the Exchange Act.)

Not Applicable

(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Not Applicable

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date.

1,900,000 shares Common Stock
         4,000,000 shares Preferred Stock (2,000,000 shares Ranch Preferred and 2,000,000 shares Horse Preferred) ****Transitional Small Business Disclosure Format (Check one):       Yes      No X

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TABLE OF CONTENTS

PAGEPART I:Item 1:
        Description of Business
        4Item 2:
        Description of Property
        5Item 3:
        Legal Proceedings
        5Item 4:
        Submission of Matters to a Vote of Security Holders
        5PART II:Item 5:
        Market for Common Equity and Related Stockholder Matters
        5Item 6:
        Management's Discussion and Analysis or Plan of Operation
        6Item 7:
        Financial Statements
        11Item 8:
        Changes In and Disagreements With Accountants on Accounting and Financial Disclosure
        238a:
        Effectiveness of the Company's Controls and Procedures
        23PART III:Item 9:
        Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of the Exchange Act
        23Item 10:
        Executive Compensation
        23Item 11:
        Security Ownership of Certain Beneficial Owners and Management
        24Item 12:
        Certain Relationships and Related Transactions
        24Item 13:
        Exhibits and Reports on Form 8-K
        24SIGNATURES
        
        24


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PART I:

ITEM 1: Description of Business.

Nevada Classic Thoroughbreds, Inc. (henceforth referred to as "NCT" or the "company") has developed a breeding, training, racing, proprietary, unified horse racing structure. The company is vertically structured making it possible for one or two people to maintain real-time contact with one to four racing horses. This provides the breeding, training and racing of the individual racehorse to be accomplished completely in-house. The company has control over the unified system.

The company's proprietary solution to the horse racing industry's challenge is ***Power Genetics***, pre-potent characteristics in horses that can reproduce themselves.

MARKET

There are five distinct markets for the company's horses. The first market is for inferior foals that do not possess the **Power Genetics** the company desires but have the other qualities that make such horses sellable in the horse industry's auctions. These foals will be sold as yearlings or weanlings at horse auctions in the industry. The sale of these inferior horses gives the company immediate cash flow and eliminates the costly expenses of racing inferior racehorses.

The second market is to race company horses in "claiming races." The claiming race is to enable people to buy the company's horses at the racetrack. This is a viable means of eliminating horses that are good but not quite able to compete at the top level of horse racing.

The third market is to sell the broodmare after it has produced a female foal that possesses the superior ***Power Genetics***, superior to the broodmare. The broodmare would be sold at the industry's auctions, which are throughout the country and designed for the purpose of selling breeding stock.

The fourth market is racing income from the racetrack. When the race horse races and performs well, NCT will receive income, or "purse money," from the winnings.

The fifth market is for the syndication of stallions. The stallions that possess outstanding pedigrees, conformation, and race records are syndicated into breeding shares. A breeding share entitles the owner to breed one mare to the stallion in any one particular breeding season for the duration of the stallion's life.

The company is not dependent on only a few customers, since the horse racing industry's market is virtually nationwide, where the horse can be raced or bred virtually throughout the entire United States. The company is not limited by its customers or limited by the location of its selected sires. The breeding rights for these stallions are, almost without exception, readily available and accessible.

The company does not require governmental approval or licensing for any of its breeding programs. However, the racetrack requires a normal training license where the horse is intended to race. The licensing is to provide safety for the horse and riders who train and compete at that specific track. NCT intends to perform this function, and there are numerous trainers available as alternatives, as the company deems beneficial. NCT believes the licensing is not material to the company's success in the horse racing industry.

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ITEM 2: Description of Property.

One of the company's real assets is its five-year-old mare of 2001, *Rio Buscador*. The company spent a vast amount of time and energy in research to find the genetic pedigree with natural horse racing ability. The company feels the five-year-old mare has the genetics, heritage, and conformation encompassed by the technology of **Power Genetics.** The five-year-old mare is invaluable to the company in producing its racehorses. The five-year-old mare has a flaw: her left front leg turns one/eighth rotation from the knee to the hoof. This flaw is normally considered a medium flaw by Arizona Equine Veterinary Clinic, in Gilbert, Arizona. Her **Power Genetics** indicated that her best racing distance would be one and one-fourth miles on the turf or grass surface.

Another of the company's real assets is its yearling colt of 2005, *Buster.* Again, the company has spent a vast amount of time and energy in research to find the genetic pedigree with natural horse racing ability. The company feels the yearling colt, *Buster*, has the genetics, heritage, and conformation encompassed by the technology of **Power Genetics.**The yearling colt is invaluable to the company in producing its racehorses. *Buster*'s Power Index Numbers would indicate that his racing style would be similar to *Alysheba* or *Seeking The Gold*. *Buster*'s best racing style would be racing off the pace, floating around the track, and having a strong home-stretch drive.

Another of the company's real assets is its yearling colt of 2005, *Titan*. Again, the company has spent a vast amount of time and energy in research to find the genetic pedigree with natural horse racing ability. The company feels that *Titan* has the genetics, heritage, and conformation encompassed by the technology of **Power Genetics.***Titan* is invaluable to the company in producing its racehorses. *Titan*'s Power Index Numbers would indicate that his racing
    style would be similar to *Alysheba* or *Seeking The Gold*. *Titan*'s best racing
    style would be racing off the pace, floating around the track, and having an
    extreme home-stretch drive. However, *Titan*'s left leg toes-out very slightly,
    indicating that he would have more tendencies toward injury on the left leg.
    This, however, is off-set by his Power Number that indicates he would be
    racing free of injury. In comparing *Titan* to *Buster*, *Titan* appears to be
    slower developing, taller, and appears not to be as confident in new
  situations.

ITEM 3: Legal Proceedings.

Not Applicable.

ITEM 4: Submission of Matters to a Vote of Security Holders.

Not Applicable.

PART II:

ITEM 5: Market for Common Equity and Related Stockholder Matters.

There are no markets for the company's securities. The company is inactive at the present time.

The beneficial shareholders have withdrawn their block of stock for sale as described in the March 31, 2004 10Q. The company could not acquired the horse interests in a timely manner. The excellent reputation of the company and the company's intent on purchasing interests in the horses allowed the company's competitors to obtain the interests in the horses before the company. To eliminate this situation, the shareholders of the company have proposed future stock disbursements (see Proposed Future Stock Disbursements, herein).

The company intends to obtain a market maker for the company's common stock and horse preferred stock.

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The preferred stock was initially registered with the Securities and Exchange Commission at its initial filing of the 10SB12G. The stock became freely tradable on October 14, 2002. On March 31, 2005 a stock split occurred, resulting in 2,000,000 shares of horse preferred stock and 2,000,000 shares of ranch preferred stock. At the present time, the Horse Preferred Stock and the Ranch Preferred Stock are freely tradable.

The company has issued dividends to its current shareholders from stock donated to the company by Descendant's Trust for that purpose. The shareholders of the company's common stock are almost entirely made up of sophisticated and accredited investors, many of whom have held their stock since 2000. The company has elected to give its shareholders on the common stock shareholders list as of July 20, 2005 1/2% (.5%) of the horse preferred stock and 1/2% (.5%) of the ranch preferred stock, which amounts to 10,000 shares of the horse preferred stock and 10,000 shares of the ranch preferred stock. The distribution amount per shareholder will be based upon the number of common stock shares held. Example: 1,400 shares of common stock, if equal to .007 percent of the issued and outstanding common stock; this allows a dividend of .007 percent each of horse preferred stock and ranch preferred stock, totaling 7 shares of horse preferred stock and 7 shares of ranch preferred stock. This excludes the 930,000 shares of common stock set aside for stock option

The disbursement of the ranch preferred stock will occur at a later date, to be determined by the management of the company.

Ideally the market for the company's stock is in the heart of the horse racing and gaming industry. One or more market makers in either of the states of Kentucky, California, Nevada, or New York would suit the needs of the investors as well as providing the company with representation in the horse racing industry, thereby giving investors the flexibility of various security goals and the company with its liquidity to take advantage of opportunities as they arise. The company needs to meet the needs of its shareholders in their buying and selling of the company's securities, and in their investment objections, having available horse preferred stock in the horses the company acquires. Investors may want the the potential capital appreciation of the company's horses.

ITEM 6: Management's Discussion and Analysis or Plan of Operation.

The major concerns of the company have been addressed: that of producing a foal that has the genetic qualities that the company needs in order to be successful. The use of the company's **Power Genetics** system has produced *Rio Buscador*, now a mare, whose **Power Genetics** numbers are greater than either the sire's or the dam's power numbers. The five-year-old mare's flaw is her left front leg turning out one/sixteenth rotation from the knee to the hoof. It would be considered a moderate rotation in normal breeding and racing circles. This flaw may or may not affect *Rio Buscador*'s racing ability.

*Rio Buscador* is a line breeding from the stallion, Mr. Prospector. Mr. Prospector is a legend in the thoroughbred horse racing industry. *Rio Buscador* is genetically three/eighths Mr. Prospector. A direct son of Mr. Prospector would be genetically four/eighths Mr. Prospector. *Rio Buscador* is genetically very similar to Fusaichi Pegasus whose sire is Mr. Prospector and whose dam is by Dansig, a Northern Dancer son. Thus both the sire and dam side are genetically similar to the company's *Rio Buscador*. Fusaichi Pegasus was syndicated for approximate $50,000,000 at the end of his racing career.

*Rio Buscador* possesses **Power Genetics** numbers greater than either the sire or the dam. This mare has exceeded the power-numbers expectation from the breeding. While the company can, for all intents and purposes, be relatively accurate in its assessment now that the foal is a five-year-old mare, the company feels it has over-achieved what the mating was expected to produce. This mare does not resemble either the sire or the dam, but actually looks like, and is built like, *Mr. Prospector* himself. This is exactly "theoretically" what was supposed to happen in a successful line breeding. The line breeding of the mare is genetically three/eighths *Mr. Prospector*. A direct offspring of *Mr. Prospector* would be four/eighths. The company feels it has achieved a successful line breeding, intensifying the good qualities, while eliminating the unwanted qualities, with the exception of the left front leg turning out one/sixteenth rotation from the knee to the hoof. This would be considered a moderate flaw. The other indications are at this time that the company has produced a top-level racehorse with the ability to reproduce top-level racehorses.

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The following discussion and analysis should be read in conjunction with the financial statements, including the notes thereto, appearing elsewhere in this
  report.

The company in its developmental stage is now developing the company's horses
    as future stallions and broodmare. The company's main purpose is to do the
    training of the broodmare, *Rio Buscador*, in loading and unloading, being
    handled, putting under lights for early breeding before shipping to the
    breeding stallion farm, estimated to be some time in February, 2008.

    The colts will undergo being handled, groomed, and learning to load and unload,
    as well as some round-pen training before being sent to a breaking farm for the
  initial training in preparation for their racing careers.

*RESULT OF OPERATIONS*

***Power Genetics***

The company has purchased or bred its initial assets; that of two breeding
    stallion prospects, *Buster* and *Titan*, and one broodmare prospect, *Rio Buscador*. The company is developing these
    horses to enter their respective breeding careers. The company may purchase
    additional horses if the standard conformation or the company's ***Power Genetics*** numbers do not meet the company's high standards. The minimum
    objective of the breeding horses is to produce race horses that win a graded-stakes race. The maximum the company is hoping for is that the horses can
  compete in the classic races.

The following is a detailed outline of the company's ***Power Genetics*** in
    comparison to *Secretariat* and *Seattle Slew*.

The company's ***Power Genetics*** is the company's tool used to evaluate the
    potential of the racing and breeding ability of its race horses. The following are the scores of the company's horses as well as some comparisons to
  *Secretariat* and *Seattle Slew*'s Power Numbers.

1. Index of the ability of the horse to sustain its top speed over a distance
    of land. The range is from 43 to 53, 43 being a short burst of speed covering
  1/8 of a mile, 53 being a long burst of speed of about 3/4 of a mile. [go to comparison chart]

2. Index of the ability of the horse to reach a high speed of racing. The
    range is from 108 to 124, 108 being a slow top speed, 124 being an extreme top
  speed. [go to comparison chart]

3. Index of the ability to race on turf or dirt. The range is from 55 to 70,
    55 being a horse that races best on dirt, 70 being a horse that races best on
  the turf. [go to comparison chart]

4. Index of the ability of the horse to have a quick turn of foot. The range
    is from -112 to +43, -112 being a slow turn of foot which means the horse will
    have to take some time to reach its top speed, +43 being a "push-button" horse,
  that is almost reaching top speed instantly when called upon by the jockey. [go to comparison chart]

5. Index to the tendency of the horse to be injured while racing. The range
    is from a -50 to a +50, -50 being an extreme tendency for injuries in the front
    legs, +50 being an extreme tendency for injury in the back legs. An index of 0
    would mean that the horse has ideal running conformation and would most likely
  remain sound during its racing career. [go to comparison chart]

6. Index of balance. The range is from -50 to a +50. -50 being a wasted
    motion because of the horse's stride from its back legs. +50 is a wasted
  motion because of the horse's stride from its front legs. An ideal score would be 0. [go to comparison chart]

7. Index of Combined racing power. The range is from 75 to 400, 75 being an
    efficient coordination of the horse's index in relation to its ability for
    powerful home-stretch drive, 400 being the inability of the horse to sustain a
  home-stretch drive efficiently. [go to comparison chart]

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This is the company's proprietary information. These indexes are, as far as
    the company understands, on the cutting edge of the horse industry, and very
    little data can be found elsewhere in the industry. Therefore, there are
    uncertainties involved in these Power Numbers. Specifically, will the company's
    colts' Power Numbers as the colts reach maturity and racing age stay the same,
    increase or decrease? And exactly how accurate are the company's Power Numbers
    which will need further analysis of a controlled and uncontrolled class of
  horses further than the company has been able to develop at the present.

Comparison of *Secretariat* & *Seattle Slew* to Company's Horses:

|   | **SECRETARIAT** | **SEATTLE SLEW** | **BUSTER** | **TITAN** | **RIO BUSCADOR**
|-- | --------------- | ---------------- | ---------- | --------- | ----------------
|1) | 53              | 50               | 49         | 49        | 48              
|2) | 123             | 120              | 119        | 120       | 121             
|3) | 62              | 55               | 58         | 57        | 58              
|4) | 21              | 28               | 31         | 38        | 6               
|5) | 0               | +10              | 0          | 0         | -10             
|6) | +3              | -2               | 0          | 0         | -10             
|7) | 112             | 128              | 100        | 75        | 130             

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In analyzing *Secretariat*'s Index scores, we can see that Index 1 indicates that
    *Secretariat* would have a long top speed Index. Index 2 indicates that
    *Secretariat* was a very fast horse at its top speed. Index 3 would indicate
    *Secretariat*'s main type of track would be dirt with some ability to race on the
    turf as well. Index 4 indicates that *Secretariat* would reach top speed slower
    than many other horses. It would take him some time and racing room to each
    and sustain top speed. Index 5 *Secretariat* would have tendencies to be injury-free while racing. Index 6, *Secretariat* would have an extreme, efficient
    motion and long stride. Index 7 *Secretariat*, if beaten, would be by a horse
    that had a higher Power Index indicating a stronger home-stretch drive. In
    watching races that *Secretariat* won and races that he lost, the Power
    Number Index would seem to correspond to situations *Secretariat* encountered
  when racing at the track.

In analyzing *Seattle Slew*'s Index scores, we can see that Index 1 indicates
    *Seattle Slew*, while not quite as brilliant as *Secretariat*, would still be able
    to sustain his top speed farther than almost any other horse. Index 2
    indicates *Seattle Slew* has an almost equal top speed to *Secretariat*. Index 3
    indicates that *Seattle Slew* would race mainly on the dirt race track. Index 4
    indicates that *Seattle Slew* would be more of a "push-button" top speed horse
    taking less time to reach top speed than *Secretariat*. Index 5 indicates that
    *Seattle Slew* would have a slight tendency toward injury in the back legs.
    Index 6 indicates that *Seattle Slew* is extremely efficient in his movement
    which would take less stress from his legs, thus off-setting the tendency
    toward leg injuries of Index 5. Index 7 indicates that *Seattle Slew* would
  have a weaker home-stretch drive than *Secretariat*. In analyzing the Power Numbers of *Seattle Slew*, we can see that the races he
    won and the races he lost also depicted the circumstances and situations that
    he encountered while racing. *Seattle Slew* used his ability to sustain his top
    speed by running in the lead and his top speed and efficiency of movement
    enabled *Seattle Slew* to sustain that speed. And his home-stretch drive was
  inconsequential to his victory.

***Buster***

In comparing the company's colt, *Buster*, to *Secretariat* and *Seattle Slew*, *Buster*'s
    Index 1 would indicate that he cannot sustain his top speed as long as
    *Secretariat* and slightly less than *Seattle Slew*. Index 2 indicates that
    *Buster*'s top speed is not as fast as *Secretariat* and slightly less than *Seattle Slew*. Index 3 indicates that he is mainly a dirt track race horse. Index 4
    indicates that he would be more of a "push-button" horse reaching a top speed
    in a very short time faster than either *Secretariat* or *Seattle Slew*. Index 5
    indicates that he should be relatively injury-free during his racing career,
    equal to *Secretariat* and slightly better than *Seattle Slew*. Index 6 indicates
    that he has an extremely efficient stride, slightly better than that of both
    *Secretariat* and *Seattle Slew*. Index 7 indicates that *Buster* would have a very
  strong home-stretch drive, better than either *Secretariat* or *Seattle Slew*.

In conclusion, *Buster*'s Power Index Numbers would indicate that his racing
    style would be similar to *Alysheba* or *Seeking The Gold*. *Buster*'s best racing
    style would be racing off the pace, floating around the track, and having a
  strong home-stretch drive.

***Titan***

In comparing the company's colt, *Titan*, to *Secretariat* and *Seattle Slew*, *Titan*'s
    Index 1 indicates that he cannot sustain his top speed as long as *Secretariat*
    and slightly less than *Seattle Slew*. Index 2 indicates that *Titan*'s top speed
    is not as fast as *Secretariat* and equal to *Seattle Slew*. Index 3 indicates
    that he is mainly a dirt track race horse. Index 4 indicates that he would be
    an extreme "push-button" horse reaching a top speed in a very short time,
    faster than either *Secretariat*, *Seattle Slew*, or the company's other colt,
    *Buster*. Index 5 indicates that *Titan* should be relatively injury-free during
    his racing career equal to *Secretariat* and slightly better than *Seattle Slew*.
    Index 6 indicates that he has an extremely efficient stride, slightly better
    than that of both *Secretariat* and *Seattle Slew*. Index 7 indicates that *Titan*
    would have an extreme home-stretch drive, better than either *Secretariat*,
  *Seattle Slew*, or the company's other colt, *Buster*.

In conclusion, *Titan*'s Power Index Numbers would indicate that his racing
    style would be similar to *Alysheba* or *Seeking The Gold*. *Titan*'s best racing
    style would be racing off the pace, floating around the track, and having an
    extreme home-stretch drive. However, *Titan*'s left leg toes-out very slightly,
    indicating that he would have more tendencies toward injury on the left leg.
    This, however, is off-set by his Power Number that indicates he would be
    racing free of injury. In comparing *Titan* to *Buster*, *Titan* appears to be
    slower developing, taller, and appears not to be as confident in new
  situations.

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***Rio Buscador***

In analyzing index scores of the company's five-year-old mare, *Rio Buscador*, we can see that Index I indicates she
    would have a shorter top speed Index than either *Secretariat* or *Seattle Slew*
    and slightly less than either *Buster* or *Titan*. Index 2 indicates that *Rio Buscador*'s top speed is faster than other comparison horses except for
    *Secretariat*. Index 3 indicates her main type of track would be dirt. Index 4
    indicates that she would reach top speed slower than most other horses. It
    would take her some time and racing room to reach and sustain top speed, even
    longer than *Secretariat*. Index 5 indicates she would have tendencies to injure
    her front legs while racing. Index 6 indicates that she would have an
    extremely efficient motion and long stride. Index 7 indicates that, if beaten,
    she would be beaten by a horse with a higher Power Index, indicating a stronger
  home-stretch drive.

In conclusion, in analyzing *Rio Buscador*'s Power Index No. 5, the Power Number
    Index 5 shows a tendency to be prone to injury on her front legs. The
    structural tendency is for her to be injured on her left front leg by toeing-out. This is the basis of the company's decision to maintain *Rio Buscador* as a
    brood mare instead of going to the expense of race training, when she has a
    high probability of injury if raced at the track. However, her extreme top
    speed, as shown in Index No. 2, is a very strong asset, and when cross-bred to
    a horse with the ability to move efficiently and sustain his top speed, the
  foal could be very nice.

*Rio Buscador* is an extremely dominant and competitive mare. She wants to race
    anything that approaches her pasture; truck, bike or person--an intangible
  quality that, in the company's opinion, all the great horses have.

*COMPETITION*

The competition is catching up to the company in one aspect of NCT's
    proprietary ***Power Genetics*** Number Indexes, specifically Index 6. For
    example, *Lost In The Fog*, a horse-of-the-year candidate in 2005, won ten
    straight races before being defeated in the Breeders Cup Championship Series
    Sprint race. *Lost In The Fog* was analyzed by a company that analyzes
    efficiency of stride. According to the Breeders Cup announcers, they
    analyzed length of stride and time in the air, and he was selected for this
    quality. This would imply that some individuals are beginning to understand
    and apply the relationship of Index 6 to a quality of the race horse.

The competition is still behind the company in using the total Power Numbers in
    selecting horses for breeding and racing. The indicators are that some
    owners and trainers are willing to go through the expense of analyzing Index
    indicator Number 6 to help in their selection process, especially the select
    Kentucky sales, where horses are sold for millions of dollars. However, the
    other indicators seem to be unnoticed at the present time in comparing horses
    that have good indicators to those that do not. Their price seems to be
    relatively the same, and no correspondence seems to exist between the poor
    and good indicators and the prices at which they are sold. The thoroughbred
    sales in California and Texas have usually less expensive horses, and it is
    rare that anyone would go to the expense of analyzing these horses because of
    their lower auction prices. This gives the company a big advantage. The
    company can see the horses a day before the sale, analyze hundreds of horses
    using the complete Power Index Numbers rather than just Index 6, and purchase
    or bid on horses that have the complete package.

At the Texas auction on December 11, 2005, the company purchased *Buster* and *Titan*, two colts
    with the highest Power Number Indexes of any colts at that auction. The
    company was able to purchase these colts at well below the average price for
    colts at this auction, and dramatically less than colts sold at the Kentucky
    auction. The company wasn't able to find colts meeting the company's "Power
    Genetics" standard at the California auction. The company believes both
    *Titan* and *Buster* are two of the best horses to sell at any of these auctions.
    The company feels fortunate to have purchased these two colts within the
    company's price range.

An interesting phenomenon the company has observed is that the company's ***Power Genetics*** injury-free Power Numbers appear to off-set the classical
  bad knee conformation. While in California we observed several stallions.
  One stallion had extremely good Power Numbers for injury-free legs, yet the
  standard classical knee conformation was so bad that the company felt this
  horse was a danger to its jockey and other horses on the track. Yet this
  horse raced at the top competitions well after most horses were retired, and
  he earned over three million dollars in earnings, held a stud fee of $5,000,
  and a breeding share price of $20,000 per breeding share. Obviously, at some
  point in the future NCT wants to examine this phenomenon in other horses and
  situations.

*MARKET MAKING*

The company is in the process of obtaining a market maker for its stock, and anticipates being on the Pink Sheets until the company meets the
    requirements of the OTC Bulletin Board. While the company is in the process
    of securing a market maker, there can be no guarantees that a market maker
    will be available, or that the company will meet their requirements in order
    to make a market for the company's securities.

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*LINES OF CREDIT*

The company has obtained a line of credit  to off-set any sudden expenses such as horse injuries or
    equipment breakdowns.

*FINANCIAL CONDITION AND LIQUIDITY*

The Company expects to remain inactive. NCT intends to be financed by its
    officers and directors until such time as the thoroughbred mare, *Rio Buscador,*can be bred
    and the colts, *Buster* and *Titan*, raced.

Historically the company has known the need for stock splits for purposes of meeting requirements of market makers and NASD quotation service.

On October 3, 2001, the company authorized 5,000 shares of its preferred stock to be split into 20,000 shares of horse preferred and 20,000 shares of ranch preferred. This split was withdrawn on April 6, 2002 without any stock issued, any remuneration received. On March 14, 2002, the company split its common stock 10-to-1. This stock split was withdrawn on April 6, 2002 without any stock issued or any remuneration received. The withdrawal of these stock splits was in response to the accidental and unexpected death of the corporation's brood mare, *Ms. Walkin*. The company decided to remain inactive until such time as its mare, *Rio Buscador*, could be evaluated as to her ***Power Genetics***, and prepared for breeding. On April 5, 2004, the company's common stock was again split 20:1. This was again in preparation to meet the demands of market makers and the NASD quotation service. There has been no new shares offered or remuneration received from any of the stock splits. In March, 2005, the company tried to take advantage of special circumstances when horse interests became available to the company. The company's beneficial shareholders, Brad Brimhall and Descendants Trust, offered a block of stock to be sold to the public, the proceeds of which were to be used to acquire interests in certain horses. The company's competitors were able to capitalize on the company's inability to move quickly, and the aforementioned horse interests were sold and, hence, the beneficial shareholders' block of stock was withdrawn, with no shares sold or remuneration received by the company or its beneficial shareholders.

**Proposed Future Stock Disbursements**

**It cannot be emphasized enough that the investors should understand that this is a goal of the company to enhance the company's ability to acquire market makers and listings on the NASD. The use of stock options, warrants, stock sales, and convertibles are some of the valuable tools needed to be determined for future stock disbursements. This is complex and integral and will need the acceptance of market makers, NASD quotation service, the Securities and Exchange Commission's disclosure standards, and the beneficial shareholders will all have to agree. Thus, the goal may or may not be achieved, depending on the requirements, regulations, of the individual entities involved.**

**Furthermore, the company has tried to establish a strong financial base of market makers since October 3, 2001, and has yet to be successful. The proposed future stock disbursement is exactly that  a proposed disbursement for future financial base for the company. Furthermore, the company may or may not be able to meet these requirements due to the disproportionate costs of the financial audits compared to other costs of the company.**

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10

---

The company also intends to look at the possibility of the beneficial shareholders selling their individual stock and donating the proceeds to the company. This again is determined by the requirements and guidelines of the NASD, the individual market makers, and the Securities and Exchange Commission.

The company anticipates obtaining stallion breeding shares ranging from relatively inexpensive to very expensive, and purchasing two broodmares with as high of ***Power Genetics*** numbers as can reasonably be obtained. The following is a breakdown as an example:

Stallion Share -- $15,000.00; Broodmare -- *Rio Buscador*

Stallion Share -- $25,000.00; Broodmare -- to be purchased -- $10,000.00

Stallion Share -- $160,000.00; Broodmare -- to be purchased -- $40,000.00

By the company acquiring these horse assets, the company anticipates the yearly foal selling price would be approximately $200,000 (this estimate was derived from information gathered in The Bloodhorse, the industry's national magazine for auctions, selling prices, broodmare and stallion sales statistics, etc.). The company believes the foal assets would give the investors an increase in their investment and put the company in a solid position to have its impact on the thoroughbred racing industry.

ITEM 7: Financial Statements.

The following financial statements are attached to this 10-KSB Annual Report and filed as a part hereof.

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11

---

NEVADA CLASSIC THOROUGHBREDS, INC. 
    (A Development Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS 
    (Unaudited)

JUNE 30, 2006

Index to Financial Statements

FINANCIAL STATEMENTS
        PAGEBalance Sheet
        
        13Statement of Operations
        
        14Statement of Stockholders' Equity
        
        15Statement of Cash Flows
        
        17Notes to Financial Statements
        
        18


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12




BALANCE SHEET

FOR PERIOD ENDING JUNE 30, 2006

ASSETSJUNE 30, 2006
        
        
        
        JUNE 30,2005CURRENT ASSETSCash
        
        
        
        
        
        
        
        
        $
        0Checking account
        
        
        
        $
        1571Savings account
        
        
        
        
        25,296Thoroughbred Five-Year-Old Mare (*Rio Buscador*) 1
        
        
        
        
        69,858
        
        
        
        
        10,000Colt (*Buster*)
        
        
        
        
        4,715Colt (*Titan*)
        
        
        
        
        4,7151991 Ford Pickup Truck14
        
        
        
        
        2,5001986 Horse Trailer15
        
        
        
        
        3,000Horse Round Pen
        
        
        
        
        950Pasture Improvements
        
        
        
        
        1,125TOTAL ASSETS
        
        
        
        
        113,730
        
        
        
        
        10,000LIABILITIES AND STOCKHOLDERS' EQUITYCURRENT LIABILITIESAccounts payable
        
        
        
        $
        0
        
        
        
        $
        0Credit Line
        
        
        
        
        1813STOCKHOLDERS' EQUITYHorse and Ranch Preferred Stock,par value $.001 per shareAuthorized 5,000,000 (2,500,000 Horse Preferredand 2,500,000 Ranch Preferred) shares;4,000,000 shares issued and outstanding(2,000,000 Horse Preferred and 2,000,000 Ranch Preferred)
        $
        4,000
        
        
        
        
        5Common stock,par value $.001 per shareAuthorized 5,000,000 shares1,900,000 shares issued andoutstanding
        
        1,900
        
        
        
        
        89Paid in capital in excess of par value of stock
        
        22,746
        
        
        
        
        12,696Stockholder receivable
        
        0
        
        
        
        
        0Deficits accumulated during developmental stage16
        
        (90,466
        )
        
        
        
        (67,720
        )TOTAL STOCKHOLDERS' EQUITY 1
        
        
        
        $
        111,917
        
        
        
        $
        10,000TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 1
        
        
        
        $
        113,730
        
        
        
        $
        10,000


See Accompanying Notes

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13




**STATEMENT OF OPERATIONS**

**FOR PERIOD ENDING JUNE 30, 2006**

JUNE 30, 2006
        
        
        
        JUNE 30, 2005REVENUE
        
        
        
        $
        0
        
        
        
        
        $
        0EXPENSESDevelopment costs
        
        
        
        
        0
        
        
        
        
        0General & Administrative
        
        
        
        
        10,936
        
        
        
        
        10,936Credit Line
        
        
        
        
        200Marketing
        
        
        
        
        0
        
        
        
        
        0General
        
        
        
        
        11,610
        
        
        
        
        1,760Five-year-old mare (*Rio Buscado*r)Pasture
        $
        1,200
        
        
        
        
        $
        1,200Supplemental Feed
        
        800
        
        
        
        
        410Veterinarian & Ferrier
        
        180
        
        
        
        
        
        
        1502,180
        
        
        
        
        1,760Colt (*Buster*)Initial Expenses
        
        4,170Pasture
        $
        300
        
        
        
        
        $
        0Supplemental Feed
        
        200
        
        
        
        
        0Veterinarian & Ferrier
        
        45
        
        
        
        
        
        
        04,715
        
        
        
        
        0Colt (*Titan*)Initial Expenses
        
        4,170Pasture
        $
        300
        
        
        
        
        $
        0Supplemental Feed
        
        200
        
        
        
        
        0Veterinarian & Ferrier
        
        45
        
        
        
        
        
        
        04,715
        
        
        
        
        0SEC Accounting
        
        
        
        
        $
        0
        
        
        
        $
        0TOTAL EXPENSES
        
        
        
        
        $
        22,746
        
        
        
        
        12,696NET (LOSS)
        
        
        
        
        $
        (22,746
        )
        
        
        $
        (12,696
        )NET (LOSS) PER COMMON SHAREBasic and diluted
        
        
        
        $
        ( .00
        )
        
        
        $
        ( .00
        )WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDINGBasic and diluted
        
        
        
        1,900,000
        
        
        
        
        1,900,000


See Accompanying Notes

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14




**STATEMENT OF STOCKHOLDERS' EQUITY**

**FOR THE PERIOD FROM INCEPTION (NOVEMBER 1, 2000) TO JUNE 30, 2006**

|Common and Preferred Stock                                                                                                              
|----------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                        
|COMMON STOCK
        Balance at Inception - November 1, 2000.                                                                           
|PREFERRED STOCKBalance at inception - November 1, 2000                                                                                  
|                                                                                                                                        
|COMMON STOCK Balance - June 2001                                                                                                        
|PREFERRED STOCK Balance - June 30, 2001                                                                                                 
|                                                                                                                                        
|COMMON Stock issued to Operations Manager for services. Donated back to company for future disbursement for period ending June 30, 2002 
|COMMON STOCK Balance - June 2002                                                                                                        
|PREFERRED STOCK Balance - June 30, 2002                                                                                                 
|                                                                                                                                        
|COMMON Stock issued to Operations Manager for services. Donated back to company for future disbursement, for period ending June 30, 2003
|COMMON STOCK Balance - June 30, 2003                                                                                                    
|PREFERRED STOCK  Balance - June 30, 2003                                                                                                
|                                                                                                                                        
|COMMON Stock split 20:1 April 5, 2004                                                                                                   
|COMMON Stock issued to Operations Manager for services. Donated back to company for future disbursement, for period ending June, 2004   
|COMMON STOCK Balance - June 30, 2004                                                                                                    
|PREFERRED STOCK Balance - June 30, 2004                                                                                                 
|                                                                                                                                        
|COMMON STOCK Balance - June 2005                                                                                                        
|PREFERRED STOCK split 800:1 June 30, 2005                                                                                               
|Preferred Stock divided into Ranch Preferred and Horse Preferred, as follows:                                                           
|Ranch Preferred:                                                                                                                        
|Horse Preferred:                                                                                                                        
|Preferred Dividends to common stock shareholders from Preferred Stock, as follows:                                                      
|Ranch Preferred:                                                                                                                        
|Horse Preferred:                                                                                                                        
|                                                                                                                                        
|COMMON STOCK Balance - June 2006                                                                                                        
|PREFERRED STOCK - June 2006                                                                                                             
|Preferred Stock includes Ranch Preferred and Horse Preferred, as follows:                                                               
|Ranch Preferred:                                                                                                                        
|Horse Preferred:                                                                                                                        
|Preferred Dividends to common stock shareholders from Preferred Stock, as follows:                                                      
|Ranch Preferred:                                                                                                                        
|Horse Preferred:                                                                                                                        
|                                                                                                                                        
|COMMON STOCK Net Loss from inception                                                                                                    
|PREFERRED STOCK Net Loss from inception                                                                                                 
|                                                                                                                                        

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15




**STATEMENT OF STOCKHOLDERS' EQUITY (Continued)**

**FOR THE PERIOD FROM JUNE 30, 2005 TO JUNE 30, 2006**

|UNAUDITED
        JUNE 30, 2006                                         |                                                                                   | UNAUDITED
        JUNE 30, 2005 |                                                                         |                                                                                   |  |  |  |  |  | 
|----------------------------------------------------------------------- | --------------------------------------------------------------------------------- | ------------------------------- | ----------------------------------------------------------------------- | --------------------------------------------------------------------------------- |  |  |  |  |  | 
|Paid in Capital
        in Excess of
        Par Value
        of Stock | Deficit
        Accumulation
        during the
        Development
        Stage |                                 | Paid in Capital
        in Excess of
        Par Value
        of Stock | Deficit
        Accumulation
        during the
        Development
        Stage |  |  |  |  |  | 
|AT DATE OF INCEPTION                                                   
|0                                                                       | 0                                                                                 |                                 | 0                                                                       | 0                                                                                 |  |  |  |  |  | 
|NOVEMBER 1, 2000 - STOCK ISSUED TO FOUNDERS                            
|Preferred                                                              
|(4,000)                                                                 | 0                                                                                 |                                 | (4,000)                                                                 | 0                                                                                 |  |  |  |  |  | 
|Common                                                                 
|(1,900)                                                                 | 0                                                                                 |                                 | (1,900)                                                                 | 0                                                                                 |  |  |  |  |  | 
|FAIR MARKET VALUE OF SERVICES DONATED BY STOCKHOLDERS                  
|10,936                                                                  |                                                                                   |                                 | 10,936                                                                  | (54,679)                                                                          |  |  |  |  |  | 
|INCREASE IN PAID IN CAPITAL FOR PAYMENT OF EXPENSES BY STOCKHOLDERS    
|11,810                                                                  |                                                                                   |                                 | 1,760                                                                   | (13,041)                                                                          |  |  |  |  |  | 
|NET (LOSS) FOR EACH PERIOD SHOWN                                       
|200                                                                     | (22,746)                                                                          |                                 | 0                                                                       | (12,696)                                                                          |  |  |  |  |  | 
|BALANCE FOR EACH PERIOD SHOWN                                          
|22,746                                                                  | (90,466)                                                                          |                                 | 12,696                                                                  | (67,720)                                                                          |  |  |  |  |  | 



**FOR THE PERIOD FROM INCEPTION (NOVEMBER 1, 2000) TO JUNE 30, 2005**

|UNAUDITEDJUNE 30, 2005                                                              |                                                                                               | UNAUDITED
  JUNE 30, 2004 |                                                             | UNAUDITED
  JUNE 30, 2003                                         |  | UNAUDITED
  JUNE 30, 2002                                   |                                                                   | AUDITED
  JUNE 30, 2001 |                                                             | UNAUDITED
  JUNE 30, 2000                                        
|----------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------- | ------------------------- | ----------------------------------------------------------- | ----------------------------------------------------------------- |  | ----------------------------------------------------------- | ----------------------------------------------------------------- | ----------------------- | ----------------------------------------------------------- | -----------------------------------------------------------------
|Paid in Capital
            in Excess of
            Par Value
            of Stock | Deficit
            Accumulation
            during the
            Development
        Stage |                           | Paid in Capital
    in Excess of
    Par Value
    of Stock | Deficit
    Accumulation
    during the
    Development
    Stage |  | Paid in Capital
    in Excess of
    Par Value
    of Stock | Deficit
    Accumulation
    during the
    Development
    Stage |                         | Paid in Capital
    in Excess of
    Par Value
    of Stock | Deficit
    Accumulation
    during the
    Development
    Stage
|AT DATE OF INCEPTION                                                               
|0                                                                                   | 0                                                                                             |                           | 0                                                           | 0                                                                 |  | 0                                                           | 0                                                                 |                         | 0                                                           | 0                                                                
|NOVEMBER 1, 2000 - STOCK ISSUED TO FOUNDERS                                        
|Preferred                                                                          
|(4,000)                                                                             | 0                                                                                             |                           | (5)                                                         | 0                                                                 |  | (5)                                                         | 0                                                                 |                         | (5)                                                         | 0                                                                
|Common                                                                             
|(1,900)                                                                             | 0                                                                                             |                           | (1,900)                                                     | 0                                                                 |  | (93)                                                        | 0                                                                 |                         | (91)                                                        | 0                                                                
|FAIR MARKET VALUE OF SERVICES DONATED BY STOCKHOLDERS                              
|10,936                                                                              | (54,679)                                                                                      |                           | 10,936                                                      | (43,793)                                                          |  | 10,936                                                      | (32,807)                                                          |                         | 10,936                                                      | (21,871)                                                         
|INCREASE IN PAID IN CAPITAL FOR PAYMENT OF EXPENSES BY STOCKHOLDERS                
|1,760                                                                               | (13,041)                                                                                      |                           | 1,760                                                       | (11,281)                                                          |  | 1,760                                                       | (9,521)                                                           |                         | 3,797                                                       | (7,761)                                                          
|NET (LOSS) FOR EACH PERIOD SHOWN                                                   
|0                                                                                   | (12,696)                                                                                      |                           | 0                                                           | (12,696)                                                          |  | 0                                                           | (12,696)                                                          |                         | 0                                                           | (13,797)                                                         
|BALANCE FOR EACH PERIOD SHOWN                                                      
|12,696                                                                              | (67,720)                                                                                      |                           | 12,696                                                      | (53,956)                                                          |  | 12,696                                                      | (41,260)                                                          |                         | 13,814                                                      | (28,564)                                                         

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16




**STATEMENT OF CASH FLOWS**

**FOR THE PERIOD FROM JUNE 30, 2005 TO JUNE 30, 2006**

UNAUDITED
            JUNE 30, 2006
        
        UNAUDITED
            JUNE 30, 2005CASH FLOWS FROM OPERATING ACTIVITIES:Net (loss)
        $
        ( 22,746
        )
        
        $
        ( 12,696
        )Adjustments to reconcile net (loss) to net cash provided by operating activities:Fair market value of services provided by stockholder
        
        10,936
        
        
        
        10,936Increase in donated or gifted capital for payment of expenses by stockholders
        
        11,810
        
        
        
        1,760Changes in operating assets and liabilities:Accounts payable
        
        0
        
        
        
        0NET CASH PROVIDED BY OPERATING ACTIVITIES
        $
        0
        
        
        $
        0CASH FLOWS FROM INVESTING ACTIVITIES
        
        0
        
        
        
        0CASH FLOWS FROM FINANCING ACTIVITIES
        
        1,813
        
        
        
        0NET INCREASE IN CASH AND CASH 
            BALANCE AT JUNE 30, 2006
        $
        25,296
        
        
        $
        0SUPPLEMENTAL DISCLOSURE OF CASH 
            FLOW INFORMATIONCash paid for interest
        $
        26
        
        
        $
        0Cash paid for taxes
        $
        0
        
        
        $
        0SCHEDULE OF NON-CASH INVESTING 
            AND FINANCING ACTIVITIESFair market value of services provided by stockholder
        $
        10,936
        
        
        $
        10,936Increase in donated or gifted capital for 
            payment of expenses paid by stockholders
        $
        22,746
        
        
        $
        12,696


See Accompanying Notes

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17




NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2006

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The company uses SOP 85-3, breeding horses under development. The horse
    evaluation is adding in direct costs to the value of the horses under
    development. The value is the lower of cost or established market value,
    until breeding maturity, then the horses are depreciated through the life
    of the breeding career. Pursuant to discussions with staff of the Securities
    and Exchange Commission in January of 2006 and in keeping with SOP 85-3
    regarding evaluations of breeding stock, the following accounting practices
  have been adopted and adjustments as of March 31, 2006.

Any financial statements prior to March 31, 2006 will be inaccurate, as they
    do not reflect SOP 85-3, breeding horses under development, and should not
    be relied upon for any meaningful representations of the company's financial
    position.

Accounting Estimates

Management uses estimates and assumptions in preparing financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were used.

Income Taxes

Provisions for income taxes are based on taxes payable or refundable for the current year and deferred taxes on temporary differences between the amount of taxable income and pretax financial income and between the basis of assets and liabilities and their reported amounts in the financial statements. Deferred tax assets and liabilities are included in the financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled as prescribed in FASB Statement No. 109, "Accounting for Income Taxes." As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes.

Net (Loss) Per Share

The Company adopted Statement of Financial Accounting Standards No. 144 that requires the reporting of both basic and diluted earnings (loss) per share. Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. In accordance with FASB 128, any anti-dilutive effects on net loss per share are excluded.

Long-Lived Assets

Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of," requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset in question may not be recoverable.

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18






NOTE 2: PREFERRED STOCK

No special rights or preferences have been assigned to the preferred stock.

NOTE 3: DEVELOPMENT STAGE OPERATIONS

As of June 30, 2006 the Company was in the development stages of operations. According to the Financial Accounting Standards Board of the Financial Accounting Foundation, a development stage Company is defined as a company that devotes most of its activities to establishing a new business activity. In addition, planned principle activities have not yet commenced.

The Company did not expense any development costs as per donation or gift from the shareholders for the period from June 30, 2005 to June 30, 2006

NOTE 3: FINANCIAL STATEMENT OF AN INACTIVE REGISTRANT

Under Statute 210.3-11, the Company does not need to provide an audited or reviewed quarterly report.

Reg. Statutes 210.3-11

(a) Gross Receipts from all sources for the fiscal year are not in excess of $100,000;

(b) The registrant has not purchased or sold any of its own stock, granted options therefore, or levied assessments upon outstanding stock;

(c) Expenditures for all purposes for the fiscal year are not in excess of $100,000;

(d) No material change in the business has occurred during the fiscal year, including any bankruptcy, reorganization, readjustment or succession or any material acquisition or disposition of plants, mines, mining equipment, mine rights or leases; and

(e) No exchange upon which the shares are listed, or governmental authority having jurisdiction, requires the furnishing to it or the publication of audited financial statements.

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19




NOTE 5: INCOME TAXES

|Net (loss)                                                                                                            | $                                | ( 22,946 | )     
|--------------------------------------------------------------------------------------------------------------------- | -------------------------------- | -------- | ------
|The provisions for income taxes is estimated as follows:                                                              |                                  |          |       
|                                                                                                                      | Currently payable                | $        | 0     
|                                                                                                                      | Deferred                         | $        | 0     
|The net (loss) for financial statements differs from the federal income tax net loss. A reconciliation is as follows: |                                  |          |       
|                                                                                                                      | Financial statement net loss     | $        | 22,946
|                                                                                                                      | Non-deductible services          |          | 10,936
|                                                                                                                      |                                  |          |       
|                                                                                                                      | Income tax net loss              |          | 12,010
|                                                                                                                      |                                  |          |       
|Significant components of the Company's deferred tax asset are as follows:                                            |                                  |          |       
|                                                                                                                      | Net operating loss carry forward | $        | 15,077
|                                                                                                                      | Less valuation allowance         |          | 0     
|                                                                                                                      |                                  |          |       
|                                                                                                                      | Net deferred asset               | $        | 15,077
|                                                                                                                      |                                  |          |       

NOTE 6: PREFERRED STOCK

No special rights or preferences have been assigned to the preferred stock.

NOTE 7: STOCK OPTION AGREEMENT

On November 1, 2000, the Company established a stock option agreement under
  which a total of 930,000 shares of common stock are reserved for the option.

The details of the option are as follows:

| | Number
      of Shares |  | Exercise
      Price |       | Exercise
      Date
| | ---------------------- |  | -------------------- | ----- | -------------------
| | 64,000                 |  | $                    | .50*  |                    
| | 866,000                |  |                      | 1.25* |                    
| | 930,000                |  |                      |       |                    

The Company has elected to account for stock-based compensation under APB
  Opinion No. 25, under which no compensation expense has been recognized for
  stock options granted to employees at fair market value.

A summary of the option activity for the period from November 1, 2000 to June
  30, 2006, pursuant to the terms of the plan is as follows:

| |                                         | Shares
      Under
      Option |  | Weighted
        Average
        Exercise Price
| | --------------------------------------- | ------------------------------- |  | -----------------------------------------------
| | Options outstanding at November 1, 2000 | 0                               |  | $                                              
| | Granted                                 | 930,000                         |  |                                                
| | Outstanding at June 30, 2006            | 930,000                         |  |                                                

All shares are exercisable at June 30, 2006.

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20




Information regarding stock options outstanding as of June 30, 2006 is as
    follows:

| | Price Range                                     | $  10.00  - | $ | 25.00
| | ----------------------------------------------- | ----------- | - | -----
| | Weighted average exercise and grant date prices | $           |   | 23.81
| | Outstanding at June 30, 2006                    | Exercisable

The weighted average fair market value of options granted in the period of
  November 1, 2000 to June 30, 2006 were estimated as of the date of grant using
  the Black-Scholes stock option pricing model, based on the following weighted
  average assumptions:

| | Dividend yield         | 0          
| | ---------------------- | -----------
| | Expected volatility    | 50%        
| | Risk fee interest rate | 5.7%       
| | Expected life          | Exercisable

For purposes of pro forma disclosure, the estimated fair market value of the
  options, if any, is amortized to expense over the options' vesting periods.

Under the Black-Scholes model, the options did not have any intrinsic value.
  Therefore, pro forma disclosure information has not been presented.

NOTE 8: SHARES OF STOCK ELIGIBLE FOR ISSUANCE

| |                                       | Common       |  | Preferred   
| | ------------------------------------- | ------------ |  | ------------
| | Total stock authorized                | 5,000,000    |  | 5,000,000   
| | Less stock issued                     | ( 1,900,000) |  | ( 4,000,000)
| | Less stock reserved for stock options | ( 930,000)   |  | 0           
| | Balance available for issuance        | 2,170,000    |  | 1,000,000   

NOTE 9: NET OPERATING LOSS CARRYFORWARD

The corporation has the following net operating loss carry forward:

| | Year          | Amount    | Expiration Date
| | ------------- | --------- | ---------------
| | June 30, 2006 | $  90,466 | June 30, 2021  

NOTE 10: FAIR MARKET VALUE OF SERVICES DONATED BY STOCKHOLDER

A stockholder, Brad Brimhall, CEO of the Company, provided services for valued at $ 10,936 annually. This estimate is $21.032 per hour for two hours per day, five days per week for 52 weeks. The salary is determined yearly by the Board of Directors. Since the company is inactive and in a development stage, the current CEO, Brad Brimhall, oversees the operations and the company’s horse assets and the filing of the financial reports. He is currently the only qualified person the company has been able to find to fill these positions at the salary the company is willing to pay. When the company becomes active and a cash flow develops, these tasks will be broken out as the company is able to locate qualified persons to fulfill these jobs. Until  such time, the fair market value is determined by what the company is willing to pay and what a qualified person is willing to accept.

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21




NOTE 11: LIMITED OPERATION COSTS

The shareholders have elected to pay the operation costs of the company up to June, 2007 as gifts or donations to the Company.

NOTE 12: GOING CONCERN

The financial statements are presented on the basis that the Company is a going concern. Going concern contemplates the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable length of time. The Company is in the development stage of breeding and training horses.

NOTE 13: INSURANCE

The Company does not have any insurance coverage on its horse nor any liability or workers' compensation insurance. However, the company intends to purchase insurance on its horses before any of the company's horses are bred or raced.

NOTE 14: FORD TRUCK ASSET   [back]

The truck was purchased and donated to the company by Brad Brimhall, Operations Manager and beneficial shareholder. The truck was purchased to give the company five to six years of operation without substantially decreasing in asset value and resale value. Furthermore, the truck was acquired for the purpose of transporting the company's broodmares safely to and from stallion breeding farm(s).

NOTE 15: HORSE TRAILER ASSET   [back]

The horse trailer was purchased and donated to the company by Brad Brimhall, Operations Manager and beneficial shareholder. The horse trailer was purchased to give the company five to six years of operation without substantially decreasing in asset value and resale value. Furthermore, the horse trailer was acquired for the purpose of transporting the company's broodmares safely to and from stallion breeding farm(s).

NOTE 16: ACCUMULATED DEFICITS   [back]

The common stock for salary was donated back to the company for the purpose of acquiring market makers and their float requirements.

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ITEM 8: Changes In and Disagreements With Accountants on Accounting and Financial Disclosure

8a. Effectiveness of the Company's Controls and Procedures

The company maintains disclosures controls and procedures designed to ensure that information required to be disclosed in its reports filed under the Securities Exchange Act of 1934, as amended (the Exchange Act), is recorded, processed, summarized, and reported within the required time periods, and that such information is accumulated and communicated to management, including the company's Chief Executive Officer and Chief Financial Officer, or persons performing these duties, to allow for timely decisions regarding required disclosure.

The company's management, including the Chief Executive Officer and Chief Financial Officer, or persons performing these duties, has evaluated the effectiveness of the company's disclosure controls and procedures over financial reporting (as defined in Exchange Act Rules). At the present time, the company is an inactive filer, with only one or two expense transactions each month and no earnings whatsoever. Because of this, the company's financial statements are unaudited. The company's management performs the function of audit committee, and has detected errors in its financial reports, which errors are not in any way related to earnings or expenditures, but merely to the manner in which cumulative balances have been reported. Such errors have been corrected in the company's June 2005 10KSB/A. The Public Company Accounting Oversight Board has defined a material weakness as a "significant deficiency or combination of significant deficiencies that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected." The aforementioned errors are considered to be minor, and thus not "material" weaknesses, significant deficiencies, or a combination of significant deficiencies.

Based upon the company's most recent evaluation, the company's management, including its Chief Executive Officer and Chief Financial Officer (or persons performing those duties), concluded the company's disclosure controls and procedures over financial reporting are adequate and effective as of June 30, 2006. The effectiveness of the company's controls and procedures are an on-going process of continual improvement. As such, when the company becomes active, with earnings to report and audited financial statements, the company's disclosure controls and procedures may require restructuring.

There has been no change in the company's internal control over financial reporting or any other factor that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting.





PART III:

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

In response to this item, the company hereby incorporates by reference the information previously filed in the 10SB12G, filed August 15, 2001. There has been no change in Directors, Executive Officers, Promoters and Control Persons as of June 30, 2006.

ITEM 10: Executive Compensation

In response to this item, the company hereby incorporates by reference the information previously filed in the 10SB12G, filed August 15, 2001. There has been no change in Executive Compensation as it relates to the dollar amount.

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ITEM 11: Security Ownership of Certain Beneficial Owners and Management

In response to this item, the company hereby incorporates by reference the information previously filed in the 10SB12G, filed August 15, 2001. There has been no change in Security Ownership of Certain Beneficial Owners and Management up to June 30, 2006.  The security ownership is as described elsewhere in this 10KSB Annual Report for the period ending June 30, 2006

ITEM 12: Certain Relationships and Related Transactions

In response to this item, the company hereby incorporates by reference the information previously filed in the 10SB12G, filed August 15, 2001. There has been no change in Certain Relationships and Related Transactions.

ITEM 13: Exhibits and Reports on Form 8-K

Exhibit 31.1 - Certification of the Chief Executive Officer pursuant to Rule 13A-14 or 15D-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 31.2 - Certification of the Acting Chief Financial Officer pursuant to Rule 13A-14 or 15D-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.1 - Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.2 - Certification of the Acting Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, and the Financial Statements of an Inactive Registrant, Regulation Section 210-3-11, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

|                       | **Nevada Classic Thoroughbreds, Inc.**                   
|---------------------- | ---------------------------------------------------------
|                       |                                                          
|Dated: October 2, 2006 | By: /s/ Brad Brimhall                                    
|                       |                                                          
|                       | Brad Brimhall                                            
|                       | Chief Accounting Officer / Acting Chief Financial Officer

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

|Dated: October 2, 2006 | By: /s/ Brad Brimhall                
|---------------------- | -------------------------------------
|                       |                                      
|                       | Brad Brimhall                        
|                       | President and Chief Executive Officer

> 

|Dated: October 2, 2006 | By: /s/ Pamela J. Brimhall
|---------------------- | --------------------------
|                       |                           
|                       | Pamela J. Brimhall        
|                       | Secretary/Treasurer       

Supplemental information to be Furnished With Reports Filed Pursuant to Section 15(d) of the Exchange Act By Non-Reporting Issuers:

Not Applicable.

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