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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON DC 20549

                                 _______________

                                    FORM 10-K
                                 _______________

|X|  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
     ACT OF 1934

     FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005

                                       OR

|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
    ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO

                           COMMISSION FILE NUMBER 0-50581

                                 _______________

                               99 CENT STUFF INC.
             (Exact name of registrant as specified in its charter)
                                 _______________

        FLORIDA                                         77-0398908
(State of incorporation)                  (IRS employer identification number)

                              1801 CLINT MOORE ROAD
                            BOCA RATON, FLORIDA 33487
                                 (561) 999-9815
    (Address, including zip code, and telephone number, including area code,
                  of Registrant's principal executive offices)

        Securities registered pursuant to Section 12(b) of the Act:

                                      NONE

          Securities registered pursuant to Section 12(g) of the Act:
                         COMMON STOCK, $.001 PAR VALUE,
                       WARRANTS EXPIRING DECEMBER 31, 2006

         Indicate by check mark whether registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No |_|

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. |X|

         Indicate by check mark whether the registrant is an accelerated filer
  (as defined in Rule 12b-2 of the Exchange Act). Yes |_| No |X|

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

         The approximate aggregate market value of the voting and non-voting
common equity held by non-affiliates of the issuer as of June 30, 2005 was
$3,300,000. The number of shares outstanding of the issuer's common stock as of
March 1, 2006 was 5,833,950.

                   DOCUMENTS INCORPORATED BY REFERENCE: None.

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<PAGE>

                                     PART I
ITEM 1.  BUSINESS

OVERVIEW

         99 Cent Stuff is a Florida-based single-priced value retailer of
primarily name-brand, consumable merchandise. Our stores offer a wide assortment
of regularly available consumer goods as well as a broad variety of
first-quality, closeout merchandise. Every product is sold at 99 cents,
including extra value savings of two or three items for 99 cents. We feature
consumer staples such as produce, milk, eggs and bread to encourage our
customers to visit our stores frequently. We believe that our strategy of value
cultivates customers as long-term clients of our stores by virtue of our
assortment of consistently replenishable merchandise, branded goods, 99 cent
pricing and convenient accessible locations. The value concept also increases
the frequency of consumer visits and impulse purchases and reduces our exposure
to seasonality and economic cycles. By offering merchandise in an attractive,
convenient and familiar environment, we believe that our stores appeal to a wide
demographic of customers.

         We opened our first store in 1999 and operate 18 retail stores in south
Florida. Our 99 Cent Stuff stores are located in neighborhood shopping centers
where consumers are more likely to do their regular household shopping. These
stores have an average size of approximately 20,000 square feet and in 2005
average net sales per store was $3.4 million for stores open the full year. In
2005, our average sale per customer was $10.13.

         99 Cent Stuff Stores' management team has many years of retail
experience including in the value merchandise sector. Our chairman and chief
executive officer, Raymond Zimmerman was chief executive of Service Merchandise
Company, a multi-billion dollar retail chain. All of our other senior management
have extensive retail experience.

INDUSTRY BACKGROUND

         Value retail is generally distinguished from other retail formats by
the purchase of closeout and other special-situation merchandise at prices
substantially below original wholesale cost, and the subsequent sale of this
merchandise at prices significantly below regular retail. As a result, our
stores offer a continually changing selection of brands and products. We believe
that over the last few years this segment has grown at roughly twice the pace of
the remainder of the retail industry and is one of the fastest growing retail
sectors in the United States. The recent economic downturn and difficult
consumer environment has not materially impacted this segment as demonstrated by
the financial results of other companies in this sector.

         The sale of closeout or special-situation merchandise developed in
response to the need of manufacturers, wholesalers and others to distribute
merchandise outside their normal channels. This merchandise becomes available
for a variety of reasons, including

         o    a manufacturer's over-production for seasonal or other reasons,

         o    discontinuance due to a change in style, color, size or packaging,

         o    the inability of a manufacturer or wholesaler to move merchandise
              effectively through regular channels, and

         o    the financial needs of the manufacturer.

         Many value retailers also sell merchandise that can be purchased from a
manufacturer or wholesaler on a regular basis. Although this merchandise is
usually purchased at less than the original wholesale cost and sold below normal
retail cost, the discount, if any, however, is generally less than with closeout
merchandise. Value retailers sell regularly available merchandise to ensure a
degree of consistency in their product offerings and to establish themselves
with customers as a reliable source of basic goods.

         The critical factor that drives success in the deep discount industry
is effective inventory purchasing and management. Purchasing is based on the
ability to make timely payment and to immediately take delivery of merchandise.

                                        2
<PAGE>

OUR STRATEGY

         Our goal is to operate stores providing continuous value to customers
on a wide variety of merchandise. We strive to exceed our customers'
expectations of the range and quality of name-brand consumables that can be
purchased for 99 cents. Our strategies to achieve this goal include the
following:

         Emphasize "Name-Brands". We believe that customers visit our stores in
search of name-brand consumable merchandise that can be purchased for 99 cents.
During 2005, we purchased from more than 500 suppliers, including merchandise
with the brand names General Mills, Colgate-Palmolive, Dial, Eveready Battery,
Heinz, General Electric, Gerber Products, Gillette, Hershey Foods, Johnson &
Johnson, Kraft General Foods, Lever Brothers, Mattel, Nabisco, Nestle,
Pillsbury, Hunts, Del Monte, Procter & Gamble and Revlon.

         Carry A Wide Selection Of Regularly Available Merchandise. Our retail
stores offer consumer items in many staple product categories, including food,
beverages, health and beauty aids, household products, housewares, hardware,
stationary and party goods, seasonal goods, baby products and toys, giftware,
pet products and clothing. To ensure that our merchandise offering is complete,
we also offer non-name brand items or private label items from other retailers.
By consistently offering a wide selection of consumable items, we encourage
customers to frequently visit our stores for their everyday household needs.

         Effective Store Layout. Our stores are designed for visual appeal and
functionality and are attractively merchandised, brightly lit and
well-maintained. The stores are organized in a "supermarket" format with items
in the same category grouped together. Our prototype stores average 20,000
square feet, which is significantly larger than most of our competitors. This
size store allows us to more effectively display a wide assortment of
merchandise, carry deep stock positions and provide customers with a more
inviting and convenient environment that encourages customers to shop longer and
buy more. Our stores feature central checkout lanes, scanning at point of sale
and shopping carts.

         Strong Supplier Relationships. Our goal is to develop a reputation as a
reliable purchaser of name-brand, quality merchandise at discount prices. We
strive to achieve this goal using our experienced buying staff to make immediate
buying decisions and take timely possession of merchandise, pay promptly, honor
all issued purchase orders and purchase goods close to a target season or out of
season. We have been able to improve our supplier relationships by quickly
selling name-brand merchandise without advertising.

         Careful Purchasing To Increase Margins. We strive to maintain a lean
operating environment focused on increasing operating margins. To reach this
goal, we purchase merchandise at substantially discounted prices as a result of
our buyers' knowledge, experience and negotiating skills and ability to select
desirable merchandise. We have recently begun purchasing merchandise in the Far
East.

EXPANSION STRATEGY

         The Florida market is rapidly growing and is the fourth most populous
state, with over 17 million residents or approximately 6% of the nation's
population. All of our current stores are in Miami-Dade, Broward, Palm Beach and
Martin counties, which include Miami, Ft. Lauderdale and West Palm Beach. These
densely populated counties have experienced high growth and are expected to
continue to grow in the future. We currently plan to open at least two stores in
2006. We believe that we could open up to 25 additional locations in south
Florida in the next few years. By continuing to focus our store openings in
south Florida for the immediate future, we can leverage our brand awareness and
take advantage of our existing warehouse and distribution facility and other
management and operating efficiencies.

                                       3

<PAGE>

         We believe that our value concept is easily replicated in most other
populated areas of Florida and the southeastern U.S. Other areas of Florida are
also experiencing explosive growth and we are developing plans to open up in
other major metropolitan areas in Florida such as the Tampa, Orlando,
Jacksonville and Naples/Fort Myers areas.

         As a result of our expansion plans, we developed a warehouse and
information systems for a substantially larger chain. Management believes that
the operating infrastructure we have in place today is capable of integrating a
significant number of new stores with minimal increase in corporate, warehouse
and other infrastructure expenses. Virtually all of our senior management
executives have held similar positions at retail chains of substantially greater
size. We believe that our buying teams have sufficient levels of experience to
support our expected new store growth.

TARGET CUSTOMERS

         We target value-conscious consumers from a wide range of socio-economic
backgrounds with a diverse ethnic mix and other demographic characteristics. We
have placed our stores in areas where there are at least 50,000 to 100,000
residents within a three-mile radius and where most households have income
ranging from $20,000 to $50,000. While most of our targeted customers are low
middle to middle income workers, higher income customers are also attracted by
the everyday values. The ages of our customers are distributed over the full
spectrum of ages. We believe that our stores have a relatively small shopping
radius, which allows us to concentrate multiple stores in a single market.

OUR STORES

         Our stores offer customers a wide assortment of regularly available
consumer goods as well as a broad variety of quality, closeout merchandise, all
at discounted prices. All merchandise sold in our stores sells for 99 cents per
item or multiple units for 99 cents.

         The following table sets forth relevant information with respect to the
growth of our existing 99 Cent Stuff store operations:
<TABLE>
<CAPTION>
                                                                  YEAR ENDED DECEMBER 31,
                                          -----------------------------------------------------------------------
                                             2001           2002           2003           2004            2005
                                          -----------    -----------    -----------    ------------   -----------
     <S>                                  <C>            <C>            <C>            <C>            <C>
     99 Cent Stuff Stores retail sales    $35,890,000    $38,661,000    $39,580,000    $47,147,000    $56,120,000
     99 Cent Stuff Stores annual sales      152.4%          7.7%           2.3%           19.1%          19.0%
     growth rate
     99 Cent Stuff Stores open at              8             10             11             11              15
     beginning of year
     99 Cent Stuff Stores open at end         10             11             11             15              18
     of year
     Average 99 Cent Stuff Stores         $3,678,000     $3,654,000     $3,871,000     $4,164,000      $3,358,000
     sales per store for stores open
     the full year
</TABLE>

         Merchandising. We believe that the appeal of our 99 Cent Stuff stores
arises from the perceived value in selling products that generally retail
elsewhere from $1.19 to $9.99, for only 99 cents per item or group of items.
Each store typically carries over 6,000 to 8,000 different stock keeping units
or SKUs. The merchandise sold in the stores primarily consists of a wide variety
of basic consumer items, including:

       o   Arts and crafts supplies       o   Frozen foods
       o   Bakery products                o   Gifts
       o   Beverages                      o   Glassware
       o   Books                          o   Grocery
       o   Candy and snacks               o   Health and beauty aids
       o   Canned goods                   o   Home hardware and automotive
       o   Cereals and crackers           o   Household/kitchen plastic products
       o   Cleaning supplies              o   Office and School Supplies
       o   Costume jewelry                o   Paper products
       o   Domestics                      o   Fresh produce and flowers
       o   Ethnic foods                   o   Pet food and supplies
                                          o   Seasonal goods

                                       4

<PAGE>

         Approximately 75% of our products sold are food and candy, health and
beauty aids, household basics and seasonal goods.

         Although our stores regularly carry a variety of basic household
consumer items, unlike typical discount retail stores, we do not continuously
stock complete lines of merchandise. Although some of the merchandise we
purchase is available for reorder, the mix of brands and products frequently
changes, depending upon the availability of merchandise at suitable prices. In
some of the stores we offer additional ethnic food products that are targeted to
the store's local customer base. To date, we have found that there is an
adequate supply of name brand closeouts and re-orderable merchandise available
to purchase at attractive prices. We believe that continuously changing specific
name-brands found in stores from one week to the next encourages impulse and
larger volume purchases and results in customers shopping more frequently.
Unlike many discount retailers, we rarely impose a limit on the quantity of
specific items that may be purchased by a single consumer.

         Store Characteristics. All 18 of our 99 Cent Stuff stores are located
in south Florida. Our stores average 20,000 square feet. We currently target new
store locations of 20,000 square feet. The larger stores allow us to more
effectively display a wider assortment of merchandise, carry deeper stock
positions and provide customers with a more inviting and convenient environment
that encourages customers to shop longer and buy more.

         The stores are located in neighborhood shopping centers where consumers
are more likely to do their regular household shopping. The stores are located
primarily in more densely populated, demographically diverse neighborhoods. Five
of the stores are in Miami-Dade County, five are in Palm Beach County, seven are
in Broward County and one in Martin County.

         Our stores are attractively merchandised, brightly lit,
well-maintained, "destination" locations. The layout of each of the stores is
customized to the size and configuration of the individual location and the
desire to focus on particular product lines from time to time. The interior of
each store is, however, designed to reflect a uniform format, like a typical
supermarket, featuring traditional merchandise display techniques, bright
lighting, lower shelving height that allows unobstructed visibility throughout
the store, distinctive color scheme, interior and exterior signage and
customized check-out counters and price tags. Merchandising displays are
maintained throughout the day, change frequently and often incorporate seasonal
themes. We believe that due to the continuously changing brand-names and layout,
the typical customer tends to shop the whole store.

         Customer purchases are by cash, credit and debit cards, food cards or
check. The stores do not accept manufacturers' coupons. The stores are generally
open 9 A.M. to 9 P.M. every day.

         Store Management. Typically a store is staffed with a manager and an
assistant manager. We currently employ one district manager responsible for
store operations. In the future, each district manager will be responsible for
approximately fifteen stores. The store managers report to the district manager
and the district manager report to the CEO. The district manager visits each
store at least twice a week and focuses on the implementation of policies,
operations and merchandising philosophy. The district manager also helps train
store management and assists store management with scheduling.

         Advertising/Promotion. To date, we have done limited advertising.
Initial awareness of new store openings is created using local newspaper "grand
opening" ads and pre-opening handout flyers. For future store openings, we plan
to use a grand opening promotional campaign that will include distribution of an
advertising flyer. Our stores feature bright colorful signage to grab customers'
attention and emphasize everyday values. We also use in-store coupons to entice
customers to purchase multiple items and to return for future purchases of the
same item.

                                       5

<PAGE>

         New Store Costs. The total cost of a new store ranges from
approximately $350,000 to $500,000. The capital investment for each new store
ranges from $150,000 to $300,000, depending on landlord allowances and existing
improvements, and a least $200,000 required for opening inventory. We also spend
approximately $30,000 for pre-opening expenses.

PURCHASING

         Our purchasing department staff consists of five buyers. Substantially
all merchandise buying decisions are made at headquarters. We believe a primary
factor contributing to our success will be our ability to identify and take
advantage of opportunities to purchase merchandise with high customer interest
at lower than regular wholesale prices. We purchase most of our merchandise from
wholesalers, manufacturers, importers and other retailers. All of our purchases
are for cash. Over time, we expect that our purchases directly from the
manufacturer will increase substantially to up to 50% of our purchases. We
continually seek to develop new sources of merchandise primarily by attending
industry trade shows, and through advertising, marketing brochures and
referrals. Our buyers also regularly travel to New York, Los Angeles, Chicago,
Las Vegas and the Far East to source identify, inspect and purchase new
merchandise.

         We do not have any contracts for the purchase of merchandise and we
continuously seek out buying opportunities from both existing suppliers and new
sources. Other than our produce supplier, which represented approximately 28% of
our total purchases due to the high turnover of inventory, no single supplier
accounted for more than 5% of total purchases in 2005. During 2005, we purchased
from more than 500 suppliers, including merchandise with the General Mills,
Colgate-Palmolive, Dial, Eveready Battery, Heinz, General Electric, Gerber
Products, Gillette, Hershey Foods, Johnson & Johnson, Kraft General Foods, Lever
Brothers, Mattel, Nabisco, Nestle, Pillsbury, Hunts, Del Monte, Procter & Gamble
and Revlon brand names. Some purchases are directly from the manufacturer and
some are from suppliers and distributors.

         Approximately half of the merchandise we purchased is re-orderable and
the remainder was closeout or special-situation merchandise. Our buyers search
continuously for closeout opportunities and quality re-orderable merchandise.
Our experience and expertise in buying merchandise has enabled us to develop
relationships with many manufacturers that offer some or all of their closeout
and special-situation merchandise to us prior to attempting to sell it through
other channels because it can be moved quickly through our stores. Our
relationships with many manufacturers and distributors, along with our ability
to purchase in large volumes, also enables us to purchase re-orderable
name-brand goods at discounted wholesale prices. We believe that our
relationship with suppliers is further enhanced by our ability to minimize
channel conflict for the manufacturer by quickly selling name-brand merchandise
without, if requested by the supplier, advertising the item.

         We believe that our relationships with our current suppliers is
excellent. In order to achieve the lowest prices, many suppliers require payment
prior to delivery of the goods or payment at the time of delivery. Our inability
to pay in advance has thus required us to pay higher prices at certain times,
limited our ability to purchase from those suppliers that require payments not
on terms or forced us to make late payment penalties.

         During 2005 our buyers traveled to the Far East and increased our
direct importing of goods, which we have higher margins. During the year we also
determined to remerchandise our stores with higher margin inventory, and
therefore we slowed down shipments to our stores so that we could sell off our
lower margin merchandise and thereby enable us to effectuate this conversion.
The transition has taken longer than we anticipated and we incurred some
execution problems including overstocking at our warehouse and reduced inventory
at the store level.

WAREHOUSING AND DISTRIBUTION

         We lease a 65,000 square foot, single level warehouse and distribution
facility in Medley, Florida. This site is conveniently located near freeway,
rail systems and ports. The distribution facility has 13 dock doors available
for receiving. Most of our merchandise is shipped directly from manufacturers
and other suppliers to this facility and the remainder is delivered directly to

                                       6

<PAGE>

our stores. We contract with local shippers to deliver merchandise to our stores
from the warehouse. Deliveries are made from our distribution center to each
store two to five times a week, depending on need. Most merchandise is
automatically replenished to our stores using a computerized stock distribution
model that orders new merchandise for delivery based on recent sales. The size
of the distribution center allows storage of bulk one-time closeout purchases
and seasonal or holiday items without incurring additional costs.

INVENTORY MANAGEMENT AND INFORMATION SYSTEMS

         Our inventory management system records transactions by SKU from the
receipt of goods at the warehouse through the shipment to the stores. Most goods
have UPC barcodes to record sales allowing our point of sale or POS system to
track the merchandise. Tracking by UPC allows us to manage and track sales by
SKU, vendor and department. This allows us to identify sales trends early and to
attempt to purchase additional inventory of fast-moving items. It also
identifies slow-moving inventory on a timely basis so that we can develop
orderly programs to sell any slow-moving inventory in the ordinary course of
business or to cut back on future purchases of these items.

         Our information technology is based on SBT Pro Series system. We have a
custom-designed POS system with a simple and efficient interface very specific
to the 99 cents price point. Checkout registers are fully integrated into the
POS system. The warehouse uses the SBT Purchase Order and Inventory Control
modules.

         We intend to upgrade our information management technology in the
future to better manage our inventories for growth beyond 25 stores. The new
systems implemented in this project will provide us with valuable sales
information to assist our buyers and improve merchandise allocation to our
stores. Controlling our inventory levels will result in more efficient
distribution and store operations.

COMPETITION

         There are no major competitors in big-box, single-price deep discount
sector in our south Florida market at this time. However, we do face competition
in both the acquisition of inventory and sale of merchandise from other value
discount stores, traditional retail stores, grocery stores and mass
merchandisers. Similar concepts exist in other regional markets, such as

     o    99 Cents Only Stores (NYSE: NDN), located primarily in California,
          Arizona and Nevada;
     o    Dollar Tree (Nasdaq: DLTR), Family Dollar (NYSE: FDO) and Dollar
          General (NYSE: DG) located nationally including Florida; and
     o    over 4,000 small retailers

         We believe that our concept is most similar to 99 Cents Only. Family
Dollar and Dollar General offer multi-priced merchandise at prices of up to $30
and generally both operate smaller stores in urban locations catering to lower
income customers. Dollar Tree also offers less closeout merchandise than our
stores.

         Industry competitors also include a large number of privately held
companies and individuals. There is increasing competition with other
wholesalers and retailers, including other value retailers, for the purchase of
quality closeout and other special-situation merchandise. Some of these
competitors have substantially greater financial resources and buying power than
us. Our ability to compete will depend on many factors including the success of
our purchase and resale of such merchandise at lower prices than the
competition. We may face intense competition in the future from new entrants in
the value retail industry, among others, that could take away our customers,
which could hurt our revenues.

TRADEMARKS AND SERVICE MARKS

         The trademark "99 Cent Stuff" has been registered in the Supplemental
Register. The other trademarks we own and use in connection with our goods and
services are not registered. There are several federally-registered trademarks
containing "99 Cents" and the owners of these trademarks may challenge the use

                                       7

<PAGE>

of our name and other marks which include "99 Cent". If challenged, we may be
forced to change the name of our stores and our other marks. We cannot assure
you that we will have the right to use our current name and other marks in the
future. Management believes that our current name and other trademarks have name
recognition value in our market but are not critical elements of our
merchandising strategy. We have applied for trademarks for some of our names but
cannot assure you that they will be granted.

EMPLOYEES

         At March 10, 2006, we had 525 employees of whom 471 were in our retail
operations, 35 in our warehouse and distribution facility and 19 in our
corporate offices. None of our employees is party to a collective bargaining
agreement. We consider relations with our employees to be good. We offer certain
benefits, including health insurance, to our full time employees.













                                       8


<PAGE>


ITEM 1A.   RISK FACTORS

FACTORS THAT MAY AFFECT OUR FUTURE RESULTS

         If any of the following risks and uncertainties actually occur, our
business' financial condition or operating results may be materially and
adversely affected. In this event, the trading price of our common stock may
decline and investors may lose part or all of its investment.

WE HAVE HAD LOSSES SINCE INCEPTION IN 1999, WHICH HAS AFFECTED OUR WORKING
CAPITAL.

         We had losses of $6.6 million in 2005, $3.6 million in 2004 and $3.7
million in 2003. We cannot assure you that we will have a profit in 2006 or any
future year. Due to these losses, we had a negative working capital of $0.9
million and a shareholders' deficit of $14.9 million at December 31, 2005 and
have continued to need cash for operations. The negative working capital amount
excludes approximately $11.8 million owed to Raymond Zimmerman, our chairman and
principal shareholder. Our losses since inception in 1999 were due to

     o    costs associated with the opening of all of its stores,
     o    inability from time to time to properly purchase inventory and stock
          the stores due to cash shortfalls,
     o    costs associated with establishing our warehouse and corporate
          operations,
     o    costs associated with developing and implementing our information
          technology systems for the warehouse and stores, and
     o    interest on loans to Mr. Zimmerman and our bank.

OUR AUDITORS HAVE ISSUED A GOING CONCERN OPINION.

         Because of the uncertainties in its ability to satisfy its future
capital needs, our auditors' report on its financial statements for the year
ended December 31, 2005 contains an explanatory paragraph about its ability to
continue as a going concern

WE WILL BE UNABLE TO GENERATE PROFITS UNLESS WE INCREASE OUR GROSS MARGINS AND
VOLUME.

         The key to achieving profitability in the value business is to be able
to rapidly purchase goods and be able to pay within terms in order to obtain the
lowest prices. Given our operating expenses, we need to increase our gross
margins in order to be profitable.

WE HAVE BEEN FINANCIALLY DEPENDENT ON OUR PRINCIPAL SHAREHOLDER FOR MUCH OF OUR
CAPITAL.

         Since inception in 1999, we have been funded principally from loans
provided by Raymond Zimmerman, our principal shareholder and bank loans
personally guaranteed by Mr. Zimmerman. Other than the public offering in 2004
that raised approximately $3.4 of net proceeds, we have not generally relied
upon other external sources of financing. Although Mr. Zimmerman converted $14.6
million to equity in 2003, he is still owed approximately $11.8 million and has
ongoing personal guarantees of $6.0 million of bank loans and several of our
property leases. Mr. Although Mr. Zimmerman has provided $1.2 million of
advances through March 27, 2006, he has not committed to provide any additional
capital during the remainder of 2006 to fund any current period deficits in
operating cash flow. While Mr. Zimmerman has indicated that he will continue the
guarantees indefinitely, his failure to continue these guarantees will cause the
loans and leases to default and thus materially harm our financial position if
we were unable to renegotiate acceptable terms.

WE WILL NEED ADDITIONAL CAPITAL TO IMPLEMENT OUR LONG TERM PLANS.

         We will need additional capital if we are to implement our long-term
expansion plans. It is also possible that we will be unable to obtain the
additional funding when we need it. If we are unable to obtain additional
funding as and when needed, we could be forced to delay opening new stores.
Additional capital could be raised through the sale of additional equity or debt
securities or the exercise of warrants. Additional equity may be obtained on
terms that may be dilutive to existing investors.

                                       9

<PAGE>

WE NEED NEW STORE OPENINGS OR WE WILL NOT ACHIEVE FUTURE GROWTH.

         Our operating results depend largely on our ability to open and operate
new stores successfully and to manage a larger business profitably. Our strategy
depends on our ability to secure financing to open and operate these stores. Any
failure by us to:

     o    identify suitable markets and sites for our new stores;
     o    negotiate leases with acceptable terms;
     o    achieve our expansion goals on a timely basis;
     o    obtain acceptance in markets in which we currently have limited or no
          presence;
     o    appropriately upgrade our financial and management information
          systems; and
     o    control or manage operating expenses

could decrease our future operating results and hurt our ability to execute our
business strategy. Some of these factors are beyond our control and we cannot
assure you that we will be able to achieve our goals.

         We also cannot assure you that when we open new stores, we will improve
our results of operations. A variety of factors, including store location, store
size, rental terms, the level of store sales and the level of initial
advertising influence if and when a new store becomes profitable. We cannot
assure you that our new stores will achieve acceptable sales per saleable square
foot and store-level operating margins. If our new stores on average fail to
achieve these results, our planned expansion could produce a decrease in our
overall sales per saleable square foot and store-level operating margins.
Increases in the level of advertising and pre-opening expenses associated with
the opening of new stores could also contribute to a decrease in our operating
margins. Finally, the opening of new stores in existing markets may reduce
retail sales of existing stores in those markets, negatively affecting
comparable store sales.

COST INCREASES COULD IMPACT OUR ABILITY TO PROVIDE QUALITY MERCHANDISE FOR 99
CENTS.

         Our ability to provide quality merchandise at the 99 cents price point
is subject to certain economic factors, which are beyond our control, including
inflation, tariffs on imported goods, general trade conditions and the
availability of merchandise at prices that would permit us to maintain our price
point with acceptable margins. Due to our inability to raise our prices,
inflation or other cost increases could hurt our margins. Our methods to respond
to ordinary price increases resulting from inflationary pressures is to adjust
the number of items sold at for 99 cents and by changing our selection of
merchandise. A sustained trend of significantly increased inflationary pressure
could require us to abandon our single price point of 99 cents per item or to
raise our price point, which could force us to change our strategy and change
our business model.

ALL OF OUR OPERATIONS ARE IN SOUTH FLORIDA, LEAVING US VULNERABLE TO EVENTS
SPECIFIC TO THIS REGION.

         All of our 99 Cent Stuff Stores are currently located in south Florida.
Accordingly, our results of operations and financial condition largely depend
upon trends in the south Florida economy. Although this region's economy has
remained strong, this trend may not continue and retail spending could decline
in the future. At times, natural disasters such as hurricanes and other events
have disrupted the local economy. These events could also pose physical risks to
our properties.

BECAUSE ALL OF OUR STORES RELY ON A SINGLE DISTRIBUTION CENTER, ANY DISRUPTION
COULD REDUCE OUR NET SALES.

         We currently rely on a single distribution center in Medley, Florida.
Any natural disaster or other serious disruption to this distribution center due
to fire, hurricane or any other cause could damage a significant portion of our
inventory and could materially impair both our ability to adequately stock our
stores and our sales and profitability, particularly because much of our
merchandise consists of closeouts and other irreplaceable products.

                                       10

<PAGE>

OUR SUCCESS DEPENDS UPON THE AVAILABILITY OF CLOSEOUT AND SPECIAL-SITUATION
MERCHANDISE AND WE MAY NOT BE ABLE TO FIND AND PURCHASE MERCHANDISE IN
QUANTITIES NECESSARY TO ACCOMMODATE OUR GROWTH.

         Our success depends in large part on our ability to locate and purchase
quality closeout and special-situation merchandise at attractive prices. We
cannot be certain that merchandise will continue to be available in the future.
Further, we may not be able to find and purchase merchandise in quantities
necessary to accommodate our growth. Additionally, our suppliers sometimes
restrict the advertising, promotion and method of distribution of their
merchandise. These restrictions in turn may make it more difficult for us to
quickly sell these items from our inventory.

         Although we believe our relationships with our suppliers are good, we
do not have any written agreements with any supplier. As a result, we must
continuously seek out buying opportunities from our existing suppliers and from
new sources. We compete for these opportunities with other wholesalers and
retailers, value, discount and deep-discount chains, mass merchandisers, food
markets, drug chains, club stores and various privately-held companies and
individuals. One of our suppliers provided approximately 28% of our total
purchases in 2005. Although we do not depend on this or any other single
supplier or group of suppliers, a disruption in the availability of merchandise
at attractive prices could impair our business.

WE RELY HEAVILY ON RAYMOND ZIMMERMAN AND THE LOSS OF HIM WILL DAMAGE OUR
OPERATIONS.

         Our success depends substantially on Raymond Zimmerman, our Chairman
and Chief Executive Officer. Mr. Zimmerman has provided our strategic direction
and financial support since our inception. We do not maintain key person life
insurance on him.

WE NEED TO HIRE ADDITIONAL MANAGEMENT AND RETAIN EXISTING MANAGEMENT OR WE WILL
NOT BE ABLE TO GROW OUR BUSINESS.

         We believe that we will need to hire additional management to manage
our planned growth. Our success will depend on our ability to identify, attract,
hire, train, retain and motivate highly skilled management personnel and the
loss of Mr. Zimmerman or other key management without suitable replacements will
harm our business.

OUR OPERATING RESULTS MAY FLUCTUATE AND MAY BE AFFECTED BY SEASONAL BUYING
PATTERNS, COMPARABLE STORE SALES AND OTHER FACTORS.

         Historically, our highest revenues and operating income have occurred
during months with major holidays such as Christmas and Easter, which affect our
operating results. In addition to seasonality, many other factors may cause our
results of operations to vary significantly from quarter to quarter. If we
miscalculate the demand for our products generally or for our product mix during
peak periods, our revenues could decline, resulting in excess inventory, which
could harm our margins and cash flow. Some of these factors are beyond our
control. These factors include:

     o    the timing of new store openings;
     o    the integration of new stores into our operations;
     o    the level of pre-opening expenses associated with new stores;
     o    general economic health of the value and deep-discount retail
          industries;
     o    changes in the mix of products sold;
     o    unexpected increases in shipping costs;
     o    ability to successfully manage our inventory levels;
     o    changes in our personnel;
     o    fluctuations in the amount of consumer spending; and
     o    the amount and timing of operating costs and capital expenditures
          relating to the growth of our business.

                                       11

<PAGE>

WE FACE STRONG COMPETITION FOR CUSTOMERS AND TO PURCHASE INVENTORY, WHICH
AFFECTS OUR PROFITABILITY.

         We compete in both the acquisition of inventory and sale of merchandise
with

     o    discount and deep-discount stores,
     o    single price point merchandisers,
     o    mass merchandisers,
     o    food markets,
     o    drug chains, and
     o    club stores

         In the future, new companies may also enter the value retail industry.
Additionally, we currently face increasing competition for the purchase of
quality closeout and other special-situation merchandise.

         Some of our competitors have substantially greater financial resources
and buying power than us. Our capability to compete will depend on many factors
including our ability to successfully purchase and resell merchandise at lower
prices than our competitors and the perceived value to consumers. We may not be
able to compete successfully against our current and future competitors. If we
are unable to compete successfully, our operating results will suffer.

WE FACE THE RISK OF LOSS FROM INVENTORY SHRINKAGE.

         The retail industry is subject to theft by customers and employees, and
damage to goods in the course of operations. Significant inventory shrinkage in
the future would increase our cost of goods sold and decrease our profitability.

OUR INFORMATION TECHNOLOGY SYSTEMS ARE VULNERABLE TO DAMAGE THAT COULD HARM OUR
ABILITY TO MANAGE OUR INVENTORY SYSTEMS.

         Our success, in particular our ability to successfully manage inventory
levels, largely depends upon the efficient operation of our computer hardware
and software systems. We use management information systems to track inventory
information at the store level, communicate customer information and aggregate
daily sales information. These systems and our operations are vulnerable to
damage or interruption from:

     o    hurricane, fire, flood and other natural disasters;
     o    power loss, computer systems failures, internet and telecommunications
          or data network failure, operator negligence, improper operation by or
          supervision of employees, physical and electronic loss of data or
          security breaches, misappropriation and similar events; and
     o    computer viruses.

         Any failure that causes an interruption in our operations or a decrease
in inventory tracking could result in reduced net sales.

OUR ANTI-TAKEOVER PROVISIONS COULD PREVENT OR DELAY A CHANGE IN CONTROL OF OUR
COMPANY, EVEN IF SUCH CHANGE OF CONTROL WOULD BE BENEFICIAL TO OUR SHAREHOLDERS.

         Provisions of our articles of incorporation and bylaws as well as
provisions of Florida law could discourage, delay or prevent a merger,
acquisition or other change in control of our company, even if such change in
control would be beneficial to our shareholders. These provisions include:

     o    a board of directors that is classified such that only one-third of
          directors are elected each year;
     o    authorizing the issuance of blank check preferred stock that could be
          issued by our board of directors to increase the number of outstanding
          shares and thwart a takeover attempt;
     o    limitations on the ability of shareholders to call special meetings of
          shareholders; and
     o    establishing advance notice requirements for nominations for election
          to the board of directors or for proposing matters that can be acted
          upon by shareholders at shareholder meetings.

                                       12

<PAGE>

         In addition, provisions of the Florida Business Corporation Act
restrict business combination transactions with parties that have not been
approved by the board of directors. These provisions and other similar
provisions make it more difficult for a third party to acquire us without
negotiation. These provisions may apply even if the transaction may be
considered beneficial by some shareholders.

WE ARE CONTROLLED BY OUR PRIMARY SHAREHOLDER. HIS INTERESTS MAY CONFLICT WITH
YOUR INTERESTS.

         Raymond Zimmerman and his family beneficially own approximately 81% of
our outstanding common stock. For as long as Mr. Zimmerman and his family
continue to own shares of common stock representing more than 50% of the voting
power of our common stock, he will be able to direct the election of all of the
members of our board of directors and determine the outcome of all matters
submitted to a vote of our shareholders, including matters involving mergers or
other business combinations, the acquisition or disposition of assets, the
incurrence of indebtedness, the issuance of any additional shares of common
stock or other equity securities and the payment of dividends on common stock.
Mr. Zimmerman will also have the power to prevent or cause a change in control,
and could take other actions that might be desirable to him but not to other
shareholders. Mr. Zimmerman's interests may be different from the interests of
the other shareholders. This could limit the voting and other rights of our
other shareholders and could depress the market price of our common stock.


OUR FINANCIAL RELIANCE ON OUR PRIMARY SHAREHOLDER MAY ACT AS AN IMPEDIMENT TO A
CHANGE OF CONTROL.

         We owe Raymond Zimmerman approximately $11.8 million for advances he
has made. Approximately $5.0 million of this amount is convertible into common
stock at $5.00 per share. He is also the guarantor on our bank loans and
property leases. Mr. Zimmerman's ability to cancel his guarantees could act as
an impediment to a change of control of the company at such time as Mr.
Zimmerman would beneficially own less than a majority of the outstanding common
stock.

THERE IS A LIMITED MARKET FOR OUR COMMON STOCK.

         Our common stock has historically traded on a limited basis. If we are
not able to develop an active public trading market for the shares, investors
may have limited liquidity and may be forced to hold the shares for an
indefinite period of time.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not Applicable

ITEM 2.  PROPERTIES

         All of our stores are leased. We typically seek leases with an initial
five-year to ten-year term and with one or more five-year options. We identify
potential sites through a network of contacts within the brokerage and real
estate communities. We expect that many of our new sites will be former big box
retailers or grocery stores. For some of the sites we have taken space that
exceeds our needs due to a desirable location or a favorable rent arrangement.
The following table describes the location and size of our properties.
<TABLE>
<CAPTION>
                                                                       SALEABLE SQUARE
LOCATION                                   GROSS SQUARE FEET                FEET                    DATE OPENED
------------------------------------      --------------------       --------------------       --------------------
  <S>                                           <C>                        <C>                     <C>
  Miami                                         24,207                     18,155                  October 1999
  South Miami                                   22,000                     16,500                  October 1999
  Boynton Beach                                 19,590                     14,693                  October 1999
  Lake Worth                                    19,360                     17,000                  December 2000
  West Palm Beach                               19,235                     14,520                  January 2001
  Coral Springs                                 20,432                     14,426                  December 2000
  Deerfield Beach                               44,000                     28,000                  January 2001
  North Miami                                   17,760                     15,000                   April 2001
  Commercial                                    22,772                     17,000                    May 2002
  Northlake                                     12,000                     11,000                    June 2003

</TABLE>

                                       13

<PAGE>

<TABLE>
<CAPTION>
                                                                       SALEABLE SQUARE
LOCATION                                   GROSS SQUARE FEET                FEET                    DATE OPENED
------------------------------------      --------------------       --------------------       --------------------
  <S>                                           <C>                        <C>                     <C>

  Jensen Beach                                  27,109                     22,109                    June 2004
  Pembroke Pines                                27,109                     22,109                    July 2004
  Hialeah                                       20,560                     15,560                   August 2004
  Pembroke Pines East                           12,000                     11,000                  December 2004
  Kendall                                       19,709                     16,000                  January 2005
  Deerfield Beach East                          11,200                     10,000                   April 2005
  Lauderdale Lakes                              23,744                     20,744                   August 2005
  Boca Raton                                    35,922                     26,000                  November 2005
  Miami Warehouse                               64,000                        -                   September 2004
  Boca Raton Corporate Office                    4,300                        -                     August 2003
</TABLE>

         The initial terms of the leases expire from 2006 to 2015 and the base
rent varies from $2.75 to $13.25 per square foot. Most of the leases have
renewal options. Some of our leases are currently guaranteed by Raymond
Zimmerman, our chairman and principal shareholder. Mr. Zimmerman is paid a fee
equal to 2% of the amounts guaranteed.

         At our Boca Raton corporate office we have our administrative,
purchasing, finance and information technology departments.


ITEM 3.  LEGAL PROCEEDINGS

         We are not currently a party to any legal actions that if determined
adversely that would materially affect us.

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

         Not applicable










                                       14

<PAGE>


                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
        ISSUER PURCHASES OF EQUITY SECURITIES

         Our common stock trades on the OTC Bulletin Board under the symbol NNCT
and our warrants under the symbol NNCTW. The following table sets forth the
range of high and low closing sale price as reported by the OTC Bulletin Board
for our common stock and the warrants for the quarters indicated. The common
stock prices have been adjusted for the 1-for-30 reverse split and the
additional 1-for-4 reverse split effective September 15, 2003. The OTC Bulletin
Board quotations represent quotations between dealers without adjustment for
retail mark-up, markdowns or commissions and may not represent actual
transactions.

COMMON STOCK
                 2003                               HIGH              LOW
                                                 ----------        ----------
                 January 1 to March 31             $10.80           $  4.80
                 April 1 to June 30                $12.00           $  7.20
                 July 1 to September 30           $  9.75           $  6.05
                 October 1 to December 31          $ 9.60            $ 5.10
                 2004
                 January 1 to March 31             $6.05             $5.00
                 April 1 to June 30                $5.35             $4.60
                 July 1 to September 30            $6.50             $4.65
                 October 1 to December 31          $5.90             $5.00
                 2005
                 January 1 to March 31             $5.45             $5.10
                 April 1 to June 30                $5.10             $3.10
                 July 1 to September 30            $3.10             $2.35
                 October 1 to December 31          $2.66             $0.82

WARRANTS
                 2004
                 January 1 to March 31              $1.00             $.85
                 April 1 to June 30                 $1.10            $1.10
                 July 1 to September 30             $1.60            $1.60
                 October 1 to December 31           $1.35            $1.35
                 2005
                 January 1 to March 31              $1.50            $1.13
                 April 1 to June 30                 $1.10            $0.35
                 July 1 to September 30             $0.30            $0.21
                 October 1 to December 31           $0.25            $0.15

         As of March 15, 2006, there were approximately 390 record holders of
the Common Stock. In addition, there were approximately 700 shareholders in
street name whose shares are held in the name of other nominees. The transfer
agent for the common stock is Signature Stock Transfer, Inc., Dallas, Texas.

DIVIDEND POLICY

         We intend to retain all our earnings to finance the growth and
development of our business. We do not anticipate paying any cash dividends on
our common stock in the foreseeable future. Any future change in our dividend
policy will be made at the discretion of our board of directors and will depend
on any applicable contractual restrictions on us contained in our financing
credit facilities and other agreements, our results of operations, earnings,
capital requirements and other factors considered relevant by our board of
directors.

RECENT SALES OF UNREGISTERED SECURITIES

         None


                                       15
<PAGE>

ITEM 6.    SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                       (in thousands, except per share numbers)

                                2001       2002        2003        2004        2005
                             --------    --------    --------    --------    --------
<S>                           <C>        <C>         <C>         <C>         <C>
STATEMENT OF OPERATIONS
DATA

   Net sales                 $ 35,889    $ 38,661    $ 39,580    $ 47,147    $ 56,120
   Cost of goods sold          26,261      28,683      28,583      33,975      40,968
                             --------    --------    --------    --------    --------

   Gross profit                 9,628       9,978      10,997      13,172      15,152

   Selling, general
   administrative expenses     14,558      14,035      13,552      16,260      20,758
                             --------    --------    --------    --------    --------

   Loss from operations        (4,930)     (4,057)     (2,555)     (3,088)     (5,606)

   Other expense                1,581       1,288       1,160         470       1,017
                             --------    --------    --------    --------    --------

   Net loss                  $ (6,511)   $ (5,345)   $ (3,715)   $ (3,558)   $ (6,623)
                             ========    ========    ========    ========    ========

   Net loss per share        $  (1.37)   $  (1.13)   $  (0.77)   $  (0.62)      (1.14)
                             ========    ========    ========    ========    ========

   Weighted average
   common
   shares outstanding           4,750       4,750       4,833       5,747       5,834
</TABLE>



<TABLE>
<CAPTION>
                                2001       2002        2003        2004        2005
                             --------    --------    --------    --------    --------
<S>                           <C>        <C>         <C>         <C>         <C>
BALANCE SHEET DATA (1):

   Working capital
   (deficit)                $ (3,254)   $ (1,157)   $   (247)   $ (5,841)   $   (916)
   Total assets                7,881       5,817       5,732       7,805       7,637
   Total long term debt           --       6,876      10,570       6,059    $ 17,429
   Total equity (deficit)   $    661    $ (4,684)   $ (8,069)   $ (8,333)   $(14,856)
</TABLE>

------------
(1)  The balance sheet data has been restated to give retroactive effect to the
     conversion of a related party notes payable and accrued interest to
     shareholders' equity of $14,592 at December 31, 2001 and 2002.


                                       16
<PAGE>


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

GENERAL

         99 Cent Stuff is a Florida-based single-priced deep-discount retailer
of primarily, consumable general merchandise. Our stores offer a wide assortment
of regularly available consumer goods as well as a broad variety of quality,
closeout merchandise. Our product offerings are comprised of brand name
merchandise and closeouts merchandise that may be available for reorder. Every
product is sold for 99 cents or less. We provide our customers value on their
everyday household needs and a positive shopping experience in
customer-service-oriented stores, which are attractively merchandised, brightly
lit and well maintained. We believe that our name-brand focus, along with a
product mix emphasizing value-priced food and beverage and other everyday
household items, increases the frequency of consumer visits and impulse
purchases and reduces some of our exposure to seasonality and economic cycles.
We believe that our format appeals to value-conscious customers in all
socio-economic groups and results in a high volume of sales.

         We operate 18 retail stores in south Florida. We opened our first three
stores in 1999, four stores in 2000, two stores in 2001, one in 2002, one in
2003, four in 2004 and three in 2005. In the past, as part of our strategy to
expand retail operations, we have opened new stores in close proximity to
existing stores so that would be more efficient in distribution, marketing and
branding. We have built corporate and warehouse support staff and systems that
we believe can handle our planned expansion. As a result of our start-up costs,
operating costs and these expenses, we have recorded losses since inception.

         Our customers use cash, checks and third-party credit and debit cards
and food cards to purchase our products. We do not issue private credit cards or
make use of complicated financing arrangements.

         99 Cent Stuff only operates in one business segment, which is retail
operations.

         The key to achieving profitability in the value business is to be able
to rapidly purchase goods and be able to pay within terms in order to obtain the
lowest prices. From time to time, due to our lack of operating cash, we were not
able to purchase inventory in the most efficient fashion and we have generally
incurred lower margins than some of our competitors. This has also affected our
revenues. We have been instituting various changes to our buying and
merchandising to increase our gross margins to satisfactory levels.

         Our success depends in large part on our ability to locate and purchase
quality closeout and special-situation merchandise at attractive prices. We must
continuously seek out buying opportunities from our existing suppliers and from
new sources. We compete for these opportunities with other wholesalers and
retailers, value, discount and deep-discount chains, mass merchandisers, food
markets, drug chains, club stores and various privately-held companies and
individuals.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

         The preparation of our consolidated financial statements requires us to
make estimates and assumptions that affect the reported amounts. The estimates
and assumptions are evaluated on an on-going basis and are based on historical
experience and on various other factors that are believed to be reasonable.
Estimates and assumptions include, but are not limited to, fixed asset lives,
intangible assets, income taxes, and contingencies. We base our estimates on
historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions. 99 Cent Stuff believes the
following critical accounting policies affect its more significant judgments and
estimates used in the preparation of the financial statements.

                                       17
<PAGE>

         Inventory: Our accounting for inventory and cost of goods sold requires
us to estimate the value of such assets and cost of such assets sold and to
continually assess whether such assets are impaired and the cost of goods sold
is presented fairly. We believe that at December 31, 2005 and December 31, 2004
no inventory was impaired.

         Further information is provided in Note 2 to the Consolidated Financial
Statements.

RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2005 COMPARED TO YEAR ENDED DECEMBER 31, 2004

Net sales. Net sales increased $9.0 million, or 19.0%, to $56.1 million in 2005
from $47.1 million in 2004. Same store net sales, for stores open all of both
periods, decreased $4.5 million in 2005, or 9.6%, compared to the prior year.
The increase in net sales was primarily due to new store openings in the second
half of 2004 and 2005. The decrease in same store sales is primarily due to our
planned strategy to remerchandise our stores with higher margin goods and
therefore we slowed down inventory shipments to our stores to allow us to
effectuate this conversion, which was completed in June 2005. In addition,
higher gasoline prices and the lingering effects of Hurricane Wilma adversely
affected the fourth quarter of the year. During 2005, approximately 28.0% of our
sales were of produce, which has a much higher turnover but lower margins than
other items sold in our stores. We anticipate that sales of produce will
decrease as a percentage of net sales due to increased purchasing of higher
margin items. We have resumed our direct import program from the Far East and
anticipate increased margins in 2006.

Gross profit. Gross profit, which consists of net sales less cost of goods sold,
increased $2.0 million, or 15.0%, to $15.2 million in 2005 from $13.2 million in
2004. As a percentage of net sales, gross profit decreased to 27.0% in 2005 from
27.9% in 2004 and was primarily attributable to a change in the product mix and
cost variations.

Selling, general and administrative. Selling, general and administrative
expenses, or SG&A, which include operating expenses and depreciation and
amortization, increased $4.5 million, or 27.7%, to $20.8 million in 2005 from
$16.3 million in 2004 and was primarily attributable to increased wages and
related benefits of $1.7 million, occupancy costs of $1.8 million, hurricane
expenses of $0.3 million including spoilage, property damage and clean-up, store
supplies of $0.2 million, insurance expense of $0.2 million, and depreciation
and amortization of $0.2 million.

Operating loss. Operating loss increased $2.5 million, or 81.5%, to $5.6 million
in 2005 from $3.1 million in 2004. As a percentage of net sales, operating loss
was 9.9% in 2005 and 6.5% in 2004 and is primarily attributable to the items
discussed above.

Other (income) expense. Interest expense increased $0.6 million, or 104.8%, to
$1.1 million in 2005 from $0.5 million in 2004. The increase is attributable to
increased borrowings and higher interest rates that increased from 4% in the
first quarter of 2004 to 7.25% in the fourth quarter of 2005.

Net loss. As a result of the items discussed above, net loss increased $3.0
million, or 86.1%, to $6.6 million in 2005 from $3.6 million in 2004.

YEAR ENDED DECEMBER 31, 2004 COMPARED TO YEAR ENDED DECEMBER 31, 2003

Net sales. Net sales increased $7.5 million, or 19.1%, to $47.1 million in 2004
from $39.6 million in 2003. Same store net sales, for stores open all of both
periods, increased $2.9 million in 2004, or 7.6%, compared to the prior year.
The increase in net sales was primarily due to increased levels of inventory
resulting in more goods available for sale and increased volume in produce.
During 2004 and 2003, approximately 27.5% of our sales were of produce, which
has a much higher turnover than other items sold in our stores. Fourth quarter
sales were $13.6 million in 2004. High margin merchandise ordered from the Far
East and anticipated to be in our stores during the quarter arrived late and was
delayed in customs, which limited to some extent our fourth quarter gains in
sales and margin. These goods will now flow through operations in the first
quarter 2005.

                                       18
<PAGE>

Gross profit. Gross profit, which consists of net sales less cost of goods sold,
increased $2.2 million, or 19.8%, to $13.2 million in 2004 from $11.0 million in
2003. As a percentage of net sales, gross profit increased to 27.9% in 2004 from
27.8% in 2003 and was primarily attributable to a change in the product mix and
cost variations, partially offset by increased sales in produce, which generally
has lower margins and increased shrinkage than non-perishable products.

Selling, general and administrative. Selling, general and administrative
expenses, or SG&A, which include operating expenses and depreciation and
amortization, increased $2.7 million, or 20.0%, to $16.3 million in 2004 from
$13.6 million in 2003 and was primarily attributable to increased wages and
related benefits of $1.4 million, occupancy costs of $0.6 million, new store
pre-opening expenses of $0.4 million insurance expense of $0.2 million and
additional costs of being a public company for the full year in 2004. As a
percentage of sales SG&A was 34.6% in 2004 compared to 34.3% in 2003. We expect
that SG&A as a percentage of sales will decrease as we open additional stores.

Operating loss. Operating loss increased $0.5 million, or 20.9%, to $3.1 million
in 2004 from $2.6 million in 2003. As a percentage of net sales, operating loss
was 6.5% in both 2004 and 2003 and was primarily attributable to the items
discussed above.

Other (income) expense. Interest expense decreased $0.7 million, or 55.5%, to
$0.5 million in 2004 from $1.2 million in 2003. The decrease was primarily
attributable to decreased borrowings and lower interest rates. Interest expense
decreased to 1.1% of net sales in 2004 from 3.1% in 2003.

Net loss. As a result of the items discussed above, net loss decreased $0.2
million, or 4.2%, to $3.5 million in 2004 from $3.7 million in 2003.

LIQUIDITY AND CAPITAL RESOURCES

         Our capital requirements result primarily from purchases of inventory,
expenses related to new store openings and working capital requirements for new
and existing stores. We take advantage of closeout and other special-situation
opportunities, which frequently result in volume purchases requirements, and as
a consequence, our cash requirements are not constant or predictable during the
year and can be affected by the timing and size of our purchases.

         From inception on June 28, 1999 until the first closing of our public
offering February 2004, we were funded principally from loans provided by
Raymond Zimmerman, our principal shareholder and bank loans personally
guaranteed by Mr. Zimmerman, and did not have other external sources of
financing. Virtually all of our fixed assets, including fixtures and equipment,
were purchased using advances made to 99 Cent Stuff from Mr. Zimmerman. In
September 2004, we had utilized all of the proceeds of the offering have
borrowed $.75 million in 2004, $4.9 million in 2005 and $1.2 million through
March 27, 2006. These amounts bear interest at the prime rate plus 2% and are
payable on December 31, 2006.

                                       19
<PAGE>

         At December 31, 2005, we had negative working capital of $0.9 million.
At that date we had no cash and $0.4 million in borrowing availability.

         At December 31, 2005, Mr. Zimmerman had advanced an aggregate of $11.8
million, which was carried on the balance sheet as accounts payable and accrued
expenses, related party. Interest was accrued at various rates equal to the
prime rate to the prime rate plus 2%. Of this amount $5.0 million was converted
into an unsecured convertible note. This note was originally due December 1,
2005 and has been extended to December 31, 2007 and bears interest at the prime
rate. The note is convertible into common stock at the option of the holder at a
conversion price equal to $5.00, subject to adjustment. We will have the right
to prepay the note at any time.

         Mr. Zimmerman has personally guaranteed our aggregate $6.0 million
lines of credit with Bank of America. As a result of these guarantees, the
interest rate on these lines has been prime minus 1%, which we believe would be
several points higher without the guarantee. As a result of the personal
guarantees, these lines of credit do not have any financial covenants or ratios
and the only events of default are standard payment defaults. Mr. Zimmerman has
also guaranteed some of our property leases. The lease guarantees expire on
various dates in 2008. We have been accruing guarantee fees of 2% of the lines
of credit and the guaranteed property leases. The accrued fees of $0.1 million
as of December 31, 2005 have been included in the accounts payable and accrued
expenses, related party.

         At December 31, 2005, approximately $0.4 million was available under
our credit lines. In March 2005, the bank agreed to extend the maturity of the
loans from June 2005 to June 2007. Mr. Zimmerman agreed to fund up to an
additional $3.5 million during 2005 for any operating cash flow shortfalls and
funded $4.9 million during the year. As a result, in 2005 these loans were
reclassified to long-term liabilities.

         Although Mr. Zimmerman has provided $1.4 million of advances through
March 31, 2006, he has not committed to provide any additional capital during
the remainder of 2006 to fund any current period deficits in operating cash
flow. Other than the existing Bank of America lines of credit, there are not
currently any other borrowing arrangements or commitments for any capital. We
are currently seeking additional financing and are in discussions with an
investment banking firm, which is currently soliciting interest from
institutional investors in a private placement. We may not be able to raise
additional funds when needed, or on acceptable terms, or at all. Also, any
additional equity financings may be dilutive to shareholders, and debt
financing, if available, may involve restrictive covenants.

         The Company is dependent on the above sources of financing to meet its
future obligations. These factors raise substantial doubt about the Company's
ability to continue as a going concern. The accompanying consolidated financial
statements do not include any adjustments that might be necessary if the Company
is unable to continue as a going concern.

         Net cash used in operations was $3.6 million in 2005 and $2.6 million
in 2004. Net cash used in operations during 2005 included a net loss of $6.6
million, accrued interest, related party of $0.8 million, depreciation of $1.2
million, an increase in accounts payable of $0.5 million and an increase in
accrued expenses of $0.4 million. Net cash used by operations during the 2004
period included a net loss of $3.6 million, depreciation of $1.0 million, an
increase in inventory of $1.2 million, accounts payable of $1.2 million and
accrued interest, related party of $0.4 million. Inventory was increased during
in 2004 as proceeds from the offering were used to increase inventory levels in
all stores and to provide inventory for the new stores opened in 2004.

         Net cash used in investing activities for purchases of property and
equipment was $1.1 million in 2005 and $1.8 million in
2004.

         Net cash provided by financing activities was $4.7 million in 2005,
primarily due to increases in accounts payable and accrued expenses, related
party of $4.9 million. Net cash provided by financing activities was $4.3
million in 2004, primarily due to $3.3 million from the sale of common stock in
the public offering and increases in accounts payable and accrued interest,
related party of $0.8 million. We used all of the proceeds of the public
offering in 2004 for increased working capital and store expenses.

         Our future capital expenditures will depend primarily on the number and
timing of new stores we open. We plan to open two additional new stores during
2006. Net capital expenditures for a new store are expected to average
approximately $150,000 to $300,000, depending on landlord allowances and
existing improvements. The average inventory investment for a new store is
approximately $200,000. Pre-opening expenses, such as marketing, salaries,
supplies and utilities, are expected to average approximately $30,000 per new
store and are expensed as incurred. Total cost of a new store ranges from
$350,000 to $500,000.

         In connection with store openings, we own store fixtures sufficient to
equip and open two new stores. Accordingly,our projected capital expenditure
needs in 2006 are not material.

                                       20
<PAGE>

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

         The following tables summarize our contractual obligations and
commercial commitments as of December 31, 2005:
<TABLE>
<CAPTION>
                                                             PAYMENTS DUE BY PERIOD (IN THOUSANDS)
                                                         -----------------------------------------------
            SIGNIFICANT CONTRACTUAL OBLIGATIO   TOTAL    WITHIN 1YEAR  2-3 YEARS  4-5 YEAR  AFTER 5 YEARS
            ---------------------------------  -------   ------------  ---------  --------  ------------
            <S>                                <C>         <C>          <C>       <C>         <C>
            Operating Leases                   $15,739     $3,308       $5,960    $3,802      $2,669
            Capital Leases                         --
</TABLE>

         We are committed under noncancelable operating leases for all store and
office spaces, expiring at various dates through 2015. These leases generally
provide minimum rent plus payments for real estate taxes and operating expenses,
subject to escalations. We do not have any capital leases.

         We moved to a larger warehouse facility in 2004. Our current warehouse
facility should be sufficient at least through 2007.

SEASONALITY AND QUARTERLY FLUCTUATIONS

         99 Cent Stuff has historically experienced some seasonal fluctuation in
our net sales, operating expenses and net loss. The highest sales periods are
the Christmas and Halloween seasons, although the Christmas season does not
increase as much as many other retailers because a high proportion of our
products are for every day use and not gifts. A greater amount of our net sales
and operating income is generally realized during the fourth quarter. Quarterly
results of operations may also fluctuate significantly as a result of a variety
of other factors, including the timing of certain holidays, such as Easter and
the timing of new store openings and the merchandise mix.

RECENT ACCOUNTING PRONOUNCEMENTS

         In December 2003, the SEC issued SAB No. 104. SAB No. 104 revises or
rescinds portions of the interpretive guidance included in Topic 13 of the
codification of staff accounting bulletins in order to make this interpretive
guidance consistent with current authoritative accounting and auditing guidance
and SEC rules and regulations. It also rescinds the Revenue Recognition in
Financial Statements Frequently Asked Questions and Answers document issued in
conjunction with Topic 13. Selected portions of that document have been
incorporated into Topic 13. The adoption of SAB No. 104 did not have a material
impact on the Company's financial position, results of operations or cash flows.

         In July 2004, the Emerging Issues Task Force ("EITF") published its
consensus on Issue No. 03-1, "The Meaning of Other-Than-Temporary Impairment and
its Application to Certain Investments." EITF Issue No. 03-1 addresses the
meaning of other than temporary impairment and its application to debt and
equity securities within the scope of SFAS No. 115, certain debt and equity
securities within the scope of SFAS No. 124, and equity securities that are not
subject to the scope of SFAS No. 115 and accounted for under the equity method.
In September 2004, the FASB issued FASB Staff Position ("FSP") EITF Issue No.
03-1-1, which delays the effect date for the recognition and measurement
guidance in EITF Issue No. 03-1. In addition, the FASB has issued a proposed FSP
to consider whether further application guidance is necessary for securities
analyzed for impairment under EITF issue No. 03-1. The Company continues to
assess the potential impact that the adoption of the proposed FSP could have on
our financial statements.

         In November 2004, the FASB issued SFAS No. 151 "Inventory Costs". This
Statement amends the guidance in ARB No. 43, Chapter 4, "Inventory Pricing", to
clarify the accounting for abnormal amounts of idle facility expense, freight,
handling costs, and wasted material (spoilage). In addition, this Statement
requires that allocation of fixed production overhead to the costs of conversion
be based on the normal capacity of the production facilities. The provisions of
this Statement will be effective for the Company beginning with its fiscal year
ending 2005. The Company but believes that it will not have a material impact on
its financial position, results of operations or cash flows.

         In December 2004, the FASB issued SFAS No. 123 (Revised 2004),
"Share-Based Payment," that addresses the accounting for share-based payment
transactions in which a Company receives employee services in exchange for (a)
equity instruments of the Company or (b) liabilities that are based on the fair
value of the Company's equity instruments or that may be settled by the issuance
of such equity instruments. SFAS No. 123R addresses all forms of share-based
payment awards, including shares issued under employee stock purchase plans,
stock options, restricted stock and stock appreciation rights. SFAS No. 123R
eliminates the ability to account for share-based compensation transactions
using APB Opinion No. 25, "Accounting for Stock Issued to Employees", that was
provided in Statement 123 as originally issued. Under SFAS No. 123R companies
are required to record compensation expense for all share based payment award
transactions measured at fair value. The estimated share-based compensation from
the adoption of SFAS No. 123R for the years ending December 31, 2006, 2007, 2008
and 2009 are $118, $54, $11 and $2, respectively.

                                       21
<PAGE>

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

         We are subject to risks resulting from interest rate fluctuations since
interest on our borrowings under the bank facility are based on variable rates.
If the prime rate were to increase 1.0% in 2006 as compared to the rate at
December 31, 2005, our interest expense for 2006 would increase $0.1 million
based on the outstanding balance at December 31, 2005. We do not hold any
derivative instruments and do not engage in hedging activities.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements are included in this Form 10-K following the signature
pages.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

Not Applicable

ITEM 9A. CONTROLS AND PROCEDURES

         The Company carried out an evaluation, under the supervision and with
the participation of the Company's Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of the Company's
"disclosure controls and procedures" (as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), as of the end of the period covered by this report. Based upon the
evaluation, the Company's Chief Executive Officer and Chief Financial Officer
concluded that the Company's disclosure controls and procedures are effective to
ensure that information required to be disclosed in Company reports filed or
submitted under the Exchange Act is recorded, processed, summarized and reported
within the required time periods and is accumulated and communicated to
management, including its principal executive officer and principal financial
officer as appropriate to allow timely decisions regarding required disclosure.

         There have been no changes in the Company's internal controls or in
other factors during the period covered by the report that have materially
affected, or are reasonably likely to materially affect the Company's internal
controls over financial reporting.

ITEM 9B. OTHER INFORMATION

There is no other information that was required to be disclosed in a report on
Form 8-K during the fourth quarter of 2005 that we did not report.



                                       22
<PAGE>


                                    PART III

Because we will file a Proxy Statement within 120 days after the end of the
fiscal year ending December 31, 2005, this Annual Report on Form 10-K omits
certain information required by Part III and incorporates by reference certain
information included in the Proxy Statement.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.


 Information about our executive officers and directors and all other matters
required to be disclosed in Item 10 appears under "Election of Directors" in the
Proxy Statement. That portion of the Proxy Statement is hereby incorporated by
reference.


SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Information about compliance with Section 16(a) of the Securities Exchange Act
of 1934 appears under "Section 16(a) Beneficial Ownership Reporting Compliance"
in the "Election of Directors" section of the Proxy Statement and is hereby
incorporated by reference.

ITEM 11. EXECUTIVE COMPENSATION.


Information about compensation of our named executive officers appears under
"Executive Compensation" in the "Election of Directors" section of the Proxy
Statement and is hereby incorporated by reference. Information about
compensation of our directors appears under "Director Compensation" in the
"Election of Directors" section of the Proxy Statement and is hereby
incorporated by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS.


Information about security ownership of certain beneficial owners and management
appears under "Security Ownership of Directors and Executive Officers" in the
"Election of Directors" section of the Proxy Statement and is hereby
incorporated by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.


Information about certain relationships and related transactions appears under
"Certain Relationships and Related Transactions in the "Election of Directors"
section of the Proxy Statement and is hereby incorporated by reference.

ITEM 14. PRINCIPAL ACCOUNTANT'S FEES AND SERVICES


Information about the fees and services of our principal accountants appears
under "Audit Committee Report" and "Fees of Independent Auditors" in the
"Ratification of Appointment of Independent Public Accountants" section of the
Proxy Statement and is hereby incorporated by reference.


                                       23
<PAGE>

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(A) The following documents are filed as a part of this report:

          1.   Consolidated Financial Statements:

          2.   Financial Statement Schedules:

          3.   Exhibits:

EXHIBIT NUMBER        EXHIBIT DESCRIPTION
-------------         ----------------------------------------------------------

2.1*                  Agreement between iVideoNow, Inc. and 99 Cent Stuff, LLC
                      dated as of July 1, 2003
3.1(1)                Articles of Incorporation
3.2(2)                Amendment to Articles of Incorporation
3.3(3)                Bylaws
3.4 (5)               Articles of Incorporation (Florida)
4.2 (5)               Warrant Agreement
4.3(4)                Underwriter's Unit Purchase Option
10.1(4)               2003 Equity Incentive Plan
10.2(4)               Lease for Beacon Warehouse

31.1                  Certification by the Chief Executive Officer pursuant to
                      Section 302 of the Sarbanes-Oxley Act of 2002

31.2                  Certification by the Chief Financial Officer pursuant to
                      Section 302 of the Sarbanes-Oxley Act of 2002

32.1                  Certification of CEO and CFO pursuant to 18 U.S.C. Section
                      1350, as adopted pursuant to Section 906 of the
                      Sarbanes-Oxley Act of 2002

32.2                  Certificate of the Chief Financial Officer pursuant to
                      Section  906 of the Sarbanes-Oxley Act of 2002

--------------
(1)  Incorporated by reference from Exhibit 3 (i) to Registrant's Form 10-SB12G
     filed June 14, 1999
(2)  Incorporated by reference to Registrant's Form 10-QSB filed on November 21,
     2001
(3)  Incorporated by reference from Exhibit 3 (iii) to Registrant's Form
     10-SB12G filed June 14, 1999
(4)  Incorporated by reference from the Registration Statement on Form S-1 (File
     No. 333-92048) filed by 99 Cent Stuff, Inc. on September 6, 2002.
(5)  Incorporated by reference from the Registration Statement on Form S-1 (File
     No. 333-108517) filed by 99 Cent Stuff, Inc. on September 4, 2003

(b) Reports on Form 8-K

None

Note: Copies of each Exhibit to this Form 10-K are available upon request.



                                       24
<PAGE>

                                   SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.


                                                     99 CENT STUFF, INC.

                                                     By: /s/ RAYMOND ZIMMERMAN
                                                         -----------------------
                                                     Raymond Zimmerman, Chairman

Date: April 11, 2006


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

          SIGNATURE                       TITLE                       DATE
---------------------------        ----------------------        --------------

/s/ RAYMOND ZIMMERMAN              Chairman of the Board         April 11, 2006
--------------------------         and Chief Executive
                                   Officer
Raymond Zimmerman

/s/ BARRY BILMES                   Chief Financial Officer       April 11, 2006
-------------------------          and Principal Accounting
Barry Bilmes                       Officer

/s/ KEVIN KEATING                  Director                      April 11, 2006
------------------------
Kevin Keating

/s/ NATHAN LIGHT                   Director                      April 11, 2006
------------------------
Nathan Light



                                       25
<PAGE>

                               99 CENT STUFF, LLC

                        CONSOLIDATED FINANCIAL STATEMENTS

                                      INDEX



Report of Registered Public Accounting Firm.............................    F-2

Consolidated Financial Statements:

     Consolidated Balance Sheets at December 31, 2005 and 2004 .............F-3

     Consolidated Statements of Operations for
     the years ended December 31, 2005, 2004 and 2003 ....................  F-4

     Consolidated Statements of Changes in Shareholders'
     Equity (Deficit) for the Years Ended December 31, 2005,
     2004 and 2003........................................................  F-5

     Consolidated Statements of Cash Flows for the years ended
     December 31, 2005, 2004 and 2003 ....................................  F-6

Notes to Consolidated Financial Statements..............................    F-7





                                      F-1

<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
             -------------------------------------------------------


To the Board of Directors and Shareholders
99 Cent Stuff, Inc. and Subsidiaries


We have audited the accompanying balance sheets of 99 Cent Stuff, Inc. and
subsidiaries as of December 31, 2005 and 2004, and the related consolidated
statements of operations, changes in shareholders' equity (deficit) and cash
flows for the years ended December 31, 2005, 2004 and 2003. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of 99 Cent Stuff, Inc. and
subsidiaries at December 31, 2005 and 2004, and the results of their operations
and their cash flows for the years ended December 31, 2005, 2004 and 2003 in
conformity with accounting principles generally accepted in the United States of
America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 8 to the
financial statements, the Company has suffered recurring losses from operations
and its total liabilities exceed its total assets. This raises substantial doubt
about the Company's ability to continue as a going concern. Management's plans
in regard to these matters are also described in Note 8. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.



/s/ Daszkal Bolton LLP

Boca Raton, Florida
March 17, 2006


                                      F-2

<PAGE>

99 CENT STUFF, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2005 AND 2004
(AMOUNTS IN THOUSANDS)
================================================================================

<TABLE>
<CAPTION>
                                                                  2005           2004
                                                                --------       --------
<S>                                                             <C>            <C>
                                     ASSETS

Current assets:
     Cash                                                       $     --       $     --
     Inventory, net                                                3,643          3,771
     Prepaid expenses and other assets                               505            467
                                                                --------       --------
             Total current assets                                  4,148          4,238
                                                                --------       --------

Property and equipment, net                                        3,327          3,396
                                                                --------       --------
Other assets:
     Security deposits                                               162            171
                                                                --------       --------
             Total assets                                       $  7,637       $  7,805
                                                                ========       ========


                     LIABILITIES AND SHAREHOLDERS' DEFICIT

Current liabilities:
     Lines of credit                                            $     --       $  5,798
     Cash overdraft                                                   81            115
     Accounts payable                                              4,149          3,698
     Accrued expenses                                                834            468
                                                                --------       --------
             Total current liabilities                             5,064         10,079
                                                                --------       --------
Long term liabilities:
     Accounts payable and accrued expenses, related party          6,804          6,059
     Shareholder loan payable                                      5,005             --
     Lines of credit                                               5,620             --
                                                                --------       --------
             Total long term liabilities                          17,429          6,059
                                                                --------       --------
             Total liabilities                                    22,493         16,138
                                                                --------       --------
Commitments and Contingencies

Shareholders' deficit:
     Preferred stock, $.01 par value, 5,000,000 shares
         authorized, -0- issued and outstanding                       --             --
     Common stock, $.001 par value, 50,000,000 shares
         authorized 5,833,950 issued and outstanding at
         December 31, 2005 and 2004                                    6              6
     Additional paid-in capital                                   (3,847)        (3,947)
     Accumulated deficit                                         (11,015)        (4,392)
                                                                --------       --------
             Total shareholders' deficit                         (14,856)        (8,333)
                                                                --------       --------
             Total liabilities and shareholders' deficit        $  7,637       $  7,805
                                                                ========       ========
</TABLE>

      See the accompanying notes to the consolidated financial statements.

                                      F-3

<PAGE>

99 CENT STUFF, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
DECEMBER 31, 2005, 2004 AND 2003
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
================================================================================

<TABLE>
<CAPTION>
                                                        2005           2004           2003
                                                      --------       --------       --------
<S>                                                   <C>            <C>            <C>
Net sales                                             $ 56,120       $ 47,147       $ 39,580

Cost of goods sold                                      40,968         33,975         28,583
                                                      --------       --------       --------
Gross profit                                            15,152         13,172         10,997

Selling, general and administrative expense             20,758         16,260         13,552
                                                      --------       --------       --------
Loss from operations                                    (5,606)        (3,088)        (2,555)
                                                      --------       --------       --------
Other income (expense):
    Other income                                            91             71             55
    Interest expense                                    (1,108)          (541)        (1,215)
                                                      --------       --------       --------
        Total other income (expense)                   (1,017)          (470)        (1,160)
                                                      --------       --------       --------
Net loss                                              $ (6,623)      $ (3,558)      $ (3,715)
                                                      ========       ========       ========

Loss per share:
    Net loss per share, basic and diluted             $  (1.14)      $  (0.62)      $  (0.77)

    Weighted average number of common and common
      equivalent shares outstanding
      - basic and diluted                                5,834          5,747          4,833
</TABLE>


      See the accompanying notes to the consolidated financial statements.

                                       F-4
<PAGE>

99 CENT STUFF, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
(AMOUNTS IN THOUSANDS)
================================================================================

<TABLE>
<CAPTION>
                                                         Common Stock       Additional
                                                     -------------------     Paid-In
                                                      Shares      Amount      Capital      Deficit      Total
                                                     --------    --------    --------     --------     --------
<S>                                                     <C>      <C>         <C>          <C>          <C>
Balance, December 31, 2002                              4,750    $      5    $ (4,689)    $     --     $ (4,684)

Net loss for the period January 1, 2003 through
September 2, 2003 (see Note 9)                             --          --      (2,881)          --       (2,881)

Common stock issued in reorganization                     250          --          --           --           --

Conversion of related party payable                        66          --         330           --          330

Net loss for the period September 3, 2003 through
December 31, 2003 (see Note 9)                             --    $     --    $     --     $   (834)    $   (834)
                                                     --------    --------    --------     --------     --------
Balance, December 31, 2003                              5,066    $      5    $ (7,240)    $   (834)    $ (8,069)

Sale of common stock, net of expenses                     767           1       3,293           --        3,294

Net loss                                                   --          --          --       (3,558)      (3,558)
                                                     --------    --------    --------     --------     --------
Balance, December 31, 2004                              5,833           6      (3,947)      (4,392)      (8,333)

Contributed services of chief executive officer            --          --         100           --          100

Net loss                                                   --          --          --       (6,623)      (6,623)
                                                     --------    --------    --------     --------     --------
Balance, December 31, 2005                              5,833    $      6    $ (3,847)    $(11,015)    $(14,856)
                                                     ========    ========    ========     ========     ========
</TABLE>






      See the accompanying notes to the consolidated financial statements.

                                       F-5

<PAGE>

99 CENT STUFF, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
(AMOUNTS IN THOUSANDS)
================================================================================

<TABLE>
<CAPTION>
                                                              2005         2004         2003
                                                            --------     --------     --------
<S>                                                         <C>          <C>          <C>
Cash flows from operating activities:
     Net loss                                               $ (6,623)    $ (3,558)    $ (3,715)
     Adjustments to reconcile net loss to net cash
       used in operating activities:
         Depreciation and amortization                         1,151          974          850
         Interest accrued on payables, related party             815          388        1,053
         Contributed services of chief executive officer         100           --           --
         (Increase) decrease in:
            Prepaid expenses and other assets                    (38)         (40)        (145)
            Inventory                                            128       (1,240)        (345)
            Security deposits                                      9          (30)          26
         Increase (decrease) in:
            Accounts payable                                     451        1,204         (102)
            Accrued expenses                                     366         (269)         141
                                                            --------     --------     --------
Net cash used in operating activities                         (3,641)      (2,571)      (2,237)
                                                            --------     --------     --------
Cash flows used in investing activities:
     Purchase of property and equipment                       (1,082)      (1,763)        (275)
                                                            --------     --------     --------
Cash flows from financing activities:
     Increase in accounts payable and accrued expenses,
         related party                                         4,935          750          523
     Increase (decrease) in cash overdraft                       (34)         115         (433)
     Borrowings under lines of credit                         13,460       16,102       17,347
     Repayments under lines of credit                        (13,638)     (15,952)     (14,899)
     Sale of common stock, net of expenses                        --        3,293           --
                                                            --------     --------     --------
Net cash provided by financing activities                      4,723        4,308        2,538
                                                            --------     --------     --------
Net increase (decrease) in cash                                   --          (26)          26

Cash at beginning of year                                         --           26           --
                                                            --------     --------     --------
Cash at end of year                                         $     --     $     --     $     26
                                                            ========     ========     ========

Supplemental cash flow information:
     Interest paid                                          $    343     $    139     $    145
                                                            ========     ========     ========
Non-cash transactions
     Conversion of related party payable to equity          $     --     $     --     $    330
                                                            ========     ========     ========
</TABLE>

      See the accompanying notes to the consolidated financial statements.

                                       F-6

<PAGE>

99 CENT STUFF, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS IN THOUSANDS)
================================================================================

NOTE 1 - DESCRIPTION OF BUSINESS, RECAPITALIZATION AND BASIS OF PRESENTATION
----------------------------------------------------------------------------

99 Cent Stuff, Inc. (the "Company") was originally organized under the laws of
the State of Delaware on June 28, 1999 as a limited liability company. In
September 2003, the Company merged with a public shell, iVideoNow, Inc., and
became a C Corporation. The Company is a specialty, single-priced retailer that
primarily targets individuals and small businesses with one-stop shopping for
food, produce, consumable hard lines, health and beauty aids, novelty and
impulse items. The Company was operating retail outlets in nineteen locations at
December 31, 2005 and fifteen locations at December 31, 2004 and eleven location
at December 31, 2003. The locations are separately incorporated as limited
liability companies and are wholly owned by the Company. All of the stores are
in southeast Florida.


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

Cash and Cash Equivalents
-------------------------

The Company considers all investments with original maturities of three months
or less and credit and debit card receivables to be cash equivalents. At
December 31, 2005 and 2004, the total credit and debit card receivables were
$145 and $59, respectively.

Fair Value of Financial Instruments
-----------------------------------

The Company's financial instruments consist mainly of cash, short-term payables,
borrowings under a line of credit and notes payable. The Company believes that
the carrying amounts approximate fair value, due to their short-term maturities
and current interest rates.

Inventory
---------

Inventory is stated at the lower of average cost or market, with cost determined
on a first-in, first-out (FIFO) basis, and consists primarily of merchandise
held for resale. The Company provides an allowance for certain merchandise that
may become obsolete, damaged, or slow moving. The allowance for these items was
approximately $5 at December 31, 2005 and 2004. The inventory is presented net
of the allowance.

Property and Equipment
----------------------

Property and equipment are stated at cost. Depreciation on property and
equipment is computed using the straight-line method. The following estimated
lives have been used for financial statement purposes:

                                                            2005        2004
                                                          --------    --------
Computer equipment                                        $   839     $    759
Furniture, fixtures and equipment                            5,171       4,523
Leasehold improvements                                       2,382       2,028
                                                          --------    --------
   Total property and equipment                              8,392       7,310
   Less: accumulated depreciation and amortization          (5,065)     (3,914)
                                                          --------    ---------
   Net property and equipment                             $  3,327    $  3,396

                                      F-7

<PAGE>

99 CENT STUFF, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(AMOUNTS IN THOUSANDS)
================================================================================


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
--------------------------------------------------------------

Income Taxes
------------

Prior to the merger with iVideoNow, Inc. on September 3, 2003 the Company was a
limited liability company. As an LLC, the Company was treated as a partnership
for Federal and State income tax purposes. Members were taxed separately on
their distributive share of the Partnership's income whether or not that income
was actually distributed. Upon the completion of the merger, the Company became
a C Corporation.

Use of Estimates
----------------

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

Principles of Consolidation
---------------------------

The accompanying consolidated financial statements include the accounts of the
Company and its wholly owned limited liability company subsidiaries, after
eliminations of all material intercompany transactions.

Advertising Costs
-----------------

Advertising and sales promotion costs are expensed as incurred. Advertising
expense totaled approximately $149, $27 and $6 for the years ended December 31,
2005, 2004 and 2003, respectively.

Revenue Recognition
-------------------

Revenue is recognized at the point of sale.

Pre-Opening Costs
-----------------

The Company expenses, as incurred, all pre-opening costs related to the opening
of new retail stores.

Operating Segments
------------------

The Company has one business segment, retail operations. The majority of the
product offerings include recognized brand-name consumable merchandise,
regularly available for reorder. The Company had no customers representing more
than 10 percent of net sales. Substantially all of the Company's net sales were
to customers located in the United States.

Shipping And Handling Costs
---------------------------

The Company follows the provisions of Emerging Issues Task Force Issue No. 00
-10, "Accounting for Shipping and Handling Fees and Costs." Any amounts billed
to third-party customers for shipping and handling is included as a component of
revenue. Shipping and handling costs incurred are included as a component of
cost of sales.

Impairment of Long-Lived Assets
-------------------------------

The Company reviews its long-lived assets for impairment whenever events or
changes indicate that the carrying amount of an asset or group of assets may not
be recoverable. No impairment losses were recorded during the periods ended
December 31, 2005, 2004 and 2003.

                                      F-8

<PAGE>

99 CENT STUFF, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(AMOUNTS IN THOUSANDS)
================================================================================


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
--------------------------------------------------------------

Stock Options
-------------

The Company applies the intrinsic value-based method of accounting prescribed by
Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued
to Employees," and related interpretations including FASB Interpretation No. 44,
"Accounting for Certain Transactions involving Stock Compensation - an
interpretation of APB Opinion No. 25" issued in March 2000, to account for its
fixed plan stock options. Under this method, compensation expense is recorded on
the date of grant only if the current market price of the underlying stock
exceeded the Stock-Based compensation. As allowed by SFAS No. 123, the Company
has elected to continue to apply the intrinsic value-based method of accounting
described above, and has adopted the disclosure requirements of SFAS No. 123.

SFAS No. 123 "Accounting for Stock Based Compensation" ("SFAS 123"), requires
the Company to disclose pro forma information regarding option grants made to
its employees. SFAS 123 specifies certain valuation techniques that produce
estimated compensation charges that are included in the pro forma results below.
These amounts have not been reflected in the Company's Statement of Operations,
because Accounting Principles Board Opinion 25, "Accounting for Stock Issued to
Employees," specifies that no compensation charge arises when the price of the
employees' stock options equal the market value of the underlying stock at the
grant date, as in the case of options granted to the Company's employees
pursuant to SFAS No. 123 pro forma numbers are as follows for the years ended
December 31, 2005 and 2004:

                                2005            2004
                             ---------       ---------
     Net loss
          As reported        $  (6,623)      $  (3,558)
                             =========       =========
          Pro forma          $  (6,807)      $  (3,625)
                             =========       =========
     Earnings per share
          As reported        $   (1.14)      $   (0.62)
                             =========       =========
         Pro forma           $   (1.17)      $   (0.63)
                             =========       =========

New Accounting Pronouncements
-----------------------------


         In December 2003, the SEC issued SAB No. 104. SAB No. 104 revises or
rescinds portions of the interpretive guidance included in Topic 13 of the
codification of staff accounting bulletins in order to make this interpretive
guidance consistent with current authoritative accounting and auditing guidance
and SEC rules and regulations. It also rescinds the Revenue Recognition in
Financial Statements Frequently Asked Questions and Answers document issued in
conjunction with Topic 13. Selected portions of that document have been
incorporated into Topic 13. The adoption of SAB No. 104 did not have a material
impact on the Company's financial position, results of operations or cash flows.

         In July 2004, the Emerging Issues Task Force ("EITF") published its
consensus on Issue No. 03-1, "The Meaning of Other-Than-Temporary Impairment and
its Application to Certain Investments." EITF Issue No. 03-1 addresses the
meaning of other than temporary impairment and its application to debt and
equity securities within the scope of SFAS No. 115, certain debt and equity
securities within the scope of SFAS No. 124, and equity securities that are not
subject to the scope of SFAS No. 115 and accounted for under the equity method.
In September 2004, the FASB issued FASB Staff Position ("FSP") EITF Issue No.
03-1-1, which delays the effect date for the recognition and measurement
guidance in EITF Issue No. 03-1. In addition, the FASB has issued a proposed FSP
to consider whether further application guidance is necessary for securities
analyzed for impairment under EITF issue No. 03-1. The Company continues to
assess the potential impact that the adoption of the proposed FSP could have on
our financial statements.

         In November 2004, the FASB issued SFAS No. 151 "Inventory Costs". This
Statement amends the guidance in ARB No. 43, Chapter 4, "Inventory Pricing", to
clarify the accounting for abnormal amounts of idle facility expense, freight,
handling costs, and wasted material (spoilage). In addition, this Statement
requires that allocation of fixed production overhead to the costs of conversion
be based on the normal capacity of the production facilities. The provisions of
this Statement will be effective for the Company beginning with its fiscal year
ending 2005. The Company believes that it will not have a material impact on its
financial position, results of operations or cash flows.

         In December 2004, the FASB issued SFAS No. 123 (Revised 2004),
"Share-Based Payment," that addresses the accounting for share-based payment
transactions in which a Company receives employee services in exchange for (a)
equity instruments of the Company or (b) liabilities that are based on the fair
value of the Company's equity instruments or that may be settled by the issuance
of such equity instruments. SFAS No. 123R addresses all forms of share-based
payment awards, including shares issued under employee stock purchase plans,
stock options, restricted stock and stock appreciation rights. SFAS No. 123R
eliminates the ability to account for share-based compensation transactions
using APB Opinion No. 25, "Accounting for Stock Issued to Employees", that was
provided in Statement 123 as originally issued. Under SFAS No. 123R companies
are required to record compensation expense for all share based payment award
transactions measured at fair value. The estimated share-based compensation from
the adoption of SFAS No. 123R for the years ending December 31, 2006, 2007, 2008
and 2009 are $118, $54, $11 and $2, respectively.

                                      F-9

<PAGE>

99 CENT STUFF, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(AMOUNTS IN THOUSANDS)
================================================================================


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
--------------------------------------------------------------

         In December 2004, the FASB issued SFAS No. 153 "Exchanges of
Non-monetary Assets--an amendment of APB Opinion No. 29". This Statement amended
APB Opinion No. 29 to eliminate the exception for non-monetary exchanges of
similar productive assets and replaces it with a general exception for exchanges
of non-monetary assets that do not have commercial substance. A non-monetary
exchange has commercial substance if the future cash flows of the entity are
expected to change significantly as a result of the exchange. The Company is
currently evaluating the impact of this new standard, but believes that it will
not have a material impact upon the Company's financial position, results of
operations or cash flows.

NOTE 3 - PROPERTY AND EQUIPMENT
-------------------------------

Property and equipment consist of the following at December 31, 2005 and 2004:

                                                            2005        2004
                                                          --------    --------
Computer equipment                                        $   839     $    759
Furniture, fixtures and equipment                            5,171       4,523
Leasehold improvements                                       2,382       2,028
                                                          --------    --------
   Total property and equipment                              8,392       7,310
   Less: accumulated depreciation and amortization          (5,065)     (3,914)
                                                          --------    ---------
   Net property and equipment                             $  3,327    $  3,396


Depreciation expense for the years ended December 31, 2005, 2004 and 2003 was
$1,151, $974 and $850,respectively.

NOTE 4 - RELATED PARTY TRANSACTIONS
----------------------------------

At December 31, 2005 and 2004, the Company was indebted to a shareholder in the
amount of approximately $11,809 and $6,059 respectively, for funds advanced to
the Company. The notes are due December 1, 2007 and bears interest at various
rates that range from 7.25% to 9.25% at December 31, 2005. As of December 31,
2005, 2004 and 2003, interest expense of approximately $815, $229 and $1,053
were accrued and included in this indebtedness to the shareholder. Included in
the amount owing to a shareholder is $5,005, which is convertible into Common
Stock at the $5.00 per share offering price as stated in the S-1 registration
statement filed with the SEC on December 1, 2003.

A shareholder of the Company is the guarantor on several of the lease agreements
for warehouse and retail facilities (Note 5), and also for the lines of credit
and letters of credit (Note 6). As of December 31, 2005, 2004 and 2003, interest
expense of $153, $153 and $134 was accrued for the shareholder's personal
guaranty of these obligations and is included in accounts payable and accrued
expenses, related party on the accompanying consolidated balance sheets.

NOTE 5 - LEASE COMMITMENTS
--------------------------

The Company leases its retail and warehouse facilities and various equipment
under long-term operating lease agreements. Rent expense for all operating
leases was $4,139, $2,753 and $2,392 for the years ended December 31, 2005, 2004
and 2003, respectively.

At December 31, 2005, future minimum lease payments for these leases are as
follows:


                    YEAR ENDING DECEMBER 31,
                    ------------------------
                             2006                 $  3,308
                             2007                    3,268
                             2008                    2,692
                             2009                    2,333
                             2010                    1,469
                         Thereafter                  2,669
                                                  --------
                 Total minumum lease payments     $ 15,739
                                                  ========

                                      F-10
<PAGE>

99 CENT STUFF, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(AMOUNTS IN THOUSANDS)
================================================================================


NOTE 6 - CREDIT FACILITIES
--------------------------

At December 31, 2005 and 2004, the Company has a $5,500 and a $500 revolving
line of credit with a financial institution that requires quarterly interest
payments at the bank's prime rate minus one percent (6.25% and 4.25% at December
31, 2005 and 2004, respectively). The lines are secured by a personal guaranty
of a shareholder of the Company and are due June 30, 2007. The shareholder is
compensated 2% per annum of the total amount available under the line of credit
for the personal guaranty. At December 31, 2005 and 2004, the Company owed
$5,620 and $5,798, respectively on its revolving lines of credit.

At December 31, 2005 and 2004, the Company had outstanding irrevocable letters
of credit approximating $259 and $230, respectively. These letters of credit,
which have terms of three months to one year, collateralize the Company's
obligation to third parties for the purchase of goods or services. The fair
value of these letters of credit approximates contract values based on the
nature of the fee arrangements with the issuing banks, usually 1 to 1.5% of the
credit issued.

NOTE 7 - LEGAL MATTERS
----------------------

The Company is involved in various claims and lawsuits arising in the normal
course of business. Management believes that any financial responsibility that
may be incurred in settlement of such claims and lawsuits are not material to
the Company's financial position and results of operations.

NOTE 8 - FINANCIAL ANALYSIS AND LIQUIDITY
-----------------------------------------

         At December 31, 2005, we had negative working capital of $0.9 million.
At that date we had no cash and $0.4 million in borrowing availability.

         At December 31, 2005, Mr. Zimmerman had advanced an aggregate of $11.8
million, which was carried on the balance sheet as accounts payable and accrued
expenses, related party. Interest was accrued at various rates equal to the
prime rate to the prime rate plus 2%. Of this amount $5.0 million was converted
into an unsecured convertible note. This note was originally due December 1,
2005 and has been extended to December 31, 2007 and bears interest at the prime
rate. The note is convertible into common stock at the option of the holder at a
conversion price equal to $5.00, subject to adjustment. We will have the right
to prepay the note at any time.

         Mr. Zimmerman has personally guaranteed our aggregate $6.0 million
lines of credit with Bank of America. As a result of these guarantees, the
interest rate on these lines has been prime minus 1%, which we believe would be
several points higher without the guarantee. As a result of the personal
guarantees, these lines of credit do not have any financial covenants or ratios
and the only events of default are standard payment defaults. Mr. Zimmerman has
also guaranteed some of our property leases. The lease guarantees expire on
various dates in 2008. We have been accruing guarantee fees of 2% of the lines
of credit and the guaranteed property leases. The accrued fees of $0.1 million
as of December 31, 2005 have been included in the accounts payable and accrued
expenses, related party.


                                      F-11

<PAGE>

99 CENT STUFF, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(AMOUNTS IN THOUSANDS)
================================================================================


NOTE 8 - FINANCIAL ANALYSIS AND LIQUIDITY (CONTINUED)
-----------------------------------------------------

         At December 31, 2005, approximately $0.4 million was available under
our credit lines. In March 2005, the bank agreed to extend the maturity of the
loans from June 2005 to June 2007. Mr. Zimmerman agreed to fund up to an
additional $3.5 million during 2005 for any operating cash flow shortfalls and
funded $4.9 million during the year. As a result, in 2005 these loans were
reclassified to long-term liabilities.

         Although Mr. Zimmerman has provided $1.4 million of advances through
March 31, 2006, he has not committed to provide any additional capital during
the remainder of 2006 to fund any current period deficits in operating cash
flow. Other than the existing Bank of America lines of credit, there are not
currently any other borrowing arrangements or commitments for any capital. We
are currently seeking additional financing and are in discussions with an
investment banking firm, which is currently soliciting interest from
institutional investors in a private placement. We may not be able to raise
additional funds when needed, or on acceptable terms, or at all. Also, any
additional equity financings may be dilutive to shareholders, and debt
financing, if available, may involve restrictive covenants.

         The Company is dependent on the above sources of financing to meet its
future obligations. These factors raise substantial doubt about the Company's
ability to continue as a going concern. The accompanying consolidated
financial statements do not include any adjustments that might be necessary if
the Company is unable to continue as a going concern.

NOTE 9 - MERGER AGREEMENTS AND SHAREHOLDERS' EQUITY RECAPITALIZATION
--------------------------------------------------------------------

On July 1, 2003 a majority of the shareholders of iVideoNow, Inc. approved an
Agreement and Plan of Reorganization (the "Reorganization Agreement") between
iVideoNow, Inc. and 99 Cent Stuff, LLC, whereby iVideoNow, Inc. issued 4,750,000
shares of its common stock and warrants to purchase 5 million shares of common
stock at an exercise price of $.001 per share (reflective of the 1 to 30 and the
1 to 4 reverse stock split on September 15, 2003) exercisable only in the event
Keating Investments LLC does not arrange for at least $3 million of equity
financing on terms reasonable acceptable to 99 Cent Stuff, LLC ("LLC") by
December 31, 2003, in exchange for all the outstanding membership interests of
the LLC (the "Merger Agreement"). The offering was completed in March 2004
resulting in net proceeds of $3,400 and the Company waived its rights to the
warrants. For accounting purposes, the share exchange was treated as a
recapitalization of the companies. The value of the net assets of the Companies
after the share exchange was completed is the same as their historic book value.

The Company's ability to provide quality merchandise at the 99 cents price point
is subject to certain economic factors, which are beyond the Company's control,
including inflation. Inflation could have a material adverse effect on the
Company's business and results of operations, especially given the constraints
on the Company to pass on any incremental costs due to price increases or other
factors. A sustained trend of significant inflationary pressure could require
the Company to abandon its single price point of 99 cents per item, which could
have a material adverse effect on the Company's business and results of
operations.

Prior to the merger with iVideoNow, Inc. the Company was a limited liability
company. Upon the completion of the merger, the Company became a C Corporation.
Under SEC Staff Accounting Bulletin Topic 4 (B), the undistributed earnings
(losses) of the limited liability company were treated as a constructive
distribution to the owners of the LLC followed by a contribution of the capital
to the new C-Corporation. On the effective date of the merger, September 3,
2003, the Company reclassified the accumulated deficit to date of $22,156 to
additional paid-in capital, net of the $14,591 of funds advanced from a
shareholder of the Company in prior years. As part of the reorganization of the
Company this note was converted into equity.

NOTE 10 - LOSS PER SHARE
------------------------

Basic net loss per common share are computed by dividing net loss applicable to
common shareholders by the weighted-average number of common shares outstanding
during the period. Diluted net loss per common share is determined using the
weighted-average number of common shares outstanding during the period, adjusted
for the dilutive effect of common stock equivalents consisting of 98,000
options. For all periods presented, the weighted-average number of common shares
outstanding excludes common stock equivalents, because their inclusion would be
anti-dilutive.

NOTE 11 - STOCK OPTION PLAN
---------------------------

In November 2003, the Company established a nonqualified and incentive stock
option plan. The plan provides for the issuance of a maximum of 250 shares of
common stock to officers, directors and consultants and other key employees.
Under the terms of the plan, the options expire after 10 years, as long as the
employee remains employed with the Company. The employee option grants provide
that the option will be canceled ninety days after an employee leaves employment
with the Company. The following is a summary of option activity for the years
ended December 31, 2005 and 2004.

                                      F-12

<PAGE>

99 CENT STUFF, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(AMOUNTS IN THOUSANDS)
================================================================================


NOTE 11 - STOCK OPTION PLAN (CONTINUED)
---------------------------------------

                                                               WEIGHTED-AVERAGE
                                                  NUMBER OF     EXERCISE PRICE
                                                   SHARES     (NOT IN THOUSANDS)
                                                 ----------     --------------
Outstanding at January 1, 2004                           92     $         5.00
Granted                                                  26     $ 5.00 to 5.85
Exercised                                                --                 --
Forfeited                                               (20)                --
                                                 ----------     --------------
Outstanding at December 31, 2004                         98     $ 5.00 to 5.85
Granted                                                  49     $ 1.15 to 3.00
Exercised                                                --                 --
Forfeited                                               (30)                --
                                                 ----------     --------------
Outstanding at December 31, 2005                        117     $ 1.15 to 5.85
                                                 ==========     ==============
Exercisable at December 31, 2005                         --
                                                 ==========
Available for issuance at December 31, 2005             133
                                                 ==========

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


Under SFAS 123, the fair value of each option grant is estimated on the date of
grant using the Black-Scholes option-pricing model. The weighted average of fair
value of options granted during the year was $79. The following weighted average
assumptions were used:


             Risk free interest rate                                  5.0%
             Expected dividends                                       0.0%
             Volatility factor                                       0.302
             Weighted average expected Life of Options                  10

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options that have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions including the expected stock price volatility. Because
the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion the existing models do not necessarily provide a reliable single measure
of the fair value of the Company's options.

NOTE 12 - PROVISION FOR INCOME TAXES
------------------------------------

The Company's evaluation of the tax benefit of its net operating loss
carryforward is presented in the following table for the year ended December 31,
2005, 2004 and 2003. At December 31, the tax amounts have been calculated using
the 34% federal and 5.5% state income tax rates.

                                               2005           2004        2003
                                              -------       -------      -------
Income tax (benefit) consists of:
   Current                                    $    --       $    --      $    --
   Deferred                                        --            --           --
                                              -------       -------      -------
Provision (benefit) for income taxes          $    --       $    --      $    --
                                              =======       =======      =======

                                      F-13
<PAGE>

99 CENT STUFF, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(AMOUNTS IN THOUSANDS)
================================================================================


NOTE 12 - PROVISION FOR INCOME TAXES (CONTINUED)
------------------------------------------------

Reconciliation of the federal statutory income tax rate to the Company's
effective tax rate is as follows:

<TABLE>
<CAPTION>
                                                                 2005             2004            2003
                                                              ----------       ----------      ----------
<S>                                                           <C>              <C>             <C>
Taxes computed at combined federal and state tax rate         $   (2,252)      $   (1,210)     $   (1,263)
Non-deductible expenses                                                2                1             980
State income taxes, net of federal income tax benefit               (240)            (129)            (30)
Increase (decrease) in deferred tax asset
   valuation allowance                                             2,490            1,338             313
                                                              ----------       ----------      ----------
      Provision (benefit) for income taxes                    $       --       $       --      $       --
                                                              ==========       ==========      ==========
</TABLE>

The components of the deferred tax asset were as follows at December 31:
<TABLE>
<CAPTION>

                                                                 2005             2004            2003
                                                              ----------       ----------      ----------
<S>                                                           <C>              <C>             <C>
Deferred tax assets:
   Net operating loss carryforward                            $    2,008       $    1,234      $      209
   Depreciation                                                      164              (38)             33
   Accrued expenses                                                  318              140              52
   Inventory reserve                                                  --                2              19
                                                              ----------       ----------      ----------
Total deferred tax assets                                          2,490            1,338             313
                                                              ----------       ----------      ----------

Valuation allowance:
   Beginning of year                                              (1,338)            (313)             --
   Decrease (increase) during the year                            (1,152)          (1,025)           (313)
                                                              ----------       ----------      ----------
   Ending balance                                                 (2,490)          (1,338)           (313)
                                                              ----------       ----------      ----------
Net deferred taxes                                            $       --       $       --      $       --
                                                              ==========       ==========      ==========
</TABLE>

As of December 31, 2005, the Company had an unused net operating loss
carryforward of approximately $9,169 available for use on its future corporate
income tax returns. This net operating loss carryforward expires beginning in
December 2023. Pursuant to Sections 382 and 383 of the Internal Revenue Code,
annual use of any of the Company's net operation loss and credit carry forwards
may be limited if cumulative changes in ownership of more than 50% occur during
any three year period.

NOTE 13 - CONCENTRATIONS
------------------------

In 2005, 2004 and 2003, one supplier provided approximately 25% of total
purchases.

NOTE 14 - SUBSEQUENT EVENT
--------------------------

In August 2005 the Company entered into an agreement with one of its landlords,
whereby it agreed to grant an option to terminate its lease for premises located
in Delray Beach, Florida for a $305,000 termination fee. On December 30, 2005
the landlord exercised its option to terminate the lease. The Company closed the
store on February 3, 2006 and it has received the full termination fee. Wind
down expenses for this store is estimated to be $50,000.




                                      F-14