UNITED
        STATES
 SECURITIES
        AND EXCHANGE COMMISSION
 Washington,
        D.C. 20549
 
 FORM
        10-KSB
 
 [X]
              ANNUAL
                  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                  OF 1934
                  For the fiscal year ended December 31,
                  2005
 
 [ 
                   ]
              TRANSITION
                  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                  OF
                  1934
 
 For
        the
        transition period from _____________ to _____________
 
 Commission
        file number 000-50274
   FUSA
        Capital Corporation
 (Name
        of
        small business issuer in its charter)
  Nevada
              51-0520296(State
                  or jurisdiction of incorporation or organization)
              (I.R.S.
                  Employer Identification No.)1420
                  Fifth Avenue, 22nd Floor, Seattle, WA
              98101(Address
                  of principal executive offices)
              (Zip
                  Code)
  Issuer's
        telephone number: (206)
        274-5107
  Securities
        registered under Section 12(b) of the Exchange Act:
 
 Title
                  of each class
              Name
                  of each exchange on which registered______________________________
              __________________________
 
 Securities
        registered under Section 12(g) of the Exchange Act:
  Common
        stock, $0.0001 par value, 500,000,000 shares authorized, 59,276,071 shares
        issued and outstanding, preferred stock 5,000,000 shares authorized, par
        value
        $0.0001, 0 shares issued and outstanding as of March 31, 2006.
  Check
        whether the issuer (1) filed all reports required to be filed by Section13
        or
        15(d) of the Exchange Act during the past 12 months (or for such shorter
        period
        that the registrant was required to file such reports), and (2) has been
        subject
        to such filing requirements for the past 90 days.
 
 Yes
              X
              No
 
 Check
        if
        disclosure of delinquent filers in response to Item 405 of Regulation S-B
        is not
        contained in this form, and no disclosure will be contained, to the best
        of
        registrant's knowledge, in definitive proxy or information statements
        incorporated by reference in Part III of this Form 10-KSB or any amendment
        to
        this Form 10-KSB. [   ]
 
 State
        issuer's revenues for its most recent fiscal year: $182 for the year ended
        December 31, 2005. State the aggregate market value of the voting and non-voting
        common equity held by non-affiliates computed by reference to the average
        of the
        bid and ask prices of $1.57 on March 31, 2006: $80,346,431
 
  
  
 
  TABLE
        OF
        CONTENTS
  FORWARD-LOOKING
                  STATEMENTS
              3PART
                  IITEM
                  1.
              DESCRIPTION
                  OF BUSINESS
              3ITEM
                  2.
              DESCRIPTION
                  OF PROPERTY
              8ITEM
                  3.
              LEGAL
                  PROCEEDINGS
              8ITEM
                  4.
              SUBMISSION
                  OF MATTERS TO A VOTE OF SECURITY HOLDERS
              8PART
                  II.ITEM
                  5.
              MARKET
                  FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
              9ITEM
                  6.
              MANAGEMENT'S
                  DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
              10ITEM
                  7.
              FINANCIAL
                  STATEMENTS
              14ITEM
                  8.
              CHANGES
                  IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                  DISCLOSURE
              15ITEM
                  8A.
              CONTROLS
                  AND PROCEDURES
              15PART
                  IIIITEM
                  9.
              DIRECTORS,
                  EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
                  SECTION
                  16(a)OF THE EXCHANGE ACT
              16ITEM
                  10.
              EXECUTIVE
                  COMPENSATION
              17ITEM
                  11.
              SECURITY
                  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
              18ITEM
                  12.
              CERTAIN
                  RELATIONSHIPS AND RELATED TRANSACTIONS
              18ITEM
                  13.
              EXHIBITS
                  AND REPORTS ON FORM 8-K
              19ITEM
                  14.
              PRINCIPAL
                  ACCOUNTANT FEES AND SERVICES
              19
 
 
  2
  
 FORWARD-LOOKING
        STATEMENTS
 
 In
        addition to historical information, this Report contains forward-looking
        statements. Such forward-looking statements are generally accompanied by
        words
        such as "intends," "projects," "assumes," "believes," "anticipates," "plans,
        "and similar terms that convey the uncertainty of future events or outcomes.
        The
        forward-looking statements contained herein are subject to certain risks
        and
        uncertainties that could cause actual results to differ materially from those
        reflected in the forward-looking statements. Factors that might cause such
        a
        difference include, but are not limited to, those discussed in ITEM 6 of
        this
        Report, the section entitled "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND PLAN OF OPERATION." Readers are cautioned not to place undue
        reliance on these forward-looking statements, which reflect management's
        analysis only as of the date hereof and are in all cases subject to the
        Company's ability to develop any significant revenue. There is no assurance
        that
        the Company will be able to generate sufficient revenues from its current
        business activities to meet day-to-day operation liabilities or to pursue
        the
        business objectives discussed herein.
 
 The
        forward-looking statements contained in this Report also may be impacted
        by
        future economic conditions. Any adverse effect on general economic conditions
        and consumer confidence may adversely affect the business of the
        Company.
 
 FUSA
        Capital Corporation undertakes no obligation to publicly revise these
        forward-looking statements to reflect events or circumstances that arise
        after
        the date hereof.
 
 PART
        I
 
 Item
        1.
        Description of Business
 
 A.
              Business
                  Development and Summary
  FUSA
          Capital Corporation, a Nevada corporation, hereinafter referred to as the
          "Company" or "FUSA" was originally named Galaxy Championship Wrestling,
          Inc.,
          ("Galaxy") which was organized by the filing of Articles of Incorporation
          with
          the Secretary of State in the State of Nevada on September 13, 2000 (NV#
          C24685-2000). The Articles of Incorporation of the Company authorized the
          issuance of twenty million (20,000,000) shares of $0.001 par value Common
          Stock
          and five million (5,000,000) shares of Preferred Stock. On May 7, 2004,
          the
          Company voted to change its name from Galaxy Championship Wrestling, Inc.
          to
          FUSA Capital Corporation. On June 7th, 2004, the shareholders of the Company
          voted to amend the Company's Articles of Incorporation to increase the
          number of
          shares of common stock authorized to be issued to 500,000,000, having a
          $.0001
          par value and 5,000,000 shares of Preferred Stock having a $.0001 par value.
          As
          of December 31, 2004, the Company had issued 9,149,188 shares of Common
          Stock to
          seventy-three (73) shareholders of record. As of March 23, 2005, the Company
          had
          issued 18,149,188 shares of Common Stock to eighty (80) shareholders of
          record.
  The
        original business of the Company, as Galaxy, was a development stage company
        that had a primary business to develop, produce, and market live entertainment
        in the forum of professional wrestling. Galaxy never developed a significant
        business in this field and ceased efforts toward establishing operations
        in the
        professional wrestling field on March 31, 2004.
 
 On
        March
        31, 2004, the controlling shareholders of Galaxy sold 5,750,000 shares of
        common
        stock of the Company to Camila Maz in a private transaction, thus effecting
        a
        change of control in the Company. On May 7, 2004, President and Director
        Jerome
        Jolly resigned as an Officer and Director, Secretary and Treasurer Grady
        Johnson
        also resigned as an Officer and Director. Concurrently, Ms. Maz was appointed
        as
        the Sole Director and Officer of the Company. On May 24, 2004, the Company
        dismissed its auditors and engaged the accounting firm of Braverman
        International P.C. as the Company's auditors. During the period from March
        31,
        2004 until December 31, 2004, the Company engaged in no significant business
        activities and had no revenues. From March 31, 2004 until March 7, 2005 the
        Company was engaged in the search for a business combination.
 
 On
        March
        7, 2005, FUSA merged with FUSA Technology Investments Corp., a Nevada
        corporation ("FTIC"). The purpose of the merger was to provide value to existing
        FUSA shareholders by providing the Company with the opportunity to enter the
        emerging growth field of video and audio search engine technology. Specifically,
        as a result of the merger, FUSA obtained certain technology concepts related
        to
        search engine technology as developed by FTIC and its principals.
 
 On
        April
        22, 2005, the board of directors declared a 3 for 1 share dividend for
        shareholders of record as of May 3, 2005, meaning 2 new dividend shares were
        issued for every share held on the record date.
 
 As
        a
        result of the merger, FUSA is now a technology company focused on the
        development and marketing of audio and video search engine technology. When
        completed, this technology will provide a complete video and audio search
        engine
        solution, consisting of multiple modules. The search engine solution modules
        will work together providing a comprehensive video and audio search engine
        system to discover, scrape, index and generate metadata in RSS (Really Simple
        Syndication) format for syndication to any Internet enabled device. The search
        engine solution can be deployed as a stand-alone server for corporate use
        or in
        a cluster of servers in a high volume public search engine environment. We
        intend to market our search solution to companies who operate Internet websites
        with news, video clip, music and sports content. We also intend to license
        our
        technology to original equipment manufacturer ("OEM") customers for use in
        various electronic devices such as wireless phones, television set top boxes,
        PDA's, wireless MP3 players, personal video recorders, digital appliances,
        cars
        and kiosks. We also intend to offer consumers search engine capabilities
        through
        the development of various internet sites based on the following URLs which
        we
        already own: www.searchforvideo.com; www.searchforaudio.com;
        www.searchfortv.com; www.searchforipod.com; www.searchfortivo.com;
        www.searchformedia.com; www.searchforpodcasts.com.
  Our
          search solution is not yet fully functional. Currently, we have launched
          a beta
          version of our websites www.searchforvideo.com and www.searchforipod.com.
          We
          have also developed the SearchForMedia Video Portal Server, which is a
          software
          suite and service that provides customers with a turnkey media search engine
          and
          portal solution. Customers can deploy and manage the software solution
          in-house
          or use any or all of SearchForMedia's design, content, advertising or hosted
          services. We just begun to seek customers for our technology and we do
          not have
          any relationships yet in place with any enterprise customers. Although
          we have
          the capability of deriving significant revenue from our search engine portals,
          current user traffic levels are insufficient to produce revenue. Some of
          the
          largest, best known and most technologically sophisticated companies in
          the
          world compete in the search engine space. Google, Yahoo, Microsoft and
          Lycos are
          well-financed, established competitors in this space. In addition, a number
          of
          start-ups have entered the audio and video search subspecialty within the
          search
          engine space. Many of these start-ups are better financed than we are and
          may
          have established customer relationships.
 3
   Although
        our position is one of vulnerable, new entrant, we believe that the possibility
        of commercial success for us exists in this field because:
 
 1.
              No
                  established or emerging company in this space has developed a market
                  dominant audio/video search engine
                  product.
 
 2.
              Because
                  of the size and diversity of the audio/video search engine market,
                  we
                  believe that the market will support a number of different solutions
                  based
                  on the preferences of individual corporate and OEM
                  licensors.
 
 3.
              We
                  believe our technology is competitive with any publicly available
                  audio/video search engine
                  technology.
 
 4.
              Our
                  "agnostic" independent, non-affiliated status in this field is
                  attractive
                  to customers who may not wish to align themselves with search engine
                  vendors who have competitive products to their own or whose corporate
                  parents are direct or indirect
                  competitors.
  5.
              As
                  has been established by the success of google.com, search engine
                  technology is sufficiently powerful and disruptive that it can
                  create
                  enormous value in a short period of time, displacing large, well-financed
                  and established market leaders.
 
 We
        believe that our competitive position versus other new entrants to the space
        is
        strong because of the flexibility, simplicity and ease of deployment of our
        technology as well as our relatively low overhead, anticipated responsiveness
        to
        customer demands and our expertise in the area of Real Simple Syndication
        (an
        HTML programming language which is optimal for the deployment of this kind
        of
        search engine technology.
 
 FUSA
        currently has extremely limited customer relationships and no significant
        revenue. Moreover, we have limited capital resources. Since the inception
        of our
        video search business on February 9, 2005 through December 31, 2005, we have
        had
        no significant revenue and have had net losses of $4,091,157. The Company
        is
        considered a development stage company.
 
 The
        Company's executive offices are located at 1420 Fifth Avenue, 22nd Floor,
        Seattle, Washington, 98101. The Company's telephone number is
        206-274-5107.
 
 The
        Company's fiscal year end is December 31.
 
 B.
              Business
                  of Issuer
 
 (1)
              Principal
                  Products and Services and Principal
                  Markets
 
 Overview
  FUSA
          Capital Corporation is a technology company that specializes in the development
          and marketing of search engine solutions for audio and video. The proliferation
          of audio and video files on the Internet, as well as in Intranets and corporate
          and university environments and on individual desktop computers, has created
          an
          enormous volume of available media sources. Audio and video files themselves
          contain vast amounts of valuable information and are readily in demand
          by
          consumers and businesses, both as sources of current news, information
          and
          entertainment, as well as sources of archival media. Any vast quantity
          of
          information is only useful as individual users can efficiently sort through
          and
          identify desired data. This identification traditionally takes place via
          the
          gradual collection of metadata about information sources, which is then
          quickly
          searched to obtain desired data. For instance, a newspaper article might
          be
          associated with metadata (or information about the data) as to its author,
          subject, number of words, keywords and date. Metadata has a long history
          of use
          in information management; library card catalogues containing author, title
          and
          subject information and a Dewey Decimal number were forms of metadata about
          books.
 Because
        the Internet and information technology has created an exponential increase
        in
        the amount of available data that can be delivered to the individual user,
        metadata has been transformed from a helpful method to make book and periodical
        retrieval more efficient, to an absolutely essential element of the ability
        to
        find and consume information. Indeed, because of the amount of information
        currently available, the information has virtually no value to an individual
        user without appropriate metadata and a mechanism or search engine to comb
        through that metadata to find desired information.
 
 While
        the
        Internet Search Engine business has developed to provide reasonably effective
        metadata gathering and search engine technologies to allow users to find
        text
        and images on the Internet, no technology has yet been successfully
        commercialized on any large scale for allowing users to find audio and video
        content. Because of the relatively higher file size, density and information
        contained in audio and video over text or individual images, the efficiency
        of
        audio and video search engines is even more crucial to user than traditional
        text/image search engines.
 
 FUSA
        believes it is near completing development on a powerful, complete,
        comprehensive solution for the gathering of metadata about audio and video
        sources and the useful searching and syndication of that metadata. Once fully
        developed, FUSA intends to develop and market its solution in three key markets:
        the enterprise market, the consumer market and the digital device
        market.
   4
 
 Current
        Operations
 
 FUSA
        maintains its day-to-day operations from its development and marketing offices
        in Vancouver, British Columbia, Canada. There are 6 full-time staff members
        and
        3 consultants who are actively engaged in the development of FUSA’s products and
        business. Current business consists primarily of:
 
 Acquisition
        of New Video and Audio Content
 Continued
        Development of the Core Search Engine and Related Proprietary Search
        Technology
 Continued
        Development of the Search for Media Video Portal Server
 Increased
        Traffic to FUSA’s portals
 Securing
        of Additional Strategic Partners/Revenue Share Partners
 Securing
        Customers for FUSA’s video server solutions
 
 Marketing
        Activities
 Our
          current marketing activities are focused on the acquisition of additional
          users
          for the FUSA search portals. We accomplish this primarily through the company’s
          internal SEO (Search Engine Optimization) efforts,the purchase of Internet
          advertising on other websites and via the search for marketing/revenue
          share
          partners who will help us to promote our portals.
 
 Product
        Marketing Strategy
  The
          Company's four point marketing plan covers methods of (a) Driving Traffic:
          driving traffic to the Company's websites of consumers looking for audio/video
          content, which will enable the Company intends to sell advertising on all
          FUSA
          sites. (b) Gathering Data: developing a valuable library of consumer usage
          data
          from our website that provides potential commercial licensors of the FUSA
          technology with current, cutting edge information about how their audio
          and
          video is being used by real consumers; (c) Enterprise Sales: using our
          technology and our collected user information to develop business alliance
          and
          customer relationships with major enterprises involved in the delivery
          of news,
          sports, music, entertainment and other audio and video content toward the
          licensing of the FUSA search solution by these enterprises.
 (2)
              Distribution
                  Methods of the Products
 
 We
        intend
        to distribute our products on the Internet for our consumer websites and
        downloadable products and through direct sales and business development efforts
        for our enterprise clients.
 
 Consumer
        Websites
  We
          are
          the owner of the distinctive and easy-to-remember URLs: www.searchforvideo.com;
          www.searchforaudio.com; www.searchfortv.com; www.searchforipod.com;
          www.searchfortivo.com; www.searchformedia.com; and www.searchforpodcasts.com.
          We
          believe that these websites, when sufficiently promoted and advertised,
          will
          become attractive websites for consumers to find relevant audio and video
          content that meets their needs. Although we have limited traffic currently
          of
          approximately 10,000 unique users per month, we believe that this number
          will
          reach 250,000 users per month by September 30, 2006, which we consider
          to be
          critical mass for the development of marketing relationships with other
          websites
          and for the generation of advertising revenue. We believe that consumer's
          use of
          the FUSA search technology through these sites will provide us with valuable
          data regarding actual consumer usage patterns for video and audio material
          on
          the Internet as well as catapult us into the position of a leading search
          engine
          for audio and video. This brand awareness and valuable consumer data will
          form
          the basis for our discussions with enterprises.. We also believe that revenues
          can be achieved through advertising on and links through our consumer websites
          that could provide an additional source of revenue for us.
  Enterprise
        Clients
 
 We
        intend
        to distribute our complete audio and video search engine solution to enterprise
        customers who operate websites in the areas of news, video clips, music and
        sports. Our method of distribution will be direct sales conducted in person
        by
        our chief executive officer as well as our Chief Technological Officer and
        our
        Vice-Presidents.
   5
 
 (3)
              Status
                  of Any Announced New Product or
                  Service
  On
          August
          23, 2005, SearchforVideo was launched in beta for the first time, allowing
          users
          to access FUSA’s powerful video search technology. On August 25, 2005, the
          service was made available to mobile devices. On September 22, 2005, there
          was a
          substantial upgrade to the Search for Video Beta site. On October 4 ,2005,
          the
          beta version of the Search for Video desktop software tool was released.
          On
          December 13, 2005, the Search for Media Portal Server 2.0 was released.
          On
          January 25, 2006, Search for Video was given a substantial upgrade to Beta
          2.0
          status. On February 1, 2006, the Reel Time Lens feature, which allows customers
          to watch videos in real time videos being consumed by other viewers of
          searchforvideo, as well as the ability to watch videos, also in real time,
          that
          are being collected from other sites, was launched. On February 16, 2006,
          the
          SearchforIpod site was launched in beta. On April 5, 2006, the SearchforIpod
          on-line video player, which helps viewers evaluate video clips for Ipod
          download, was launched.
 (4)
              Competitive
                  Business Conditions and the Issuer's Competitive
                  Position
 
 Industry
        Description
 
 The
        search engine industry can really be divided into two separate industries.
        These
        are, broadly speaking, the web portal/web service or consumer directed search
        engine tool and the software based enterprise licensed search tool. All search
        engines have in common their primary function of connecting people with useful
        information. Our industry has functioned traditionally through three primary
        revenue/business models, consisting of search portal advertising, keyword
        advertising and software solution sales. As the audio/video search engine
        business is just developing, it will probably foster the development of
        additional revenue models. For instance, relationships between audio search
        engines and music download services may provide a more direct model for search
        engine revenue than currently exists...meaning that music download sites
        may
        wish to sponsor audio search engines and then seamlessly integrate purchase
        capabilities for those search result songs which exist in their libraries.
        The
        most sophisticated, largest financed and most well known companies in the
        world
        compete in the search engine industry, which has tended to be dominated by
        Inktomi, Yahoo, Microsoft, Lycos, Ask Jeeves and more recently, by Google.
        While
        the search engine industry itself is a multi-billion dollar, global business,
        no
        reliable statistics are available on the size of the audio/video search engine
        industry.
 
 Many
        websites are currently offering partially functional, beta versions of video
        and
        audio search that produce inconsistent results, as this technology has not
        yet
        been deployed on any large scale. While the search engine industry itself
        is
        robust, competitive and well developed, the audio/video search engine industry
        is relatively new and uncharted.
 
 Competitive
        Position in our Industry.
 
 Our
        position within the audio/video search engine industry can best be described
        as
        vulnerable new entrant. In addition to large, multi-national competitors
        such as
        Microsoft, Yahoo and Google, smaller competitors, such as singingfish.com,
        are
        providing functional audio/video search solutions on the Internet right now.
        All
        of these companies, and most competitors in the space, have substantially
        more
        cash, technological and human resources than we do. In addition, many of
        our
        competitors have already established sales relationships with enterprise
        customers, making our business development and sales efforts more
        difficult.
   6
 
 Methods
        of Competition
 
 The
        methods of competition in the search engine industry tend to involve competition
        on the basis of speed, number of pages or data indexed, currency of metadata
        or
        indexed information, number of users, ease of use, downloads of embedded
        toolbars and search tools and range of deployment amongst affiliated websites.
        Search engines compete against each other by offering consumers higher quality,
        faster results and on ease of use and ease of access. They compete against
        each
        other for enterprise/OEM business by a demonstration of their results with
        consumers and the technological power of their solutions, as well as on
        price/value and featurization.
  (5)
              Sources
                  And Availability Of Raw Materials And The Names Of Principal
                  Suppliers
 
 Not
        applicable.
 
 (6)
              Customers
 
 The
        Company does not foresee that its business in the future will depend on one
        or a
        few major customers. This observation could change if the Company is selected
        by
        a substantial media concern as the preferred search engine across its properties
        as such a relationship might involve a substantial degree of dependence,
        but no
        such relationships exist to date.
 
 (7)
              Patents,
                  Trademarks, Licenses, Franchises, Concessions, Royalty Agreements,
                  or
                  Labor
 
 
 We
        protect or will protect our intellectual property through a combination of
        trade
        secrets, confidentiality agreements, trademarks, license agreements and patents.
        We have currently filed for trademark protection for several of our key
        trademarks. We have also filed preliminary patent applications on our key
        technologies. There can be no assurance that any of these preliminary patent
        applications will ever result in the issuances of any patents.
 
 (8)
              Government
                  Approval of Principal Products or
                  Services
 
 None.
 
 (9)
              Effects
                  of Existing or Probable Governmental
                  Regulations
 
 Our
        business is subject to a variety of U.S. and foreign laws, which could subject
        us to claims or other remedies based on the nature and content of the video
        or
        audio searched or displayed by our products and could limit our ability to
        provide video or audio regarding regulated industries and products.
 
 The
        laws
        relating to the liability of providers of online services for activities
        of
        their users are currently unsettled both within the U.S. and abroad. Claims
        have
        been threatened and filed under both U.S. and foreign law for defamation,
        libel,
        invasion of privacy and other data protection claims, tort, unlawful activity,
        copyright or trademark infringement, or other theories based on the nature
        and
        content of the materials searched or the content generated by our users.
        From
        time to time we may receive notices from individuals who do not want their
        names
        or web sites to appear in our audio/video web search results when certain
        keywords are searched. It is also possible that we could be held liable for
        obscene or libelous material provided over the web when that audio or video
        appears in our web search results. If one of these complaints results in
        liability to us, it could be potentially costly, encourage similar lawsuits,
        distract management and harm our reputation and possibly our business. In
        addition, increased attention focused on these issues and legislative proposals
        could harm our reputation or otherwise affect the growth of our
        business.
 
 The
        application to us of existing federal, state and international laws regulating
        obscenity or obscene materials, including meta data results which could be
        perceived as obscene, could cause us significant liability or technological
        problems and costs associated with identifying and complying with applicable
        law.
 
 Several
        other federal laws could have an impact on our business. Compliance with
        these
        laws and regulations is complex and may impose significant additional costs
        on
        us. For example, the Digital Millennium Copyright Act has provisions that
        limit,
        but do not eliminate, our liability for listing or linking to third-party
        web
        sites that include materials that infringe copyrights or other rights, so
        long
        as we comply with the statutory requirements of this act. The Children's
        Online
        Protection Act and the Children's Online Privacy Protection Act restrict
        the
        distribution of materials considered harmful to children and impose additional
        restrictions on the ability of online services to collect information from
        minors. In addition, the Protection of Children from Sexual Predators Act
        of
        1998 requires online service providers to report evidence of violations of
        federal child pornography laws under certain circumstances. Any failure on
        our
        part to comply with these regulations may subject us to additional liabilities.
        We also face risks associated with international data protection. The
        interpretation and application of data protection laws in Europe and elsewhere
        are still uncertain and in flux. It is possible that these laws may be
        interpreted and applied in a manner that is inconsistent with our planned
        data
        practices. If so, in addition to the possibility of fines, this could result
        in
        an order requiring that we change our planned data practices, which in turn
        could have a material effect on our business.
   7
   We
        also
        face risks from legislation that could be passed in the future. For example,
        there is a risk that state legislatures will attempt to regulate the delivery
        of
        audio or video content on obscenity or other grounds that may include our
        metadata and may subject us to compliance costs or may materially impact
        our
        ability to conduct our business as currently planned.
  (10)
              Research
                  and Development Activities
 
 We
        will
        need to expend resources to continue to develop our audio/video search engine
        products. In addition, we may need to expend significant resources in
        customization or in meeting customer requirements as well as continuing to
        respond to competition and competitive developments in the market place.
        We
        believe that this development process will be continuous and on-going. We
        expect
        to spend approximately $1,000,000 on research and development over the next
        12
        months.
 
 (11)
              Impact
                  of Environmental Laws
 
 None.
  (12)
              Employees
 
 The
        Company currently has 6 full-time employees and 3 consultants. The Company
        intends to expand its staff significantly over the next 12 months, including
        additional hires in technology, marketing and sales.
 
 C.
              Reports
                  to Security Holders
 
 (1)
              Annual
                  Reports
 
 FUSA
        will
        furnish its shareholders with annual financial reports certified by FUSA's
        independent auditors.
 
 (2)
              Periodic
                  Reports with the SEC
 
 FUSA
        is a
        reporting issuer with the Securities and Exchange Commission. FUSA will continue
        to file annual reports on Form 10-KSB, quarterly reports on Form 10-QSB,
        current
        reports on Form 8-K and amendments to these reports filed or furnished pursuant
        to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended,
        as
        required to maintain the fully reporting status.
 
 (3)
              Availability
                  of Filings
 
 The
        public may read and copy any materials FUSA files with the SEC at the SEC's
        Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549.
        The
        public may obtain information on the operation of the Public Reference Room
        by
        calling the SEC at 1-800-SEC-0330. Additionally, the SEC maintains an Internet
        site (http://www.sec.gov) that contains reports, proxy and information
        statements, and other information regarding issuers that file electronically
        with the SEC.
   Item
        2.
        Description of Property.
  The
          Company's executive offices are located at 1420 Fifth Avenue, 22nd Floor,
          Seattle, Washington, 89101. The Company's telephone number is 206-274-5107.
          The
          Company conducts its operations from two separate office facilities in
          Vancouver, Canada. One of the facilities in Vancouver is leased under a
          three-year operating lease expiring in October 2008. The other lease is
          short
          term as of December 31, 2005. The office in Seattle is leased under a month
          to
          month rental.
   Item
        3.
        Legal Proceedings.
 
 FUSA
        is
        not a party to any pending legal proceeding.
 
 
 Item
        4.
        Submission of Matters to a Vote of Security Holders.
 
 During
        the fourth quarter of the fiscal year ending December 31, 2005, no matter
        was
        submitted for vote to holders of the Company’s securities.
  
 8
   PART
        II
 
 
 Item
        5.
        Market for Common Equity and Related Stockholder Matters.
 
 Market
        Information
 
 The
        Company's equity is currently traded on the OTCBB(R) under the symbol FSAC.OB.
        The following table displays the monthly high and low prices of the Company’s
        stock as listed on the OTCBB exchange during the period of March 7, 2005,
        the
        first date the Company was trading with its current business until April,
        10,
        2006.
 
 Date
              High
              LowApr-06
              1.70
              1.40Mar-06
              2.37
              1.36Feb-06
              3.83
              1.54Jan-06
              1.59
              1.11Dec-05
              1.26
              0.77Nov-05
              1.19
              0.95Oct-05
              1.41
              1.02Sep-05
              1.62
              1.10Aug-05
              1.55
              0.92Jul-05
              1.14
              1.00Jun-05
              1.15
              0.7416-May-053
                  FOR 1 STOCK DIVIDEND3May-05
              2.90
              0.75Apr-05
              3.25
              2.77Mar-05
              2.90
              1.85
 
 
 Outstanding
        Options, Conversions, and Planned Issuance of Common Stock
 
 There
        Company has issued options to employees and consultants to purchase 200,000
        shares of its common stock at a weighted average exercise price of $1.04
        per
        share. The Company has issued warrants to purchase 930,000 shares of common
        stock. These warrants were issued to purchasers of the Company’s common stock in
        a private placement conducted in 2005. The weighted average exercise price
        of
        the warrants is $0.61 per share.
 
 Security
        Holders
 
 FUSA
        currently has 59,276,071 shares of Common Stock issued and outstanding held
        by
        eighty (80) shareholders of record as of March 31, 2006.
 
 Dividends
 
 As
        of the
        date of this report, FUSA has not declared nor paid any dividends on its
        Common
        Stock. As of the date of this report, FUSA does not have a formal dividend
        policy.
 
 Transfer
        Agent and Registrar
 
 The
        Transfer Agent for the shares of common voting stock of FUSA is Edith Vasquez,
        Pacific Stock Transfer Company, 500 East Warm Springs Road, Suite 240, Las
        Vegas, Nevada 89119, (702) 361-3033.
   9
 
 Recent
        Sales of Unregistered Securities.
 
 The
        Company was incorporated in Nevada on September 13, 2000. The Company was
        originally authorized to issue 20,000,000 shares of its $0.001 par value
        common
        stock and 5,000,000 shares of its $0.001 par value preferred stock. In June
        of
        2004, the Company amended its articles of incorporation to authorize the
        issuance of up to 500,000,000 shares of $0.0001 par value common stock and
        up to
        5,000,000 shares of $0.0001 par value preferred stock.
 
 On
        September 13, 2000, an officer, director and shareholder of the Company donated
        capital of $125.
 
 On
        September 14, 2000, the Company issued 5,750,000 shares of its $0.001 par
        value
        common stock to two individuals, who are officers and directors of the Company
        in exchange for cash in the amount of $8,000 and fixed assets with a historical
        cost of $14,949.
 
 On
        December 15, 2000, the Company issued 600,000 shares of its $0.001 par value
        common stock to Go Public Central for consulting services rendered.
 
 On
        December 15, 2000, the Company closed its private placement offering and
        issued
        1,303,000 of its $0.001 par value common stock for cash of $65,150.
 
 During
        the year ended December 31, 2001, the Company received $63,325 in cash for
        shares that were issued in the offering pursuant to Regulation D, Rule 505,
        of
        the Securities Act of 1933, as amended. This amount is considered a subscription
        payable.
 
 On
        May
        31, 2002, the Company closed its offering and issued 633,250 of its $0.001
        par
        value common stock for total of $63,325 pursuant to an offering pursuant
        to
        Regulation D, Rule 505, of the Securities Act of 1933, as amended.
 
 On
        June
        10, 2002, the Company issued 310,000 shares of its $0.001 par value common
        stock
        to Go Public First, Inc. for consulting services rendered valued at
        $31,000.
 
 On
        June
        10, 2002, the Company issued 552,938 shares of its $0.001 par value common
        stock
        to Go Public First, Inc. for consulting services valued at $55,294, of which
        $10,000 is considered deferred compensation.
 
 On
        June
        30, 2002, an officer, director and shareholder of the Company donated fixed
        assets in the amount of $5,550.
 
 During
        the year ended December 31, 2003, the Company adjusted deferred compensation
        in
        the amount of $10,000.
 
 As
        of
        March 7, 2005, the Company issued 27,000,000 (post-dividend) shares to the
        shareholders of FTIC in the merger transaction through which FUSA began its
        search engine business.
 
 On
        May
        13, 2005, the Company paid a 3 for 1 stock dividend to shareholders of record
        as
        of May 3, 2005. This resulted in the issuance of approximately 38,600,000
        additional shares of common stock.
 
 Between
        March 2005 and June 2005, the Company issued 930,000 shares of common stock
        in a
        private placement financing.
 
 In
        August, 2005, the Company issued 2,100,000 shares of common stock to a
        consultant for marketing services.
 
 In
        2005,
        the Company issued officer and director Stephen Craig Pollard 600,000 shares
        of
        common stock as compensation.
 
 
 Item
        6.
        Management's Analysis of Financial Condition and Plan of Operation.
 
 A.
              Management's
                  Analysis of Financial Condition
 
 This
        section should be read in conjunction with the audited financial statements
        included in Part F/S of this filing.
 
 In
        the
        approximately eleven (11) months of operation from February 9, 2005 (Date
        of
        Inception of present business) to December 31, 2005, the Company generated
        limited revenues of $182 in interest and incurred a cumulative net loss of
        $4,091,157. The Company's loss resulted primarily from costs of stock-based
        compensation, start-up activities, including consulting fees and other general
        and administrative expenses.
   10
 
 As
        noted
        by the Auditors, the Company has limited operations and has only commenced
        planned principal operations as of February 9, 2005, which raises substantial
        doubt about its ability to continue as a going concern. Due to the Company's
        lack of any current revenue source, the Company is dependent upon its ability
        to
        secure equity and/or debt financing. There are no assurances that the Company
        will be successful in securing such funding. It is important to note that
        without additional capital, it would be unlikely for the Company to continue
        as
        a going concern and it may be forced to terminate business
        operations.
 
 Over
        the
        next twelve months, the Company plans to take the following material steps
        to
        further implement our business plan:
 
 (1)
              Plan
                  of Operation:
 
 FUSA
        is a
        start up software company. The company is considered high-risk for many reasons.
        Although we have indications of interest from investors interested in purchasing
        our common stock we have not negotiated terms with any such
        investors.
 
 We
        intend
        to spend about $1 million US on marketing and business development this year.
        Most of our marketing efforts initially will be aimed toward getting consumers
        to visit our website and begin searching for audio and video. Our business
        plan
        is dependent on a high volume of visitors to our site in a short period of
        time.
        We intend to continue marketing our website to potential visitors throughout
        the
        next 12 months.
  In
          September, 2006, we believe that we will have enough visits our site, and
          therefore enough customer usage data and evidence of interest and usability,
          to
          begin producing some advertising revenue as well as some minor sales on
          the
          enterprise level. We intend to have trained a sales force by this time
          and to be
          ready to concentrate on negotiating licensing transactions with some of
          the
          largest entertainment and news companies in the world. Our strategy involves
          enticing potential enterprise clients with the richness of our consumer
          data,
          the substantial interest and use we hope to have already generated with
          our
          website and size of potential revenue returns that our software can provide
          to
          these clients via enhancements in the way that they market video and audio
          content.
 
 It
          is
          anticipated that additional sales persons we will hire probably cost us
          $65,000
          USD per year in salary plus 5% commissions. We hope to be able to hire
          an
          additional sales person by late summer or early fall, with roughly the
          same
          salary requirements. We anticipate spending about $2,000,000 on operations
          and
          salaries and costs related to marketing and research and development. In
          addition to the payments for office space, we believe that we will have
          to spend
          around $100,000 USD for our servers and network administration
          costs.
 
 Our
          12
          month plan is to complete our search engine software, have it utilized
          by
          consumers on our websites and then license our software to content
          enterprises..
 (2)
              Material
                  Steps Required to Implement the Twelve-Month
                  Plan:
 
 Our
        twelve-month plan requires us to accomplish the following steps:
 
 1.
              Complete
                  full-featured release of Search for Video website and
                  tools.
 2.
              Complete
                  full release of Search for Ipod website and
                  tools.
 3.
              Complete
                  full featured release of Search for Video desktop
                  tool.
 4.
              Drive
                  traffic of at least 100,000 unique visitors per month to our websites.
 5.
              Hire
                  additional sales and marketing
                  staff.
 6.
              Continue
                  to develop technical team.
 7.
              Compile
                  usage statistics for our websites.
 8.
              Identify
                  most likely customers amongst content
                  providers.
 9.
              Develop
                  rapport with likely content
                  customers.
 10.
              Present
                  content customers with sales
                  presentation.
 11.
              Hire
                    full-time key market business development
                    executive.
 12.
              Develop
                  beta test with additional content
                  customers.
 13.
              Deploy
                  several customer beta tests.
 14.
              Evaluate
                  beta tests.
 15.
              Negotiate
                  and sign license agreements with one or more content
                  customers.
 16.
              Add
                  at least one more site under the “searchfor”
                  umbrella
 17.
              Increasing
                  aggregated video and audio content references to at least 5,000,000
                  clips.
 18.
              Architect
                  subsequent versions and upgrades to core
                  technology.
 19.
              Begin
                  development on subsequent versions and upgrades to core
                  technology.
   11
 
 (3)
              Estimated
                  Costs and Timetable for Completion of
                  Steps:
 
 The
        following lists costs and dates for the completion of various steps in our
        twelve-month plan. Costs include an initial cost plus any amounts that will
        be
        incurred through 12/31/06 in maintaining or finishing the indicated milestone,
        such as maintenance or salary costs.
 
  Date
              
              Milestone(s)
              
              Cost5/30/06
              
              Search
                  engine complete
              
              $200,000Websites
                  fully operationalEngine
                  Fully Deployed09/30/06
              
              Drive
                  Additional Traffic
              
              $1,000,000Hire
                  Additional Sales Persons10/30/06
              
              Develop
                  technical team
              
              $250,000Compile
                  usage statisticsIdentify
                  customersDevelop
                  customer rapport11/30/06
              
              Sales
                  Presentation
              
              $250,000Hire
                  second sales personDevelop
                  beta testDeploy
                  beta test12/15/06
              
              Evaluate
                  beta test
              
              $100,000Sign
                  license agreementsIdentify
                  EnterprisecustomersDevelop Enterprisebeta
                  testDeploy
                  beta test12/31/06
              
              Evaluate
                  Enterprisebeta test
              
              $200,000Sign Enterpriselicense
                  agreementsArchitect
                  upgradesBegin
                  upgrade development
 
 Management's
        Analysis of Financial Performance
 
 The
        Company had no significant operations from the period January 1, 2004 until
        December 31, 2004. It financed its operations, which were limited to securing
        a
        business combination and its public reporting requirements, loans obtained
        from
        an unrelated third party. We began our current business on February 9, 2005.
        Moreover, we have limited capital resources currently. In the approximately
        eleven (11) months of operation from February 9, 2005 (Date of Inception
        of
        present business) to December 31, 2005, the Company generated limited revenues
        of $182 in interest and incurred a cumulative net loss of $4,091,157. The
        Company's loss resulted primarily from costs of stock-based compensation,
        start-up activities, including consulting fees and other general and
        administrative expenses.
 
 The
        Company is considered a development stage company.
 
 The
        Company is authorized to issue 500,000,000 shares of its $0.0001 par value
        Common Stock and 5,000,000 shares of its $0.0001 Preferred Stock. During
        September 2000, the Company issued 5,750,000 shares of its $0.001 par value
        common stock to a former officer and current director in exchange for cash
        and a
        vehicle in the amount of $22,949. During December 2000, the Company issued
        600,000 shares of its $0.001 par value common stock in exchange for consulting
        services valued. The consulting services were valued at $60,000.
 During
          the period February 9, 2005 through March 31, 2005, the Company conducted
          a
          private placement under pursuant to Regulation D, Rule 505 of the Securities
          Act
          of 1933, as amended, and issued a total of 930,000 shares of its $0.001
          par
          value common stock in exchange for cash of $310,000, and 930,000 warrants
          with a
          weighted average exercise price of $.61 per share exercisable immediately,
          which
          expire on December 31,2006. The Company also borrowed funds of $985,133
          from
          third parties. In addition, the Company issued 2,700,000 shares in exchange
          for
          consulting services and 125,000 shares for investor relations services
          during
          the period.
  12
 FUSA
          financed its operations during the period from February 9, 2005 to December
          31,
          2005 primarily by issuing capital stock to unaffiliated investors in exchange
          for cash and services in a private placement, As of December 31, 2005,
          FUSA has
          received $182 in interest revenue.
 
 As
          of
          December 31, 2005, FUSA had $381,964 in current assets and $ 1,158,841
          in
          current liabilities. The current assets consisted of $342,094 in cash,
          $28,750
          in restricted cash and $11,120 in prepaid expenses. The current liabilities
          consisted of accounts payable and accrued liabilities of $173,708 and $985,133
          in advances payable. In February, 2006, the Company issued 1,073,507 shares
          of
          common stock as repayment of the advances payable.
 B.
              Plan
                  of Operation
 
 The
        Company believes that it has insufficient resources to support its operations
        for the next twelve to eighteen months. This conclusion is based upon the
        fact
        that fixed costs for the Company could be substantial in implementing its
        vision
        as currently contemplated. Although the Company has indications from investors
        that they will invest in common stock of the Company, there is no legal
        obligation for them to do so and such a financing may not occur. Currently,
        the
        Company does not currently have sufficient resources to complete its current
        plans without securing additional financing. However, without realizing
        revenues, the Company will face financial difficulties and need to raise
        additional capital. It is the intent of the Company, in the next twelve months,
        to raise funds and then subsequently to generate revenues sufficient to operate
        and grow as a going concern. The Company's audited financial statements clearly
        indicate concern on the part of the auditor as to the viability of the Company
        as a going concern. If the Company does not realize significant revenues
        in the
        near-term or does not secure additional capital, it may be difficult to continue
        operations.
  FUSA
          believes that it has insufficient resources to support its operations for
          the
          next twelve to eighteen months. Without realizing revenues or additional
          borrowings, FUSA will face financial difficulties and needs to raise additional
          capital. It is the intent of FUSA, in the next twelve months, to generate
          investment and revenues sufficient to operate and grow as a going
          concern.
 
            13
   Item
        7.
        Financial Statements
 
 TABLE
        OF CONTENTS
 
 
 PAGEREPORT
                  OF INDEPENDENT REGISTERED ACCOUNTING FIRM
              F-1CONSOLIDATED
                  BALANCE SHEET
              F-2CONSOLIDATED
                  STATEMENT OF OPERATIONS
              F-3CONSOLIDATED
                  STATEMENT OF STOCKHOLDERS’ EQUITY
              F-4CONSOLIDATED
                  STATEMENT OF CASH FLOWS
              F-5NOTES
                  TO CONSOLIDATED FINANCIAL STATEMENTS
              F-6
 
 
 
 
 
  14
  
 REPORT
        OF
        INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To
        the
        Board of Directors and Stockholders
 FUSA
        Capital Corporation
 Seattle,
        Washington
 
 We
        have
        audited the accompanying balance sheet of FUSA Capital Corporation (a Nevada
        corporation in the development stage) as of December 31, 2005, and the related
        consolidated statements of operations, stockholders’ equity (deficit), and cash
        flows for the period from February 9, 2005 (date of inception), to December
        31,
        2005. These consolidated financial statements are the responsibility of the
        Company’s management. Our responsibility is to express an opinion on these
        consolidated financial statements based on our audit.
 
 We
        conducted our audit in accordance with the standards of the Public Company
        Accounting Oversight Board (United States). Those standards require that
        we plan
        and perform the audit to obtain reasonable assurance about whether the
        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 also 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 audit provides a reasonable basis for our opinion.
 
 In
        our
        opinion, the consolidated financial statements referred to above present
        fairly,
        in all material respects, the financial position of FUSA Capital Corporation
        as
        of December 31, 2005, and the results of its operations and its cash flows
        for
        the period from February 9, 2005 (date of inception), to December 31, 2005,
        in
        conformity with accounting principles generally accepted in the United States
        of
        America.
 
 The
        accompanying consolidated financial statements have been prepared assuming
        the
        Company will continue as a going concern. As discussed in Note 3 to the
        consolidated financial statements, the Company is in the development stage,
        has
        not commenced operations, has sustained a significant loss as of December
        31,
        2005, and had a deficit in working capital and stockholders’ equity at that
        date, which raises substantial doubt about its ability to continue as a going
        concern. Management’s plans in regard to these matters are also described in
        Notes 3 and 11. The consolidated financial statements do not include any
        adjustments that might result from the outcome of this uncertainty.
 
 
 
 Braverman
        International, P.C.
 Prescott,
        Arizona
 March
        31,
        2006
 
  F-1
  
 **FUSA
        CAPITAL CORPORATION**
 **(A
        DEVELOPMENT STAGE COMPANY)**
 **CONSOLIDATED
        BALANCE SHEET**
 **DECEMBER
        31,2005**
 
 
 **ASSETS**CURRENT
                  ASSETSCash
              
              $
              342,094Restricted
                  cash
              
              
              28,750Prepaid
                  expenses
              
              
              11,120Total
                  Current Assets
              
              
              381,964Property
                  and equipment, net
              
              
              30,252Lease
                  deposits
              
              
              7,603Total
                  Assets
              
              $
              419,819**LIABILITIES
                  AND STOCKHOLDERS' EQUITY (DEFICIT)**CURRENT
                  LIABILITIESAccounts
                  payable and accrued liabilities
              
              $
              173,708Advances
                  payable
              
              
              985,133Total
                  Current Liabilities
              
              
              1,158,841COMMITMENTS
                  AND CONTINGENCIESSTOCKHOLDERS'
                  EQUITYPreferred
                  stock, $.0001 par value, 5,000,000 shares authorized, none
                  issued
              
              
              -Common
                  stock, par value $.0001, 500,000,000 shares authorized, 58,202,564
                  issued
                  and outstanding
              
              
              5,820Paid
                  in capital
              
              
              3,346,315(Deficit)
                  accumulated during the development stage
              
              
              (4,091,157
              )Total
                  Stockholders' Equity (Deficit)
              
              
              (739,022
              )$
              419,819
 
 
 
 SEE
        ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
 
  F-2
  **FUSA
        CAPITAL CORPORATION**
 **(A
        DEVELOPMENT STAGE COMPANY)**
 **CONSOLIDATED
        STATEMENT OF OPERATIONS**
 **FEBRUARY
        9, 2005 (INCEPTION) TO DECEMBER 31, 2005**
 
 
 REVENUES-
                  Interest
              
              $
              182EXPENSESSelling,
                  general and administrative
              
              
              1,601,798Research
                  and development
              
              
              2,254,152Beneficial
                  conversion expense
              
              
              230,900Interest
              
              
              1,631Depreciation
                  and amortization
              
              
              2,858Total
                  expenses
              
              
              4,091,339NET
                  (LOSS)
              
              $
              (4,091,157
              )NET
                  (LOSS) PER COMMON SHARE, BASIC
              
              $
              (0.08
              )WEIGHTED
                  AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
              
              
              54,323,695
 
 
 
 
 
 
 
 SEE
        ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
 
 
 
  F-3
  **FUSA
        CAPITAL CORPORATION**
 **(
        A DEVELOPMENT STAGE COMPANY)**
 **CONSOLIDATED
        STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)**
 
 
 Common
                  Stock
              
              Paid-in
              
              (Deficit)
                  Accumulated During Development
              
              Total
                  Stockholders’
                  EquityShares
              
              Amount
              
              Capital
              
              Stage
              
              (Deficit)Inception,
                  Feb 9, 2005, Stock issued for services @ $.0001 per share
              
              
              27,000,000
              
              $
              2,700
              
              $
              6,300
              
              $
              -
              
              $
              9,000Net
                  (Loss), for the period ended March 6, 2005
              
              
              
              
              
              
              
              
              
              
              
              (11,605
              )
              
              (11,605
              )**Balances
                  March 6, 2005**
              
              
              27,000,000
              
              
              2,700
              
              
              6,300
              
              
              (11,605
              )
              
              (2,605
              )Restated
                  Recapitalization, March 7 2005
              
              
              27,447,564
              
              
              2,744
              
              
              (104,701
              )
              
              -
              
              
              (101,957
              )***Shares
                  issued for cash in a private placement***March
                  9, 2005 Stock issued for cash @ $.34 per share
              
              
              300,000
              
              
              30
              
              
              99,970
              
              
              
              
              
              100,000March
                  31, 2005 Stock issued for cash @ $.34 per share
              
              
              390,000
              
              
              39
              
              
              129,961
              
              
              
              
              
              130,000April
                  5, 2005 Stock issued for cash @ $.34 per share
              
              
              60,000
              
              
              6
              
              
              19,994
              
              
              
              
              
              20,000April
                  15, 2005 Stock issued for cash @ $.34 per share
              
              
              120,000
              
              
              12
              
              
              39,988
              
              
              
              
              
              40,000April
                  21, 2005 Stock issued for cash @ $.34 per share
              
              
              60,000
              
              
              6
              
              
              19,994
              
              
              
              
              
              20,000Offering
                  costs
              
              
              
              
              
              
              
              
              (4,000
              )
              
              
              
              
              (4,000
              )Benefical
                  conversion feature- 930,000 warrants issued in above PPM
              
              
              
              
              
              
              
              
              230,900
              
              
              
              
              
              230,900***Shares
                  issued as compensation***June
                  15, 2005 Stock issued @ FMV of $.89 per share
              
              
              1,200,000
              
              
              120
              
              
              1,066,380
              
              
              
              
              
              1,066,500July
                  29, 2005 Stock issued @ FMV of $1.02 per share
              
              
              900,000
              
              
              90
              
              
              917,910
              
              
              
              
              
              918,000September
                  21, 2005 Stock issued @ FMV of $1.22 per share
              
              
              600,000
              
              
              60
              
              
              731,940
              
              
              
              
              
              732,000September
                  22, 2005 Stock issued @ FMV of $1.21 per share
              
              
              50,000
              
              
              5
              
              
              60,495
              
              
              
              
              
              60,500October
                  26, 2005 Stock issued @ FMV of $1.19 per share
              
              
              25,000
              
              
              3
              
              
              29,748
              
              
              
              
              
              29,750November
                  10, 2005 Stock issued @ FMV of $.89 per share
              
              
              50,000
              
              
              5
              
              
              54,495
              
              
              
              
              
              54,500***Stock
                  options issued for compensation to
                  non-employees***April
                  18, 2005 120,000 options vested @ FMV of $.32 per share
              
              
              
              
              
              
              
              
              38,298
              
              
              
              
              
              38,298April
                  18, 2005 21,819 options vested @ FMV of $.40 per share
              
              
              
              
              
              
              
              
              8,643
              
              
              
              
              
              8,643Loss
                    for the period from March 6, 2005to December 31,
                    2005
              
              
              
              
              
              
              
              
              
              
              
              (4,079,552
              )
              
              (4,079,552
              )**Balances
                  December 31, 2005**
              
              
              58,202,564
              
              $
              5,820
              
              $
              3,346,315
              
              $
              (4,091,157
              )
              $
              (739,022
              )
 
 
 
 
 
 SEE
        ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
 
  F-4
  
 **FUSA
        CAPITAL CORPORATION**
 **(
        A DEVELOPMENT STAGE COMPANY)**
 **CONSOLIDATED
        STATEMENT OF CASH FLOWS**
 **FEBRUARY
        9, 2005 (INCEPTION) TO DECEMBER 31, 2005**
 
 **OPERATING
                  ACTIVITIES**Net
                  (loss) from operations
              
              $
              (4,091,157
              )Adjustments
                  to reconcile net (loss) to net Cash (used) by operating
                  activities:Common
                  stock issued for compensation
              
              
              2,861,250Common
                  stock issued for services
              
              
              9,000Stock
                  options issued for services
              
              
              46,941Beneficial
                  conversion feature on warrant issuance
              
              
              230,900Depreciation
                  and amortization
              
              
              2,858Loss
                  on disposal of property and equipment
              
              
              4,486Changes
                  in operating assets and liabilities:Increase
                  in prepaid expenses
              
              
              (11,120
              )Increase
                  in accounts payable and accrued liabilities
              
              
              160,031Increase
                  in lease deposits
              
              
              (7,603
              )Total
                  adjustments
              
              
              3,296,743Net
                  cash (used by) operating activities
              
              
              (794,415
              )**INVESTING
                  ACTIVITIES**(Increase)
                  in property and equipment
              
              
              (37,593
              )Net
                  cash (used by) investing activities
              
              
              (37,593
              )**FINANCING
                  ACTIVITIES**Cash
                  received in recapitalization of the company
              
              
              184Proceeds
                  from issuance of common stock
              
              
              310,000Offering
                  costs from issuance of stock
              
              
              (4,000
              )Increase
                  in advances payable
              
              
              896,667Net
                  cash provided by financing activities
              
              
              1,202,851Net
                  increase in cash
              
              
              370,844Cash,
                  beginning of period
              
              
              -Cash,
                  end of period
              
              $
              370,844Cash
                  Summary, December 31,2005Cash
              
              $
              342,094Restricted
                  Cash
              
              
              28,750Total
              
              $
              370,844**SUPPLEMENTAL
                  DISCLOSURES OF NON-CASH INVESTING AND FINANCING
                  ACTIVITIES**Non-monetary
                  net liabilities assumed in a recapitalization of the Company on
                  March 7,
                  2005:Liabilities
                  assumed
              
              $
              102,140Less
                  cash received
              
              
              184Total
                  non-monetary net liabilities assumed
              
              $
              101,956Interest
                  paid
              
              $
              1,631
 
 
 SEE
        ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
  F-5
  
 **FUSA
        CAPITAL CORPORATION**
 **(A
        Development Stage Company)**
 **Notes
        to Consolidated financial statements**
 
 Note
        1
        - Basis of presentation
 
 On
        March
        7, 2005 the Company acquired all of the issued and outstanding shares of
        common
        stock of FUSA Technology Investments, Inc, (FTIC) a development stage Nevada
        Corporation, formed on February 9, 2005, in exchange for 27 million restricted
        shares of common stock of the Company at par value of $2,700. This stock
        exchange transaction resulted in a change of control wherein the consolidated
        financial statements are those of the acquired company, FTIC, consolidated
        with
        its legal parent, FUSA Capital Corporation (FCC), as required for proper
        financial presentation. At the date of the stock exchange all of the net
        assets
        of FCC were acquired by FTIC at fair value which equaled FCC’s book value.
 
 The
        historical transactions of the acquired company will be carried forward,
        similar
        to the accounting treatment given in a recapitalization. In effect, the acquired
        company is considered the acquirer for accounting purposes only, not since
        its
        shareholders received less shares of the Company’s common stock than were
        outstanding prior to the exchange, but for the reason that the Company’s Board
        of Directors resigned and were replaced by the FTIC Board. All transactions
        between the companies have been eliminated in consolidation. Both companies
        have
        a December 31 year end and in accordance with FAS No. 7, they were in the
        development stage having no substantial earned revenues as of December 31,
        2005.
 
 As
        of
        December 31, 2005 the Company was in the process of developing software to
        integrate into a search engine using principally video and audio as its primary
        source for users to quickly locate what is on the world wide web. At that
        date
        the search engine was in Beta 2 testing and users are able to test it and
        comment on it.
 On
          April
          22, 2005, the Company's Board of Directors declared a three for one forward
          stock split in the form of a dividend payable May 13, 2005 to the shareholders
          of record on May 3, 2005. This split resulted in the issuance of approximately
          36.8 million additional shares of common stock, and was accounted for by
          the
          transfer of approximately $3,676 from paid in capital to par value. Retroactive
          effect of this split has been reflected in the accompanying financial statements
          for the periods presented.
 
 
 Note
        2
        - Significant accounting policies
 
 ***Use
        of estimates***
 
 The
        preparation of consolidated 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 consolidated financial statements and the reported amounts
        of
        revenue and expenses during the reporting period. Actual results could differ
        from these estimates.
 
 ***Restricted
        cash***
 
 At
        December 31, 2005 current assets include restricted cash of $28,750, which
        is
        held as short term, interest bearing collateral to support a bank credit
        facility for the Company.
 
 ***Cash
        Equivalents***
 
 The
        Company considers all highly liquid investments with the original maturities
        of
        three months or less to be cash equivalents.
   F-6
 
 **Financial
        instruments**
 
 The
        fair
        value of cash, accounts payable and accrued liabilities are comparable to
        the
        carrying amounts thereof given their short-term maturity.
 
 ***Concentrations
        of credit risk***
 
 The
        Company is subject to concentrations of credit risk on their temporary cash
        investments due to the use of a limited number of banking institutions. The
        Company mitigates this risk by placing temporary cash investments with major
        financial institutions, which have all been accorded high ratings by primary
        rating agencies.
 
 **Advertising
        Costs**
 
 We
        expense all advertising, promotion and marketing costs as they so far have
        not
        included any direct-response advertising costs requiring capitalization.
        Non
        direct and related costs incurred during 2005 within this category, which
        are
        included in selling, general and administrative expense, amounted to
        approximately $180,000.
 
 ***Stock-based
        compensation***
 
 As
        permitted by SFAS No. 123, Accounting for Stock-Based Compensation, the Company
        has elected to follow Accounting Principles Board Opinion (“APB”) No. 25,
        Accounting for Stock Issued to Employees, and related interpretations in
        accounting for its stock-based compensation to employees. Under APB No. 25,
        when
        the exercise price of the Company’s employee stock options is equal to or
        greater than the fair value of the underlying stock on the date of grant,
        no
        compensation expense is recognized.
  In
        December 2004, the FASB issued SFAS 123R, Share Based Payments. SFAS 123R
        is
        applicable to transactions in which an entity exchanges its equity instruments
        for goods and services. It focuses primarily on transactions in which an
        entity
        obtains employee services in share-based payment transactions. SFAS No. 123R
        supersedes the intrinsic value method prescribed by APB No. 25, requiring
        that
        the fair value of such equity instruments be recorded as an expense as services
        are performed. Prior to SFAS 123R, only certain pro forma disclosures of
        accounting for these transactions at fair value were required. SFAS 123R
        will be
        effective for the first quarter 2006 consolidated financial statements, and
        permits varying transition methods including retroactive adjustment of prior
        periods or prospective application beginning in 2006. The Company will adopt
        SFAS 123R using the modified prospective method effective January 1, 2006.
        Under
        this transition method the Company will begin recording stock option expense
        prospectively, starting in first quarter 2006.
 
 For
        stock
        based compensation to non-employees, the Company is required to follow SFAS
        No.
        123, which requires that stock awards granted to directors, consultants and
        other non-employees be recorded at the fair value of the award granted.
 
 ***Research
        and development costs***
 
 Pursuant
        to SFAS No. 2, "Accounting for Research and Development Costs," our research
        and
        development costs, which relate to the development of software technologyto
        be used in our search engine, were expensed as technological feasibility
        of the
        software had not been reached as of December 31, 2005.
 
 The
        cost
        of materials and equipment that are acquired for research and development
        activities and that have alternative future uses are capitalized when acquired,
        such as computer equipment.
 
 ***Property
        and equipment***
 
 Property
        and equipment are recorded at cost. Depreciation is provided over the estimated
        useful lives of the related assets using the straight-line method and the
        half
        year convention. Estimated useful lives for property and equipment categories
        are as follows:
 
 Furniture
                  and fixtures
              7
                  yearsComputer
                  systems
              5
                  yearsLeasehold
                  improvements
              Lease
                  term
   F-7
 
 Long
        lived assets are tested for impairment whenever events or changes in
        circumstances indicate their carrying amount may not be recoverable. The
        determination of any impairment loss includes a comparison of estimated
        undiscounted future cash flows anticipated to be generated during the remaining
        life of the asset or group of assets to the net carrying value of the asset
        or
        group of assets. Where the net carrying amount of the asset or the group
        of
        assets is less than the undiscounted future cash flows, an impairment loss
        is
        recognized.
 
 ***Income
        taxes***
 
 Deferred
        tax liabilities and assets are determined based on the differences between
        the
        book values and the tax bases of assets and liabilities, using tax rates
        in
        effect for the years in which the differences are expected to reverse. A
        valuation allowance is provided to offset any deferred tax asset if, based
        upon
        the available evidence, it is more likely than not that some or all of the
        deferred tax assets will not be realized.
 
 ***Foreign
        currency transactions***
 
 The
        business of the Company from Canada involves incurring a substantial number
        of
        operational transactions in Canada for which it transacts payments in Canadian
        currency through a bank account maintained for that purpose. Included in
        such
        transactions are payments for salaries, rent, consulting and many other
        expenses. At the time of payment, each Canadian disbursement is translated
        into
        the U. S. dollar equivalent amount and an exchange gain or loss on currency
        is
        recorded at that time. During 2005, the currency exchange transactions resulted
        in a gain of $11,688. As of December 31, 2005 the Canadian bank account balance,
        which was the only account balance maintained in foreign currency at that
        date
        was converted into a U. S. dollar equivalent amount.
 
 
 Note
        3
        - Going concern
 
 The
        Company's consolidated financial statements are prepared using the accounting
        principles generally accepted in the United States of America applicable
        to a
        going concern, which contemplates the realization of assets and liquidation
        of
        liabilities in the normal course of business. However, the Company has not
        commenced its planned principal operations and has not generated revenues.
        It
        has incurred a significant operating loss as of December 31, 2005 has a
        deficiency in working capital and a deficit in stockholders’ equity as of that
        date, however, as disclose in Note 11, the Company did convert all of the
        advances included in working capital to equity, thereby subsequently eliminating
        both deficits.
 
 The
        Company is dependent upon its ability to secure equity and/or debt financing
        and
        there are no assurances that the Company will be successful. Without sufficient
        financing, completion of the technology and achievement of profitable operations
        thereby, it would be unlikely for the Company to continue as a going concern.
        Management’s plan is to complete the development of its video and audio search
        engine technology and to utilize it as an internet service for profit.
 
 Note
        4
        - Related party transactions
 
 During
        the year, in lieu of paying its technology officer’s his earned compensation
        directly of $182,686, it paid it to a consulting company owned by the Officer.
        This amount relates principally to his efforts through December 31, 2005,
        in
        furthering the development of the Company’s video and audio search engine
        technology, accordingly, the entire amount was included in research and
        development expense.
 
 Note
        5
        - Property and equipment
 
 A
        summary
        of property and equipment as of December 31, 2005 follows:
 
 
 **Cost**
              ****
              **Accumulated**
                **Depreciation**
                **and**
                **amortization**
              ****
              **Net
                  book value**Furniture
                  and fixtures
              
              $
              7,470
              
              $
              697
              
              $
              6,773Computer
                  systems
              
              
              17,019
              
              
              1,922
              
              
              15,097Leasehold
                  improvements
              
              
              8,621
              
              
              239
              
              
              8,382$
              33,110
              
              $
              2,858
              
              $
              30,252
  
 F-8
 
  Note
        6
        - Advances payable
 
 Advances
        payable at December 31, 2005 of $985,131 consists of advances from unrelated
        parties that are non-interest bearing, unsecured, and have no fixed terms
        of
        repayment and are repayable or convertible into the common stock of the Company.
 
 Note
        7
        - Commitments and contingencies
 
 ***Operating
        Leases***
 
 The
        Company conducts its operations from two separate office facilities in
        Vancouver, Canada and one office in Seattle, Washington. One of the facilities
        in Vancouver is leased under a three-year operating lease expiring in October
        2008. The other lease is short term as of December 31, 2005.
 
 The
        office in Seattle is leased under a month to month rental.
 
 The
        following is a schedule of future minimum lease payments, exclusive of all
        executory costs, required under the long-term operating lease above as of
        December 31, 2005:
 
 2006
              
              $
              28,3112007
              
              
              28,3112008
              
              
              23,593
 
 Lease
        and
        rental expense totaled $30,223 for 2005.
 
 
 Note
        8
        - Stock-based compensation
 
 ***Shares
        issued for services***
 
 On
        April
        26, 2005, the Company entered into two consulting agreements, and one employment
        agreement with the President /Chief Executive Officer of the Company with
        an
        indefinite term, unless terminated by either party.
 
 One
        consulting agreement provided for compensation which, at the Company’s
        discretion, may take the form of up to a total of 2,100,000 shares of Company
        stock or up to a total of $70,000 in cash payments. The compensation of either
        stock options or cash was payable by the Company in varying amounts upon
        the
        successful completion of six acceptable performance and project milestones.
        Under the agreement, the Company had no obligation to the consultant until
        it
        had accepted and approved the achievement of a milestone. During 2005, the
        Company approved the achievement of all six milestones entitling the consultant
        to receive 2.1 million shares of Company stock.
 
 These
        share issuances were accounted for in accordance with SFAS No. 123, which
        requires compensation expense to be measured at fair value. As such, the
        value
        of the underlying shares was determined based on the fair value of Company
        stock
        on the date that each of the milestones was achieved and approved. The total
        value of the stock compensation awarded under this agreement was $1,984,500.
        As
        this stock compensation pertained solely to software development, the total
        amount was included as research and development expense and as a corresponding
        component of stockholders’ equity as of December 31, 2005.
 
 The
        second consulting agreement provided for compensation which, at the Company’s
        discretion, may take the form of up to a total of 1,500,000 shares of Company
        stock or up to a total of $50,000 in cash payments. The compensation of either
        shares or cash is payable by the Company in varying amounts upon the successful
        completion of six acceptable performance and project milestones. Under the
        agreement, the Company has no obligation to the consultant until it has accepted
        and approved the achievement of a milestone. During 2005, there were no
        milestones achieved under the terms of the agreement.
 
 During
        2005, the Company issued 600,000 shares of the Company’s stock as compensation
        to an officer of the company. In addition, the Company issued 125,000 shares
        to
        two investor relations firms for services rendered in addition to cash
        compensation. The resulting value of stock compensation of $876,750 was included
        in selling, general and administration expense and also included as a component
        of stockholders’ equity as of December 31, 2005.
   F-9
 
 ***Stock
        options issued for services***
 
 On
        April
        18, 2005 the Company adopted a non-qualified stock option plan the features
        of
        which follows:
 
 1.
              All
                  directors, employees, consultants, advisors of FUSA and its subsidiaries
                  are eligible to participate in the Plan. It is a five-year plan
                  with
                  a 6 million share authorization of which options to purchase 600,000
                  shares are available for grants to Non-Employee
                  Directors.
 
 2.
              Upon
                  the effectiveness of the Plan, all Non-Employee Directors will
                  be granted
                  options to purchase 120,000 shares and yearly grants of options
                  to
                  purchase 22,500 shares. New Non-Employee Directors upon their appointment
                  to the Board of Directors will receive options to purchase 120,000
                  shares.
                  In addition, the Chairman of the Audit Committee will receive initial
                  and
                  annual grants of options to purchase 7,500
                  shares.
 
 3.
              The
                  maximum number of shares of Common Stock that may be subject to
                  options
                  granted under the Plan to any individual shall not exceed
                  2,400,000.
 
 4.
              Only
                  stock options and dividend equivalents rights (which may be granted
                  simultaneously with the granting of the stock options) may be offered
                  under the Plan. Restricted stock is not authorized to be issued
                  under the
                  Plan.
 
 5.
              Options
                  may be issued as incentive stock options under Section 422 of the
                  Internal
                  Revenue Code of 1986, as amended, or as non-qualified stock
                  options.
 
 6.
              The
                  Plan requires stockholder approval in order to: reduce the exercise
                  price
                  of outstanding options or effect repricing through cancellation
                  and
                  re-grants of new options, increase the number of shares issued
                  under the
                  Plan, materially increase the benefits accruing under the plan,
                  materially
                  modify the requirements as to eligibility for participation, decrease
                  the
                  exercise price of an option to less than 85% of fair market value
                  on the
                  grant date and extend the term of the
                  option.
 
 7.
              The
                  Plan is administered by the Compensation/Stock Option Committee,
                  which is
                  comprised solely of at least one independent, non-employee
                  director.
 
 8.
              Options
                  granted under the Plan will have a maximum term of ten years and
                  unless
                  otherwise determined by the Compensation/Stock Option Committee
                  at the
                  time of grant will be subject to a vesting period of four
                  years.
 
 9.
              The
                  total number of Options authorized under the plan shall be increased
                  or
                  adjusted consistent with any stock splits, stock dividends or other
                  dividends under the supervision of the board of
                  directors.
 
 Under
        this plan, the Company issued 120,000 fully vested stock options with an
        exercise price of $.93 to a Director.
 
 On
        September 28, 2005, the Company entered into an eleven month consulting
        agreement ending on August 15th, 2006. Under the terms of the agreement,
        the
        consultant was granted 80,000 stock options with an exercise price equal
        to
        $1.20. These options vest monthly in equal installments of 7,273 starting
        on
        October 1, 2005. At December 31, 2005, there were 21,819 vested
        options.
 
 
 The
        fair
        value of each option award is estimated on the date of grant using the
        Black-Scholes-Merton option-pricing model, which uses the assumptions, noted
        in
        the following table. These assumptions are based on various factors including
        the expected volatility of the Company’s stock price and expected future
        exercising patterns.
 
 **For
                  the period from inception on February 9 -**
                **December
                  31, 2005**Dividend
                  yield
              NilExpected
                  volatility
              58%Risk
                  free interest rate
              4.15%Expected
                  life of options
              2
                  yearsWeighted
                  average grant date fair value
              $.33
  The
        following table represents stock option activity for the period from inception
        on February 9, 2005 to December 31, 2005:
 
 **Number
                  of shares**
              
              **Weighted
                  Average**
                **Exercise
                  Price**Outstanding
                  options at beginning of period
              
              
              -
              
              
              -Granted
              
              
              200,000
              
              $
              1.04Exercised
              
              
              -
              
              
              -Outstanding
                  options at end of period
              
              
              200,000
              
              $
              1.04Outstanding
                  exercisable, December 31, 2005, vested
              
              
              141,819
              
              $
              .97
 F-10
 The
        following table summarizes non-vested stock option activity for the period
        from
        inception on February 9, 2005 to December 31, 2005:
 
 **Number
                  of shares**
              
              **Weighted
                  Average**
                **Exercise
                  Price**Non
                  vested stock options at beginning of period
              
              
              -
              
              
              -Granted
              
              
              200,000
              
              $
              1.04Vested
              
              
              141,819
              
              $
              .97Non
                  vested stock options December 31, 2005
              
              
              58,181
              
              $
              1.20
 
 Note
        9-Income taxes
 
 The
        provision for current income taxes is as follows as of December 31,
        2005:
 
 Federal
                  tax benefit at statutory rates-34%
              
              $
              (1,390,993
              )Permanent
                  differences
              
              
              95,996Valuation
                  allowance
              
              
              1,294,997Income
                  tax expense
              
              $
              0
 
 A
        deferred tax asset of $1,294,997 was recognized for the net operating loss
        carry-forward of $3,808,000 for the period from inception on February 9,
        2005
        through December 31, 2005, which expires in year 2025 if not utilized earlier.
        A
        valuation allowance of $1,294,997 was used to offset the deferred tax to
        zero,
        since it is more likely than not that this deferred tax asset will not be
        utilized as a future benefit at the present time. Incentive stock option
        awards
        and warrants totaling $280,837 were considered to be non-deductible permanent
        difference for federal income tax purposes, pursuant to FAS 123 (R), and
        were
        the major component of permanent differences shown above. The entire net
        operating loss is attributed to the parent, FCC, since it incurred all of
        the
        expenses and resulting losses for 2005.
 
 The
        Company operates in Vancouver, Canada in the province of British Columbia,
        and
        is subject to Canadian income taxes because its central management and control
        reside there. Accordingly, the Company will report its U.S. income or loss
        to
        Canada due to these circumstances. No province income taxes are
        applicable.
 
 FCC,
        the
        legal parent, has not filed any income tax returns since inception of the
        Company in 2000. There have been at least two Section 382 limitations on
        the use
        of any net operating losses carried forward prior to the acquisition of FTIC,
        which approximate a total of $400,000 as of December 31, 2004. The actual
        benefit of any of these net operating losses in any subsequent year has not
        been
        definitely determined or included in the deferred tax asset of $1,294,997,
        nor
        the valuation allowance of the same amount.
 
 Note
        10 - Common stock purchase warrants
 
 On
        June
        1, 2005, FCC issued stock purchase warrants to shareholders in connection
        with a
        private placement of the common stock of the Company. Of the total warrants
        issued of 930,000, 300,000 had an exercise price of $.50 per share and the
        balance had an exercise price of $.66 per share. The value of the shares
        underlying the warrants on the dates the proceeds from the offering were
        received, considered the commitment date, were $230,900 more than the total
        exercise price of all warrants issued. Accordingly, this amount was charged
        against operations as a beneficial conversion feature which was also added
        to
        paid in capital for the same amount in accordance with EITF 98-5. All of
        the
        warrants are exercisable immediately through December 31, 2006, were issued
        without additional consideration and as of December 31, 2005, were outstanding.
        The weighted average exercise price for the 930,000 warrants is $.61 per
        share.
 
 Note
        11 - Subsequent events
 
 Transfer
        of technology
 
 Subsequent
        to December 31, 2005, the Company formalized the transfer of the original
        technology from FTIC to itself, and agreed to assume all outstanding expenses
        and obligations of FTIC then in existence or incurred thereafter.
 `
 Conversion
        of advances
 
 On
        February 2, 2006, all of the advances included as debt on the accompanying
        consolidated balance totaling $985,133 were converted to equity through the
        issuance of a total of 1,073,507 shares of restricted common stock.
 F-11
 ITEM
          8.
          CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL
          DISCLOSURE.
  On
          May
          24, 2004, based upon the recommendation of and approval by our board of
          directors, the Company dismissed Beckstead and Watts, LLP ("Beckstead and
          Watts") as its independent auditor and engaged Braverman International.,
          P.C.
          (formerly Braverman and Company, P.C. to serve as its independent auditor
          for
          the fiscal year ending December 31, 2004. The Board has since re-appointed
          Braverman International, P.C. to serve as its independent auditor for the
          fiscal
          year ending December 31, 2005. Beckstead and Watts' reports on the Company's
          financial statements for each of the fiscal years ended December 31, 2003
          and
          2002 did not contain an adverse opinion or disclaimer of opinion, nor were
          they
          qualified or modified as to uncertainty, however, the audit reports contained
          going concern qualifications.
  During
          the years ended December 31, 2003 and 2002, there were no disagreements
          with
          Beckstead and Watts on any matter of accounting principle or practice,
          financial
          statement disclosure or auditing scope or procedure which, if not resolved
          to
          Beckstead and Watts' satisfaction, would have caused them to make references
          to
          the subject matter in connection with their reports of the Company's financial
          statements for such years.
 In
          addition, the Company believes there were no reportable events as defined
          in
          Item 304(a)(1)(iv)(B) of Regulation S-B. The Company has provided Beckstead
          and
          Watts with a copy of the foregoing statements and requested that Beckstead
          and
          Watts provide it with a letter addressed to the Securities and Exchange
          Commission stating whether it agrees with the foregoing statements. A copy
          of
          Beckstead and Watts' letter is filed as an exhibit to the Company's report
          on
          Form 8-K as previously filed with the Commission on May 24, 2004.
 
 On
          May
          24, 2004, the board of directors of the Company engaged the accounting
          firm of
          Braverman International., P.C. as principal auditor for the fiscal year
          ended
          December 31, 2004. Subsequently, the Company engaged Braverman International,
          P.C. as principal auditor for the fiscal year ended December 31, 2005.
          The
          Company has not consulted Braverman International P.C. during the Company's
          two
          most recent fiscal years.
 
 On
          March
          23, 2006, the Company's principal auditor, Braverman International, P.C.
          of
          Prescott, Arizona resigned. During our two recent fiscal year ended December
          31,
          2005, and the subsequent interim period through the date of resignation,
          there
          were no disagreements with Braverman International,P.C. on any matter of
          accounting principles or practice, financial statement disclosure, or auditing
          scope of procedure.
  During
        the past two years the auditor's report has not contained an adverse opinion,
        a
        disclaimer of opinion, or was qualified or modified as to uncertainty, audit
        scope or accounting principles.
 
 The
        resignation was due to a misunderstanding and communications between the
        Company
        and Braverman International, P.C.
 
 On
        March
        27, 2006, Braverman International, P.C. of Prescott, Arizona confirmed that
        the
        client-auditor relationship between FUSA Capital Corporation and Braverman
        International, P.C., had been reinstated effective March 27, 2006.
 
  ITEM
        8A.
        CONTROLS AND PROCEDURES.
  DISCLOSURE
          CONTROLS AND PROCEDURES. The Company maintains disclosure controls and
          procedures that are designed to ensure that information required to be
          disclosed
          in our Securities Exchange Act of 1934 reports is recorded, processed,
          summarized and reported within the time periods specified in the SEC's
          rules and
          forms, and that such information is accumulated and communicated to our
          management, including our Chief Executive Officer, as appropriate, to allow
          timely decisions regarding required disclosure. As of the end of the period
          covered by this report, December 31, 2004, we completed an evaluation,
          under the
          supervision and with the participation of our management, consisting of
          our
          Chief Executive Officer, of the effectiveness of the design and operation
          of our
          disclosure controls and procedures pursuant to Securities Exchange Act
          of 1934
          Rules 13a-14(C) and 15d-14c). Based upon the foregoing, our Chief Executive
          Officer concluded that our disclosure controls and procedures were not
          effective
          in connection with the filing of this annual report on Form 10-KSB for
          the
          fiscal year ended December 31, 2005.
 
 To
          improve our control of the public reporting process, and internal controls,
          we
          plan to establish a reporting review committee with participants from throughout
          the Company. This committee will review all publicly filed documents before
          they are
          released to more thoroughly review and ensure the accuracy, correctness,
          and
          appropriateness of the filing. Our financial
          officer is increasing her level of continuing education and relying less
          upon
          the review by our auditors. We
          also
          intend to retain accounting specialists when we encounter areas outside
          our
          normal accounting and financial practices.
    15
  
 PART
        III
 
 Item
        9.
        Directors, Executive Officers, Promoters and Control Persons
 
 A.
        Directors, Executive Officers and Significant Employees
 
 The
        names, ages, and positions of the Company's current and former directors,
        executive officers, and significant employees are as follows:
 
 NAME
              AGE
              POSITION
              DIRECTOR
                  SINCE/UNTILJerome
                  Jolly
              40
              Former
                  President, Treasurer, Secretary, and
                Director
              September
                  2000/May 2004Grady
                  Johnson
              63
              Former
                  Executive-VP, Treasurer, Director
              September
                  2000/May 2004Camila
                  Maz
              36
              Sole
                  Officer and Director
              May
                  2004/March 2005Jenifer
                  Osterwalder
              40
              President,
                  Treasurer, Chief Executive Officer,
                Secretary,
                  Principal Accounting Officer,
                Director.
              March
                  2005/PresentStephen
                  Craig Pollard
              45
              Former
                  Director and Current Vice President
              April
                  2005/Alexander
                  Khersonski
              33
              Director
              March
                  2005/Present
 
 Jenifer
          Osterwalder has served as Executive Officer, Secretary, Principal Accounting
          Officer and Director since March 7, 2005. From January 2005 - March 2005,
          Jenifer was employed by FUSA Technology Investments Corp of Vancouver,
          BC,
          Canada as President, CEO, Secretary and Treasurer and Director. From January
          2000 - January 2005 Jenifer was a consultant to Five Seas Securities of
          Vancouver, BC, Canada holding a position of Investment Banker. From August
          2004
          - December 2004 Jenifer was a consultant to International Conference Services
          of
          Vancouver, BC, Canada holding the position as Manager. From January 2003
          -
          December 2003, Jenifer was a consultant to Terrikon Corporation of Vancouver,
          BC, Canada holding the position of Investment Liason and Marketing Director.
          Jenifer Osterwalder received her BSBA from Ohio State University of Columbus,
          Ohio marketing and logistics.
 
 Alexander
        Khersonski has served as a director since March 7, 2005. From November 2004
        - to
        the present he serves Alderwoods Group Inc., Burnaby, B.C., Canada as a Senior
        Accountant. From August 2004 - October 2004 he served Scorpio Mining Group
        of
        Vancouver, BC, Canada as Assistant Controller. From September 2003 - July
        2004
        he served Dawn Pacific Management Corp., Vancouver, BC, Canada as a Corporate
        Accountant - Client Services. From January 2000 - August 2000 he served ICC
        International Business Services Ltd., Vancouver, B.C., Canada, as a Consultant.
        Additionally, from September 2000 - August 2003 he served the Jewish Community
        Centre of Greater Vancouver as a Senior Accountant. He received his CGA
        Designation in 2005 from the CGA BC Association, Vancouver, Canada. He received
        his B.Sc. in Economics and Management in May, 1993 from Chelyabinsk State
        Technical University, Chelyabinsk, Russia.
 Stephen
          Craig Pollard served as a director from April 2005 until December 2005.
          He has
          served as a Vice-President since April 2005. From March of 2000 to March
          of
          2005, Mr. Pollard was employed by Globalstar Canada Satellite Co. of Ontario,
          Canada, most recently as the Manager of Data Services Canada.
 
 Jerome
        Jolly resigned as an officer and director in May of 2004. James Grady Johnson
        resigned as an officer and director in May of 2004. Camila Maz resigned as
        an
        officer and director in March of 2005.
  The
        Company does not have an audit committee financial expert serving on its
        audit
        committee. The Company believes that an audit committee financial expert
        is not
        currently needed due to the fact that the Company has a limited number of
        financial transactions, the financial transactions being conducted are not
        complex, and the Company has limited resources available to hire such an
        expert.
 
 B.
              Family
                  Relationships
 
 None.
 
 C.
              Involvement
                  on Certain Material Legal Proceedings During the Last Five
                  Years
 
 No
        director, officer, significant employee or consultant has been convicted
        in a
        criminal proceeding, exclusive of traffic violations. No director, officer,
        significant employee or consultant has been permanently or temporarily enjoined,
        barred, suspended or otherwise limited from involvement in any type of business,
        securities or banking activities. No director, officer or significant employee
        has been convicted of violating a federal or state securities or commodities
        law.
  
 16
   Item
        10.
        Executive Compensation.
 
 Summary
        Compensation Table
 
 NAME
              POSITION
              COMPENSATIONJerome
                  Jolly
              President,
                  Treasurer, Secretary, and Director
              NoneGrady
                  Johnson
              Executive
                  VP, Treasurer, and Director
              NoneCamila
                  Maz
              Sole
                  Officer and Director
              NoneJenifer
                  Osterwalder
              President,
                  Treasurer, Chief Executive Officer, Secretary, Principal Accounting
                  Officer, Director.
              Approximately
                  $85,000 per yearAlexander
                  Khersonski
              Director
              Options
                  to purchase 120,000 shares of common stock at $0.93 per
                  share
 
 
 In
        addition, affiliate Tommy Jo St. John has served in the capacity of Chief
        Technological Officer of the Corporation since March 7, 2005. Although Mr.
        St.
        John himself does not directly receive payment for services, a company we
        believe to be wholly or partially owned and controlled by him, Newport
        Technologies, received payments of $182,686 for the fiscal year ending December
        31, 2005.
 
 In
        the
        future, the Board of Directors may set annual bonuses based on profitability
        and
        performance of the Company.
 
 Employment
        Contracts
 
 The
        Company has no employment agreements with any of its officers or directors
        except chief executive officer Jenifer Osterwalder. Key features of this
        agreement include:
 
 *
              Annual
                  base salary of $51,000 USD with potential for 150% of base salary
                  in
                  additional bonus. This base salary has been raised to approximately
                  $85,000 USD.
 
 *
              Termination
                  without cause or for good reason of the employment shall result
                  in
                  severance of up to 150% of base salary plus acceleration of all
                  options
 
 *
              Four
                  Weeks Vacation per year
 
 *
              Up
                  to 3,000,000 option shares subject to vesting to be
                  determined
 
 *
              Acceleration
                  of options on terminations for cause or upon certain constructive
                  termination events
 
 *
              Indemnification
                  for any expenses, litigation, court costs, etc. arising out of
                  the
                  performance of Chief Executive Officer duties to the fullest extent
                  permissible under law.
 
 *
              A
                  commitment of the Company to secure director’s and officer’s
                  insurance
 
 As
        of
        March 31, 2006, Ms. Osterwalder has not been issued any stock options nor
        has
        the company secured director’s and officer’s insurance.
 17
 Item
        11.
        Security Ownership of Certain Beneficial Owners and Management.
 
 Security
        Ownership of Certain Beneficial Owners and Management
 
 The
        following table sets forth certain information as of the date of this
        Registration Statement with respect to the beneficial ownership of the Common
        Stock of the Company by (i) each director, (ii) each executive officer, (iii)
        the directors and officers of the Company as a group, (iv) and each person
        known
        by the Company to own beneficially more than five percent (5%) of the Common
        Stock. Unless otherwise indicated, the owners have sole voting and investment
        power with respect to their respective shares.
 
 Title
                  of Class
              Name
                  of Beneficial Owner
              Number
                  of Shares
              %
                  of ClassCommon
                  Stock
              Stephen
                  Craig Pollard (4)
              600,000
              1.01%Common
                  Stock
              Jenifer
                  Osterwalder, President, Treasurer, Chief Executive Officer, Secretary,
                  Principal Accounting Officer, Director. (1)
              None.
              0.0%Common
                  Stock
              Alexander
                  Khersonski Director (2)
              0
              0.00%Common
                  Stock
              Tommy
                  Jo St. John (3)
              8,100,000
              13.66%Common
                  Stock
              Officers
                  and Directors as a Group
              8,700,000
              14.68%
 
 Footnotes:
 (1).
              The
                  address for Jenifer Osterwalder is 1304 - 1055 Homer Street, Vancouver
                  BC,
                  Canada, V6B1G3.
 (2).
              Alexander
                  Khersonski has options to purchase 120,000 shares of the Company’s common
                  stock at a purchase price of $0.93 per share. The address for Alexander
                  Kheronski is 8110 Oak Street, Vancouver, BC
                  V6P4A7.
 (3).
              The
                  Address for Tommy Jo St. John is 134 Abbott Street, Suite 202,
                  Vancouver
                  BC, V6B2K4.
 (4)
              The
                  Address for Stephen Craig Pollard is134 Abbott Street, Suite 202,
                  Vancouver BC, V6B2K4..
  Change
        in
        Control
 
 No
        arrangements exist that may result in a change of control of FUSA.
 
 
 Item
        12.
        Certain Relationships and Related Transactions.
 
 During
        2004, a related party (a company owned by FUSA's president) that had provided
        management and office overhead for the Company, contributed to paid in capital
        as of December 31, 2004, $24,585 of such services. The balance of the total
        of
        contributed capital for 2004 of $16,000 came from the cancellation of $10,000
        from an account payable and $6,000 from the cancellation of a note
        payable.
 
 In
        September 2004, the Company leased an automobile for a 3 year period with
        minimum monthly lease payments including sales tax of $437.62 for a 3 year
        period. In February 2005, it was discovered that this obligation should have
        been the obligation of an unrelated party, inasmuch as the vehicle was being
        used by that party. Accordingly, as of December 31, 2004 all expenses incident
        to its operation, which had been paid by several related and unrelated parties,
        including lease payments, were reversed for 2004. The total of such expenses
        were $4,834.
 
 As
        of May
        31, 2002, the Company issued 53,325 warrants to purchase the Company's $0.001
        par value common stock on a one-for-one basis. The warrant exercise price
        is
        $0.11 per share of common stock and substantially all warrants would have
        expired on or before May 31, 2005.
 
 During
        the year ended December 31, 2004, all of these warrants were cancelled by
        the
        Company for $20,000. This cost, which was evidenced by an unsecured demand
        note,
        was classified as a reduction of paid in capital at date of purchase, April
        6,
        2004.
 
 During
        the year, in lieu of paying its technology officer Tommy Jo St. John his
        earned
        compensation directly of $182,686, it paid it to a consulting company owned
        by
        the Officer. This amount relates principally to his efforts through December
        31,
        2005, in furthering the development of the Company’s video and audio search
        engine technology, accordingly, the entire amount was included in research
        and
        development expense.
 
 Director
        Alexander Khersonski was issued options to purchase 120,000 of the Company’s
        common shares at an exercise price of $0.93 per share in the fiscal year
        ending
        December 31, 2005.
 
 Director
        Stephen Craig Pollard was compensated by the grant of 600,000 shares of common
        stock in the fiscal year ending December 31, 2005.
 
 Chief
        Executive Officer Jenifer Osterwalder’s base annual salary was raised from
        $51,000 to $85,000.
 
 
 18
 
 Item
        13.
        Exhibits
 
 (a)
              Exhibits
                  required by Item 601 of Regulation
                  S-B
 
 Exhibit
                  Number
              Name
                  and/or Identification of Exhibit3.1
                  (i)
              Articles
                  of Incorporation of the Company filed September 13, 2000 and Amendments
                  thereto, incorporated by reference to the Registration Statement
                  on Form
                  10-SB, as amended, previously filed with the SEC.3.2
                  (ii)
              By-Laws
                    of the Company adopted September 13, 2000 , and incorporated
                    by reference
                    to the Registration Statement on Form 10-SB, as amended, previously
                    filed
                    with the SEC.31.1
              Certification
                  of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
                  Act of 200232.1
              Certification
                  of the Company's Chief Executive Officer pursuant to 18 U.S.C.
                  Section
                  1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
                  Act of
                  2002
 
  (b)
              Items
                  reported on Form 8-K.
 
 There
        were no reports made by the issuer on Form 8-K during the quarter ended December
        31, 2005.
 
 ITEM
        14.
        PRINCIPAL ACCOUNTANT FEES AND SERVICES.
 Audit
          fees. Total annual audit fees billed for professional services rendered
          by
          Braverman International, P.C. during the 2005 fiscal year for the audit
          of our
          annual financial statements and the review of the financial statements
          included
          in our quarterly reports on Form 10-QSB, or services that are normally
          provided
          by Braverman International, P.C. in connection with statutory and regulatory
          filings or engagements for 2005, totaled $18,523. Audit fees billed for
          our
          fiscal year ending December 31, 2004 were $10,575.
  Audit-related
        Fees. Total annual audit fees billed during the 2005 fiscal year for assurance
        and related services by Braverman International, P.C that are reasonably
        related
        to the performance of the audit or review of the Company's financial statements
        and not reported in the paragraph above under "Audit Fees" were $0.
  Tax
        Fees.
        The total fees billed during the 2005 for professional services rendered
        by
        Braverman International, P.C for tax compliance, tax advice, and tax planning
        services were $0
  All
        Other
        Fees. There were no fees billed by Braverman International, P.C. during our
        2005
        fiscal year for any other services rendered to the Company other than the
        amounts set forth above.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  19
  
 SIGNATURES
 
 In
        accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
        this report to be signed on its behalf by the undersigned, thereunto duly
        authorized.
 
  FUSA
        Capital Corporation Inc.
 (Registrant)
 
 
 Signature
              Title
              Date/s/
                  Jenifer
                  Osterwalder
              President,
                  Principal Executive Officer, Director
              April
                  11,2006Jenifer
                  Osterwalder/s/
                  Jenifer
                  Osterwalder
              Principal
                  Financial Officer
              April
                  11,2006Jenifer
                  Osterwalder/s/
                  Jenifer
                  Osterwalder
              Principal
                  Accounting Officer
              April
                  11,2006Jenifer
                  Osterwalder
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 20