UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 
 FORM
10-K
 
 (Mark
One)
 
 [X]
              ANNUAL
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 For the
fiscal year ended December 31, 2008.
 
 [ 
      ]
              TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 For the
transition period from ________ to _________
 Commission
File No. 0-50274
 
 
 
 FUSA
Capital Corporation
 (Name of
small business issuer in its charter)
 
 Nevada
                51-0520296(State
      or other jurisdiction of incorporation or organization)
                (I.R.S.
      Employer Identification No.)701
      Fifth Avenue, Suite 4200, Seattle, Washington
                98104(Address
      of principal executive offices)
                (Zip
      Code)
 
 
 Issuer’s telephone number:  (888)-366-6115
 
 Securities
registered under Section 12(b) of the Exchange Act:
 
 None
 
 Securities
registered under Section 12(g) of the Exchange Act:
 
 Common
Stock, $0.0001 par value
 (Title of
Class)
 
 Securities
registered pursuant to Section 12 (b) of the Act: none
 
 Securities
registered pursuant to Section 12 (g) of the Act:  500,000,000 common
shares par value $0.0001 per share
  
  Indicate
by check mark whether the registrant (l) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (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 T  No
 
 Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. 
 
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
 
 Large
      accelerated filer   o
                Accelerated
      filer  oNon-accelerated
      filer (Do not check if a smaller reporting company)  o
                Smaller
      reporting company   x
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes  No T
 
 The
number of shares of the issuer’s Common Stock outstanding as of March 31, 2009
is 69,947,083.
 
 Revenues
for the fiscal year ended December 31, 2008 were $55,012.
 
 As at
March 31, 2009, the aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the last reported sales
price of such common equity  was approximately $209,841.
  
 DOCUMENTS
INCORPORATED BY REFERENCE
 
 None
 
     
  TABLE OF
CONTENTS
  Page
                                                  NumberFORWARD
                                                  LOOKING
                                                  STATEMENTS
                                                  
                                                  PART
      IITEM
      1.
                                                Description
      of Business.
                                                1ITEM
      1A.
                                                Risk
      Factors.
                                                11ITEM
      2.
                                                Description
      of Property.
                                                15ITEM
      3.
                                                Legal
      Proceedings.
                                                15ITEM
      4.
                                                Submission
      of Matters to a Vote of Security Holders.
                                                15PART
      IIITEM
      5.
                                                Market
      for Common Equity and Related Stockholder Matters.
                                                16ITEM
      7.
                                                Management’s
      Discussion and Analysis or Plan of Operation.
                                                19ITEM
      8.
                                                Financial
      Statements.
                                                F-1ITEM
      9.
                                                Changes
      In and Disagreements With Accountants on Accounting and Financial
      Disclosure.
                                                24ITEM
      9A.
                                                Controls
      and Procedures.
                                                24ITEM
      9B.
                                                Other
      Information.
                                                26PART
      IIIITEM
      10.
                                                Directors,
      Executive Officers, Promoters and Control Persons and Corporate
      Governance;  Compliance With Section 16(a) of the  Exchange
      Act.
                                                27ITEM
      11.
                                                Executive
      Compensation.
                                                29ITEM
      12.
                                                Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters.
                                                30ITEM
      13.
                                                Certain
      Relationships and Related Transactions, and Director
      Independence.
                                                31ITEM
      14.
                                                Principal
      Accountant Fees and Services.
                                                32PART
      IVITEM
      15.
                                                Exhibits
                                                33Signatures
                                                34
  
  PART
I
 
 SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
 This Form
10-K, press releases and certain information provided periodically in writing or
verbally by our officers or our agents contain statements which constitute
forward-looking statements. The words “may”, “would”, “could”, “will”, “expect”,
“estimate”, “anticipate”, “believe”, “intend”, “plan”, “goal”, and similar
expressions and variations thereof are intended to specifically identify
forward-looking statements. These statements appear in a number of places in
this Form 10-K and include all statements that are not statements of historical
fact regarding the intent, belief or current expectations of us, our directors
or our officers, with respect to, among other things: (i) our liquidity and
capital resources; (ii) our financing opportunities and plans; (iii) our ability
to generate revenues; (iv) competition in our business segments; (v) market and
other trends affecting our future financial condition or results of operations;
(vi) our growth strategy and operating strategy; and (vii) the declaration
and/or payment of dividends.
 
 Investors
and prospective investors are cautioned that any such forward-looking statements
are not guarantees of future performance and involve risks and uncertainties,
and that actual results may differ materially from those projected in the
forward-looking statements as a result of various factors. The factors that
might cause such differences include, among others, those set forth in Part II,
Item 7 of this annual report on Form 10-K, entitled Management’s Discussion and
Analysis or Plan of Operation, including without limitation the risk factors
contained therein. Except as required by law, we undertake no obligation to
update any of the forward-looking statements in this Form 10-K after the date of
this report.
 
 ITEM
1. DESCRIPTION OF BUSINESS.
 
 OVERVIEW
  We are a
development stage technology company focused on the refinement and marketing of
a comprehensive suite of media search engine technologies. Our objective is to
maintain the media search engine properties and technologies we currently have
and to eventually enhance and grow those properties and technologies. We
currently operate the website newstowatch.com.
 Newstowatch.com is a
breaking news discovery service that programatically reads thousands of current
news stories and intelligently categorizes, organizes and ranks the most popular
stories and topics from around the web.   We also operate the
consumer media search websites searchforvideo.com,
podanza.com and
iheard.com.  We
hope to be able to maintain our existing suite of on-line properties and
technologies through the current challenging financial environment and to
eventually be able to expand and grow our web properties and technologies in the
future.
  1
  CORPORATE
HISTORY AND DEVELOPMENT
  We were
incorporated in the State of Nevada on September 13, 2000 as Galaxy Championship
Wrestling, Inc., a media and entertainment company focused on developing,
producing and marketing live entertainment in the professional wrestling
sphere.
  On March
31, 2004, unable to generate sufficient revenues to sustain our professional
wrestling business, we ceased operations in this field and began exploring other
business opportunities.
  Also on
March 31, 2004 our controlling shareholders entered into a certain private stock
purchase agreement, wherein they sold an aggregate of 5,750,000 of our common
shares, representing a sixty-two and seventeen twentieths percent (62.85%)
controlling interest, to an unrelated third party.
  By
certificate of amendment filed June 17, 2004, we changed our name from Galaxy
Championship Wrestling, Inc. to FUSA Capital Corporation.
  During
the period from March 31, 2004 until March 7, 2005 we had no meaningful
operations and did not carry on any active business, focusing instead on
identifying and evaluating the merits of alternative potential business and
acquisition opportunities which might allow us to restart
operations.
  On March
7, 2005 we entered into a certain plan and agreement of reorganization with FUSA
Technology Investments Corp. ("FTIC"), a Nevada corporation engaged in the
emerging growth field of audio and video search engine technology, whereby we
acquired all of the issued and outstanding capital stock of FTIC in addition to
obtaining certain intellectual property concepts related to search engine
technology as developed by FTIC and its principals.
  On April
22, 2005, our board of directors declared a three-for-one common stock dividend,
wherein each holder of record of our common shares as of May 3, 2005 received
two additional shares for each common share then held. Unless otherwise noted,
all references to the number of common shares included in this annual report on
Form 10-K for the fiscal year ended December 31, 2008 are stated on a
post-dividend basis. Per share amounts have also been restated to reflect the
common share dividend.
  Since
April, 2005, we have been engaged continuously in the development and operation
of consumer focused media search engine technologies and portals. During the
last six months of 2008, we began to substantially curtail our operations and
ongoing technology development as a consequence of (i) having completed a
substantial portion of our planned principal technology development work and
(ii) being unable to raise sufficient funds through revenue or sales of debt or
equity securities to continue our previous levels of operation and
development.
 
 We have
consistently lost money on our on-line consumer media properties due to the
expenses involved in hosting, promotion, development and management of those
sites.  In an effort to maintain as much traffic as possible on our
most popular media site, www.searchforvideo.com,
which is also responsible for a large proportion of our expenses, we contracted
with Brass Consulting Ltd. to maintain the site in exchange for net revenue
produced from the site.  This agreement is cancellable after 30 days
notice.  This agreement allows us to maintain www.searchforvideo.com
in the absence of adequate personnel or financial resources and to preserve its
value for the future when we may have sufficient resources to maintain the site
ourselves and grow its user base and revenue potential.
  Our
principal executive offices are located at 701 Fifth Avenue, Suite 4200,
Seattle, Washington 98104. Our phone number is (888)366-6115.
  2
  PRINCIPAL
PRODUCTS AND SERVICES
  The
proliferation of audio and video files on the Internet, as well as in intranets,
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 as sources of current news, information and
entertainment, as well as sources of archival media. Any sizable quantity of
information is only as 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 example, 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, such 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
  Our
technology provides customers and consumers with comprehensive search engine
solutions, consisting of multiple modules. The search engine solution modules
work together providing a complete search engine system to discover, scrape,
index and generate metadata in RSS (Really Simple Syndication) format for
syndication to any internet enabled device.
  In 2007,
we had developed and relaunched our consumer website, NewstoWatch.com, with
significant technological upgrades. In March of 2008, we completed additional
upgrades to the site.  We believe these technological upgrades and
site feature enhancements provide us with an opportunity to gain traffic and
exposure with its unique combination of software and community
participation.  Newstowatch.com is a
breaking news discovery service that programatically reads tens of thousands
current news stories and intelligently categorizes, organizes and ranks the most
popular stories and topics from around the web.
  NewstoWatch
makes it easy for users to participate in shaping the news. Along with the
algorithmic news editor, users influence the rank and importance of news stories
by their consumption and contributing new stories into the NewstoWatch news
network.
  In June
of 2008, we completed the A-Z RSS (Really Simple Syndication) discovery
directory for NewstoWatch, which makes it easier for users to find the news they
are looking for.
 
 We did
not launch any new consumer media portals during 2008 and we estimate that the
audience for our consumer media portals, which had grown throughout 2007 and
part of 2008, will decline in the absence of additional resources to promote our
properties.
  3
 
 OPERATIONS
 
 At
present we maintain day-to-day operations from the home of our chief executive
officer in Vancouver, Canada and through our correspondence office and principal
executive offices in Seattle, Washington.  We have 1 full-time staff
member and 2 consultants actively engaged in the development of our products and
business, consisting primarily in the maintenance of our consumer web properties
and in maintaining our corporate books and records and compliance with our
public company responsibilities.
 
 RESEARCH
AND DEVELOPMENT
 
 As of
December, 2008 we have discontinued substantially all of our research and
development efforts due to a combination of having achieved our initial
development goals and a lack of funding to continue to our subsequent
development goals.  We have the  need to expend some
additional resources to continue to develop our search engine products and
services, but are currently unable to do so due to funding constraints. 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 marketplace, which we are currently unable to
fund.
 
 During
the fiscal year ended December 31, 2008 we incurred expenses of $54,862 on our
research and development activities. From February 9, 2005 (inception) through
the fiscal year ended December 31, 2008 we incurred research and development
expenses of $1,991,195. We believe that our research and development expenses
will decrease substantially in 2009 as we have virtually no planned research and
development expenses unless our financial situation improves
substantially.    We also signed an agreement in 2007 to
license the Argon Search Engine technology and related technologies which may
improve and optimize aspects of our core search engine and consumer media portal
technologies.  In April of 2009, we elected to discontinue and cancel
our license and development of the Argon Search Engine technology due to lack of
acceptable progress by our development partner and lack of financial resources
to continue to develop and deploy the technology.
  4
  PRINCIPAL
MARKETS
 
 We are
not currently marketing our search engine solutions to companies operating
Internet websites with news, video clip, music and sports content, but have done
so in the past and would like to do so in the future once we have the personnel
and financial resources to pursue such marketing.   We currently
offer consumers direct search engine capabilities through our various Internet
websites, which we continue to maintain but have ceased actively marketing due
to funding constraints.
 
 We had
just begun to seek customers for our technology prior to running out of funds
for substantial marketing efforts and, although we have some content
relationships in place, we are not yet generating substantial revenues from our
customers. Although we have the capability of deriving significant revenue from
our search engine portals, current user traffic levels are not yet sufficient to
produce significant revenue.
 
 We have
also just entered the field of participatory media, with the re-launch of our
www.NewstoWatch.com consumer portal.  Unlike traditional news, which
is static and unidirectional (from news-organization to consumer), the
technology, which powers NewstoWatch.com facilitates user participation in the
development of news related content.  Our tools allow users to rank
stories and to shape the prominence of news within the NewstoWatch.com
portal.  Freshness, relevance and number of viewers contribute to the
rank of a story on the portal, which means that the featured content is
dynamically shifting in response to the behavior of the portal community
combined with site algorithms.
 
 In
addition, while there are finite resources available to us to scan the Internet
for the freshest and most relevant news content, there is a vastly larger body
of news that our portal community members are exposed to.  Our
programmatic editor allows users to post their own stories, giving them
editorial control and a sense of ownership and participation within the portal
community.  In addition, the sheer diversity and volume of the stories
that can be posted by our users eclipses the variety of content we would be able
to access ourselves without this type of community support.  At the
moment, we have very little posting by our user community, but we expect that
this would change if we were to have resources to more effectively promote the
site.
 
 ADVERTISING
AND MARKETING
 
 We have
been deriving a small amount of advertising revenue from sales of ads on our
consumer media portals as they were in development.  In 2008, as we
concluded major development on our consumer media portals, we had hoped to
significantly expand the revenue stream from these portals.   A
combination of lack of funds to sufficiently market our properties to increase
user traffic and a very difficult financial environment for aspiring Internet
advertising portals has led to weaker advertising revenues than we had
anticipated or hoped for.  We believe that without additional
financial resources to properly market our Internet properties, we anticipate
that user traffic and advertising revenue will deteriorate throughout 2009. If
we were to be successful in obtaining additional financing resources, which
seems unlikely in the near term, we would like to pursue the three point
marketing plan that we developed for 2008 and beyond which consists
of:
 
 ·
              Driving Traffic -
      Driving traffic of consumers to our websites, which will ultimately enable
      us to sell advertising on all of our
websites;
 
 ·
              Gathering Data -
      Developing a valuable library of consumer usage data from our websites
      that will provides potential commercial licensors of our technology with
      current, cutting edge information about how their audio and video content
      is being used by real consumers;
 
 ·
              Content Partnerships -
      Developing relationships and partnerships with a variety of content owners
      who want their content promoted through the company’s various
      websites.
  5
  In
addition to the above marketing plan, we believe that the nature of the
participatory media experience itself as embodied within NewstoWatch.com
provides a powerful marketing tool to expand usage of the site.  Every
time one of our users adds a story to NewstoWatch, they are increasing their own
ties to the portal community.   Unlike traditional news sites,
which allow users to email stories to friends but not to determine the content
of the site, www.NewstoWatch.com allows those users to refer their friends to a
news community that they themselves are shaping.  We think that this
type of relationship can make our users much more likely to spread the word
about www.NewstoWatch.com
and can supply us with a type of marketing which we cannot buy through
traditional advertising spend...that is an emotional connection, sense of
belonging and sense of ownership and participation within the portal
community.  We believe that this participation could result in
significant growth in the website without substantial increases in our
advertising expenditures, however, in order for this to occur, www.newstowatch.com
would have to reach a certain critical mass threshold of users, which we have
been unable to reach to date.  We do not believe we will be able to
reach this critical mass without substantial additional resources for promoting
the site.  Therefore, without additional resources, we believe that
the site will not reach its potential and will not unleash the power of
participatory media as described herein.
 
 DISTRIBUTION
 
 We
distribute our products and services via the Internet for our consumer
websites.  We have historically also made in person efforts by our
business development personnel to develop marketing and content
relationships.  We are not currently pursuing any of these in person
efforts, but hope to resume them should we be successful in obtaining additional
resources.  Our chief executive officer does engage in answering
queries from companies interested in partnering with us, but we have yet to
receive a query that represents an opportunity to materially improve our
business and that we would have the resources to pursue.
 
 Consumer
Websites
 
 We are
the owner of numerous distinctive and easy-to-remember group of URLs
including:
 
 ·
              www.searchforvideo.com;
 
 ·
              www.searchforaudio.com;
 
 ·
              www.searchfortv.com;
 
 ·
              www.searchforipod.com;
 
 ·
              www.searchformedia.com;
 
 ·
              www.searchforpodcasts.com;
      and
 
 ·
                www.newstowatch.com
 
 In
addition, we also own the URLs for www.iheard.com and
www.podanza.com.  We believe that these websites, when sufficiently
promoted and advertised, can become attractive websites for consumers to find
relevant content that meets their needs. We believe that consumers’ use of our
search technology through these sites can provide us with valuable data
regarding actual consumer usage patterns for material on the Internet as well as
catapult us into the position of a suite of leading search engines. This brand
awareness and valuable consumer data could form the basis for our discussions
regarding revenue opportunities through advertising and content partnerships.
However, currently, we lack the resources to promote these sites in any
meaningful way and therefore have minimal traffic on them.
  6
  COMPETITION
 
 Overview
 
 Some of
the largest, best known and most technologically sophisticated companies in the
world compete in the search engine space. GoogleTM,
Yahoo!®,
AOL®,
Microsoft®,
AltaVista® and
Lycos®
represent some of our most well-financed and established competitors.
Additionally, we face competition from a number of start-ups and new market
entrants in the audio/video search subspecialty within the search engine
space.
 
 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
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.
 
 In
addition, as we are now competing in the field of participatory media, there are
a number of sophisticated competitors that compete fiercely within this
space.  Digg.com, youtube.com, facebook.com, LinkedIn.com and others
offer tools that allow users to shape, develop and post the content that makes
the site appealing and valuable to other users.  We believe that
www.NewstoWatch.com cannot compete successfully in spite of its focus on the
most relevant, international news content and its proprietary algorithmic tools
due to our lack of funding to promote the site, but  even with funding
the site’s success will ultimately be determined by how it competes in the area
of creating a relationship with the members of the portal community that causes
them to invest time on an individual basis posting news content to the
community, as they have done with other types of content on our competitors’
sites.  These competitors all have significantly more financial and
human resources than we have and currently operate large and sophisticated media
companies.  Right now we cannot compete effectively in this
field.
 
 Failure
of Competitors
 
 We
anticipate that many of our smaller competitors will face similar challenges to
us during this difficult economic time and that many will fail.  This
will provide an even more significant competitive advantage to the larger
players within the space, further consolidating their user base and making it
more difficult for newer or smaller entrants, such as FUSA, to compete in this
market.
  7
  Our
Competitive Position
 
 Many
websites are currently offering functional, beta versions of audio/video search
engines 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, although our position is one of vulnerable, new entrant, we
believe that the possibility of commercial success does not currently exist for
us in this field without additional resources, but if we were to acquire these
resources, there are some factors which would help us, such as:
 
 ·
              we
      believe our technology is competitive with any publicly available
      audio/video search engine technology, as long as we have resources to
      develop and improve it;
 
 ·
              If
      we were to have a business development capability, our “agnostic”
      independent, non-affiliated status in this field would be 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; and
 
 ·
              as
      has been established by the success of Google, 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
exceptionally weak due to our lack of financial resources.  However,
we believe that we could become a strong competitor if we had additional
resources 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). IF we had additional resources, we would rely on what
we believe to be our superior technology and we would retain experienced
management to compete within the search engine industry. However, we may not be
able to effectively compete in this intensely competitive industry as many of
our competitors have longer operating histories, larger customer bases and
greater financial, marketing, service, support, technical and other resources
than we do.
 
 Many
companies also operate websites that compete in the participatory media space
that we have just entered through www.NewstoWatch.com.  We do not
believe we can compete effectively in this space due to a lack of resources,
however, we would have strong possibilities as a competitor if we had additional
resources because of the flexibility and innovative design embodied in the
proprietary features of the website.  We also believe that our
particular position within the highly competitive field of participatory media
is an underserved sub-segment in which no brand has yet achieved dominance and
in which our easy-to-remember, intuitive URL is a possible competitive
advantage.
 
 SIGNIFICANT
CUSTOMERS AND SUPPLIERS
 
 As of the
date of this annual report on Form 10-K for the fiscal year ended December 31,
2008, we are not and do not anticipate becoming dependent upon any single or
group of major customers. This may, however, change should we be 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 and are very unlikely to be developed unless we
are successful in securing additional resources.
  8
  REGULATIONS
 
 We are
subject to a number of United States and foreign laws and regulations that
affect companies conducting business on the internet, and which could subject us
to claims or other remedies based on the nature and content of the audio or
video data searched for or displayed by our search engine solutions and could
consequently limit our ability to provide audio or video content regarding
regulated industries and products.
 
 The laws
relating to the liability of providers of online services for the activities of
their users and other third parties are currently unsettled both within the
United States and abroad, and are being tested by a number of claims, including
actions for defamation, libel, invasion of privacy and other data protection
claims, tort, unlawful activity, copyright or trademark infringement and other
theories based on the nature and content of the materials searched for or the
content generated by users. From time to time we may receive notices from
individuals who do not want their names or websites to appear in our audio/video
web search results. It is also possible that we may be held accountable for
obscene or libelous material provided over the web should such audio or video
content appear in our web search results. Any such complaints, should they
arise, may result in liability to us, could be potentially costly, encourage
similar such lawsuits, distract management and harm our reputation and possibly
our business. Furthermore, the application to us of existing federal, state and
international laws regulating obscenity or obscene materials, including metadata
results which could be perceived as obscene, could also cause us significant
liability or technological problems and costs associated with identifying and
complying with any applicable laws and regulations.
 
 Several
other federal laws could also have an impact on our business. For example, the
Digital Millennium Copyright Act has provisions that limit, but do not
necessarily eliminate, our liability for listing or linking to third-party
websites that include materials that infringe copyrights or other rights. 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 children under the age of 13. 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. The costs of complying with these laws may increase in the future
as a result of changes in interpretation, and any failure on our part to comply
with these laws may subject us to significant liabilities.
 
 Likewise
we are also subject to federal, state and foreign laws regarding privacy and
protection of user data. The interpretation and application of data protection
laws in Europe and other foreign jurisdictions is still uncertain and in flux.
It is possible that these laws may be interpreted and applied in conflicting
ways from country to country and in a manner that is inconsistent with our
planned data protection practices. Complying with these varying international
requirements could cause us to incur additional costs and force us to change our
business practices. Moreover, any failure by us to protect our users’ privacy
and data, in addition to the possibility of fines, could result in an order
requiring that we change our planned data practices, which in turn could have a
material adverse effect on our business.
 
 In
addition, laws and regulations relating to user privacy, freedom of expression,
content, advertising, information security and intellectual property rights are
being debated and considered for adoption by many states within the United
States and foreign countries throughout the world. We face risks from proposed
legislation that could be passed in the future which may subject us to
additional compliance costs or may materially impact our ability to conduct our
business as currently planned.
  9
  INTELLECTUAL
PROPERTY
 
 Overview
 
 We rely
for our business on a combination of pending trademarks and trade secrets in
order to protect our intellectual property. Our pending trademarks and trade
secrets are among the most important assets we possess in our ability to
generate revenue and profits and we will depend significantly on these
intellectual property assets in being able to effectively compete in our
markets.
 
 We cannot
be certain that the precautions we have taken to safeguard pending trademarks
and trade secrets will provide meaningful protection from unauthorized use. If
we must pursue litigation in the future to enforce or otherwise protect our
intellectual property rights, or to determine the validity and scope of the
proprietary rights of others, we may not prevail and will likely have to make
substantial expenditures and divert valuable resources in the process. Moreover,
we may not have adequate remedies if our intellectual property is appropriated
or our trade secrets are disclosed.
 
 Trademarks
 
 We have
applied for registration of a number of our trademarks with the United States
Patent and Trademark Office in order to establish and protect our brand names as
part of our intellectual property assets. As of the date of this annual report
on Form 10-K for the fiscal year ended December 31, 2008, all of our
registrations are either completed or in the preliminary stages of the
application process or remain pending.
 
 Trade
Secrets
 
 Whenever
we deem it important for purposes of maintaining competitive advantages, we
require parties with whom we share, or who otherwise are likely to become privy
to, our trade secrets or other confidential information to execute and deliver
to us confidentiality and/or non-disclosure agreements. Among others, this may
include employees, consultants and other advisors, each of whom may require to
execute such an agreement upon commencement of their employment, consulting or
advisory relationships. These agreements generally provide that all confidential
information developed or made known to the individual by us during the course of
the individual’s relationship with us is to be kept confidential and not to be
disclosed to third parties except under specific circumstances.
 
 As of the
date of this annual report on Form 10-K for the fiscal year ended December 31,
2008, we have executed non-disclosure agreements with all of our key employees,
consultants or advisors.
  10
  EMPLOYEES
 
 For the
fiscal year ended December 31, 2008, we had one full-time and no part-time
employees, and two consultants. We do not intend to significantly expand our
staff over the next twelve months, as we have completed principal development on
our suite of media portals and do not have the resources currently to continue
improvements on an on-going basis or to hire business development or sales
personnel, though we think that the competitive position of our company will be
dependent on our ability to do so at some point in the future.
 
 We are
not subject to any collective bargaining agreements and believe that our
relationships with our employees are good.
 
 Item
1A.  RISK FACTORS
 
 In
addition to the other information included in this annual report, the following
factors should be carefully considered in evaluating our business, financial
position and future prospects. Any of the following risks, either alone or taken
together, could materially and adversely affect our business, financial position
or future prospects. If one or more of these or other risks or uncertainties
materialize, or if our underlying assumptions prove to be incorrect, our actual
results may vary materially from what we have projected.
 
 We
have incurred losses since inception and anticipate that, we will continue to
incur losses throughout the foreseeable future.
  We have
operated continuously at a loss since inception and may be unable to continue as
a going concern. We expect to experience continuing financial losses. Losses for
the fiscal year ended December 31, 2008, and losses since inception were
approximately $301,182 and $5,553,805, respectively.  The extent to
which we continue to experience losses will depend on a number of factors,
including:
  ●
              Whether
      we can raise additional funds to promote our sites and increase traffic
      and revenue;
 
 ●
              competitive
      developments in our market;
  ●
              Costs
      of hosting, Internet advertising and
promotion;
  ●
              our
      ability to attract, retain and motivate qualified personnel, particularly
      sales associates if we have the resources to hire such individuals;
      and
  ●
              the
      continued use of our portals by customers in spite of our lack of spending
      on marketing, promotion or improvements of our
  sites.
 
 Our sites
may never achieve the scale of users necessary for us to become
profitable.   In addition, we may never obtain or sustain
positive operating cash flow, generate net income or ultimately achieve cash
flow levels sufficient to support our operations.
 
 We
only had $14,366  in cash at December 31, 2008, without additional
cash we will fail within 6-12 months.
  11
 
 Even if
we lose only 33% of the $301,182 we lost in 2008, we will run out of cash in
6-12 months.  We may not be able to obtain equity or debt financing by
this time and may need to cease business operations.
 
 Our
accumulated deficit makes it more difficult to borrow funds.
 
 As of the
fiscal year ended December 31, 2008, and as a result of historical operating
losses from prior operations and losses accumulated during our development
stage, our consolidated accumulated deficit was $5,553,805.. Lenders generally
regard an accumulated deficit as a negative factor in assessing
creditworthiness, and for this reason, the extent of our accumulated deficit
coupled with our historical operating losses will negatively impact our ability
to borrow funds if and when required. Any inability to borrow funds, or a
reduction in favorability of terms upon which we are able to borrow funds,
including the amount available to us, the applicable interest rate and the
collateralization required, may affect our ability to meet our obligations as
they come due, and adversely affect on our business, financial condition, and
results of operations, raising substantial doubts as to our ability to continue
as a going concern.
 
 We
are utterly dependent on our chief executive officer, Jenifer Osterwalder, who
is our only full-time employee.  If she were to resign or otherwise
leave us, it is very likely that we would immediately cease
operations.
  Jenifer
Osterwalder is currently responsible for every aspect of our business, except
certain legal, accounting and site hosting functions.  If she were to
leave, the Company would most likely cease operations.   It would
be very difficult to replace her given the Company’s lack of resources, negative
cash flow, expenses and deteriorating levels of user traffic.
 
 Our
sites will continue to deteriorate without maintenance and promotion and could
eventually become virtually unused, destroying the value within our
Company.
  We do not
have resources to maintain or promote our properties.  Internet
communities are dynamic and features, such as search, continue to
evolve.  If we are not able to obtain resources to maintain and
promote our properties, the user base will continue to shrink, the technology
will continue to become outdated and the value of our assets will be destroyed
thereby.
 
 If
we fail to pay our consultant in a timely fashion, we could lose the domain name
www.searchforvideo.com,
our most valuable asset.
 
 Under our
agreement with Brass Consulting Ltd, dated December 1, 2008, if we fail to make
payments due thereunder to Brass for operating www.searchforvideo.com,
the agreement provides that Brass can seize the www.searchforvideo.com
domain name.
 
 Our
Promissory Note of April 10, 2009 could cause substantial dilution to our
shareholders
 
 Our
Promissory Note of April, 2009 provides that $50,000 advanced to us by
shareholders can be converted at their option into our common shares at the per
share price of our next financing or at our 30 day trailing average stock price,
whichever is lower.  This means that there is no way to anticipate in
advance how many shares may be issued on conversion of this note and our current
shareholders could see their holdings substantially diluted or diluted to the
point of being worthless.
  12
 
 Unless
an active trading market develops for our securities, you may not be able to
sell your shares.
 
 Although,
we are a reporting company and our common shares are listed on the OTC Bulletin
Board (owned and operated by the Nasdaq Stock Market, Inc.) under they symbol
“FSAC”, there is currently a volatile and thinly traded market for our common
stock which may not be maintained. Failure to develop maintain adequate trading
volumes and price stability in the stock will have a generally negative affect
on the price of our common stock, and you may be unable to sell your common
stock or any attempted sale of such common stock may have the affect of lowering
the market price and therefore your investment could be a partial or complete
loss.
 
 Since
our common stock is thinly traded it is more susceptible to extreme rises or
declines in price, and you may not be able to sell your shares at or above the
price paid.
 
 Since our
common stock is thinly traded its trading price is likely to be highly volatile
and could be subject to extreme fluctuations in response to various factors,
many of which are beyond our control, including:
 
 ·
              the
      trading volume of our shares;
 
 ·
              the
      number of securities analysts, market-makers and brokers following our
      common stock;
 
 ·
              changes
      in, or failure to achieve, financial estimates by securities
      analysts;
 
 ·
              new
      products introduced or announced by us or our
  competitors;
 
 ·
              announcements
      of technological innovations by us or our
  competitors;
 
 ·
              actual
      or anticipated variations in quarterly operating
  results;
 
 ·
              conditions
      or trends in our business
industries;
 
 ·
              announcements
      by us of significant acquisitions, strategic partnerships, joint ventures
      or capital commitments;
 
 ·
              additions
      or departures of key personnel;
 
 ·
              sales
      of our common stock; and
 
 ·
              general
      stock market price and volume fluctuations of publicly-traded, and
      particularly microcap, companies.
  13
  You may
have difficulty reselling shares of our common stock, either at or above the
price you paid, or even at fair market value. The stock markets often experience
significant price and volume changes that are not related to the operating
performance of individual companies, and because our common stock is thinly
traded it is particularly susceptible to such changes. These broad market
changes may cause the market price of our common stock to decline regardless of
how well we perform as a company. In addition, securities class action
litigation has often been initiated following periods of volatility in the
market price of a company’s securities. A securities class action suit against
us could result in substantial legal fees, potential liabilities and the
diversion of management’s attention and resources from our business. Moreover,
and as noted below, our shares are currently traded on the OTC Bulletin Board
and, further, are subject to the penny stock regulations. Price fluctuations in
such shares are particularly volatile and subject to manipulation by
market-makers, short-sellers and option traders.
 
 Trading
in our common stock on the OTC Bulletin Board may be limited thereby making it
more difficult for you to resell any shares you may own.
 
 Our
common stock trades on the OTC Bulletin Board (owned and operated by the Nasdaq
Stock Market, Inc.). The OTC Bulletin Board is not an exchange and, because
trading of securities on the OTC Bulletin Board is often more sporadic than the
trading of securities listed on a national exchange or on the Nasdaq National
Market, you may have difficulty reselling any of the shares of our common stock
that you may own.
 
 Our
common stock is subject to the “penny stock” regulations, which are likely to
make it more difficult to sell.
 
 Our
common stock is considered a “penny stock,” which generally is a stock trading
under $5.00 and not registered on a national securities exchange or quoted on
the Nasdaq National Market. The SEC has adopted rules that regulate
broker-dealer practices in connection with transactions in penny stocks. These
rules generally have the result of reducing trading in such stocks, restricting
the pool of potential investors for such stocks, and making it more difficult
for investors to sell their shares once acquired. Prior to a transaction in a
penny stock, a broker-dealer is required to:
 
 ·
              deliver
      to a prospective investor a standardized risk disclosure document that
      provides information about penny stocks and the nature and level of risks
      in the penny stock market;
 
 ·
              provide
      the prospective investor with current bid and ask quotations for the penny
      stock;
 
 ·
              explain
      to the prospective investor the compensation of the broker-dealer and its
      salesperson in the transaction;
 
 ·
              provide
      investors monthly account statements showing the market value of each
      penny stock held in the their account;
and
 
 ·
              make
      a special written determination that the penny stock is a suitable
      investment for the purchaser and receive the purchaser’s written agreement
      to the transaction.
  14
  These
requirements may have the effect of reducing the level of trading activity in
the secondary market for a stock that is subject to the penny stock rules. Since
our common stock is subject to the penny stock rules, investors in our common
stock may find it more difficult to sell their shares.
 
 We
do not intend to pay any common stock dividends in the foreseeable
future.
 
 We have
never declared or paid a dividend on our common stock and, because we have very
limited resources and a substantial accumulated deficit, we do not anticipate
declaring or paying any dividends on our common stock in the foreseeable future.
Rather, we intend to retain earnings, if any, for the continued operation and
expansion of our business. It is unlikely, therefore, that the holders of our
common stock will have an opportunity to profit from anything other than
potential appreciation in the value of our common shares held by them. If you
require dividend income, you should not rely on an investment in our common
stock.
 
 Future issuances of our common stock
may depress our stock price and dilute your interest.
 
 We may
issue additional shares of our common stock in future financings or grant stock
options to our employees, officers, directors and consultants under our stock
incentive plan. Any such issuances could have the affect of depressing the
market price of our common stock and, in any case, would dilute the percentage
ownership interests in our company by our shareholders. In addition, we could
issue serial preferred stock having rights, preferences and privileges senior to
those of our common stock, including the right to receive dividends and/or
preferences upon liquidation, dissolution or winding-up in excess of, or prior
to, the rights of the holders of our common stock. This could depress the value
of our common stock and could reduce or eliminate amounts that would otherwise
have been available to pay dividends on our common stock (which are unlikely in
any case) or to make distributions on liquidation.
 
 
 
 ITEM
2. DESCRIPTION OF PROPERTY.
 
 Our
principal executive offices are located at 701 Fifth Avenue, Suite 4200,
Seattle, Washington, 98104.  Our telephone number is (888)-366-6115.
We lease this space on a month-to-month basis.
 
 We had
previously leased space in Vancouver under a long-term lease. We were able to
terminate this lease.  We also operate from the home of our Chief
Executive Officer in Vancouver and from the offices of our consultants, for
which we do not pay rent.
 
 ITEM
3. LEGAL PROCEEDINGS.
 
 As of the
date of this annual report on Form 10-K for the fiscal year ended December 31,
2008, there were no pending material legal proceedings to which we were a party
and we are not aware that any were contemplated. There can be no assurance,
however, that we will not be made a party to litigation in the future. Any
finding of liability imposed against us is likely to have an adverse effect on
our business, our financial condition, including liquidity and profitability,
and our results of operations
  ITEM 4. SUBMISSION OF MATTERS TO A VOTE
OF SECURITY HOLDERS.
 
 No
matters were submitted to a vote of our stockholders, through the solicitation
of proxies or otherwise, during the fourth quarter of the fiscal year ended
December 31, 2008.
  15
  PART
II
  ITEM
5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
 
 Our
common stock is quoted on the OTC Bulletin Board, a service provided by the
Nasdaq Stock Market Inc., under the symbol “FSAC”, and on the Frankfurt Stock
Exchange under the symbol “F3S”.
 
 The
following table sets forth the high and low bid prices for our common stock as
reported each quarterly period within the last four fiscal years on the OTC
Bulletin Board, and as obtained from investopedia.com. The high and low prices
reflect inter-dealer prices, without retail mark-up, markdown or commission and
may not necessarily represent actual transactions.
 
 Period
                                                        
                                                        High*
                                                        
                                                        
                                                        Low*Fiscal
      year ended 2005 Quarter endedMarch
      31, 2005**
                                                        
                                                        $
                                                        0.517
                                                        
                                                        
                                                        $
                                                        0.933June
      30, 2005
                                                        
                                                        $
                                                        0.817
                                                        
                                                        
                                                        $
                                                        1.350September
      30, 2005
                                                        
                                                        $
                                                        0.920
                                                        
                                                        
                                                        $
                                                        1.570December
      31, 2005
                                                        
                                                        $
                                                        0.890
                                                        
                                                        
                                                        $
                                                        1.410Fiscal
      year ended 2006 Quarter endedMarch
      31, 2006
                                                        
                                                        $
                                                        1.120
                                                        
                                                        
                                                        $
                                                        3.500June
      30, 2006
                                                        
                                                        $
                                                        1.010
                                                        
                                                        
                                                        $
                                                        1.780September
      30, 2006
                                                        
                                                        $
                                                        0.590
                                                        
                                                        
                                                        $
                                                        1.180December
      31, 2006
                                                        
                                                        $
                                                        0.830
                                                        
                                                        
                                                        $
                                                        1.660Fiscal
      year ended 2007 Quarter endedMarch
      31, 2007
                                                        
                                                        $
                                                        0.740
                                                        
                                                        
                                                        $
                                                        1.380June
      30, 2007
                                                        
                                                        $
                                                        0.750
                                                        
                                                        
                                                        $
                                                        1.160September
      30, 2007
                                                        
                                                        $
                                                        0.520
                                                        
                                                        
                                                        $
                                                        0.780December
      31, 2007
                                                        
                                                        $
                                                        0.160
                                                        
                                                        
                                                        $
                                                        0.750Fiscal
      year ended 2008 Quarter endedMarch
      31, 2008
                                                        
                                                        $
                                                        0.200
                                                        
                                                        
                                                        $
                                                        0.080June
      30, 2008
                                                        
                                                        $
                                                        0.300
                                                        
                                                        
                                                        $
                                                        0.120September
      30, 2008
                                                        
                                                        $
                                                        0.250
                                                        
                                                        
                                                        $
                                                        0.050December
      31, 2008
                                                        
                                                        $
                                                        0.040
                                                        
                                                        
                                                        $
                                                        0.010*
      All
      stock prices are adjusted to reflect three-for-one common stock dividend
      paid on May 13, 2005 to all stockholders of record as of May 3,
      2005.
  STOCKHOLDERS
 
 As of
March 31, 2009, there were approximately 60 holders of record of our common
shares.
  16
  DIVIDENDS
 
 From our
inception we have never declared or paid any cash dividends on shares of our
common stock and we do not anticipate declaring or paying any cash dividends in
the foreseeable future. The decision to declare any future cash dividends will
depend upon our results of operations, financial condition, current and
anticipated cash needs, contractual restrictions, restrictions imposed by
applicable law and other factors that our board of directors deem relevant.
Although it is our intention to utilize all available funds for the development
of our business, no restrictions are in place that would limit our ability to
pay dividends. The payment of any future cash dividends will be at the sole
discretion of our board of directors.
 
 
 RECENT
SALES OF UNREGISTERED SECURITIES
  Date
      Securities Issued
                  Securities
                    Title
                  Issued
      to
                  Number
      of
                    Securities
                    Issued
                  Consideration *
                  FootnotesCommon
      Stock IssuancesIssued for
      cash2/16/2006
                  Common
      Stock
                  Hypo
      Bank
                  400,000
                  $400,000
                  (A)(1)5/24/2006
                  Common
      Stock
                  Hypo
      Bank
                  200,000
                  $150,000
                  (A)(2)6/5/2006
                  Common
      Stock
                  UBS
                  133,334
                  $100,000
                  (A)(2)8/16/2006
                  Common
      Stock
                  Investor’s
      Link Ventures
                  42,670
                  $32,000
                  (A)(2)8/23/2006
                  Common
      Stock
                  Investor’s
      Link Ventures
                  93,340
                  $70,000
                  (A)(2)10/20/2006
                  Common
      Stock
                  Investor’s
      Link Ventures
                  133,334
                  $100,000
                  (A)(2)12/18/2006
                  Common
      Stock
                  Investor’s
      Link Ventures
                  133,334
                  $100,000
                  (A)(2)2/20/2007
                  Common
      Stock
                  Various
                  200,000
                  $150,000
                  (A)(3)5/20/2007
                  Common
      Stock
                  Various
                  250,000
                  $150,000
                  (A)(4)07/10/2007
                  Common
      Stock
                  Various
                  250,000
                  $100,000
                  (A)(5)8/22/2007
                  Common
      Stock
                  Various
                  400,000
                  $100,000
                  (A)(6)11/16/2007
                  Common
      Stock
                  Various
                  1,500,000
                  $150,000
                  (A)(7)1/15/2008
                  Common
      Stock
                  Various
                  7,500,000
                  $300,000
                  (A)(8)
 
 *      There
were no underwriter discounts or commissions associated with these sales of
common stock for cash.
 
 (1)
              Valued
      at $1.00 per common share.
 
 (2)
              Valued
      at $0.75 per common share.
 
 (3)
              Valued
      at $0.75 per common share.
 
 (4)
              Valued
      at $0.60 per common share.
 
 (5)
              Valued
      at $0.40 per common share.
 
 (6)
              Valued
      at $0.25 per common share.
 
 (7)
              Valued
      at $0.10 per common share.
 
 (8)
              Valued
      at $0.04 per common share.
  17
  
 Date
                        Securities
                        Issued
                      
                      Securities
                        Title
                      
                      Issued
      to
                      
                      Number
      of Securities
                        Issued
                      
                      
                      Consideration
                      
                      FootnotesCommon
      Stock IssuancesIssued as
      compensation to independent contractors5/24/2006
                      
                      Common
      Stock
                      
                      Jonathan
      Dariyanani, Esq.
                      
                      10,000
                      
                      
                      14,000
                      
                      (B)(1)12/22/2006
                      
                      Common
      Stock
                      
                      Alexander
      Khersonski
                      
                      25,000
                      
                      
                      24,000
                      
                      (B)(2)
  (1)
              Issued
      as compensation for legal services. Valued at $1.40 per common
      share.
 
 (2)
              Issued
      as compensation for services as a member of the board of directors. Valued
      at $0.96 per common share.
   Date
                  Securities
                  Issued
                
                Securities
                  Title
                
                Issued
      to
                
                Number
      of
                  Securities
                  Issued
                
                
                Consideration
                
                FootnotesCommon
      Stock IssuancesIssued
      upon conversion of debt2/2/2006
                
                Common
      Stock
                
                Unrelated
      Third-Parties
                
                1,073,507
                
                $
                985,133
                
                (B)(1)
  (1)
              Issued
      upon conversion of all advances payable included as debt on our December
      31, 2005 consolidated balance sheet. Valued at $0.91 per common
      share.
  18
  General
Footnotes
 
 (A)
              We
      relied in each case for these unregistered sales on the private offering
      exemption of Section 4(2) of the Securities Act and/or the private
      offering safe harbor provision of Rule 506 of Regulation D promulgated
      thereunder based on the following factors: (i) the number of offerees or
      purchasers, as applicable, (ii) the absence of general solicitation, (iii)
      representations obtained from the acquirors relative to their
      accreditation and/or sophistication (or from offeree or purchaser
      representatives, as applicable), (iv) the provision of appropriate
      disclosure, and (v) the placement of restrictive legends on the
      certificates reflecting the securities coupled with investment
      representations obtained from the
acquirors.
 
 (B)
              We
      relied in each case for these unregistered sales on the private offering
      exemption of Section 4(2) of the Securities Act based on the following
      factors: (i) the number of offerees, (ii) the absence of general
      solicitation, (iii) representations obtained from the acquirors relative
      to their sophistication (or from offeree representatives, as applicable),
      (iv) the provision of appropriate disclosure, and (v) the placement of
      restrictive legends on the certificates reflecting the securities coupled
      with investment representations obtained from the
    acquirors.
  ITEM
7. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
 
 The
following discussion and analysis of our financial condition, results of
operations and liquidity should be read in conjunction with our consolidated
financial statements for the fiscal years ended December 31, 2008 and 2007 and
the related notes appearing elsewhere in this annual report. Our consolidated
financial statements have been prepared in accordance with generally accepted
accounting principles, contemplate that we will continue as a going concern, and
do not contain any adjustments that might result if we were unable to continue
as a going concern, however, our independent registered public accounting firms
have added explanatory paragraphs in Note 3 of each of our consolidated
financial statements for the fiscal years ended December 31, 2008 and 2007,
respectively, raising substantial doubt as to our ability to continue as a going
concern.
 
 CRITICAL
ACCOUNTING POLICIES
 
 Our
critical accounting policies, including the assumptions and judgments underlying
those policies, are more fully described in the notes to our consolidated
financial statements. We have consistently applied these policies in all
material respects. Investors are cautioned, however, that these policies are not
guarantees of future performance and involve risks and uncertainties, and that
actual results may differ materially. Set forth below are the accounting
policies that we believe most critical to an understanding of our financial
condition, results of operations and liquidity.
  19
  Use
of Estimates
 
 The
preparation of our consolidated financial statements in conformity with
generally accepted accounting principles requires management to make certain
estimates and assumptions that affect the amounts of assets, liabilities,
revenues and expenses reported in our consolidated financial statements and the
accompanying notes. We evaluate our estimates on an ongoing basis, and make our
estimates and assumptions based on actual historical experience which we believe
to be reasonable under the circumstances at that time. Actual results may differ
materially from our current estimates.
 
 Research and
Development Costs
 
 We
account for research and development expenses in accordance with Statement of
Financial Accounting Standards (“SFAS”) No. 2,“Accounting for Research and Development
Costs”. Our research and development costs, which include expenses
relating to the development of software to be used in our search
engine technology, are expensed in the period in which they are
incurred.
 
 We
capitalize
the cost of materials and equipment acquired for research and
development activities that have alternative future
uses, such as computer equipment, in the period in which they are
acquired.
 
 Property
and Equipment
 
 Property
and equipment are stated at cost. Depreciation of property and
equipment are provided over the estimated
useful lives of the related assets using
the straight-line method and the half-year
convention.
 
 Impairment
Long-lived Assets
 
 We test
long-lived assets 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 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 value is less than the
undiscounted future cash flows, an impairment loss is recognized.
 
 Income Taxes
 
 We
determine deferred tax liabilities and assets 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
 
 We incur
a substantial number of operational transactions in Canada which
we carry out in Canadian currency through
a bank account maintained
for that purpose. Included among such transactions
are payment of salaries, rent, consulting and other related
expenses. At the time of such payment each Canadian
disbursement is translated into U.S. dollar
equivalents and an exchange gain or loss on currency is
recorded.
 
  20
  OVERVIEW
 
 We are a
development stage technology company focused on the refinement and marketing of
a comprehensive suite of media search engine technologies. Our objective is to
maintain the media search engine properties and technologies we currently have
and to eventually enhance and grow those properties and technologies. We
currently operate the website newstowatch.com.
 Newstowatch.com is a
breaking news discovery service that programatically reads thousands of current
news stories and intelligently categorizes, organizes and ranks the most popular
stories and topics from around the web.   We also operate the
consumer media search websites searchforvideo.com,
podanza.com and
iheard.com.  We
hope to be able to maintain our existing suite of on-line properties and
technologies through the current challenging financial environment and to
eventually be able to expand and grow our web properties and technologies in the
future.
 
 PLAN
OF OPERATIONS
  Over the
next six to twelve months we intend to maintain our current web properties and
make whatever modest efforts we are capable of, given our limited resources, to
slow the deterioration of user traffic on these properties while we search for
additional financing to allow us to promote and update our
properties.   We believe our sites, www.newstowatch.com,
www.searchforvideo.com,
www.iheard.com
and www.podanza.com, will
continue to deteriorate in spite of consumers recognizing the unique content,
ease-of-use, speed of search tools and quality of indexed content due to lack of
promotion and updating of the properties.   We will not be able
to expand our participatory media offerings over the course of the year due to
lack of resources.  It is believed that the combination of the growth
of our participatory media website, www.Newstowatch.com and the organic growth
of our other consumer portals could increase the company’s overall value by
increasing its assets and marketability if we had the resources to promote and
update our properties.  In the absence of additional resources, our
properties are likely to continue to have their user traffic
deteriorate.
 
 We
currently produce a small amount of advertising revenue that we have derived
during the principal development phase of our various consumer
portals.  Not only will this revenue not be enough to make us cash
flow positive, we have also signed an agreement where virtually all of our small
revenues will go to Brass Consulting Ltd. in exchange for maintaining www.searchforvideo.com.  Of
course, we can cancel this agreement at any time and we hope to do so, as soon
as financing and market conditions improve and we can raise the resources
necessary to service, promote and update our sites.  There can be no
assurance such resources will be forthcoming and we have no understandings with
any potential investors or partners regarding the same.
 
 We also
anticipate spending much less on operations and salaries and costs related to
marketing and no money related to research and development over the course of
the next twelve months now that principal development on our consumer portals
has been completed and we lack the resources to improve or promote our
properties . We anticipate our largest expenses will be hosting, administrative,
legal and accounting expenses, payments of our www.searchforvideo.com
revenue to Brass Consulting Ltd. and the salary of our chief executive officer,
Jenifer Osterwalder.
  21
  Our
twelve-month plan requires us to accomplish the following steps:
  ·
              Minimizing
      the deterioration of user traffic on our
  websites;
 
 ·
              Raise
      additional funds in order to promote and improve our
  sites;
 
 ·
              Compile
      usage statistics for our websites;
 
 ·
              Raise
      funds to enhance our participatory media capabilities and to promote the
      associated community of
www.Newstowatch.com;
 
 ·
              Develop
      rapport with likely strategic partners ;
and
 
 ·
              Terminate
      our consulting arrangement with Brass Consulting Ltd. and take back the
      operation of www.searchforvideo.com
      as soon as we have sufficient
resources.
 
 
 RESULTS
OF OPERATIONS FROM FEBRUARY 9, 2005 (INCEPTION) AND THE FISCAL YEAR ENDED
DECEMBER 31, 2008
 
 Revenues
 
 Our
revenues increased $20,440 from $34,553 for the twelve months ended December 31,
2007 to $55,012 for the fiscal year ended December 31, 2008. This increase was
primarily attributable to increased advertising revenue.
 
 Research
and Development
 
 Research
and development expenses decreased $91,342 from $146,204 for the twelve months
ended December 31, 2007 to $54,862 for the fiscal year ended December 31, 2008.
This decrease was primarily attributable to the completion of principal
development of our web properties and also because of our lack of resources to
continue development and improvement of our properties.
 
 General
and Administrative Expenses
 
 General
and administrative expenses principally include salary expenses, professional
fees, investor relations fees, rent and general corporate overhead. General and
administrative expenses decreased $306,610, from $599,173 for the twelve months
ended December 31, 2007 to $292,563 for the fiscal year ended December 31, 2008.
This decrease is primarily attributable to a decrease in the amount of
administrative overhead due to our completion of principal development on our
consumer portals and due to lack of resources to hire additional personnel to
promote and improve our properties.
 
 LIQUIDITY
AND CAPITAL RESOURCES
 
 As of the
fiscal year ended December 31, 2008 we had $14,366 of cash on hand.
 
 Our net
loss decreased $424,877, from $726,059  for the twelve months ended
December 31, 2007 to $301,182 for the fiscal year ended December 31, 2008, and
our working capital surplus decreased $1,182, from $4,369 for the twelve months
ended December 31, 2007 to $3,187 for the fiscal year ended December 31,
2008.
  22
 
 Net cash
used in operating activities decreased $508,758, from $1,217,179 for the twelve
months ended December 31, 2006 to $708,421 for the fiscal year ended December
31, 2007. This increase was primarily the result of the completion of principal
development activities on our consumer portals.
 
 Net cash
provided by financing activities decreased $350,000, from $650,000 for the
twelve months ended December 31, 2007 to $300,000 for the fiscal year ended
December 31, 2008. Net cash provided by financing activities was primarily in
the form of sales of our common stock and the difference attributable to lower
proceeds from the sale of common stock.
 
 Although
we have borrowed an additional $50,000 from shareholders in March, 2008, we do
not believe that our current financial resources are sufficient to meet our
working capital needs over the next twelve months and, accordingly, we will need
to secure additional external financing to continue our operations. We may seek
to raise additional capital though private equity or debt financings and further
shareholder loans. As of the date of this annual report on Form 10-K for the
fiscal year ended December 31, 2008, we have not obtained, any commitments,
verbal or otherwise, from our security holders to make further investments in
our company; and there can be no assurance that those further investments, if
and when made, will be sufficient to sustain our required level of operations.
Moreover, there can be no assurance that we will be able to secure additional
external financing, or, if we are able to secure such external financing, that
it will be on terms favorable, or even acceptable, to us. If necessary, we may
explore strategic alternatives, including a merger, asset sale, joint venture or
other comparable transactions. Any inability to achieve or sustain profitability
or otherwise secure external financing or locate a strategic partner would have
a material adverse effect on our business, financial condition, and results of
operations, raising substantial doubts as to our ability to continue as a going
concern, and we may ultimately be forced to seek protection from creditors under
the bankruptcy laws or cease operations.
 
 Our
short-term prospects are challenging considering our lack of financial
resources. In the absence of additional financing, sales of our products or
services, or locating a strategic partner willing to finance our further
development, our short-term and long-term prospects for growth are minimal over
and above incremental sales of our existing products and
services.
  23
  ITEM
8. FINANCIAL STATEMENTS.
 
 
 FUSA
CAPITAL CORPORATION
 (A
DEVELOPMENT STAGE COMPANY)
 
 
 TABLE
OF CONTENTS
 
 PageReport
      of Independent Registered Public Accounting Firm
                F-2Consolidated
      Balance Sheets as of December 31, 2008 and 2007
                F-3Consolidated
      Statements of Operations for the Years Ended December 31, 2008 and
      December 31, 2007, and for the period from February 9, 2005 (Inception)
      through the Year Ended December 31, 2008
                F-4Consolidated
      Statements of Cash Flows for the Years Ended December 31, 2008 and
      December 31, 2007, and for the period from February 9, 2005 (Inception)
      through the Year Ended December 31, 2008
                F-5Consolidated
      Statements of Stockholders’ Equity (Deficit)
                F-6Notes
      to the Consolidated Financial Statements
                F-8
 
 
 
  F-1
  MOORE
& ASSOCIATES, CHARTERED
 ACCOUNTANTS AND
ADVISORS
 PCAOB REGISTERED
 
 
 REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 To
the Board of Directors
 FUSA
Capital Corporation
 (A
Development Stage Company)
 
 We have
audited the accompanying balance sheets of FUSA Capital Corporation (A
Development Stage Company) as of December 31, 2008 and 2007, and the related
statements of operations, stockholders’ equity (deficit) and cash flows for the
years ended December 31, 2008, 2007 and since inception on February 9, 2005
through December 31, 2008. These financial statements are the responsibility of
the Company’s management.  Our responsibility is to express an opinion
on these financial statements based on our audits.
 
 We
conduct our audits in accordance with standards of the Public Company Accounting
Oversight Board (United States).  Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audits provide a reasonable basis
for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of FUSA Capital Corporation (A
Development Stage Company) as of December 31, 2008 and 2007, and the related
statements of operations, stockholders’ equity (deficit)  and cash
flows for the years ended December 31, 2008, 2007 and since inception on
February 9, 2005 through December 31, 2008, in conformity with accounting
principles generally accepted in the United States of America.
 
 The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern.  As discussed in Note 3 to the
financial statements, the Company has not commenced its planned principal
operations, has not generated significant revenues and has incurred significant
operating loss to date, which raises substantial doubt about its ability to
continue as a going concern.  Management’s plans concerning these
matters are also described in Note 3.  The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
 
 
 /s/
Moore & Associates, Chartered
 
 Moore
& Associates, Chartered
 Las
Vegas, Nevada
 April 1,
2009
 
 6490 West Desert Inn Rd, Las
Vegas, NV 89146 (702) 253-7499 Fax (702) 253-7501
 
  F-2
  FUSA
CAPITAL CORPORATION
 (A
DEVELOPMENT STAGE COMPANY)
 BALANCE
SHEETS
 DECEMBER
31, 2008 AND DECEMBER 31, 2007
 
 December
      31
                                    
                                    
                                    December
      312008
                                    
                                    
                                    2007ASSETSCURRENT
      ASSETSCash
                                    
                                    $
                                    14,366
                                    
                                    
                                    $
                                    5,255Restricted
      cash-Note 2
                                    
                                    
                                    11,500
                                    
                                    
                                    
                                    28,750Accounts
      receivable
                                    
                                    
                                    280
                                    
                                    
                                    
                                    -Prepaid
      expenses
                                    
                                    
                                    500
                                    
                                    
                                    
                                    500Total
      Current Assets
                                    
                                    
                                    26,646
                                    
                                    
                                    
                                    34,505Property
      and equipment-net - Note 5
                                    
                                    
                                    14,654
                                    
                                    
                                    
                                    23,806Lease
      deposits
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Total
      Assets
                                    
                                    $
                                    41,300
                                    
                                    
                                    $
                                    58,311LIABILITIES AND STOCKHOLDERS’
      EQUITYCURRENT
      LIABILITIESAccounts
      payable and accrued liabilities
                                    
                                    $
                                    38,113
                                    
                                    
                                    $
                                    53,942Total
      Current Liabilities
                                    
                                    
                                    38,113
                                    
                                    
                                    
                                    53,942STOCKHOLDERS’
      EQUITY (DEFICIT)Preferred
      stock, $.0001 par value, 5,000,000 shares authorized, none
      issued
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Common
      stock, par value $.0001, 500,000,000 shares authorized, 69,947,083 issued
      and outstanding (2007-62,447,083 issued and outstanding)
                                    
                                    
                                    6,993
                                    
                                    
                                    
                                    6,243Paid
      in capital
                                    
                                    
                                    5,549,999
                                    
                                    
                                    
                                    5,250,749Deficit
      accumulated during the development stage
                                    
                                    
                                    (5,553,805
                                    )
                                    
                                    
                                    (5,252,623
                                    )Total
      Stockholders’ Equity
                                    
                                    
                                    3,187
                                    
                                    
                                    
                                    4,369$
                                    41,300
                                    
                                    
                                    $
                                    58,311
  The
accompanying notes are an integral part of the financial
statements
  F-3
  FUSA
CAPITAL CORPORATION
 (A
DEVELOPMENT STAGE COMPANY)
 STATEMENTS
OF OPERATIONS
  Year
                      
                      
                      Year
                      
                      
                      February
      9, 2005ended
                      
                      
                      ended
                      
                      
                      (Inception)
      toDecember
      31, 2008
                      
                      
                      December
      31, 2007
                      
                      
                      December
      31, 2008REVENUESales
                      
                      $
                      55,012
                      
                      
                      $
                      33,117
                      
                      
                      $
                      101,279Interest  and
      other
                      
                      
                      -
                      
                      
                      
                      1,416
                      
                      
                      
                      2,56155,012
                      
                      
                      
                      34,553
                      
                      
                      
                      103,840OPERATING
      EXPENSESSelling,
      general and administrative
                      
                      
                      98,673
                      
                      
                      
                      219,898
                      
                      
                      
                      2,411,772Wages
      and benefits
                      
                      
                      150,833
                      
                      
                      
                      253,333
                      
                      
                      
                      724,901Legal
      fees
                      
                      
                      43,057
                      
                      
                      
                      125,942
                      
                      
                      
                      261,504Research
      and development-Note 4
                      
                      
                      54,862
                      
                      
                      
                      146,204
                      
                      
                      
                      1,991,195Beneficial
      conversion expense
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      230,900Interest
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      1,631Loss
      on disposal of property and equipment
                      
                      
                      -
                      
                      
                      
                      1,393
                      
                      
                      
                      1,393Foreign
      exchange loss (gain)
                      
                      
                      (
      383
                      )
                      
                      
                      4,430
                      
                      
                      
                      4,047Depreciation
      and amortization
                      
                      
                      9,152
                      
                      
                      
                      9,392
                      
                      
                      
                      30,302Total
      Expenses
                      
                      
                      356,194
                      
                      
                      
                      760,592
                      
                      
                      
                      5,657,645INCOME
      ( LOSS) BEFORE INCOME TAXES
                      
                      
                      (301,182
                      )
                      
                      
                      (726,059
                      )
                      
                      
                      (5,553,805
                      )INCOME
      TAX EXPENSE
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -NET
      INCOME (LOSS)
                      
                      $
                      (301,182
                      )
                      
                      $
                      (726,059
                      )
                      
                      $
                      (5,553,805
                      )NET
      LOSS PER COMMON SHARE, BASIC
                      
                      $
                      (0,00
                      )
                      
                      $
                      (0.01
                      )WEIGHTED
      AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
                      
                      
                      69,947,083
                      
                      
                      
                      60,738,750
  The
accompanying notes are an integral part of the financial
statements
  F-4
 
 FUSA
CAPITAL CORPORATION
 (A
DEVELOPMENT STAGE COMPANY)
 STATEMENTS
OF CASH FLOWS
  Year
                                                                  
                                                                  
                                                                  Year
                                                                  
                                                                  
                                                                  February
      9, 2005Ended
                                                                  
                                                                  
                                                                  Ended
                                                                  
                                                                  
                                                                  (Inception)
      toDecember
      31, 2008
                                                                  
                                                                  
                                                                  December
      31, 2007
                                                                  
                                                                  
                                                                  December
      31, 2008OPERATING
      ACTIVITIESNet
      loss from operations
                                                                  
                                                                  $
                                                                  (301,182
                                                                  )
                                                                  
                                                                  $
                                                                  (726,059
                                                                  )
                                                                  
                                                                  $
                                                                  (5,553,805
                                                                  )Adjustments
      to reconcile net loss to net cash
      (used) by operating activities:Common
      stock issued (cancelled) for compensation
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  2,129,250Common
      stock issued for services
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  47,000Stock
      options issued for services
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  55,669Beneficial
      conversion feature on warrant issuance
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  230,900Depreciation
      and amortization
                                                                  
                                                                  
                                                                  9,152
                                                                  
                                                                  
                                                                  
                                                                  9,392
                                                                  
                                                                  
                                                                  
                                                                  30,302Loss
      on disposal of property and equipment
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  1,393
                                                                  
                                                                  
                                                                  
                                                                  5,879Changes
      in operating assets and liabilities:Decrease
      (increase) in prepaid expenses
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  (500
                                                                  )Decrease
      (increase) in accounts payable and accrued liabilities
                                                                  
                                                                  
                                                                  (15,829
                                                                  )
                                                                  
                                                                  
                                                                  4,698
                                                                  
                                                                  
                                                                  
                                                                  27,433Decrease
      (increase) in accounts receivable
                                                                  
                                                                  
                                                                  (280
                                                                  )
                                                                  
                                                                  
                                                                  (280
                                                                  )Decrease
      (increase) in lease deposits
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  2,155
                                                                  
                                                                  
                                                                  
                                                                  -Total
      adjustments
                                                                  
                                                                  
                                                                  (6,957
                                                                  )
                                                                  
                                                                  
                                                                  17,638
                                                                  
                                                                  
                                                                  
                                                                  2,525,653Net
      cash (used by) operating activities
                                                                  
                                                                  
                                                                  (308,139
                                                                  )
                                                                  
                                                                  
                                                                  (708,421
                                                                  )
                                                                  
                                                                  
                                                                  (3,028,152
                                                                  )INVESTING
      ACTIVITIESProceeds
      on disposal of capital assets
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  494
                                                                  
                                                                  
                                                                  
                                                                  494Acquisition
      of property and equipment
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  (5,741
                                                                  )
                                                                  
                                                                  
                                                                  (51,327
                                                                  )Net
      cash (used by) investing activities
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  (5,244
                                                                  )
                                                                  
                                                                  
                                                                  (50,833
                                                                  )FINANCING
      ACTIVITIESCash
      received in recapitalization of the company
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  184Proceeds
      from issuance of common stock
                                                                  
                                                                  
                                                                  300,000
                                                                  
                                                                  
                                                                  
                                                                  650,000
                                                                  
                                                                  
                                                                  
                                                                  2,212,000Offering
      costs from issuance of stock
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  (4,000
                                                                  )Increase
      (decrease) in advances payable
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  -
                                                                  
                                                                  
                                                                  
                                                                  896,667Net
      cash provided by financing activities
                                                                  
                                                                  
                                                                  300,000
                                                                  
                                                                  
                                                                  
                                                                  650,000
                                                                  
                                                                  
                                                                  
                                                                  3,104,851Net
      increase (decrease) in cash
                                                                  
                                                                  
                                                                  (8,139
                                                                  )
                                                                  
                                                                  
                                                                  (63,668
                                                                  )
                                                                  
                                                                  
                                                                  25,866Cash,
      beginning of period
                                                                  
                                                                  
                                                                  34,005
                                                                  
                                                                  
                                                                  
                                                                  97,673
                                                                  
                                                                  
                                                                  
                                                                  -Cash,
      end of period
                                                                  
                                                                  $
                                                                  25,866
                                                                  
                                                                  
                                                                  $
                                                                  34,005
                                                                  
                                                                  
                                                                  $
                                                                  25,866Cash
      Summary, December 31Cash
                                                                  
                                                                  $
                                                                  14,366
                                                                  
                                                                  
                                                                  $
                                                                  5,255
                                                                  
                                                                  
                                                                  $
                                                                  14,366Restricted
      Cash
                                                                  
                                                                  
                                                                  11,500
                                                                  
                                                                  
                                                                  
                                                                  28,750
                                                                  
                                                                  
                                                                  
                                                                  11,500Total
                                                                  
                                                                  $
                                                                  25,866
                                                                  
                                                                  
                                                                  $
                                                                  34,005
                                                                  
                                                                  
                                                                  $
                                                                  25,866SUPPLEMENTAL
      DISCLOSURES OF NON-CASH
      INVESTING AND FINANCING ACTIVITIESNon-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
  The
accompanying notes are an integral part of the financial
statements
  F-5
  FUSA
CAPITAL CORPORATION
 (A
DEVELOPMENT STAGE COMPANY)
 STATEMENTS
OF STOCKHOLDERS’ EQUITY (DEFICIT)
 
 DeficitCommon
      Stock
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    AccumulatedDuring
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    TotalPaid-in
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    Development
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    Stockholders’Shares
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    Amount
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    Capital
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    Stage
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    EquityInception, 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
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    (11,604
                                                                                                                                                                                                    )
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    (2,605
                                                                                                                                                                                                    )Restated
      RecapitalizationMarch 7, 2005
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    27,447,564
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    2,744
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    (104,701
                                                                                                                                                                                                    )
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    (101,957
                                                                                                                                                                                                    )Shares issued for
      cash in a private placementMarch 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
                                                                                                                                                                                                    )Beneficial
      conversion feature-930,000
      warrants issued in above PPM
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    230,900
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    230,900Shares
      issued as compensationJune
      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
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    54,500Stock options issued
      for compensation
      to non-employeesApril 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, 2005 to
      March 31, 2006
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    (4,079,552
                                                                                                                                                                                                    )
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    (4,079,552
                                                                                                                                                                                                    )Balances,
      December31, 2005
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    58,202,564
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    $
                                                                                                                                                                                                    5,820
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    $
                                                                                                                                                                                                    3,346,315
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    $
                                                                                                                                                                                                    (4,091,157
                                                                                                                                                                                                    )
                                                                                                                                                                                                    
                                                                                                                                                                                                    $
                                                                                                                                                                                                    (739,022
                                                                                                                                                                                                    )  F-6
  Stock
      options issued forCompensation to
      non-employeesJanuary 1, 2006
      7,273 options vested @
      FMV $.41 per share
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    2,996
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    2,996April 7, 2006,
      21,819 options vested @ FMV
      of $.40 per share
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    8,728
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    8,728Shares issued for
      services to non-employeesMay
      24, 2006, stock issued for FMV of $1.40
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    10,000
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    1
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    13,999
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    14,000December
      11, 2006, stock issued for FMV of $0.96
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    25,000
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    3
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    23,997
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    24,000Shares
      issued for cash in a private placementFebruary 16, 2006
      Stock issued for cash @
      $1.00 per share
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    400,000
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    40
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    399,960
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    400,000May 24, 2006 Stock
      issued for cash @
      $.75 per share
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    200,000
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    20
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    149,980
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    150,000June 5, 2006 Stock
      issued for cash @
      $.75 per share
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    133,334
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    13
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    99,987
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    100,000August 16, 2006
      Stock issued for cash @
      $.75 per share
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    42,670
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    4
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    31,996
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    32,000August 23, 2006
      Stock issued for cash @
      $.75 per share
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    93,340
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    9
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    69,991
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    70,000October 20, 2006
      Stock issued for cash @$.75
      per share
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    133,334
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    13
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    99,987
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    100,000December 18,2006
      Stock issued for cash @.75
      per share
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    133,334
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    13
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    99,987
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    100,000Shares
      exchanged for debtFebruary 2, 2006
      Stock issued for cash @
      $.91 per share
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    1,073,507
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    107
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    985,026
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    985,133Cancellation of
      share issued as compensation
      to employees
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    (600,000
                                                                                                                                                                                                    )
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    (60
                                                                                                                                                                                                    )
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    (731,940
                                                                                                                                                                                                    )
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    (732,000
                                                                                                                                                                                                    )Loss for the period
      ended December
      31, 2006
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    (435,407
                                                                                                                                                                                                    )
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    (435,407
                                                                                                                                                                                                    )Balances,
      December 31, 2006
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    59,847,083
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    5,983
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    4,601,009
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    (4,526,564
                                                                                                                                                                                                    )
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    80,428Shares
      issued for cash in a private placementFebruary
      20, 2007 Stock issued for cash@ $.75 per
      share
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    200,000
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    20
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    149,980
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    150,000May
      20, 2007 Stock issued for cash@ $.60 per
      share
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    250,000
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    25
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    149,975
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    150,000July
      10, 2007 Stock issued for cash@ $.40 per
      share
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    250,000
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    25
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    99,975
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    100,000August  22,
      2007 Stock issued for cash@ $.25 per
      share
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    400,000
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    40
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    99,960
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    100,000November
      16, 2007 Stock issued forCash @ $.10 per
      share
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    1,500,000
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    150
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    149,850
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    150,000Loss
      for the year endedDecember 31, 2007
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    (726,059
                                                                                                                                                                                                    )
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    (726,059
                                                                                                                                                                                                    )Balances,
      December 31, 2007
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    62,447,083
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    6,243
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    5,250,749
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    (5,252,623
                                                                                                                                                                                                    )
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    4,369Shares
      issued for cash in a private placementJanuary
      15, 2008 Stock issued for cash@ $.04 per
      share
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    7,500,000
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    750
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    299,250
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    300,000Loss
      for the periodDecember 31,
      2008
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    (301,182
                                                                                                                                                                                                    )
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    (301,182
                                                                                                                                                                                                    )Balances,
      December 31, 2008
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    69,947,083
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    6,993
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    5,549,999
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    (5,553,805
                                                                                                                                                                                                    )
                                                                                                                                                                                                    
                                                                                                                                                                                                    
                                                                                                                                                                                                    3,187
  The
accompanying notes are an integral part of the financial
statements
  F-7
  FUSA
CAPITAL CORPORATION
 (A
Development Stage Company)
 Notes
to  Financial Statements
 December
31, 2008
 
 
 Note 1–General Organization and
Business
 
 Galaxy
Championship Wrestling Inc., a development stage company, was incorporated on
September 13, 2000 under the laws of the State of Nevada and changed its name to
Fusa Capital Corporation on June 17, 2005.  On March 7, 2005, the
Company acquired all of the issued and outstanding shares of Fusa Technology
Investments, Inc., a development stage Nevada Corporation , formed on February
9, 2005, under the laws of the State of Nevada. For accounting purposes, the
transaction was accounted for as a recapitalization such that the historical
transactions of the acquired company, were carried forward.
  The
Company is in the business of developing internet search engine
technology.  It has limited revenue and in accordance with SFAS # 7,
is considered to be in the development stage.
  Note 2–Significant accountingpolicies
 
 Use
of estimates
 
 The
preparation of  financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the 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, 2008 current assets include restricted cash of $11,500
(2007-$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.
 
 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.
  F-8
  FUSA
CAPITAL CORPORATION
 (A
Development Stage Company)
 Notes
to Financial Statements
 December
31, 2008
  
 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 the year
December 31, 2008 within this category, which are included in selling, general
and administrative expense, amounted to approximately $1,297 (
2007-93,796).
 
 Stock-based
compensation
 
 As
permitted by SFAS No. 123, AccountingforStock-BasedCompensation,the Company has elected
to follow Accounting Principles Board Opinion (“APB”) No. 25, Accounting forStockIssued toEmployees, 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, ShareBasedPayments. 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 2007  financial statements, and
permits varying transition methods including retroactive adjustment of prior
periods or prospective application beginning in 2007.  The Company
will adopt SFAS 123R using the modified prospective method effective January 1,
2007. Under this transition method the Company began recording stock option
expense prospectively, starting in first quarter 2007.
 
 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, "AccountingforResearchandDevelopmentCosts," our research and
development costs, which relate to the development of software to be used in our
search engine technology, were expensed as technological feasibility of the
software had not been reached as of December 31, 2008.
 
 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.
  F-9
  FUSA
CAPITAL CORPORATION
 (A
Development Stage Company)
 Notes
to Consolidated Financial Statements
 December
31, 2008
   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
 
 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 the year ended December 31, 2008, the currency
exchange transactions resulted in a (loss) gain of $ 383 (2007 –$(4,430). As of
December 31, 2008, 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.
 
 Revenue
recognition
  The
company recognizes revenues when products are fully delivered or services have
been provided and collection is reasonably assured.
  F-10
  FUSA
CAPITAL CORPORATION
 (A
Development Stage Company)
 Notes
to  Financial Statements
 December
31, 2008
   Note 3 - Goingconcern
 
 The
Company's  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
significant revenues. It has incurred a significant operating loss as of
December 31, 2008.
 
 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–Relatedpartytransactions
 
 During
the year ended December 31, in lieu of paying its technology officer’s his
earned compensation directly of $27,402 ( 2007- $ 30,234), it paid it to a
consulting company owned by the Officer. This amount relates principally to his
efforts through December 31, 2008, 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 andequipment
 
 
 A summary
of property and equipment as of December 31, 2008 follows:
 
 Accumulated
      Net Book ValueCost
                    
                    
                    Depreciation
                    
                    
                    2008
                    
                    
                    2007Furniture
      and fixtures
                    
                    $
                    8,228
                    
                    
                    $
                    4,223
                    
                    
                    $
                    4,005
                    
                    
                    $
                    5,180Computer
      systems
                    
                    
                    26,713
                    
                    
                    
                    16,064
                    
                    
                    
                    10,649
                    
                    
                    
                    15,992Leasehold
      improvements
                    
                    
                    8,621
                    
                    
                    
                    8,621
                    
                    
                    
                    -
                    
                    
                    
                    2,634$
                    43,562
                    
                    
                    $
                    19,756
                    
                    
                    $
                    14,654
                    
                    
                    $
                    23,806
  F-11
  FUSA
CAPITAL CORPORATION
 (A
Development Stage Company)
 Notes
to Financial Statements
 December
31, 2008
 
 
 Note6–Commitments andcontingencies
 
 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 March 31, 2007.
  The
office in Seattle is leased under a month to month rental.
  Lease and
rental expense included in selling and administrative expenses for the year
totaled $3,562.  ( 2007 - $ 11,543)
   Note 7–IssuanceofCommon Stock
 
 In
February 2006, all of the advances included as debt on the December 31, 2005
consolidated balance totaling $985,133 were converted to equity through the
issuance of a total of 1,073,507 shares of restricted common stock.
 
 During
the year ended December 31, 2007, the company issued 2,600,000 (2006-1,209,346)
shares of common stock for proceeds of $ 650,000 ( 2006-$952,000).
 
 During
the year ended December 31, 2007, the company issued nil (2006-10,000) shares of
common stock for services rendered. The resulting value of stock compensation of
$ nil ( 2006-$14,000) has been included in selling, general and administrative
expenses and also included as a component of shareholders’ equity as at December
31, 2007.
 
 During
the year ended December 31, 2007, the company issued nil (2006-25,000) shares of
common stock to a director of the company for services rendered. The resulting
value of stock compensation of nil ( 2006-$ 24,000) has been included in
selling, general and administrative expenses and also included as a component of
shareholders’ equity as at December 31, 2007.
  In
addition during the year ended December 31, 2007, the company cancelled nil
(2006-600,000) shares of common stock which had previously been issued for
services rendered.  The previously recorded value of stock
compensation of nil ( 2006-$ 722,000) has been credited to research and
development expenses and  included as a component of shareholders’
equity as at December 31, 2007.
 
 During
the year ended December 31, 2008 the company issued 7,500,000 shares of common
stock for cash consideration of  $ 300,000
 
 
 Note 8 - Deferred Tax
Assets
 
 The
following table summarizes the significant components of the Company's deferred
tax assets:
  Deferred
      tax Assets
                            
                            2008
                            
                            
                            2007Non-capital
      loss carryforward
                            
                            $
                            102,400
                            
                            
                            $
                            246,840Less:  valuation
      allowance
                            
                            
                            (102,400
                            )
                            
                            
                            (246,840
                            )$
                            -
                            
                            
                            $
                            -
  F-12
  FUSA
CAPITAL CORPORATION
 (A
Development Stage Company)
 Notes
to Financial Statements
 December
31, 2008
   The
amount taken into income as deferred tax assets must reflect that portion of the
income tax loss carryforwards that is likely to be realized from future
operations.  The Company has chosen to provide an allowance of 100%
against all available income tax loss carryforwards regardless of their
expiry
 
 Note 9 - Income
Taxes
 
 No provision for income taxes has been
provided for in these financial statements due to the net loss.  At
December 31, 2008, the Company has a net operating loss carryforward which
expires commencing in 2025, totaling approximately $5,554,000 the benefit of
which has not been recorded in the financial statements.
 
 
 Note 10 - Technology License
Agreement
 
 During
the period, the company entered into a technology license agreement with Minerva
Technologies Pvt. Ltd. to acquire a perpetual, fully-paid, royalty free
exclusive license to technology Minerva has related to the Argon Search Engine
Software.  As consideration for the license, the company has agreed to
pay Minerva a one-time license fee of 23,000,000 shares of common stock of the
company.
 
 
 Note 11 Recent Accounting
Pronouncements
 
 In
June 2008, the FASB issued FASB Staff Position EITF 03-6-1, Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities,
(“FSP EITF 03-6-1”). FSP EITF 03-6-1 addresses whether instruments granted in
share-based payment transactions are participating securities prior to vesting,
and therefore need to be included in the computation of earnings per share under
the two-class method as described in FASB Statement of Financial Accounting
Standards No. 128, “Earnings per Share.” FSP EITF03-6-1 is effective for
financial statements issued for fiscal years beginning on or after
December 15, 2008 and earlier adoption is prohibited. We are not required
to adopt FSP EITF 03-6-1; neither do we believe that FSP EITF 03-6-1 would have
material effect on our consolidated financial positionand results of
operations if adopted.
 
 In May 2008, the Financial Accounting
Standards Board (“FASB”) issued SFAS No. 163, “Accounting for Financial
Guarantee Insurance Contracts-and interpretation of FASB Statement No.
60”.  SFAS No. 163 clarifies how Statement 60 applies to financial
guarantee insurance contracts, including the recognition and measurement of
premium revenue and claims liabilities. This statement also requires expanded
disclosures about financial guarantee insurance contracts. SFAS No. 163 is
effective for fiscal years beginning on or after December 15, 2008, and interim
periods within those years. SFAS No. 163 has no effect on the Company’s
financial position, statements of operations, or cash flows at this
time.
 
 In March
2008, the Financial Accounting Standards Board, or FASB, issued SFAS No. 161,
Disclosures about Derivative Instruments and Hedging Activities—an amendment of
FASB Statement No. 133.  This standard requires companies to provide
enhanced disclosures about (a) how and why an entity uses derivative
instruments, (b) how derivative instruments and related hedged items are
accounted for under Statement 133 and its related interpretations, and (c) how
derivative instruments and related hedged items affect an entity’s financial
position, financial performance, and cash flows. This Statement is effective for
financial statements issued for fiscal years and interim periods beginning after
November 15, 2008, with early application encouraged. The Company has not yet
adopted the provisions of SFAS No. 161, but does not expect it to have a
material impact on its consolidated financial position, results of operations or
cash flows.
  F-13
  FUSA
CAPITAL CORPORATION
 (A
Development Stage Company)
 Notes
to Financial Statements
 December
31, 2008
 
 
 In
December 2007, the SEC issued Staff Accounting Bulletin (SAB) No. 110 regarding
the use of a "simplified" method, as discussed in SAB No. 107 (SAB 107), in
developing an estimate of expected term of "plain vanilla" share options in
accordance with SFAS No. 123 (R), Share-Based Payment.  In particular,
the staff indicated in SAB 107 that it will accept a company's election to use
the simplified method, regardless of whether the company has sufficient
information to make more refined estimates of expected term. At the time SAB 107
was issued, the staff believed that more detailed external information about
employee exercise behavior (e.g., employee exercise patterns by industry and/or
other categories of companies) would, over time, become readily available to
companies. Therefore, the staff stated in SAB 107 that it would not expect a
company to use the simplified method for share option grants after December 31,
2007. The staff understands that such detailed information about employee
exercise behavior may not be widely available by December 31, 2007. Accordingly,
the staff will continue to accept, under certain circumstances, the use of the
simplified method beyond December 31, 2007. The Company currently uses the
simplified method for “plain vanilla” share options and warrants, and will
assess the impact of SAB 110 for fiscal year 2009. It is not believed that this
will have an impact on the Company’s consolidated financial position, results of
operations or cash flows.
 
 In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements—an amendment of ARB No. 51.  This
statement amends ARB 51 to establish accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an
ownership interest in the consolidated entity that should be reported as equity
in the consolidated financial statements. Before this statement was issued,
limited guidance existed for reporting noncontrolling interests. As a result,
considerable diversity in practice existed. So-called minority interests were
reported in the consolidated statement of financial position as liabilities or
in the mezzanine section between liabilities and equity. This statement improves
comparability by eliminating that diversity. This statement is effective for
fiscal years, and interim periods within those fiscal years, beginning on or
after December 15, 2008 (that is, January 1, 2009, for entities with calendar
year-ends). Earlier adoption is prohibited. The effective date of this statement
is the same as that of the related Statement 141 (revised 2007). The Company
will adopt this Statement beginning March 1, 2009. It is not believed that this
will have an impact on the Company’s consolidated financial position, results of
operations or cash flows.
 
 In
December 2007, the FASB, issued FAS No. 141 (revised 2007), Business
Combinations’.  This Statement replaces FASB Statement No. 141,
Business Combinations, but retains the fundamental requirements in
Statement 141.  This Statement establishes principles and
requirements for how the acquirer: (a) recognizes and measures in its financial
statements the identifiable assets acquired, the liabilities assumed, and any
noncontrolling interest in the acquiree; (b) recognizes and measures the
goodwill acquired in the business combination or a gain from a bargain purchase;
and (c) determines what information to disclose to enable users of the financial
statements to evaluate the nature and financial effects of the business
combination. This statement applies prospectively to business combinations for
which the acquisition date is on or after the beginning of the first annual
reporting period beginning on or after December 15, 2008. An entity may not
apply it before that date. The effective date of this statement is the same as
that of the related FASB Statement No. 160, Noncontrolling Interests in
Consolidated Financial Statements.  The Company will adopt this
statement beginning March 1, 2009. It is not believed that this will have an
impact on the Company’s consolidated financial position, results of operations
or cash flows.
  F-14
  FUSA
CAPITAL CORPORATION
 (A
Development Stage Company)
 Notes
to  Financial Statements
 December
31, 2008
 
 
 In
February 2007, the FASB, issued SFAS No. 159, The Fair Value Option for
Financial Assets and Liabilities—Including an Amendment of FASB Statement No.
115.  This standard permits an entity to choose to measure many
financial instruments and certain other items at fair value. This option is
available to all entities. Most of the provisions in FAS 159 are elective;
however, an amendment to FAS 115 Accounting for Certain Investments in Debt and
Equity Securities applies to all entities with available for sale or trading
securities. Some requirements apply differently to entities that do not report
net income. SFAS No. 159 is effective as of the beginning of an entity’s first
fiscal year that begins after November 15, 2007. Early adoption is permitted as
of the beginning of the previous fiscal year provided that the entity makes that
choice in the first 120 days of that fiscal year and also elects to apply the
provisions of SFAS No. 157 Fair Value Measurements.  The Company will
adopt SFAS No. 159 beginning March 1, 2008 and is currently evaluating the
potential impact the adoption of this pronouncement will have on its
consolidated financial statements.
 
 In
September 2006, the FASB issued SFAS No. 157, Fair Value
Measurements  This statement defines fair value, establishes a
framework for measuring fair value in generally accepted accounting principles
(GAAP), and expands disclosures about fair value measurements. This statement
applies under other accounting pronouncements that require or permit fair value
measurements, the Board having previously concluded in those accounting
pronouncements that fair value is the relevant measurement attribute.
Accordingly, this statement does not require any new fair value measurements.
However, for some entities, the application of this statement will change
current practice. This statement is effective for financial statements issued
for fiscal years beginning after November 15, 2007, and interim periods within
those fiscal years. Earlier application is encouraged, provided that the
reporting entity has not yet issued financial statements for that fiscal year,
including financial statements for an interim period within that fiscal year.
The Company will adopt this statement March 1, 2008, and it is not believed that
this will have an impact on the Company’s consolidated financial position,
results of operations or cash flows.
 
 
 
 
 ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AN ACCOUNTING FINANCIAL
DISCLOSURE.
  There
were no previously unreported events under this Item 9 during the fiscal year
ended December 31, 2008.
 
 ITEM
9A. CONTROLS AND PROCEDURES.
 
 Evaluation
of Disclosure Controls and Procedures
 
 As
required by Rule 13a-15 under the Exchange Act, we carried out an evaluation of
the effectiveness of the design and operation of our disclosure controls and
procedures as of December 31, 2008.  This evaluation was carried out
under the supervision and with the participation of our Chief Executive Officer
and Principal Financial and Accounting Officer, as well as outside
consultants.  In assessing the effectiveness of our internal control
over financial reporting we utilized the criteria set forth by the Committee of
Sponsoring Organizations of the Treadway Commission as published in "Internal
Control over Financial Reporting – Guidance for Smaller Public
Companies."  Based on that evaluation, our Chief Executive Officer and
Principal Financial and Accounting Officer found material weaknesses in our
disclosure controls and procedures and therefore concluded that our disclosure
controls and procedures as of the end of the period covered by this report were
ineffective.
  The
determination of ineffective internal control is based upon the lack of
separation of duties. Our entire management is comprised of one individual. It
is impossible to create a system of checks and balances with oversight in this
circumstance. It is management’s intention to bring additional people into the
management team. Once there are more members of management, responsibilities can
be divided and oversight roles created.  Although the Company does not
currently have sufficient financial resources to hire additional management, the
Company hopes to have such resources, make such hires and create segregation of
duties and proper oversight within 12 months.  The Company estimates
the annual costs of such remediation efforts in the form of additional
management will be $150,000 per year.
 
 We
understand that remediation of disclosure controls is a continuing work in
progress due to the issuance of new standards and
promulgations.  However, remediation of the material weaknesses
described above is among our highest priorities.  Our management will
periodically assess the progress and sufficiency of our ongoing initiatives and
make adjustments as and when necessary.  As of the date of this
report, our management believes that our efforts will remediate the material
weaknesses in internal control over financial reporting as described
above.
  Notwithstanding
these material weaknesses which are described below, our management performed
additional analyses, reconciliations and other post-closing procedures and has
concluded that the Company’s consolidated financial statements for the periods
covered by and included in this Annual Report on Form 10-K are fairly stated in
all material respects in accordance with generally accepted accounting
principles in the U.S. for each of the periods presented herein.
 24
 Inherent
Limitations Over Internal Controls
 
 The
Company's internal control over financial reporting is designed to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. The Company's internal control over
financial reporting includes those policies and procedures that:
 
 (i)   pertain
to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the Company's assets;
 
 (ii)   provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that the Company's receipts and expenditures are
being made only in accordance with authorizations of the Company's management
and directors; and
 
 (iii)   provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the Company's assets that could have a
material effect on the financial statements.
 Management
does not expect that the Company's internal controls will prevent or detect all
errors and all fraud. A control system, no matter how well designed and
operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met. Further, the design of a control
system must reflect the fact that there are resource constraints, and the
benefits of controls must be considered relative to their costs. Because of the
inherent limitations in all control systems, no evaluation of internal controls
can provide absolute assurance that all control issues and instances of fraud,
if any, have been detected. Also, any evaluation of the effectiveness of
controls in future periods are subject to the risk that those internal controls
may become inadequate because of changes in business conditions, or that the
degree of compliance with the policies or procedures may
deteriorate.
 
 Management's
Report on Internal Control Over Financial Reporting
 
 Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting for the company as defined in Rules 13a-15(f)
and 15d-15(f) under the Exchange Act. Our internal control over financial
reporting is designed to provide reasonable assurance regarding the (i)
effectiveness and efficiency of operations, (ii) reliability of financial
reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles, and (iii) compliance
with applicable laws and regulations. Our internal controls framework is based
on the criteria set forth in the Internal Control - Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO).
 
 Management,
consisting of our Chief Executive Officer and Principal Accounting and Financial
Officer, is responsible for establishing and maintaining adequate internal
control over the Company's financial reporting.
 
 Management
assessed the effectiveness of our internal control over financial reporting as
of December 31, 2008, utilizing the criteria set forth by the Committee of
Sponsoring Organizations of the Treadway Commission as published in "Internal
Control over Financial Reporting – Guidance for Smaller Public
Companies."  Based on the assessment by management, we determined that
our internal control over financial reporting was ineffective as of December 31,
2008.
 
 As a
non-accelerated smaller reporting filer, management's assessment of the
effectiveness of our internal control over financial reporting as of December
31, 2008 is not required to be audited by Moore & Associates, Chartered, our
independent registered public accountant until our fiscal year ending December
31, 2009.
  25
  Changes
in Internal Control of Financial Reporting
 
 During
the fiscal year ended there were no changes in our internal control over
financial reporting that have materially affected, or are reasonably likely to
affect, our internal control over financial reporting.
 
 ITEM
9B. OTHER INFORMATION.
 
 On
December 1, 2008, the Company signed a consulting agreement with Brass
Consulting Ltd.  The agreement can be cancelled at 30 days notice and
provides that Brass will service and support the www.searchforvideo.com
site in exchange for the net revenue that the site produces from advertising
after expenses.  The agreement provides that the domain name www.searchforvideo.com
will become property of Brass in the event that the Company does not pay the
amounts due under the contract in a timely fashion.
 
 In
addition, on April 10, 2009, the Company notified Minerva Technology Ltd. that
it was cancelling the Technology License Agreement of August 23, 2007 due to
non-performance by Minerva and lack of resources by the Company to pursue
development of the Argon search engine technology.  The Company will
not issue the 23,000,000 shares under the agreement nor will it utilize the
Argon technology.
 
 Furthermore,
in March, 2009, the Company borrowed $50,000 from various shareholders at 10%
annual interest.  The debt is convertible at the option of the holder
into the Company’s common stock at the per share price of the Company’s next
financing or at 30 day average closing price of the Company’s stock, whichever
is lower.  The debt is due by December 31, 2009.
  26
 
 PART
III
 
 ITEM
10  . DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND
CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE
ACT.
 
 The
following table sets forth our directors and executive officers and their ages
as of the fiscal year ended December 31, 2008:
 
 Name
                  
                  Age
                  
                  PositionJenifer
      Osterwalder
                  
                  43
                  
                  Chief
      Executive Officer, Principal Accounting Officer, President, Treasurer,
      Secretary and DirectorAlexander
      Khersonski
                  
                  36
                  
                  Director
 
 Jenifer Osterwalder - Chief Executive Officer, Principal
Accounting Officer, President, Treasurer, Secretary and
Director
 
 Jenifer
Osterwalder has served as our Chief Executive Officer, Principal Accounting
Officer, President, Treasurer, Secretary and as a director since March 7, 2005.
Previously, from January 2005 to March 2005, Ms. Osterwalder served as
President, Chief Executive Officer, Treasurer, Secretary and as a director FUSA
Technology Investments Corp. From January 2000 to January 2005 she served as an
consultant investment banker to Five Seas Securities, Ltd., a securities firm in
British Columbia, Canada. From August 2004 to December 2004 Ms. Osterwalder
served as a consultant Manger to International Conference Services, Ltd., a
conference and destination management firm in British Columbia, Canada. From
January 2003 to December 2003, she served as a consultant Investment Liaison and
Marketing Director for Terrikon Corporation, in British Columbia, Canada. Ms.
Osterwalder received her Bachelor of Science in Business Administration in
marketing and logistics from Ohio State University.
 
 Alexander Khersonski
- Director
 
 Alexander
Khersonski has served as one of our directors since March 7, 2005. In addition,
Mr. Khersonski currently serves as a Senior Accountant for Service Corporation
International (formerly Alderwood Group, Inc.), a provider of funeral, cremation
and cemetery services throughout North America, a position which he has held
since November 2004. From August 2004 to October 2004 Mr. Khersonski served as
Assistant Controller for Scorpio Mining Corporation, a publicly traded mineral
exploration company in British Columbia, Canada. From September 2003 to July
2004 he served as a Corporate Accountant in client services at Dawn Pacific
Management Corporation, an accounting and regulatory maintenance services firm
in British Columbia, Canada. From January 2000 to August 2000 he served as a
consultant to ICC International Business Services Ltd., in British Columbia,
Canada. Additionally, from September 2000 to August 2003 Mr. Khersonski served
as a Senior Accountant for the Jewish Community Centre of Greater Vancouver. Mr.
Khersonski received holds a Certified General Accountant Designation from the
Certified General Accountants Association of British Columbia, Canada. He
received his Bachelor of Science in economics and management from Chelyabinsk
State Technical University, Chelyabinsk, Russia.
  27
  FAMILY
RELATIONSHIPS
 
 There are
no family relationships, by blood or marriage, among any of our directors or
executive officers.
 
 INVOLVEMENT
IN CERTAIN LEGAL PROCEEDINGS
 
 During
the past five years, none of our directors, executive officers and control
persons have been involved in any of the following events:
 
 ·
              any
      bankruptcy petition filed by or against any business of which such person
      was an executive officer either at the time of the bankruptcy or within
      two years prior to that time;
 
 ·
              any
      conviction in a criminal proceeding or being subject to a pending criminal
      proceeding (excluding traffic violations and other minor
      offenses);
 
 ·
              being
      subject to any order, judgment, or decree, not subsequently reversed,
      suspended or vacated, of any court of competent jurisdiction, permanently
      or temporarily enjoining, barring, suspending or otherwise limiting his
      involvement in any type of business, securities or banking activities;
      and
 
 ·
              being
      found by a court of competent jurisdiction (in a civil action), the
      Securities and Exchange Commission or the Commodity Futures Trading
      Commission to have violated a federal or state securities or commodities
      law, and the judgment has not been reversed, suspended, or
      vacated.
 
 BOARD
OF DIRECTORS COMMITTEES
 
 As of the
date of this annual report on Form 10-K for the fiscal year ended December 31,
2008, we have no standing committees and our entire board of directors serves as
our audit, compensation and nominating committees. Our board of directors has
determined that Alexander Khersonski, a member of our board, qualifies as an
audit committee financial expert (as defined in Regulation 228.407(d)(5)(ii) of
Regulation S-B).
 
 As of the
date of this annual report on Form 10-K for the fiscal year ended December 31,
2008, there have been no material changes to the procedures by which our
security holders may recommend nominees to our board of directors.
 
 CODE
OF ETHICS
 
 As of the
date of this annual report on Form 10-K for the fiscal year ended December 31,
2008, we have not yet adopted a code of ethics for our principal executive
officer, principal financial officer or principal accounting officer. We are,
however, in the process of drafting such a code of ethics and, upon adoption, it
we will provide a copy of our code of ethics, without charge, to any person who
so requests a copy, in writing, at: FUSA Capital Corporation., 1420 Fifth
Avenue, 22nd Floor, Seattle, Washington 98101.
 
 COMPLIANCE
WITH SECTION 16(A)
 
 Section
16(a) of the Exchange Act requires our directors and executive officers, and
persons who own more than ten percent of a registered class of our equity
securities, to file with the SEC initial reports of ownership and reports of
changes in ownership of our common stock and other equity securities of ours.
Officers, directors and greater than ten percent stockholders are required by
the SEC’s regulations to furnish us with copies of all Section 16(a) forms they
filed.
  28
 
 The
following table sets for the compliance reporting under Section 16(a) during the
last fiscal year.
 
 Number
      of
                    Late
      Reports
                  
                  Number
      of
                    Transactions
      Not
                    Timely
      Reported
                  
                  Failure
                    to
      FileJenifer
      Osterwalder
                  0
                  
                  0
                  
                  1Alexander
      Khersonski
                  0
                  
                  0
                  
                  0Tommy
      Jo St. John
                  0
                  
                  0
                  
                  1
 
 ITEM 11. EXECUTIVE COMPENSATION.
 
 The
following table sets forth the total compensation awarded to, earned by, or paid
to our Chief Executive Officer during each of the last two completed fiscal
years. No other individuals are employed by us or have earned a total annual
salary and bonus in excess of $100,000 during any of the last two completed
fiscal years.
 
 SUMMARY COMPENSATION
TABLE
 
 Name
      and Principal Position
                  
                  Year
                  
                  Salary
                  
                  Bonus
                  
                  Stock
      Awards
                  
                  Option
      Awards
                  
                  Non-Equity
                    Incentive
      Plan
                    Compensation
                  
                  Nonqualified
                    Deferred
                    Compensation
      Earnings
                  
                  All
      Other Compensation
                  
                  TotalJenifer
      Osterwalder
                  
                  2008
                  
                  $125,000
                  
                  -
                  
                  -
                  
                  -
                  
                  -
                  
                  -
                  
                  -
                  
                  $125,000Chief
      Executive Officer
                  
                  2007
                  
                  $125,000
                  
                  -
                  
                  -
                  
                  -
                  
                  -
                  
                  -
                  
                  -
                  
                  $125,000
  EMPLOYMENT
AGREEMENTS
 
 Ms.
Osterwalder is employed pursuant to a month to month employment agreement, which
commenced on April 26, 2005. The agreement originally provided for an annual
base salary of $51,000 with a potential for an annual bonus equal to 150% of the
base salary, however, in 2007 the annual base salary was increased to $125,000.
The agreement also provides for the issuance of options to purchase up 3,000,000
common shares subject to vesting to be determined by the board of directors.
Since the agreement was entered into, the Board of Directors elected to grant
Ms. Osterwalder options to purchase 5,000,000 common shares in lieu of the
3,000,000 that had been specified in her employment agreement. In the event Ms.
Osterwalder is terminated by us, other than for cause, we are required to pay
her severance of up to 150% of her base salary plus the acceleration of all then
outstanding options.
 
 As of the
date of this annual report on Form 10-K for the fiscal year ended December 31,
2008, we have no other employment agreements in place with any of our other
executive officers, directors or employees.
 
 OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR END
 
 There
were no unexercised options, stock that had not vested, or equity incentive plan
awards outstanding for our Chief Executive Officer as of the end of the fiscal
year ended December 31, 2008.
  29
 
 COMPENSATION
OF DIRECTORS
 
 Pursuant
to authority granted under our Article II, Section 2.16 of our bylaws, directors
are entitled to such compensation as our board of directors shall from time to
time determine. The following table sets forth the compensation of our directors
for the fiscal year ended December 31, 2008:
  
  DIRECTOR COMPENSATIONName
                  
                  Fees
      Earned
                    or
      Paid
                    in
      Cash
                  
                  Stock
                    Awards
                  
                  Option
                    Awards
                  
                  Non-Equity
                    Incentive
      Plan
                    Compensation
                  
                  Non-
                    Qualified
                    Deferred
                    Compensation
                    Earnings
                  
                  All
      Other
                    Compensation
                  
                  TotalAlexander
      Khersonski
                  
                  $
                  0
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  $
                  0
   ITEM
12. SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS.
 
 SECURITIES
AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
 
 The
following table sets forth information with respect to compensation plans under
which our equity securities are authorized for issuance as of the end of the
fiscal year ended December 31, 2008.
 
 EQUITY
COMPENSATION PLAN INFORMATION
 
 Number
      of securities to be issued upon exercise of outstanding options, warrants
      and rights
                    
                    (a)
                  
                  Weighted-average
      exercise price of outstanding options, warrants and rights
                    
                    (b)
                  
                  Number
      of securities remaining available for future issuance under equity
      compensation plans (excluding securities reflected in column
      (a))
                    
                    (c)Equity
      compensation plans approved by security holders
                  
                  --
                  
                  --
                  
                  --Equity
      compensation plans not approved by security holders
                  
                  454,549
                  
                  $0.74
                  
                  5,545,451Total
 
 SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
 The
following table sets forth certain information regarding the beneficial
ownership of our common stock as of March 31, 2008. The information in these
tables provides ownership information for:
 
 ·
              each
      person known by us to be the beneficial owner of more than a 5% of our
      common stock
 
 ·
              each
      of our directors and executive officers;
and
 
 ·
              all
      of our directors and executive officers as a
  group.
  30
  Beneficial
ownership has been determined in accordance with the rules and regulations of
the SEC and includes voting or investment power with respect to our common stock
and those rights to acquire additional shares within sixty days. Unless
otherwise indicated, the persons named in the table below have sole voting and
investment power with respect to the number of shares of common stock indicated
as beneficially owned by them, except to the extent such power may be shared
with a spouse. Common stock beneficially owned and percentage ownership are
based on 69,947,083 shares of common stock currently outstanding (reflects a
three-for-one common stock dividend of our common shares that occurred on April
22, 2005) and no additional shares potentially acquirable within sixty days. The
address of each person listed is care of FUSA Capital Corporation., 701 Fifth
Avenue, Suite 4200, Seattle, Washington, 98104.
  Name
                      
                      Amount
      and
                        Nature
      of Ownership
                      
                      Percent of
      Class*Jenifer
      Osterwalder (1)
                      
                      5,900,000
                      
                      8.4 %Tommy
      Jo St. John (2)
                      
                      6,436,976
                      
                      9.2
      %Alexander
      Khersonski (3)
                      
                      100,000
                      
                      0.1%All
      officers, directors, and 5% or greater shareholders as a group (3
      persons)
                      
                      12,436,976
                      
                      17.7%
 
 (1)
              Consists
      of stock options to acquire up to 5,000,000 shares of common stock, none
      of which are presently exercisable and 900,000 shares of common stock
      directly owned.
 
 (2)
              Consists
      of 7,510,000 shares of common stock directly
  owned.
 
 (3)
              Consists
      of stock options to acquire up to 100,000 shares of common stock, none of
      which are presently exercisable.
 
 
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS AND DIRECTOR INDEPENDENCE.
 
 During
the year ended December 31, 2008, in lieu of paying our former Chief Technology
Officer, Tommy Jo St. John, his earned compensation of $27,402 directly, we paid
it instead to a consulting company owned by Mr. St John. This amount relates
principally to Mr. St John’s efforts, through December 31, 2008, in furthering
the development of our audio and video search engine
technology.
  31
  ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
 
 The
following table sets forth the aggregate amount of various professional fees
billed by our principal accountants with respect to our last two fiscal
years:
 
 2008
                                  
                                  
                                  2007Audit
      fees
                                  
                                  $
                                  6,000
                                  
                                  
                                  $
                                  6,000Audit-related
      fees
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Tax
      fees
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -All
      other fees
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Total
                                  
                                  $
                                  6,000
                                  
                                  
                                  $
                                  6,000
 
 All audit
fees are approved by our board of directors. Moore & Associates, Chartered
(“Moore”) were our principal accountants for the fiscal year ended December 31,
2007 and December 31, 2008, they did not provide any non-audit services to
us.
 
 Audit
Fees
 
 Audit
fees billed for professional services rendered by Moore & Associated, during
the fiscal year ended December 31, 2008 and the twelve months ended December 31,
2007, respectively, for the audit of our annual consolidated financial
statements, review of the consolidated financial statements included in our
quarterly reports on Form 10-Q, and any services provided in connection with
statutory and regulatory filings or engagements for those years ended, totaled
approximately $6,000 and $6,000, respectively.
 
 Audit-Related
Fees
 
 Audit-related
fees billed by Moore & Associates during the fiscal year ended December 31,
2007 and December 31, 2008, respectively, for assurance and related services and
totaled approximately $0 and $0, respectively.
 
 Tax
Fees
 
 Tax fees
billed by Moore & Associates during the fiscal year ended December 31, 2008
and the twelve months ended December 31, 2007, respectively, for tax compliance,
tax advice and tax planning services totaled approximately $0 and $0,
respectively.
 
 All
Other Fees
 
 There
were no fees billed by Moore & Associates during the fiscal year ended
December 31, 2008 and the twelve months ended December 31, 2007, for services
rendered other than the amounts set forth above.
  32
  ITEM
15. EXHIBITS.
 
 
 No.
                                                              Description
      of Exhibit2.1
                                                              Plan
      and Agreement of Reorganization by and between FUSA Capital Corporation
      and FUSA Technology Investment Corporation, dated March 7, 2005,
      incorporated by reference to Exhibit 2.1 on Form 8-K filed March 8,
      2005.3(i)(1)
                                                              Articles
      of Incorporation of FUSA Capital Corporation, dated September 13, 2000,
      incorporated by reference to Exhibit 3(a) on Form 10-SB filed May 1,
      2003.3(i)(2)
                                                              Certificate
      of Amendment to Articles of Incorporation of FUSA Capital Corporation,
      dated June 17, 2007, incorporated by reference to Exhibit 2.1 on Form 8-K
      filed July 7, 2004.3(ii)
                                                              By-laws
      of FUSA Capital Corporation, dated September 14, 2000, incorporated by
      reference to Exhibit 3(b) on Form 10-SB filed May 1,
  2003.10.1
                                                              Technology
      License Agreement between the registrant and Minerva Technologies, Ltd.
      Dated August 23, 2007 and incorporated by reference to Exhibit 10.1to Form
      8K filed on August 23, 2007.10.2
                                                              2005
      Stock Option Plan, dated April 18, 2005, incorporated by reference to
      Exhibit 99.1 on Form 8-K filed April 19, 2005.10.3
                                                              Consulting
      Agreement with Brass Consulting Ltd., dated December 1,
    2008.10.4
                                                              Convertible
      Promissory Note for $50,000 dated April 11, 2009 issued to FSAC Investment
      Partners.31.1
                                                              Certification
      of FUSA Capital Corporation Chief Executive Officer, Jenifer Osterwalder,
      required by Rule 13a-14(a) or Rule 15d-14(a), dated March 31, 2007. FILED
      HEREWITH31.2
                                                              Certification
      of FUSA Capital Corporation Chief Financial Officer, Jenifer Osterwalder,
      required by Rule 13a-14(a) or Rule 15d-14(a), dated March 31, 2007. FILED
      HEREWITH32.1
                                                              Certification
      of FUSA Capital Corporation Chief Executive Officer, Jenifer Osterwalder,
      required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter
      63 of Title 18 of the United States Code (18 U.S.C. 1350), dated March 28,
      2007. FILED HEREWITH.32.2
                                                              Certification
      of FUSA Capital Corporation Chief Financial Officer, Jenifer Osterwalder,
      required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter
      63 of Title 18 of the United States Code (18 U.S.C. 1350), dated March 28,
      2007. FILED
HEREWITH.
  33
  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.
  
  Date:
      April 13, 2009
                FUSA CAPITAL
      CORPORATIONBy:
                /s/ Jenifer
      OsterwalderJenifer
      OsterwalderChief
      Executive Officer &
                  Principal
      Financial Officer
  
 
 
 34