SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

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

                   For the fiscal year ended December 31, 2005
                                -----------------

  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                                      1934

For the transition period from _________________ to __________________


                        Commission file number: 001-31546


                            FOOTHILLS RESOURCES, INC.
                ------------------------------------------------------
                (Exact name of Registrant as specified in its charter)


            Nevada                                   98-0339560
-------------------------------            ------------------------------------
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation or organization)



                 Canadiana Lodge, Wellfield Close, Coad's Green
                     Launceston, Cornwall, England, PL15 7LR
                 ----------------------------------------------
                    (Address of principal executive offices)

                                  01566 782 199
               --------------------------------------------------
               Registrant's telephone number, including area code

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

Title of each class                    Name of each exchange on which
to be so registered                    each class is to be registered

      None                                       None

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


                         Common Stock, Par Value $0.001
                         ------------------------------
                                (Title of Class)

                                       1
<page>


Check whether the issuer is not required to file reports  pursuant to Section 13
or 15(d) of the Exchange Act. [ ] Note - Checking the box above will not relieve
any registrant  required to file reports  pursuant to Section 13 or 15(d) of the
Exchange Act from their obligations under those Sections.

Check  whether the Issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Securities  Exchange  Act  during the past 12 months (or for
such shorter period that the registrant was required to file such reports),  and
(2) has been subject to such filing requirements for the past 90 days.

                     Yes      X                        No
                         ------------                     -------------

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

                      Yes      X                               No
                         ------------                     -------------

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

                         Yes  [ X ]                     No  [   ]


State issuer's revenues for its most recent fiscal year:           Nil
                                                          ----------------------

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates  computed by reference to the price at which the common equity
was sold,  or the average bid and asked  price of such  common  equity,  as of a
specified  date within the past 60 days.  (See  definition  of affiliate in Rule
12b-2 of the Exchange Act.)

                          $55,800 as at March 15, 2006
                          -----------------------------
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.

                          39,356,189 on March 15, 2006
                          ----------------------------

                                       2
<page>


TABLE OF CONTENTS

                                                                          Page
PART I

ITEM 1:  DESCRIPTION OF BUSINESS............................................4
ITEM 2:  DESCRIPTION OF PROPERTY............................................6
ITEM 3:  LEGAL PROCEEDINGS..................................................6
ITEM 4:  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS................6
PART II
ITEM 5:  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS...........6
ITEM 6:  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION..........7
ITEM 7:  FINANCIAL STATEMENTS...............................................7
ITEM 8:  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
                AND FINANCIAL DISCLOSURES..................................21
PART III
ITEM 9:  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS......22
ITEM 10:  EXECUTIVE COMPENSATION...........................................22
ITEM 11:  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT...23
ITEM 12:  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...................23
PART IV
ITEM 13:  EXHIBITS AND REPORTS.............................................24
ITEM 14:  PRINCIPAL ACCOUNTANT FEES AND SERVICES ......................... 24



                                       3
<page>

PART I

ITEM 1:  DESCRIPTION OF BUSINESS
In General

We are a pre-exploration stage company. In 2001, we acquired a mining lease on a
total of five unpatented  lode mineral claims  property  located in the State of
Nevada.  During  the year,  the  owners  of these  claims  terminated  the lease
agreement  due to our  failure  to make a  required  lease  payment.  Management
continues  to review  other  potential  resource  and  non-resource  assets  for
acquisition.

Employees

We have no employees as of the date of this annual report.

Research and Development Expenditures

We have not incurred any exploration  expenditures to date. We have not incurred
any other research or development expenditures since our incorporation.

Subsidiaries

We do not have any subsidiaries.

Patents and Trademarks

We do not own, either legally or beneficially, any patents or trademarks.

Risk Factors

In addition to the other  information  in this  current  report,  the  following
factors should be carefully considered in evaluating our business and prospects:

IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL FAIL.

Our current  operating funds are less than necessary in order for us to identify
and acquire  another asset and to complete any  subsequent  business plan. As of
December 31, 2005, we had cash in the amount of $3,188. We currently do not have
any operations and we have no income.

We  will  require  additional   financing  in  order  to  sustain  our  business
operations.  We do not currently have any  arrangements for financing and we can
provide no assurance  to  investors  that we will be able to find or obtain such
financing  on  acceptable  terms if required.  The most likely  source of future
funds presently  available to us is through the sale of equity  securities.  Any
sale of equity securities will result in dilution to existing shareholders.

                                       4
<page>

WE MAY NOT BE ABLE TO OPERATE AS A GOING CONCERN AND OUR BUSINESS MAY FAIL.

The Independent  Auditor's  Report to our audited  financial  statements for the
fiscal  year  ended  December  31,  2005,  indicates  that there are a number of
factors  that raise  substantial  doubt about our ability to continue as a going
concern.  Such  factors  identified  in the  report  are:  we are in a net  loss
position; we have not attained profitable operations;  and we are dependent upon
obtaining adequate financing to fulfil our exploration activities. If we are not
able to  continue as a going  concern,  it is likely  investors  will lose their
investments.

BECAUSE OUR SOLE DIRECTOR OWNS 86.7% OF OUR  OUTSTANDING  COMMON STOCK, HE COULD
MAKE AND CONTROL  CORPORATE  DECISIONS THAT MAY BE  DISADVANTAGEOUS  TO MINORITY
SHAREHOLDERS.

Our sole officer and director,  Mr. J. Earl Terris,  owns approximately 86.7% of
the  outstanding  shares  of our  common  stock.  Accordingly,  he  will  have a
significant  influence in determining the outcome of all corporate  transactions
or  other  matters,  including  mergers,  consolidations  and the sale of all or
substantially all of our assets, and also the power to prevent or cause a change
in control.  The  interests of our director may differ from the interests of the
other   stockholders   and  thus  result  in   corporate   decisions   that  are
disadvantageous to other shareholders.

BECAUSE  OUR  PRESIDENT  HAS  OTHER  BUSINESS  INTERESTS,  HE MAY NOT BE ABLE OR
WILLING  TO  DEVOTE A  SUFFICIENT  AMOUNT  OF TIME TO OUR  BUSINESS  OPERATIONS,
CAUSING OUR BUSINESS TO FAIL.

Our  president,  sole officer and  director,  Mr. Terris is not bound to spend a
minimum  amount of his  business  time on business  management  services for our
company.  While Mr. Terris  presently  possesses  adequate time to attend to our
interests,  it is  possible  that the  demands  on Mr.  Terris  from  his  other
obligations  could  increase  with the result that he would no longer be able to
devote  sufficient  time to the  management  of our business.  In addition,  Mr.
Terris  may not  possess  sufficient  time for our  business  if the  demands of
managing our business increased substantially beyond current levels.

OUR STOCK PRICE WILL LIKELY BE VOLATILE.

We anticipate  that the market price of our common stock will be subject to wide
fluctuations in response to several factors, including:

(1) actual or  anticipated  variations  in our  results of  operations;  (2) our
ability or inability to generate new revenues;  (3) increased  competition;  and
(4) conditions and trends in the mineral exploration industry.

Further,  our stock  price may be  affected  by factors  that are  unrelated  or
disproportionate to our operating  performance.  These market  fluctuations,  as
well as general economic,  political and market conditions,  such as recessions,
interest rates or international  currency  fluctuations may adversely affect the
market price of our common stock.

                                       5
<page>


Forward-Looking Statements

This Form 10-KSB  contains  forward-looking  statements  that involve  risks and
uncertainties.  We use words such as anticipate,  believe, plan, expect, future,
intend and similar expressions to identify such forward-looking  statements. You
should not place too much  reliance  on these  forward-looking  statements.  Our
actual results are likely to differ  materially from those  anticipated in these
forward-looking  statements  for many  reasons,  including the risks faced by us
described in the above "Risk Factors" section and elsewhere in this document.

ITEM 2:  DESCRIPTION OF PROPERTY

Our executive  offices are located at Canadiana Lodge,  Wellfield Close,  Coad's
Green  Launceston,  Cornwall,  England.  Our president,  J. Earl Terris provided
principal executive office space and telephone service free of charge until June
10, 2004.  Effective July 1, 2004,  the Company was charged $500 per month.  The
costs  associated  with the use of the telephone and mailing address were deemed
by management to be reasonable.  Effective April 1, 2005, the president provided
certain administrative  services at no charge to the Company.  Accordingly,  the
fair  value  for  these  services  has been  recorded  as  contributed  surplus.
Effective  August 1, 2005, the president  started to charge $2,500 per month for
his administrative services.

ITEM 3:  LEGAL PROCEEDINGS

There are no legal proceedings pending or threatened against us.

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

No matter was submitted to a vote of security  holders during the fourth quarter
of our 2005 fiscal year, through the solicitation of proxies or otherwise.

PART II

ITEM 5: MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

While our  shares of  common  stock  have been  quoted  for  trading  on the OTC
Bulletin  Board since  December 23, 2004,  there have not been any trades of our
stock through its facilities since that date.

We have 13 shareholders of record as at the date of this annual report.

Dividends

There are no  restrictions  in our  articles  of  incorporation  or bylaws  that
prevent us from declaring  dividends.  The Nevada Revised Statutes,  however, do
prohibit  us  from  declaring  dividends  where,  after  giving  effect  to  the
distribution of the dividend:

1.       we would not be able to pay our debts as they become due  in  the usual
         course of business; or

                                       6
<page>

2.       our  total    assets    would   be   less   than  the sum of our  total
         liabilities  plus the amount that would be needed to satisfy the rights
         of  shareholders  who  have  preferential   rights  superior  to  those
         receiving the distribution.

         We have not declared any  dividends,  and we do not plan to declare any
         dividends in the foreseeable future.

ITEM 6: MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Plan of Operation

Our plan of operation for the twelve months following the date of this report is
to review other potential resource and non-resource  assets for acquisition.  We
anticipate  spending  the  following  over the next 12 months on  administrative
fees:

   *         $20,000 on legal fees
   *         $18,000 on accounting and audit fees
   *         $2,000 on EDGAR filing fees
   *         $1,000 on transfer agent fees
   *         $42,000 on general administration costs

Total  expenditures  over the next 12  months,  therefore,  are  expected  to be
approximately $83,000.

We currently have nominal cash on hand and cannot satisfy our cash  requirements
without raising  additional funds. We anticipate that additional funding will be
required  in the form of equity  financing  from the sale of our  common  stock.
However,  we cannot provide investors with any assurance that we will be able to
raise  sufficient  funding from the sale of our common stock to fund both phases
of the  exploration  program.  We do not have any  arrangements in place for any
future equity financing.

Results of Operations For the Year Ended December 31, 2005

We incurred a net loss of $331,841 for the  year-ended  December  31,  2005,  as
compared  to a loss of $30,501 in the same period in 2004.  The  increase in net
loss was  primarily  due to an  increase in legal fees in the amount of $280,100
primarily  related to an  acquisition  that did not  materialize.  In  addition,
management  fees to a private  company  owned by Mr. J.  Earl  Terris,  our sole
officer and director, increased by $13,500.

During fiscal year 2005, we incurred accounting  fees of $18,346 (2004: $6,886),
management fees of $19,500 (2004: $6,000),   resource   property   costs of $Nil
(2004: $7,671), and transfer  agent fees of $4,042 (2004: $3,577). At  year-end,
we had cash on hand of $3,188. Our  liabilities  at  the same date was $325,599,
which consisted of accounts payable of $10,048, due  to  related party of $2,500
and loans and accrued interest of $313,051.


ITEM 7:  FINANCIAL STATEMENTS

                                       7
<page>

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Stockholders,
Foothills Resources, Inc.

We have audited the accompanying balance sheets of Foothills Resources,  Inc. (A
Pre-exploration  Stage  Company)  as of  December  31,  2005  and  2004  and the
statements of operations,  stockholders'  equity (deficiency) and cash flows for
each of the years ended  December 31, 2005 and 2004 and the period  November 17,
2000 (Date of Inception) to December 31, 2005.  These  financial  statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting  Oversight Board (United States of America).  Those standards require
that we plan and perform an audit 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,  these financial statements referred to above present fairly, in
all material respects, the financial position of Foothills Resources, Inc. as of
December 31, 2005 and 2004 and the results of its  operations and its cash flows
for each of the years  ended  December  31,  2005 and 2004 and the  period  from
November 17, 2000 (Date of Inception)  to December 31, 2005, in conformity  with
accounting principles generally accepted in the United States of America.

The  accompanying  financial  statements  referred  to above have been  prepared
assuming that the Company will continue as a going concern. As discussed in Note
1 to the financial statements,  the Company is in the pre-exploration stage, and
has no  established  source of revenue and is  dependent on its ability to raise
capital from shareholders or other sources to sustain operations. These factors,
along with other  matters as set forth in Note 1, raise  substantial  doubt that
the  Company  will  be able  to  continue  as a  going  concern.  The  financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.


Vancouver, Canada                                              "AMISANO HANSON"
January 31,  2006,  except as to Note 11,  which is       Chartered Accountants
as of February 15, 2006

                                       8
<page>


                            FOOTHILLS RESOURCES, INC.
                        (A Pre-exploration Stage Company)
                                 BALANCE SHEETS
                           December 31, 2005 and 2004
                             (Stated in US Dollars)


<table>
<caption>
                                                     ASSETS                        2005               2004
                                                     ------                        ----               ----

                                                                         <c>                 <c>
Current
    Cash                                                                    $           3,188   $           3,472
                                                                            =================   =================

LIABILITIES

Current
    Accounts payable and accrued liabilities - Notes 3, 4 and 7             $          10,048   $          18,197
    Due to related party - Notes 3 and 7                                                2,500              38,963
    Loans payable - Note 4                                                            313,051                   -
                                                                            -----------------   -----------------

                                                                                      325,599              57,160
                                                                            -----------------   -----------------

STOCKHOLDERS' DEFICIENCY

Preferred stock, $0.001 par value
    1,000,000 shares authorized, none outstanding
Common stock, $0.001 par value
    100,000,000 shares authorized
         39,356,189 (2004: 6,426,077) shares outstanding - Note 3                      39,356              6,426
Additional paid-in capital - Note 7                                                   104,562             74,374
Deficit accumulated during the pre-exploration stage                                 (466,329)          (134,488)
                                                                            -----------------   ----------------

                                                                                     (322,411)           (53,688)
                                                                            -----------------   ----------------

                                                                            $           3,188   $          3,472
                                                                            =================   ================
</table>

Nature and Continuance of Operations - Note 1
Commitments - Note 5
Subsequent Event - Note 11



                             SEE ACCOMPANYING NOTES

                                       9
<page>


                            FOOTHILLS RESOURCES, INC.
                        (A Pre-exploration Stage Company)
                            STATEMENTS OF OPERATIONS
                 for the years ended December 31, 2005 and 2004
           and for the period November 17, 2000 (Date of Inception) to
                                December 31, 2005
                             (Stated in US Dollars)


<table>
<caption>
                                                                                                   November 17, 2000
                                                                        Years ended               (Date of Inception)
                                                                       December 31,                 to December 31,
                                                                  2005              2004                 2005
                                                                  ----              ----                 ----

                                                         <c>               <c>               <c>
Expenses
    Accounting and audit fees                               $        18,346   $         6,886   $           46,717
    Bank charges                                                        195               367                1,485
    Consulting fees                                                       -                 -                5,000
    Deferred acquisition costs written off - Note 6                 280,100                 -              280,100
    Interest - Note 4                                                 6,658                 -                6,504
    Legal (recovery)                                                 (3,000)            3,000               38,227
    Management fees - Notes 3 and 7                                  19,500             6,000               43,000
    Office and miscellaneous - Notes 3 and 7                          6,000             3,000                9,893
    Mineral property costs                                                -             7,671               21,725
    Transfer agent and filing fees                                    4,042             3,577               12,966
    Travel                                                                -                 -                  712
                                                            ---------------   ---------------   ------------------

Net loss for the period                                     $      (331,841)  $       (30,501)  $         (466,329)
                                                            ===============   ===============   ==================

Basic loss per share                                        $        (0.01)   $         (0.00)
                                                            ==============    ===============

Weighted Average Number of Shares Outstanding                    35,566,972         6,426,077
                                                            ===============   ===============
</table>



                             SEE ACCOMPANYING NOTES

                                       10
<page>



                            FOOTHILLS RESOURCES, INC.
                        (A Pre-exploration Stage Company)
                            STATEMENTS OF CASH FLOWS
                 for the years ended December 31, 2005 and 2004
           and for the period November 17, 2000 (Date of Inception) to
                                December 31, 2005
                             (Stated in US Dollars)


<table>
<caption>
                                                                                              November 17, 2000
                                                                   Years ended               (Date of Inception)
                                                                  December 31,                 to December 31,
                                                             2005              2004                  2005
                                                             ----              ----                  ----

                                                    <c>               <c>              <c>
Cash Flows used in Operating Activities
    Net loss for the period                            $      (331,841)  $       (30,501)  $         (466,329)
    Add item not affecting cash
      Non-cash administrative expenses                           8,500                 -                8,500
      Deferred acquisition costs written off                   280,100                 -              280,100
    Changes in non-cash working capital items
    related to operations:
      Prepaid expenses                                               -               200                    -
      Accounts payable and accrued liabilities                   5,351            10,820               23,548
                                                       ---------------   ---------------   ------------------

                                                               (37,890)          (19,481)            (154,181)
                                                       ---------------   ---------------   ------------------

Cash Flows used in Investing Activity
    Deferred acquisition costs                                (280,100)                -             (280,100)
                                                       ---------------   ---------------   ------------------

Cash Flows from Financing Activities
    Capital stock issued                                             -                 -               80,800
    Increase (decrease) in due to related party                  4,655            22,272               43,618
    Increase in loans payable                                  313,051                 -              313,051
                                                       ---------------   ---------------   ------------------

                                                               317,706            22,272              437,469
                                                       ---------------   ---------------   ------------------

Increase (decrease) in cash during the period                     (284)            2,791                3,188

Cash, beginning of the period                                    3,472               681                    -
                                                       ---------------   ---------------   ------------------

Cash, end of the period                                $         3,188   $         3,472   $            3,188
                                                       ===============   ===============   ==================
</table>

Non-Cash Transactions - Note 7


                             SEE ACCOMPANYING NOTES

                                       11
<page>


                            FOOTHILLS RESOURCES, INC.
                        (A Pre-exploration Stage Company)
                 STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
           for the period November 17, 2000 (Date of Incorporation) to
                                December 31, 2005
                             (Stated in US Dollars)


<table>
<caption>
                                                                                                          Deficit
                                                                                                         Accumulated
                                                     Common Shares       Additional                      During the
                                              ------------------------   Paid-in     Subscriptions    Pre-Exploration
                                               Number      Par Value     Capital       Received            Stage         Total
                                               ------      ---------      -------      --------            -----         -----

                                           <c>          <c>           <c>          <c>            <c>             <c>
Capital stock issued for cash  - at $0.021       672,715     $     673   $   13,627   $      -         $       -     $    14,300

Net loss for the period                                -             -            -          -            (4,927)         (4,927)
                                              ----------   -----------   ----------   --------         ---------     -----------

Balance as at December 31, 2000                  672,715           673       13,627          -            (4,927)          9,373
Capital stock issued for cash  - at $0.021       503,360           503       10,197          -                 -          10,700

Net loss for the year ended December 31, 2001          -             -            -          -           (44,243)        (44,243)

Subscriptions received                                 -             -            -      5,000                 -           5,000
                                              ----------   -----------   ----------   --------         ---------     -----------

Balance as at December 31, 2001                1,176,075         1,176       23,824      5,000           (49,170)        (19,170)

Subscriptions converted                                -             -            -     (5,000)                -          (5,000)

Capital stock issued for cash  - at $0.011     5,250,001         5,250       50,550          -                 -          55,800

Net loss for the year ended December 31, 2002          -             -            -          -           (41,883)        (41,883)
                                              ----------   -----------   ----------   --------         ---------     -----------

Balance as at December 31, 2002                6,426,076         6,426       74,374          -           (91,053)        (10,253)

</table>

                                    Continued

                                       12
<page>

                            FOOTHILLS RESOURCES, INC.
                        (A Pre-exploration Stage Company)
                 STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
           for the period November 17, 2000 (Date of Incorporation) to
                                December 31, 2005
                             (Stated in US Dollars)


<table>
<caption>
                                                                                                          Deficit
                                                                                                         Accumulated
                                                     Common Shares       Additional                      During the
                                              ------------------------   Paid-in     Subscriptions    Pre-Exploration
                                               Number      Par Value     Capital       Received            Stage         Total
                                               ------      ---------      -------      --------            -----         -----

                                           <c>          <c>           <c>          <c>             <c>            <c>
Net loss for the year ended December 31, 2003       -              -              -         -           (12,934)        (12,934)
                                              ----------   -----------   ----------   --------         ---------     -----------

Balance as at December 31, 2003               6,426,076        6,426         74,374         -          (103,987)        (23,187)

Net loss for the year ended December 31, 2004         -            -              -         -           (30,501)        (30,501)
                                              ----------   -----------   ----------   --------         ---------     -----------

Balance as at December 31, 2004               6,426,076        6,426         74,374         -          (134,488)        (53,688)

Capital stock issued for settlement
of debts   - at $0.0016                      32,930,113       32,930         21,688         -                 -          54,618

Capital contribution - Note 3                         -            -          8,500         -                 -           8,500

Net loss for the year ended December 31, 2005         -            -              -         -          (331,841)       (331,841)
                                              ----------   -----------   ----------   --------         ---------     -----------

Balance as at December 31, 2005               39,356,189   $  39,356     $  104,562   $     -        $ (466,329)   $   (322,411)
                                              ==========   ===========   ==========   ========       ===========   =============
</table>


By a director's  resolution dated April 20, 2005 and effective on that date, the
Company  declared a forward stock split and increased its  authorized and issued
common  shares on a 4.704301  for 1 basis.  The number of shares and  allocation
between  par value and  additional  paid-in  capital  has been  restated to give
retroactive effect to the forward stock split.


                             SEE ACCOMPANYING NOTES

                                       13
<page>


                            FOOTHILLS RESOURCES, INC.
                        (A Pre-exploration Stage Company)
                        NOTES TO THE FINANCIAL STATEMENTS
                           December 31, 2005 and 2004
                             (Stated in US Dollars)


Note 1        Nature and Continuance of Operations - Notes 6 and 11
              ------------------------------------

              The Company is in the pre-exploration stage. During the year ended
              December 31, 2001, the Company  acquired a mining lease on a total
              of five  unpatented  lode mineral claims  property  located in the
              State of Nevada.  During the year ended  December  31,  2005,  the
              Company  decided to abandon the property and terminate the claims.
              The Company  continues  to review  other  potential  resource  and
              non-resource assets for acquisition.

              These  financial  statements have been prepared in accordance with
              generally  accepted  accounting  principles  applicable to a going
              concern,  which  assumes that the Company will be able to meet its
              obligations  and continue its operations for its next fiscal year.
              Realization  values may be  substantially  different from carrying
              values as shown and these financial  statements do not give effect
              to adjustments  that would be necessary to the carrying values and
              classification  of assets and  liabilities  should the  Company be
              unable to continue as a going  concern.  At December 31, 2005, the
              Company  had  not  yet   achieved   profitable   operations,   has
              accumulated losses of $466,329 since its inception,  has a working
              capital deficiency of $322,411 and expects to incur further losses
              in the development of its business, all of which casts substantial
              doubt about the Company's  ability to continue as a going concern.
              The Company's  ability to continue as a going concern is dependent
              upon its ability to generate future  profitable  operations and/or
              to obtain the  necessary  financing  to meet its  obligations  and
              repay its liabilities arising from normal business operations when
              they come due.  Management  has no formal plan in place to address
              this concern but considers that the Company will be able to obtain
              additional   funds  by  equity   financing  and/or  related  party
              advances,  however  there is no  assurance of  additional  funding
              being available.

              The Company was incorporated in the State of Nevada, United States
              of America on November 17, 2000.

Note 2        Summary of Significant Accounting Policies
              ------------------------------------------
              The  financial  statements  of the Company  have been  prepared in
              accordance with generally  accepted  accounting  principles in the
              United States of America.  Because a precise determination of many
              assets and  liabilities  is  dependent  upon  future  events,  the
              preparation  of  financial  statements  for a  period  necessarily
              involves the use of estimates,  which have been made using careful
              judgement. Actual results may vary from these estimates.

              The financial  statements  have,  in  management's  opinion,  been
              properly   prepared   within  the  framework  of  the  significant
              accounting policies summarized below:


                                       14
<page>


Note 2        Summary of Significant Accounting Policies - (cont'd)
              ------------------------------------------

              Pre-exploration Stage Company
              -----------------------------
              The Company  complies with  Financial  Accounting  Standard  Board
              Statement No. 7 and The  Securities  and Exchange  Commission  Act
              Guide 7 for its characterization of the Company as pre-exploration
              stage.

              Mineral Lease
              -------------
              Costs of lease  acquisition,  exploration,  carrying and retaining
              unproven mineral lease properties are expensed as incurred.

              Environmental Costs
              -------------------
              Environmental  expenditures that relate to current  operations are
              expensed or capitalized as appropriate.  Expenditures  that relate
              to an existing  condition caused by past operations,  and which do
              not  contribute  to  current  or future  revenue  generation,  are
              expensed.  Liabilities are recorded when environmental assessments
              and/or  remedial  efforts  are  probable,  and  the  cost  can  be
              reasonably  estimated.  Generally,  the  timing of these  accruals
              coincides with the earlier of completion of a feasibility study or
              the  Company's  commitments  to plan of  action  based on the then
              known facts.

              Income Taxes
              ------------
              The Company uses the  liability  method of  accounting  for income
              taxes  pursuant to  Statement of  Financial  Accounting  Standards
              ("FAS") No. 109  "Accounting  for Income Taxes".  Under the assets
              and  liability  method  of  FAS  109,   deferred  tax  assets  and
              liabilities  are  recognized  for  the  future  tax   consequences
              attributable  to  temporary   differences  between  the  financial
              statements carrying amounts of existing assets and liabilities and
              their  respective tax bases.  Deferred tax assets and  liabilities
              are measured  using enacted tax rates expected to apply to taxable
              income  in the  years in which  those  temporary  differences  are
              expected to be recovered or settled.

              Basic Loss Per Share
              --------------------
              The Company  reports basic loss per share in  accordance  with FAS
              No. 128,  "Earnings  Per Share".  Basic loss per share is computed
              using the weighted average number of shares outstanding during the
              year.

                                       15
<page>

Note 2        Summary of Significant Accounting Policies - (cont'd)
              ------------------------------------------

              Financial Instruments
              ---------------------
              The  carrying  value  of  cash,   accounts   payable  and  accrued
              liabilities,  due to related party and loans payable  approximates
              fair value  because of the short  maturity  of these  instruments.
              Unless  otherwise  noted,  it is  management's  opinion  that  the
              Company is not exposed to significant interest, currency or credit
              risks arising from these financial instruments.


              New Accounting Standards
              ------------------------
              Management does not believe that any recently issued,  but not yet
              effective  accounting  standards if currently adopted could have a
              material effect on the accompanying financial statements.

Note 3        Related Party Transactions - Note 6
              --------------------------

              The  Company  was  charged  the  following  by a  director  of the
              Company:

<table>
<caption>

                                                                                            November 17, 2000
                                                                                         (Date of Inception) to
                                                                December 31,                  December 31,
                                                            2005             2004                 2005
                                                            ----             ----                 ----
              
                                      <c>              <c>                  <c>
              Management fees                          $       19,500   $     6,000          $        25,500
              Office and miscellaneous                          6,000         3,000                    9,000
                                                       --------------   -----------          ---------------

                                                       $       25,500   $     9,000          $        34,500
                                                       ==============   ===========          ===============
</table>

              These  charges were  measured by the exchange  amount which is the
              amount agreed upon by the transacting parties.

              During the year ended  December  31,  2005,  the Company  incurred
              management costs and office and  miscellaneous  totalling  $25,500
              with respect to services provided by the President of the Company.
              Of these services,  $8,500 was contributed by the President of the
              Company.

              Included in accounts  payable at December  31, 2005 is $Nil (2004:
              $9,000)  consisting  of unpaid  management  fees and rent due to a
              company with a common director.


                                       16
<page>


Note 3        Related Party Transactions - Note 6 - (cont'd)
              --------------------------

              The amount due to related party, a company with a common director,
              consists  of  unpaid  advances.   The  amount  due  is  unsecured,
              non-interest bearing and has no specific terms for repayment.

              During  the year ended  December  31,  2005,  the  Company  issued
              32,930,113 common shares to settle $54,618 in accounts payable and
              amounts  due to a  related  party.  These  amounts  were  due to a
              company with a common director.

Note 4        Loans Payable
              -------------

<table>
<caption>
                                                                                     2005               2004
                                                                                     ----               ----
            
                                                               <c>                 <c>
            Unsecured,  non-interest  bearing and having no specific
            terms for repayment                                               $         6,393     $             -
                                                                              ---------------     ---------------

            Promissory  note,  unsecured,  bears interest at 10% per
            annum and is due October 11, 2006                                         300,000                   -
            Accrued interest                                                            6,658                   -
                                                                              ---------------     ---------------

                                                                                      306,658                   -
                                                                              ---------------     ---------------

                                                                              $       313,051     $             -
                                                                              ===============     ===============
</table>

Note 5        Commitments
              -----------
              Exploration Lease

              By a lease agreement  effective March 1, 2001 and amended February
              22, 2002, September 30, 2002, December 1, 2002, March 28, 2003 and
              January 1, 2004 the Company was  granted  the  exclusive  right to
              explore,  develop  and mine the  Golden  Cross  resource  property
              located in White Pine  County of the State of Nevada.  The term of
              the lease was for 20 years,  renewable  for an additional 20 years
              so long as conditions of the lease are met.

              The Company was to pay a royalty of 3% of the net smelter  returns
              from all production.  In respect to this royalty,  the Company was
              required to pay minimum advance royalty  payments.  As at December
              31, 2004, the Company had paid $17,500 in advance royalty payments
              and was  required to pay  $10,000,  which was due January 1, 2005.
              This payment was not made and  consequently  during the year ended
              December 31, 2005,  management  of the Company  decided to abandon
              the property and terminate the claims.

                                       17
<page>

Note 6        Deferred Acquisition Costs
              --------------------------
              During the year ended  December  31,  2005,  the Company  incurred
              legal fees of $280,025 in  connection  with the due diligence of a
              business  opportunity.  Management  of the Company  decided not to
              pursue this  opportunity  and has  written-off  the deferred costs
              totalling $280,025.

Note 7        Non-cash Transactions
              ---------------------
              Investing  and  financing  activities  that do not  have a  direct
              impact on current cash flows are excluded from the statements.

              During  the year ended  December  31,  2005,  the  Company  issued
              32,930,113 common shares at $0.0016 per share as consideration for
              settlement  of $13,500 in accounts  payable and $41,118 in amounts
              due to a  related  party.  These  amounts  were  due to a  company
              controlled by the President of the Company.

              The president of the Company has provided  certain  administrative
              services  at no charge to the  Company.  The fair  value for these
              services  has been  recorded  as  additional  paid-in  capital  as
              follows:

<table>
<caption>
                                                                                            November 17, 2000
                                                                Year ended               (Date of Inception) to
                                                               December 31,                   December 31,
                                                           2005             2004                  2005
                                                           ----             ----                  ----
            
                                      <c>               <c>              <c>
            Management fees                          $        4,000    $           -    $               4,000
            Office and miscellaneous                          4,500                -                    4,500
                                                     --------------    -------------    ---------------------

                                                     $        8,500    $           -    $               8,500
                                                     ==============    =============    =====================
</table>

              These transactions were excluded from the statements of cash flow.


Note 8        Deferred Tax Assets
              -------------------

              The following table  summarizes the significant  components of the
              Company's deferred tax assets:

<table>
<caption>
                                                                                    Total             Total
                                                                                     2005             2004
                                                                                     ----             ----
             
                                                               <c>               <c>
             Deferred Tax Assets
                 Non-capital loss carryforward                                 $      159,094    $       35,700
             Less valuation allowance                                                (159,094)          (35,700)
                                                                               --------------    --------------

                                                                               $            -    $            -
                                                                               ==============    ==============
</table>

                                       18
<page>

Note 8        Deferred Tax Assets - (cont'd)
              -------------------

              The amount  taken into income as deferred  tax assets must reflect
              that  portion of the income  tax loss  carryforwards  that is more
              likely than not 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 time of 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, 2005 the
              Company  has  net  operating  loss  carryforwards,   which  expire
              commencing in 2020, totalling  approximately $466,239, the benefit
              of which has not been recorded in the financial statements.

Note 10       Interest Risk
              -------------
              Loans  payable  bear  fixed  interest  rates for  $300,000  of the
              $313,051 loans  payable,  which matures in the year ended December
              31, 2006.

Note 11       Subsequent Event
              ----------------
              By a Term Sheet dated  February 15, 2006, the Company has proposed
              the  following  transactions  that it  intends  to  undertake  and
              complete as follows:

                  The Company will  incorporate a wholly-owned  subsidiary on or
                  before May 31,  2006 to merge  with  Brasada  Resources,  LLC,
                  ("Brasada") a company  engaged in oil and gas  exploration and
                  development.  As a result,  the Company  will  acquire all the
                  issued and  outstanding  shares of Brasada  and  Brasada  will
                  become  a   wholly-owned   subsidiary  of  the  Company.   The
                  consideration   for  the   acquisition   will  be   18,000,000
                  post-forward split common shares of the Company.

                  Concurrent  with the closing of the merger,  the Company  will
                  cancel 34,106,183 commons shares previously issued and forward
                  split its common shares on a 2.5238066 for one basis.

                  As a  condition  of closing of the merger,  the  Company  will
                  close a  private  placement  ("PP") of up to  8,750,000  units
                  ("Units")  at $0.80 per unit.  Each Unit will  consist  of one
                  post-forward  split  common share of the Company and one share
                  purchase  warrant.  Four  warrants  will entitle the holder to
                  purchase  one  post-forward  split  common  share at $1.25 per
                  share for a period of five years.

                  As a further condition of closing, the Company will sell up to
                  $2,500,000 of convertible  debentures.  The debentures will be
                  unsecured,  bear interest at 9% per annum (commencing 120 days
                  from  issuance)  and  will be for a term of three  years.  The
                  debentures will convert into units at $0.80 per unit, equal to
                  the unit  price in the PP. The  debentures  will be payable in
                  consecutive  monthly  instalments  of  principal  and interest
                  commencing 120 days from issuance.

                                       19
<page>

Note 11       Subsequent Event - (cont'd)
              ----------------

                  The  debentures  will be converted as to the principal  amount
                  into  Units  upon  closing of the merger and the PP. The Units
                  will form a portion  of the PP. In  addition,  the  debentures
                  will become convertible,  at the option of the holder, 70 days
                  after the earlier of i) termination of the exclusivity  period
                  provided  for in the term sheet,  if the merger has not closed
                  by such date, or ii) the date of termination or abandonment of
                  the merger prior to the end of the exclusivity period.

                  Pending  closing  of the  merger,  the  Company  will  use the
                  debenture proceeds to provide bridge financing to Brasada. The
                  bridge  financing  will be for a term of 120 days from closing
                  of the bridge  financing  and will be  secured by a  perfected
                  security  interest and first lien on all the assets of Brasada
                  and the entire equity interest in Brasada's  subsidiaries  and
                  51% of the  issued  shares of  Brasada.  Closing of the merger
                  will constitute repayment in full. The loan will bear interest
                  at 9% per annum with interest only payable  monthly.  Upon the
                  occurrence of an event of default under the bridge  financing,
                  or failure to consummate  the merger,  the interest rate shall
                  increase to 15%.

                  The Company  agrees to pay a cash fee of up to 5% of the gross
                  proceeds   received   from  the  PP.  to   persons   who  make
                  introductions  to offerees to the PP. The Company  shall pay a
                  finder's fee of 500,000  post-forward split common shares. The
                  Company shall also adopt a 2,000,000 post-forward split common
                  share employee stock option plan.

              This term sheet is subject to the execution of a definitive merger
              agreement.

Note 12       Comparative Figures
              -------------------
              The  comparative  figures have been  reclassified to be consistent
              with the current year's presentation.



ITEM 8:  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

ITEM 8A:  CONTROLS AND PROCEDURES

Evalution of Disclosure Controls

We evaluated the effectiveness of our disclosure controls and procedures  as  of
the end of the 2005 fiscal year. This evaluation was   conducted  by  our  chief
executive officer and  our   principal   accounting officer, Mr. J. Earl Terris.

Disclosure  controls  are  controls  and other  procedures  that are designed to
ensure that  information that we are required to disclose in the reports we file
pursuant  to  the  Securities  Exchange  Act of  1934  is  recorded,  processed,
summarized and reported.

Limitations on the Effective of Controls

Our  management  does not expect that our  disclosure  controls or our  internal
controls over  financial  reporting  will prevent all error and fraud. A control
system, no matter how well conceived and operated,  can provide only reasonable,
but no absolute,  assurance  that the  objectives  of a control  system are met.
Further, any control system reflects limitations on resources,  and the benefits
of a control system must be considered  relative to its costs. These limitations
also include the realities that judgments in  decision-making  can be faulty and
that  breakdowns  can occur  because of simple  error or mistake.  Additionally,
controls  can be  circumvented  by the  individual  acts  of  some  persons,  by
collusion of two or more people or by management override of a control. A design
of a control  system is also  based upon  certain  assumptions  about  potential
future conditions;  over time, controls may become inadequate because of changes
in conditions,  or the degree of compliance  with the policies or procedures may
deteriorate.  Because of the inherent  limitations in a  cost-effective  control
system, misstatements due to error or fraud may occur and may not be detected.

Conclusions

Based upon his  evaluation  of our  controls,  the chief  executive  officer and
principal  accounting  officer has concluded  that,  subject to the  limitations
noted  above,  the  disclosure  controls are  effective in providing  reasonable
assurance that material  information  relating to us is made known to management
on a timely basis during the period when our reports are being  prepared.  There
were no  changes in our  internal  controls  that  occurred  during the  quarter
covered by this report that have materially  affected,  or are reasonably likely
to materially affect our internal controls.


                                       20
<page>

PART III

ITEM 9:  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS


Name           Age  Position with Registrant             Served  as a  Director
                                                         or Officer since
J. Earl Terris  60  President,  Secretary,  Treasurer,   November 17, 2000
                    Chief  Executive  Officer,
                    and Director (Principal Executive
                    Officer, Principal Financial Officer,
                    and Principal Accounting Officer)

The following is a biographical summary of Mr. Earl Terris:

J. Earl Terris is the founder of our company. Mr. Terris has been the President,
Secretary-Treasurer  and Director since our company's  inception on November 17,
2000. He is currently employed as the president and owner of Sirret Investments,
Ltd., a Canadian private investment  company,  and as a development  manager for
Berkshire  Young  Enterprises.  Between  September  1999 and January 2000 he was
employed as the deputy store  manager for Thresher  Wine Stores.  From  November
1998  through  August  1999  he  was  employed  as a  sales  advisor  and  sales
administrator  for Comet Stores,  Inc. From September 1996 through April 1998 he
was  employed  as the  president  of Koda  Resources,  Ltd.,  a Canadian  public
resources company.  From 1994 through 1997 Mr. Terris was a partner in Franchise
Sales Associates and Franchise Conxions.

All directors are elected annually by our shareholders and hold office until the
next annual  meeting.  Each officer holds office at the pleasure of the board of
directors.

Code of Ethics

The Company has not  formally  adopted a written  code of ethics that applies to
the  Company's  principal  executive  officer,  principal  financial  officer or
controller,  or persons performing  similar functions.  Based on our small size,
early development  stage and limited  financial and human resources,  we did not
believe that formally adopting a written code of ethics would

Audit Committee

Since we have only one director, we have neither an audit committee of the Board
of Directors nor an "audit committee  financial expert," as such term is defined
under the Securities Exchange Act.

ITEM 10:  EXECUTIVE COMPENSATION

The table below  summarizes all  compensation  awarded to, earned by, or paid to
our executive officers by any person for all services rendered in all capacities
to us for the fiscal year ended December 31, 2005.

                                       21
<page>

<table>
<caption>
                                            Annual Compensation                Long Term Compensation
                                                                                                          LTIP
                                                                 Other Annual  Restricted      Options/   payouts    All Other
Name (1)      Title                         Year  Salary Bonus   Compensation  Stock Awarded   SARs (#)   ($)        Compensation
--------      -----                         ----  ------ -----   ------------  -------------   --------   ---        ------------

           <c>                           <c>   <c>    <c>     <c>           <c>             <c>        <c>        <c>
J. Earl       President/Secretary/Treasurer 2005  $0     $0      $15,500       $0              $0         $0           0
Terris
J. Earl       President/Secretary/Treasurer 2004  $0     0       $ 6,000        0               0          0           0
Terris
J. Earl       President/Secretary/Treasurer 2003  $0     0       $     0        0               0          0           0
Terris

</table>

Section 16(A) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our executive officers and directors,
and persons who beneficially own more than 10% of our equity securities, to file
reports of ownership and changes in ownership  with the  Securities and Exchange
Commission.  Officers,  directors and greater than 10% shareholders are required
by SEC  regulation  to furnish us with  copies of all  Section  16(a) forms they
file.  Based on our review of the copies of such forms we  received,  we believe
that during the fiscal year ended December 31, 2005 all such filing requirements
applicable to our officers and  directors  were  complied  with  exception  that
reports were filed late by the  following  persons:  J. Earl Terris filed a late
Form 3 on June 29, 2005.


ITEM 11:  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding the beneficial ownership of
our shares of common stock at March 15, 2006,  by (i) each person known by us to
be the  beneficial  owner of more  than 5% of our  outstanding  shares of common
stock, (ii) each of our directors, (iii) our executive officers, and (iv) by all
of our  directors and  executive  officers as a group.  Each person named in the
table,  has sole voting and investment power with respect to all shares shown as
beneficially  owned by such person and can be contacted at our executive  office
address.

<table>
<caption>
------------------------- -------------------------------- ---------------------------- ---------------------------
TITLE OF CLASS            NAME OF BENEFICIAL OWNER         SHARES OF COMMON STOCK       PERCENT OF CLASS
------------------------- -------------------------------- ---------------------------- ---------------------------

                       <c>                              <c>                          <c>
Common                    J. Earl Terris                           34,106,183                     86.7%
------------------------- -------------------------------- ---------------------------- ---------------------------
Directors and Officers                                                                            86.7%
as a Group consisting
of one person
------------------------- -------------------------------- ---------------------------- ---------------------------
</table>

The percent of class is based on  39,356,189  shares of common  stock issued and
outstanding as of the date of this annual report.


ITEM 12:  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During the fiscal year ended  December  31,  2005,  we paid  $13,000 and accrued
$2,500 as  management  fees to our  president,  J. Earl  Terris  for  management
services and $1,500 for office services that he has provided to us.


                                       22
<page>


During the fiscal year ended  December 31, 2005, we   issued 32,930,113   common
shares at $0.0016 per share   as   consideration   for  settlement of $13,500 in
accounts payable and $41,118 in amounts due to a company   controlled by J. Earl
Terris

Otherwise,  neither our sole director or officer,  nor any proposed  nominee for
election  as a  director,  nor any person who  beneficially  owns,  directly  or
indirectly,  shares  carrying more than 10% of the voting rights attached to all
of our outstanding  shares, nor any promoter,  nor any relative or spouse of any
of the foregoing persons has any material interest,  direct or indirect,  in any
transaction  since our  incorporation or in any presently  proposed  transaction
which, in either case, has or will materially affect us.

Our management is involved in other  business  activities and may, in the future
become  involved  in  other  business  opportunities.  If  a  specific  business
opportunity  becomes  available,  such  persons may face a conflict in selecting
between our business  and their other  business  interests.  In the event that a
conflict of interest  arises at a meeting of our  directors,  a director who has
such a conflict  will disclose his interest in a proposed  transaction  and will
abstain from voting for or against the approval of such transaction.

ITEM 13:  EXHIBITS AND REPORTS

  3.1          Articles of Incorporation*
  3.2          By-Laws*
  10.1         Term Sheet, dated as of February 15, 2006, between the Company
               and Brasada Resources LLC.
  31.1         Certification pursuant to 18  U.S.C. Section  1350, as adopted
               pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
  31.2         Certification pursuant to 18 U.S.C. Section 1350, as adopted
               pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
  32.1         Certification pursuant to 18  U.S.C. Section 1350, as adopted
               pursuant to Section 906  of  the Sarbanes-Oxley Act of 2002
  32.2         Certification   pursuant to 18 U.S.C. Section 1350, as adopted
               pursuant  to  Section  906  of  the Sarbanes-Oxley Act of 2002

*   previously filed as an exhibit to our registration statement on Form SB-2,
   as amended.

ITEM 14:  PRINCIPAL ACCOUNTANT FEES AND SERVICES

Our principal accountants,  Amisano Hanson,  Chartered  Accountants,  billed the
following fees for the services indicated:

                                      Fiscal year-ended
                               December 31, 2005              December 31, 2004

Audit fees                         $ 6,715                         $ 1,607
Audit-related fees                       -                               -
Tax fees                               562                               -
All other fees                     $ 7,448                         $ 3,658


                                       23
<page>


Audit  fees  consist  of fees  related  to  professional  services  rendered  in
connection  with the audit of our annual  financial  statements.  All other fees
relate to  professional  services  rendered in connection with the review of the
quarterly financial statements.

Our  Board's  policy  is to  pre-approve  all audit  and  permissible  non-audit
services  performed by the independent  accountants.  These services may include
audit services,  audit-related services, tax services and other services.  Under
our Board's policy,  pre-approval is generally provided for particular  services
or categories of services,  including planned  services,  project based services
and  routine  consultations.   In  addition,  the  Board  may  also  pre-approve
particular  services on a  case-by-case  basis.  Our Board approved all services
that our independent accountants provided to us in the past two fiscal years.



                                   SIGNATURES

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

                                          Foothills Resources, Inc.

                                           /s/ J. Earl Terris
                                          ---------------------------
                                           J. Earl Terris
                                           President, Secretary, Treasurer
                                           Chief Executive Officer and Director
                                           (Principal Executive Officer,
                                           Principal Financial Officer and
                                           Principal Accounting Officer)
                                           Dated: March 15, 2006



                                       24