| |                                                                       |                                                                                                             
| | --------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------
| | SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB | OMB APPROVAL
OMB Number:
3235-0420
Expires:
March 31, 2007
Estimated average burden
Hours per response1646



(Mark One)



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

For the fiscal year endedDecember 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

333-85460



ONLINE HOLDINGS, INC.

(Name of small business issuer in its charter)



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Nevada                                                         |  | 84-1598154                          
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification No.)



|                                         |  |           
|---------------------------------------- |  | ----------
|959 South 2300 East, Springville, Utah   |  | 84663     
|(Address of principal executive offices) |  | (Zip Code)



Issuers telephone number 801-491-9401



Securities registered under Section 12(b) of the Exchange Act:



|                    |  |                                          
|------------------- |  | -----------------------------------------
|Title of each class |  | Name of each exchange
on which registered
|                    |  |                                          
|                    |  |                                          
|                    |  |                                          



Securities registered under Section 12(g) of the Exchange Act:



Common Stock

(Title of class)



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.



SEC 2337 (12-05)

Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.



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



Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B 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.              £



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

Yes S     No £



State issuers revenues for its most recent fiscal year. $-0-



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.)  On December 31, 2005 the aggregate market value of the voting stock of Online Holdings, Inc. held by non-affiliates of the registrant was $-0-.  There is currently no public market for the registrants common stock.  Therefore, the aggregate market value of the stock is deemed to be $-0-.



Note: If determining whether a person is an affiliate will involve an unreasonable effort and expense, the issuer may calculate the aggregate market value of the common equity held by non-affiliates on the basis of reasonable assumptions, if the assumptions are stated.



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



Check whether the issuer has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes £     No £



(APPLICABLE ONLY TO CORPORATE REGISTRANTS)



State the number of shares outstanding of each of the issuers classes of common equity, as of the latest practicable date.  At December 31, 2005 there were 23,850,000 shares of common stock of the registrant outstanding, par value $.001.



DOCUMENTS INCORPORATED BY REFERENCE



If the following documents are incorporated by reference, briefly describe them and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) any annual report to security holders; (2) any proxy or information statement; and (3) any prospectus filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933 (Securities Act). The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1990).



Transitional Small Business Disclosure Format (Check one): Yes £ ; No S



2





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PART I



Item 1.

Description of Business.



Our History



Online Holdings formed as a Nevada corporation on July 27, 2001. Until December 31, 2003 we were in the business of developing and marketing easily maintained website systems. In addition we provided website hosting, search engine placement, email marketing and graphic design.



We operated through E-Site Technologies, Inc., our wholly owned subsidiary. E-Site was founded in Colorado on January 26, 2000. On August 2, 2001, we exchanged 4,000,000 shares of Online common stock for 10,000 shares of E-Site Technologies. This represented all of the issued and outstanding shares of E-Site. As a result, E-Site became a wholly owned subsidiary of Online Holdings.



In April of 2002, we submitted a registration statement on Form SB-2 to the Securities and Exchange Commission for the sale of a minimum of 480,000 shares of Common Stock and a maximum of 960,000 shares of Common Stock at a price of $0.125 per share. The registration became effective on May 14, 2002 and closed on July 13, 2002. As a result of the offering 650,000 shares were sold generating $81,250.



Because we were not successful in our plan to provide corporate communication website systems to any substantial number of customers, we made the decision to cease operations on December 31, 2003.  We are now considered a blank check company.



On April 25, 2005, Mr. Shaun Carter acquired control of our Company by purchasing 20,000,000 shares of restricted common stock in exchange for $20,000.  As a result of the stock purchase and the cancellation of 3,000,000 shares by our former officer and director, Mr. Carter acquired 83.9% of the Company.  Mr. Dennis Lairamore resigned his position as an Officer and Director of our Company after the appointment of Mr. Carter as President and Director.  As a part of the change in control we changed our address to Springville, Utah.

Our Business

We have not had ongoing business operations since December 31, 2003.



Online Holdings intends to seek, investigate, and if warranted, acquire an interest in a business opportunity.  We are not restricting our search to any particular industry or geographical area.  We may therefore engage in essentially any business in any industry.  Our management has unrestricted discretion in seeking and participating in a business opportunity, subject to the availability of such opportunities, economic conditions and other factors.



The selection of a business opportunity in which to participate is complex and extremely risky and will be made by management in the exercise of its business judgment.  There is no assurance that we will be able to identify and acquire any business opportunity which will ultimately prove to be beneficial to our company and shareholders.



Because we have no specific business plan or expertise, our activities are subject to several significant risks.  In particular, any business acquisition or participation we pursue will likely be based on the decision of management without the consent, vote, or approval of our shareholders.





3





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Sources of Opportunities



We anticipate that business opportunities may arise from various sources, including officers and directors, professional advisers, securities broker-dealers, venture capitalists, members of the financial community, and others who may present unsolicited proposals.



We will seek potential business opportunities from all known sources, but will rely principally on the personal contacts of our officers and directors as well as indirect associations between them and other business and professional people.  Although we do not anticipate engaging professional firms specializing in business acquisitions or reorganizations, we may retain such firms if management deems it in our best interests.  In some instances, we may publish notices or advertisements seeking a potential business opportunity in financial or trade publications.



Criteria



We will not restrict our search to any particular business, industry or geographical location.  We may acquire a business opportunity in any stage of development.  This includes opportunities involving start up or new companies.  In seeking a business venture, management will base their decisions on the business objective of seeking long-term capital appreciation in the real value of our company.  We will not be controlled by an attempt to take advantage of an anticipated or perceived appeal of a specific industry, management group, or product.



In analyzing prospective business opportunities, management will consider the following factors:



·

available technical, financial and managerial resources;

·

working capital and other financial requirements;

·

the history of operations, if any;

·

prospects for the future;

·

the nature of present and expected competition;

·

the quality and experience of management services which may be available and the depth of the management;

·

the potential for further research, development or exploration;

·

the potential for growth and expansion;

·

the potential for profit;

·

the perceived public recognition or acceptance of products, services, trade or service marks, name identification; and other relevant factors.



Generally, our management will analyze all available factors and make a determination based upon a composite of available facts, without relying on any single factor.

Methods of Participation of Acquisition



Management will review specific business opportunities and then select the most suitable opportunities based on legal structure or method of participation.  Such structures and methods may include, but are not limited to, leases, purchase and sale agreements, licenses, joint ventures, other contractual arrangements, and may involve a reorganization, merger or consolidation transaction.  Management may act directly or indirectly through an interest in a partnership, corporation, or other form of organization.





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Procedures



As part of the our investigation of business opportunities, officers and directors may meet personally with management and key personnel of the firm sponsoring the business opportunity.  We may visit and inspect material facilities, obtain independent analysis or verification of certain information provided, check references of management and key personnel, and conduct other reasonable measures.



We will generally ask to be provided with written materials regarding the business opportunity.  These materials may include the following:



·

descriptions of product, service and company history; management resumes;

·

financial information;

·

available projections with related assumptions upon which they are based;

·

an explanation of proprietary products and services;

·

evidence of existing patents, trademarks or service marks or rights thereto;

·

present and proposed forms of compensation to management;

·

a description of transactions between the prospective entity and its affiliates;

·

relevant analysis of risks and competitive conditions;

·

a financial plan of operation and estimated capital requirements;

and other information deemed relevant.



Competition



We expect to encounter substantial competition in our efforts to acquire a business opportunity.  The primary competition is from other companies organized and funded for similar purposes, small venture capital partnerships and corporations, small business investment companies and wealthy individuals.



Employees



We do not have any employees and do not anticipate hiring additional employees until our operations resume and expand to such a degree that necessitates hiring auxiliary staff.



Item 2.

Description of Property.



We do not currently own any property.  As a part of the change in control we moved our office to Springville, Utah where our president provides office space at no charge.  We will not seek independent office space until we pursue a viable business opportunity and recognize income.



Item 3.

Legal Proceedings.



Management is not aware of any other current or pending legal proceedings involving Online Holdings or our officers or directors.



Item 4.

Submission of Matters to a Vote of Security Holders.



No matters were submitted to a vote of security holders during the period covered by this report.





5





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PART II



Item 5.

Market for Common Equity and Related Stockholder Matters.



There is currently no public market for our common stock.



As of December 31, 2005, there were approximately 62 shareholders of record holding 23,850,000 shares of common stock. The holders of common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. Holders of the common stock have no preemptive rights and no right to convert their common stock into any other securities. There are no redemption or sinking fund provisions applicable to the common stock.



We have not paid, nor declared, any dividends since our inception and do not intend to declare any such dividends in the foreseeable future. Our ability to pay dividends is subject to limitations imposed by Nevada law. Under Nevada law, dividends may be paid to the extent that a corporations assets exceed its liabilities and it is able to pay its debts as they become due in the usual course of business.



Item 6.

Managements Discussion and Analysis or Plan of Operation.



Forward-Looking Statement Notice



When used in this report, the words "may," "will," "expect," "anticipate," "continue," "estimate," "project,"  "intend," and similar expressions are intended to identify forward-looking statements within the meaning of Section 27a of the Securities Act of 1933 and Section 21e of the Securities Exchange Act of 1934 regarding events, conditions, and financial trends that may affect the Company's future plans of operations, business strategy, operating results, and financial position.  Persons reviewing this report are cautioned  that any forward-looking  statements  are  not  guarantees  of future performance and are subject to risks and uncertainties and that actual results may differ materially from those included within the forward-looking statements as a result of various factors.  Such factors are discussed under the "Item 2.  Management's Discussion and Analysis of Financial Condition or Plan of Operations," and also include general economic factors and conditions that may directly or indirectly impact the Company's financial condition or results of operations.

Results of Operations Years Ended December 31, 2005 and 2004



The Company had no revenue from operations for the year ended December 31, 2005 or December 31, 2004.  Operating expenses were $19,625 for the year ended December 31, 2005 compared to $22,749 for the year ended December 31, 2004.  Other expenses were $1,881 for the year ended December 31, 2005 compared to $567 for the same period in 2004.  Total net loss for the year ended December 31, 2005 was $21,506 compared to $23,316 for the same period in 2004.  Expenses during 2005 consisted mainly of legal and accounting fees.



Results of Operations Years Ended December 31, 2004 and 2003



The Company had no revenue from operations for the year ended December 31, 2004 compared to $2,740 in revenue for the year ended December 31, 2003.  Operating expenses were $22,749 for the year ended December 31, 2004 compared to $13,656 for the year ended December 31, 2003.  Expenses during 2004 consisted largely of legal and accounting fees.



The Company realized a net loss of $23,316 for the year ended December 2004 compared to a net loss of $13,816 for the year ended December 2003.



6





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Liquidity and Capital Resources



At December 31, 2005 our assets consisted of $11,503 in cash and $340 in interest receivable.  We had liabilities at December 31, 2005 consisting of $6,869 in accounts payable, $15,000 in note payable to a stockholder and $2,805 interest payable to a stockholder.   Stockholders deficit totaled $12,831 for the year ended December 31, 2005 compared to $11,325 for the year ended December 31, 2004. We have no capital commitments for the next 12 months.



The Companys former sole officer and stockholder made an unsecured demand loan to the Company bearing interest at 15% annually.  The balance outstanding at December 31, 2005 was $15,000 with accrued interest of $2,805 owing.



We anticipate that our expenses for the next twelve months will be approximately $20,000.  In the past year we have relied on advances from our president to cover our operating costs.   Management anticipates that we will receive sufficient advances from our president to meet our needs through the next 12 months.  However, there can be no assurances to that effect.  Our need for capital may change dramatically if we acquire an interest in a business opportunity during that period.  At present, we have no understandings, commitments or agreements with respect to the acquisition of any business venture, and there can be no assurance that we will identify a business venture suitable for acquisition in the future.  Further, we cannot assure that we will be successful in consummating any acquisition on favorable terms or that we will be able to profitably manage any business venture we acquire.  Should we require additional capital, we may seek additional advances from officers, sell common stock or find other forms of debt financing.

Plan of Operation



We ceased operations in December 31, 2003.  Resumption of operations is contingent upon the results of our investigation into new capital and business opportunities. Our current operating plan is to continue searching for potential businesses, products, technologies and companies for acquisition and to handle the administrative and reporting requirements of a public company.  To demonstrate our commitment to maintaining ethical reporting and business practices, we adopted a Code of Ethics and Business Conduct and included it as an exhibit to our 2002 10-KSB filed March 31, 2003.



Item 7.

Financial Statements.



The financial statements of the Company appear at the end of this report beginning on Page 12.

Item 8.

Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.



None.



Item 8A. Controls and Procedures.



(a) Evaluation of disclosure controls and procedures. Based on the evaluation of our disclosure controls and procedures (as defined in Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) required by Securities Exchange Act Rules 13a-15(b) or 15d-15(b), our Chief Executive Officer and our Chief Financial Officer have concluded that as of the end of the period covered by this report, our disclosure controls and procedures were effective.



(b) Changes in internal controls. There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



7





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Item 8B.  Other Information.



None.



PART III



Item 9.

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



The following table sets forth the name, age, position and office term of each executive officer and director of the Company.



|             |     |                                                                                                |           
|------------ | --- | ---------------------------------------------------------------------------------------------- | ----------
|Name         | Age | Position                                                                                       | Since     
|Shaun Carter | 30  | Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer and Director | March 2005



The following is a brief biography of our officer and director.



For the past five years, Shaun Carter has worked at Rocky Mountain Printing in Provo Utah. For the past year he has been the bindery foreman and prior to that he was a journeyman operator.



All officers hold their positions at the will of the Board of Directors. All directors hold their positions for one year or until their successors are elected and qualified.



The Company has no audit committee financial expert, as defined under Section 228.401, serving on its audit committee because it has no audit committee and is not required to have an audit committee because it is not a listed security as defined in Section 240.10A-3.



Section 16 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:



|                                                        |                        |                                  |                                       
|------------------------------------------------------- | ---------------------- | -------------------------------- | --------------------------------------
|Name and Principal Position                             | Number of Late Reports | Transactions Not Timely Reported | Known Failures
To File a Required Form
|                                                        |                        |                                  |                                       
|Shaun Carter, Sole Officer and Director
10% shareholder | 1                      | 0                                | 0                                     





8





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Item 10. Executive Compensation.



In March 2005, Mr. Carter became our sole officer upon the resignation of Mr. Lairamore.  A summary compensation table for the previous three years is provided below.



SUMMARY COMPENSATION TABLE

|                                                                 |                |             |             |                          
|---------------------------------------------------------------- | -------------- | ----------- | ----------- | -------------------------
|Name and Principal Position                                      | Year           | Salary ($)  | Bonus ($)   | Other Annual
Compensation
|                                                                 |                |             |             |                          
|Shaun Carter
Chief Executive Officer
Chief Financial Officer     | 2005           | -0-         | -0-         | -0-                      
|                                                                 |                |             |             |                          
|Dennis Lairamore
Chief Executive Officer
Chief Financial Officer | 2005
2004
2003 | -0-
-0-
-0- | -0-
-0-
-0- | -0-
-0-
-0-              



In July of 2001 we adopted a long-term stock incentive plan.  At the date of this report, we have not issued any options under the plan.  We have not established any pension, profit sharing or insurance programs for the benefit of our employees.

Item 11.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.



The following table sets forth as of December 31, 2005, the name and shareholdings of each person known to us that either directly or beneficially holds more than 5% of our 23,850,000 issued and outstanding shares of common stock, par value $.001.  The table also lists the name and shareholdings of each director and of all officers and directors as a group.  Except as otherwise indicated, the persons named in the table have sole voting and dispositive power with respect to all shares beneficially owned, subject to community property laws where applicable.



|                                                              |                |                                     |            
|------------------------------------------------------------- | -------------- | ----------------------------------- | -----------
|Name and Address                                              | Title of Class | Number of Shares Beneficially Owned | % of Shares
|                                                              |                |                                     |            
|Shaun Carter (1)
959 South 2300 East
Springville, Utah  84663 | Common         | 20,000,000                          | 83.86%     
|                                                              |                |                                     |            
|Dennis Lairamore (1)
5957 South Birch Way
Littleton, CO 80121 | Common         | 2,000,000                           | 8.38%      
|                                                              |                |                                     |            
|Officers and Directors as a group
One Person                  | Common         | 20,000,000                          | 83.86%     



(1)

Officer and Director





9





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Item 12.  Certain Relationships and Related Transactions.



The Companys former sole officer and stockholder made an unsecured demand loan to the Company bearing interest at 15% annually.  The balance outstanding at December 31, 2005 was $15,000 with accrued interest of $2,805 owing.



Item 13.  Exhibits.



Exhibit 3(I)

Articles of Incorporation*

Exhibit 3(ii)

Bylaws*

Exhibit 14

Code of Ethics**

Exhibit 31.1

Certification of the Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 32.1

Certification of the Principal Executive Officer and Principal Financial Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002***



(b)  Reports on Form 8-K.



There were no reports filed on Form 8-K during the period covered by this report.



* Incorporated by reference. Filed as exhibit to SB-2 filed December 19, 2001



**Incorporated by reference. Filed as exhibit to 2002 10KSB filed March 2003



***The Exhibit attached to this Form 10-KSB shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to liability under that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 14.  Principal Accountant Fees and Services.



Audit Fee

The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal account for the audit of Online Holdings annual financial statement and review of financial statements included in Online Holdings 10-QSB reports and services normally provided by the accountant in connection with statutory and regulatory filings or engagements were $7,250 for fiscal year ended 2004 and $8,000 for fiscal year ended 2005.

Audit-Related Fees

There were no fees for other audit related services for fiscal year ended 2005.

Tax Fees

There were no fees for tax compliance, tax advice and tax planning for the fiscal years 2004 and 2005.

All Other Fees

There were no other aggregate fees billed in either of the last two fiscal years for products and services provided by the principal accountant, other than the services reported above.

We do not have an audit committee currently serving and as a result our board of directors performs the duties of an audit committee.  Our board of directors will evaluate and approve in advance, the scope and cost of the engagement of an auditor before the auditor renders audit and non-audit services.  We do not rely on pre-approval policies and procedures.





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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.





ONLINE HOLDINGS, INC.





By: /s/ Shaun Carter

Shaun Carter

Chief Executive Officer and

Chief Financial Officer



Date: March 30, 2006





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





By: /s/ Shaun Carter

Shaun Carter, Sole Director





Date: March 30, 2006



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the Board of Directors and Stockholders

Online Holdings, Inc.

Springville, Utah



We have audited the accompanying balance sheet of Online Holdings, Inc. as of December 31, 2005 and the related statements of operations, stockholders deficit and cash flows for the years ended December 31, 2005 and 2004.  These financial statements are the responsibility of the Companys management.  Our responsibility is to express an opinion on these financial statements based on our audits.



We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, an audit of its internal controls over financial reporting.  Our audit included consideration of internal controls over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting.  Accordingly, we express no such opinion.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the 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 Online Holdings, Inc. as of December 31, 2005, and the results of their operations and their cash flows for the years ended December 31, 2005 and 2004 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.  The Company ceased business operations in December 2003.  The Company has also incurred accumulated losses through December 31, 2005 of $114,055 and current liabilities exceed current assets by $12,831.  These conditions raise substantial doubt about the Companys ability as a going concern.  Managements plans regarding these matters are described in Note 1.  The financial statements do not include any adjustments that might result from the outcome of the uncertainty.



/s/  Ehrhardt Keefe Steiner & Hottman PC



Ehrhardt Keefe Steiner & Hottman PC



February 16, 2006

Denver, Colorado



12





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ONLINE HOLDINGS, INC.



Balance Sheet

December 31, 2005



|                                                               |   |          
|-------------------------------------------------------------- | - | ---------
|Assets                                                         |   |          
|Current Assets                                                 |   |          
|                                                               |   |          
|Cash                                                           | $ | 11,503   
|Interest Receivable                                            |   | 340      
|                                                               |   |          
|Total Current Assets                                           | $ | 11,843   
|                                                               |   |          
|Liabilities and Stockholders Deficit                          |   |          
|                                                               |   |          
|Current Liabilities                                            |   |          
|Accounts Payable                                               | $ | 6,869    
|Note Payable  stockholder                                     |   | 15,000   
|Interest Payable  stockholder                                 |   | 2,805    
|                                                               |   |          
|Total Current Liabilities                                      | $ | 24,674   
|                                                               |   |          
|Stockholders deficit                                          |   |          
|Preferred stock, authorized 5,000,000 shares, $.001 par value; | $ | -        
|none issued and outstanding                                    |   |          
|Common stock, authorized 100,000,000 shares, $.001 par value;  |   |          
|23,850,000 shares issued and outstanding                       |   | 23,850   
|Additional paid-in capital                                     |   | 77,374   
|Accumulated deficit                                            |   | (114,055)
|Total stockholders deficit                                    |   | (12,831) 
|Total liabilities and stockholders deficit                    | $ | 11,843   















See Notes to consolidated financial statements.



13





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ONLINE HOLDINGS, INC.

Statements of Operations







|                              |   |                                  |   |          
|----------------------------- | - | -------------------------------- | - | ---------
|                              |   | For the Years Ended December 31,
|                              |   | 2005                             |   | 2004     
|                              |   |                                  |   |          
|                              |   |                                  |   |          
|Revenue                       | $ | 0                                | $ | 0        
|                              |   |                                  |   |          
|Cost of Revenue               | $ | 0                                | $ | 0        
|                              |   |                                  |   |          
|                              |   | 0                                |   | 0        
|                              |   |                                  |   |          
|Operating Expenses            |   | 19,625                           |   | 22,749   
|                              |   |                                  |   |          
|Net loss from operations      | $ | (19,625)                         | $ | (22,749) 
|                              |   |                                  |   |          
|Other Income (expense)        |   |                                  |   |          
|Interest Income               |   | 359                              |   | 0        
|Interest Expense              |   | (2,240)                          |   | (567)    
|                              |   |                                  |   |          
|Total Other income(expense)   | $ | (1,881)                          | $ | (567)    
|                              |   |                                  |   |          
|Net Loss                      | $ | (21,506)                         | $ | (23,316) 
|                              |   |                                  |   |          
|Loss per share                |   |                                  |   |          
|Basic and diluted             | $ | (0.001)                          | $ | (0.003)  
|                              |   |                                  |   |          
|Weighted average shares       |   |                                  |   |          
|outstanding  basic & diluted |   | 18,540,411                       |   | 6,850,000















See notes to consolidated financial statements.



14





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ONLINE HOLDINGS, INC.



Statement of Stockholders Deficit







|                             |              |   |          |   |             |   |               |   |         
|---------------------------- | ------------ | - | -------- | - | ----------- | - | ------------- | - | --------
|                             |              |   |          |   | Additional  |   |               |   | Total   
|                             | Common Stock |   | Paid- In |   | Accumulated |   | Stockholders
|                             | Shares       |   | Amount   |   | Capital     |   | Deficit       |   | Deficit 
|                             |              |   |          |   |             |   |               |   |         
|Balance, December 31, 2003   | 6,850,000    | $ | 6,850    | $ | 74,374      | $ | (69,233)      | $ | 11,991  
|                             |              |   |          |   |             |   |               |   |         
|Net loss                     | -            |   | -        |   | -           |   | (23,316)      |   | (23,316)
|                             |              |   |          |   |             |   |               |   |         
|Balance, December 31, 2004   | 6,850,000    |   | 6,850    |   | 74,374      |   | (92,549)      |   | (11,325)
|                             |              |   |          |   |             |   |               |   |         
|Issuance of common stock for |              |   |          |   |             |   |               |   |         
|Cash                         | 20,000,000   |   | 20,000   |   | -           |   | -             |   | 20,000  
|                             |              |   |          |   |             |   |               |   |         
|Cancellation of common stock | (3,000,000)  |   | (3,000)  |   | 3,000       |   | -             |   | -       
|                             |              |   |          |   |             |   |               |   |         
|Net loss                     | -            |   | -        |   | -           |   | (21,506)      |   | (21,506)
|                             |              |   |          |   |             |   |               |   |         
|Balance, December 31, 2005   | 23,850,000   | $ | 23,850   | $ | 77,374      | $ | (114,055)     | $ | (12,831)











































See notes to consolidated financial statements.



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ONLINE HOLDINGS, INC.

Statements of Cash Flows





|                                          |   |                                  |   |         
|----------------------------------------- | - | -------------------------------- | - | --------
|                                          |   | For the Years Ended December 31,
|                                          |   | 2005                             |   | 2004    
|                                          |   |                                  |   |         
|Cash flows from operating activities      |   |                                  |   |         
|Net loss                                  | $ | (21,506)                         | $ | (23,316)
|Changes in assets and liabilities         |   |                                  |   |         
|Interest Receivable                       |   | (340)                            |   | 0       
|Accounts Payable & Accrued expenses       |   | 9,107                            |   | 567     
|                                          |   |                                  |   |         
|Net cash used by operating activities     |   | (12,739)                         |   | (22,749)
|                                          |   |                                  |   |         
|Cash flows from financing activities      |   |                                  |   |         
|Proceeds from note payable- stockholder   |   | -                                |   | 15,000  
|Proceeds from issuance of common Stock    |   | 20,000                           |   | -       
|                                          |   |                                  |   |         
|Net Cash provided by financing activities |   | 20,000                           |   | 15,000  
|                                          |   |                                  |   |         
|Net increase (decrease) in cash           |   | 7,261                            |   | (7,749) 
|                                          |   |                                  |   |         
|Cash, beginning of period                 |   | 4,242                            |   | 11,991  
|                                          |   |                                  |   |         
|Cash, end of period                       | $ | 11,503                           | $ | 4,242   





Supplemental disclosure of non-cash investing activities:





The Company paid no interest during the years ended December 31, 2005 and 2004.











See notes to consolidated financial statements.



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ONLINE HOLDINGS, INC.



Notes to Financial Statements



Note 1  Organization and Summary of Significant Accounting Policies



Online Holdings, Inc. and Subsidiaries (the Company), was incorporated July 27, 2001 in the state of Nevada.  The Company is organized for the purpose of developing and marketing easily maintained website systems.  The Company ceased business operations effective December 31, 2003.  Prior to ceasing business operations, the Company operated through its wholly owned subsidiary, E-Site Technologies, Inc., a Colorado corporation that was incorporated January 26, 2000.



The Company is no longer considered a development stage company for the year ended December 31, 2005.  In prior years the Company had been classified as a development stage company.



Managements Plan



The Company ceased operations in December 31, 2003.  Resumption of operations is contingent upon the results of the Companys investigation into new capital and business opportunities.  The Companys current operating plan is to continue searching for potential businesses, products, technologies and companies for acquisition and to handle the administrative and reporting requirements of a public company.  Although there are no firm commitments, the Company will rely on advances from its management until an acquisition is consummated.



Reorganization



In August 2001, Online Holdings, Inc. (Online) acquired all of the issued and outstanding common shares of E-Site Technologies, Inc. (E-Site) in exchange for 4,000,000 shares of common stock of Online.  For financial reporting purposes, the business combination was accounted for as an additional capitalization of the Company (a reverse acquisition with E-Site as the acquirer).  E-Site is considered the surviving entity.  The historical financial statements prior to the merger are those of E-Site.  At the time of the merger, Online had no assets and a net book value of $(108) and after the transaction, E-Site shareholders held 81% of the common stock of the Company.



Cash



The Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents.







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ONLINE HOLDINGS, INC.



Notes to Financial Statements



Note 1  Organization and Summary of Significant Accounting Policies (continued)





Income Taxes



Deferred income taxes result from temporary differences.  Temporary differences are differences between the tax basis of assets and liabilities and their reported amounts in the financial statements that will result in taxable or deductible amounts in future years.  The measurement of deferred tax assests in reduced, if necessary, by the amount of any tax benefits that, based on available evidence, are not expected to be realized.



Use of Estimates



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



Basic Earnings Per Share



The Company has adopted the provisions of Statement of Financial Accounting Standards No. 128, Earning Per Share (SFAS 128).  SFAS 128 established new definitions for calculating and disclosing basic and diluted earning per share.  Basic earnings per share are based upon the weighted average number of shares outstanding as defined in SFAS 128.  Diluted earnings per shares is not presented, as there are no potential dilutive common shares.



Comprehensive Income



The Company adopted Statement of Financial Accounting Standard No. 130 (SFAS 130), Comprehensive Income.  There were no components of comprehensive income; consequently, no separate statement of comprehensive income has been presented.





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ONLINE HOLDINGS, INC.



Notes to Financial Statements





Note 1  Organization and Summary of Significant Accounting Policies (continued)



Fair Value of Financial Instruments



The carrying amount of cash approximates fair value due to the short-term maturity of these instruments.  The carrying amount of note payable  stockholder approximate the interest rate on debt with similar terms available to the Company.



Recently Issued Accounting Pronouncements



In December 2004, the FASB issued SFAS 123R Share-Based Payment,  a revision to FASB No. 123, SFAS 1223R replaces existing requirements under SFAS 123 and APB 25, and requires public companies to recognize the cost of employee services received in exchange for equity instruments, based on the grant-date fair value of those instruments, with limited exception.  SFAS 123R also affects the pattern in which compensation costs is recognized, the accounting for employee share purchase plan, and the accounting for income tax effects of share-based payment transactions.  For small-business filers, SFAS 123R will be effective for interim periods beginning after December 15, 2005.  Management believes this Statement will currently have no impact on the financial statements of the Company once adopted.



In June 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections  replacement of APB Opinion No. 20 and FASB Statement No. 3 (SFAS 154). SFAS 154 changes the accounting for and reporting of a change in accounting principle by requiring retrospective applications to prior periods financial statements of changes in accounting principle unless impracticable. SFAS 154 is effective for accounting changes made in fiscal years beginning after December 15, 2005. The Company does not expect the adoption of SFAS 154 to have a material impact on its results of operations, financial position or cash flows.



Reclassifications



Certain 2004 balances have been reclassified to conform with 2005 presentations.



Note 2  Note Payable  Stockholder



The Companys former sole officer and stockholder made an unsecured demand loan to the company bearing interest at 15% annually.  The Balance outstanding at December 31, 2005 was $15,000.  The Company has also accrued $2,805 of interest on this note as of December 31, 2005.



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ONLINE HOLDINGS, INC.



Notes to Financial Statements





Note 3  Income Taxes



The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns.  Deferred tax liabilities and asset are determined based on the difference between the financial statement and tax basis of assets and liabilities using the enacted tax rates in effect for the year in which the differences are expected to reverse.  The measurement of deferred tax assets is reduced, if necessary, by the amount of any tax benefits that, based on available evidence, are not expected to be realized.



Financial statement and tax return temporary differences are carry forwards, which give rise to a significant portion of deferred tax assets and liabilities are as follows:



|                                        |   |              |   |         
|--------------------------------------- | - | ------------ | - | --------
|                                        |   | December 31,
|                                        |   | 2005         |   | 2004    
|                                        |   |              |   |         
|Loss carry-forwards                     | $ | 16,500       | $ | 13,350  
|                                        |   |              |   |         
|Valuation allowance                     | $ | (16,500)     | $ | (13,350)
|                                        |   |              |   |         
|Net deferred tax assets and liabilities | $ | -            | $ | -       



No tax consequences have been recognized in the statement of operations due to the Company generating taxable losses.  A valuation allowance has been established, which offsets a deferred tax asset or deferred benefit due to the Company not yet demonstrating that utilization of deferred tax assets will be realized.  As of December 31, 2005, the company has net operating loss carry-forwards for tax purposes of approximately $111,000.  If not used, these carry-forwards will expire between 2020 and 2025.



The following is a reconciliation of income taxes at the Federal Statutory rate with income taxes recorded by the Company.



|                                               |              |  |     
|---------------------------------------------- | ------------ |  | ----
|                                               | December 31,
|                                               | 2005         |  | 2004
|                                               |              |  |     
|Computed income taxes at the statutory rate    | 15%          |  | 15% 
|State income taxes, net of Federal tax benefit | 3            |  | 3   
|Valuation allowance                            | (18)         |  | (18)
|                                               |              |  |     
|                                               | -%           |  | -%  



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ONLINE HOLDINGS, INC.



Notes to Financial Statements





Note 5  Stockholders Equity



Common Stock



In April of 2005, the Company issued 20,000,000 shares of its common stock to Shaun Carter of its $0.001 par value common stock for $20,000.  Shaun is currently the sole officer and director of the company.  In connection with this stock purchase, the Companys former sole officer and director agreed to cancel 3,000,000 shares of his common stock in the Company.



Note 6  2001 Stock Incentive Plan



The Company applies Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (APB 25), and related interpretations in accounting for all stock option plans.



Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation (SFAS 123), requires the Company to provide pro forma information regarding net income as if compensation cost for the Companys stock option plans had been determined in accordance with the fair value based method prescribed in SFAS 123.  To provide the required pro forma information, the company estimates the fair value of each stock option at the grant date by using the Black-Scholes option-pricing model.



In August 2001, the Company adopted the 2001 Long-Term Stock Incentive Plan (the Plan), which provides for the grant to employees, officers, directors and consultants stock options or stock appreciation rights (SAR) up to an aggregate of 2,500,000 share of common stock, consisting of both incentive stock options and non-qualified options.  The exercise prices are determined by a committee elected by the board of directors at the time the Option or SAR is granted at an exercise price of not less than 100% of the fair market value of the common stock, on the date of grant.  To date no options or SARs have been granted under the plan









21