UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549



FORM 10-KSB



[ X ]

ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXHANGE ACT OF 1934



For the Fiscal Year ended December 31, 2004



[   ]

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



for the transition period from  _____ to _____



Commission File Number:  333-85460



ONLINE HOLDINGS, INC.

(Name of small business issuer as specified in its charter)



Nevada                                                            84-1598154

(State or other jurisdiction of                          (I.R.S. Employer Identification Number)

incorporation or organization)





8035 South Logan Court, Littleton, CO  80121

(Address of principal executive offices)



303-257-1619

(Issuers telephone number)



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



None



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



None



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



On December 31, 2004 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-.  At December 31, 2004 there were 6,850,000 shares of common stock of the registrant outstanding, par value $.001.



The issuers revenue for its most recent fiscal year was: $-0-.



Documents Incorporated by Reference: None.



Transitional Small Business Disclosure Format:  Yes [   ]  No [ X ]



1









FORM 10-KSB

ONLINE HOLDINGS, INC.

INDEX

|         |                                                                                                                                                                                                                                                                                                                                                                                              | Page             
|-------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------
|PART I   | Item 1.  Description of Business

Item 2.  Description of Property

Item 3.  Legal Proceedings

Item 4.  Submission of Matters to a Vote of Security Holders                                                                                                                                                                                                                                 | 3

5

5

5       
|PART II  | Item 5.  Market for Common Equity and Related Stockholder Matters

Item 6.  Managements Discussion and Analysis or Plan of Operation

Item 7.  Financial Statements

Item 8.  Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

Item 8A.  Controls and Procedures

Item 8B. Other Information                                                           | 5

6

7


7

7

7
|PART III | Item 9.  Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act

Item 10.  Executive Compensation

Item 11.  Security Ownership of Certain Beneficial Owners and Management

Item 12.  Certain Relationships and Related Transactions

Item 13.  Exhibits and Reports on Form 8-K

Item 14.  Principal Accountant Fees and Services | 7

8

8

9

9

10
|         | Signatures                                                                                                                                                                                                                                                                                                                                                                                   | 11               



(Inapplicable items have been omitted)



2







PART I





Item 1. Description of Business



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.



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 operate 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.



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







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.



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.





4







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



Our sole officer and director, Mr. Dennis Lairamore is our only employee. We do not anticipate hiring additional employees until our operations resume and expand to such a degree that necessitates hiring auxiliary staff. Mr. Lairamore has not received any salary or other remuneration since June of 2002.



Item 2. Description of Property



Our president provides office space at no charge.  However, we ceased operations on December 31, 2003.  Our previous operations required minimal facilities and we believe our use of the office was of negligible value. We anticipate that this arrangement will continue until such time as resumption of operations may require additional space.



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 Securities Holders



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



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, 2004, there were approximately 46 shareholders of record holding 6,850,000 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.





5







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



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 $23,316 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.



Results of Operations Years Ended December 31, 2003 and 2002



The Company had $2,740 in revenue from continuing operations for the year ended December 31, 2003. However, the cost of revenue for 2003 was $2,900 and operating expenses totaled $13,656 for the same period. Expenses during 2003 consisted largely of legal and accounting fees.



Online Holdings generated $6,800 in revenue from continuing website hosting accounts during the year ended December 31, 2002. However, cost of revenue during this period was $10,380 and operating expenses were $32,122. Operating expenses in 2002 consisted largely of legal and accounting fees associated with our public offering and ongoing reporting costs. Other expenses in 2002 included executive compensation of $14,500.



As a result of the foregoing factors, we realized a net loss of $13,816 for the year ended December 31, 2003 compared to net loss of $35,702 in 2002.



Liquidity and Capital Resources



At December 31, 2004 our assets consisted of $4,242 in cash.  We had liabilities at December 31, 2004 consisting of $567 in accrued expenses and $15,000 in notes payable for total liabilities of $15,567.  Stockholders deficit totaled $11,325 for the year ended December 31, 2004 compared to $11,991

for the year ended December 31, 2003. We have no capital commitments for the next 12 months.



We anticipate that our expenses for the next twelve months will be approximately $6,500.  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.



6







Item 7. Financial Statements



The financial statements of the Company appear at the end of this report beginning with the Index to Financial Statements on Page 13.



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.  The Company's management, with the participation of the chief executive officer and the chief financial officer, carried out an evaluation of the effectiveness of the Company's "disclosure, controls and procedures" (as defined in the Securities Exchange Act of 1934 (the "Exchange Act") Rules 13a-15(3) and 15-d-15(3) as of the end of the period covered by this quarterly report (the "Evaluation Date").  Based upon that evaluation, the chief executive officer and the chief financial officer concluded that, as of the Evaluation Date, the Company's disclosure, controls and procedures are effective, providing them with material information relating to the Company as required to be disclosed in the reports the Company files or submits under the Exchange Act on a timely basis.



(b)

Changes in Internal Control over Financial Reporting.  There were no changes in the Company's internal controls over financial reporting, known to the chief executive officer or the chief financial officer, that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.



Item 8B. Other Information



There are no further disclosures. All information that was required to be disclosed in a Form 8-K during the fourth quarter, 2004 has been disclosed.



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 | Positions                                           | Since
|---------------- | --- | --------------------------------------------------- | -----
|Dennis Lairamore | 36  | Chief Executive Officer and Chief Financial Officer | 2001 

The following is a brief summary of the business experience of Mr. Lairamore



Dennis Lairamore, President and Director. Mr. Lairamore holds a Bachelor of Science degree in

Accounting from the University of Northern Colorado. Since January 1999 he has been president of D.L. International, LLC where he is involved in investor relations, capital formation and strategic positioning

for companies. Mr. Lairamore is also the President and CEO of E-Site Technologies, Inc., a subsidiary of



Online Holdings, Inc. He has held that position since January 2000. In October 2000, Mr. Lairamore became General Partner of 1st Accredited Venture Capital, LLLP. Previously, Mr. Lairamore was Assistant Vice President of Investments for Kirkpatrick Pettis from July 1996 to January 1999. From November 1992 to July 1996 he worked for Dean Witter as an Account Executive.



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.



7









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.



Item 10. Executive Compensation



From August 2001 through June 2002 we paid our sole officer and director, Dennis Lairamore a salary of $2,000 per month. We are not currently providing any compensation to 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
|---------------------------------------------------------------- | -------------- | -------------- | ----------- | -------------------------
|Dennis Lairamore
Chief Executive Officer
Chief Financial Officer | 2004
2003
2002 | -0-
-0-
14,500 | -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.



The following table sets forth as of December 31, 2004, the name and shareholdings of each person known to us that either directly or beneficially holds more than 5% of our 6,850,000 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             
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ----------------------------------- | ------------------------
|Dennis Lairamore (1)
5957 South Birch Way
Littleton, CO 80121                                                                                                                                     | Common                     | 5,000,000                           | 72.99%                  
|Libco Equities, Inc.
C/O 899 South Artistic Circle
Springville, UT 84663

Bateman Dynasty LC
1065 West 1150 South
Provo, UT 84601

Gary J. McAdam (2)
14 Red Tail Drive
Highlands Ranch, CO 80126 | Common



Common



Common | 416,000



400,000



416,000       | 6.07 %



5.84%



6.07%
|Officers and Directors as a group
One Person                                                                                                                                                      | Common                     | 5,000,000                           | 72.99%                  





8







(1)

Officer and Director

(2) 404,000 shares representing 5.89% of total shares held in the name of Fortune Seekers, an entity owned and controlled by Gary J. McAdam. 4,000 shares representing 0.06% of total shares held in the name of GJM Trading Partners LTD, an entity owned and controlled by Gary J. McAdam.  4,000 shares representing 0.06% of total shares held in the name of Growth Ventures, Inc., an entity owned and controlled by Gary J. McAdam and 4,000 shares representing 0.06 of the total shares held in the name of Gary J. McAdam.



Item 12. Certain Relationships and Related Transactions.



The Company has entered into a sublicense agreement with 1st Accredited Venture Capital LLLP (1st Accredited) to use certain technology used in the companys website system solutions. Dennis Lairamore, the President and primary stockholder of the Company, is the general partner of 1st Accredited. As part of the sublicense agreement, 1st Accredited receives either co-ownership of a clients contact management database or a fee of $20,000. For the years ended December 31, 2003 and 2002, the Company paid no fees to 1st Accredited to develop or host a website for a customer of the Company.



The Company has an outstanding note payable dated September 30, 2004 to Dennis Lairamore in the amount of $15,000 with interest at the rate of 15% per annum, payable within 8 months from the date of the note or upon demand.



Item 13. Exhibits and Reports on Form 8-K.



The Company has adopted a code of ethics that applies to the Companys principal executive officer, principal financial officer, principal accounting officer or controller which was attached as Exhibit 99.1 to its 2002 Form 10KSB.  The Company will provide, at no cost, a copy of the Code of Ethics to any shareholder of the Company upon receiving a written request sent to the Companys address shown on Page 1 of this report.



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.





9







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 $4,500 for fiscal year ended 2004 and $5,250 for fiscal year ended 2003.



Audit-Related Fees



There were no fees for other audit related services for fiscal year ended 2004.



Tax Fees



There were no fees for tax compliance, tax advice and tax planning for the fiscal years 2004 and 2003.



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.





10







SIGNATURES



In accordance with the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



ONLINE HOLDINGS, INC.





Date: March 30,2005

By: /s/ Dennis Lairamore

Dennis Lairamore

CEO and Chief Financial Officer





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.







Date: March 30, 2005

By:/s/ Dennis Lairamore

Dennis Lairamore

Director









11







Table of Contents





Page



Independent Auditors Report

13



Consolidated Financial Statements



Consolidated Balance Sheet

14



Consolidated Statements of Operations

15



Consolidated Statement of Stockholders Deficit

16



Consolidated Statements of Cash Flows

17



Notes to Consolidated Financial Statements

18













12







REPORT OF REGISTERED PUBLIC ACCOUNTING FIRM





The Board of Directors and Stockholders

Online Holdings, Inc. and Subsidiaries

Littleton, Colorado



We have audited the accompanying consolidated balance sheet of Online Holdings, Inc. and Subsidiaries (a Development Stage Company) as of December 31, 2004 and the related consolidated statements of operations, stockholders deficit and cash flows for the years ended December 31, 2004 and 2003 and cumulative from January 26, 2000 (inception) through December 31, 2004.  These consolidated 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.  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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of Online Holdings, Inc. and Subsidiaries as of December 31, 2004, and the results of their operations and their cash flows for the years ended December 31, 2004 and 2003 and cumulative from January 26, 2000 (inception) to December 31, 2004 in conformity with accounting principles generally accepted in the United States of America.



The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.  As shown in the consolidated financial statements, the Company is in the development stage and has a stockholder deficit of $11,325.  The planned principal operations had commenced, but there has been no significant revenue therefrom.  This condition raises 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

March 30, 2005

Denver, Colorado



13







ONLINE HOLDINGS, INC. AND SUBSIDIARIES

(a Development Stage Company)



Consolidated Balance Sheet

December 31, 2004





|Assets                                                                                               
|-----------------------------------------------------------------------------------------------------
|Current assets                                                                                       
|Cash                                                                                                 
|                                                                                                     
|Total assets                                                                                         
|                                                                                                     
|Liabilities and Stockholders Equity (Deficit)                                                       
|                                                                                                     
|Current liabilities                                                                                  
|Accrued expenses                                                                                     
|Notes payable - stockholder                                                                          
|Total current liabilities                                                                            
|                                                                                                     
|Commitments                                                                                          
|                                                                                                     
|Stockholders equity (deficit)                                                                       
|Preferred stock, authorized 5,000,000 shares, $.001 par value; none issued or outstanding            
|Common stock, authorized 100,000,000 shares, $.001 par value; 6,850,000 shares issued and outstanding
|Additional paid-in capital                                                                           
|Deficit accumulated during the development stage                                                     
|Total stockholders equity (deficit)                                                                 
|                                                                                                     
|Total liabilities and stockholders equity (deficit)                                                 

























See notes to consolidated financial statements.



14







ONLINE HOLDINGS, INC. AND SUBSIDIARIES

(a Development Stage Company)



Consolidated Statements of Operations





|                                                        | For the Years Ended December 31, | Cumulative from January 26, 2000 (inception) through December 31,
|------------------------------------------------------- | -------------------------------- | -----------------------------------------------------------------
|                                                        | 2004                             | 2003                                                             
|                                                        |                                  |                                                                  
|Revenues                                                | $               0                | $         2,740                                                  
|                                                        |                                  |                                                                  
|Cost of revenues                                        | 0                                | 2,900                                                            
|                                                        | 0                                | (160)                                                            
|                                                        |                                  |                                                                  
|Operating expenses                                      | 23,316                           | 13,656                                                           
|                                                        |                                  |                                                                  
|Net loss                                                | $      (23,316)                  | $      (13,816)                                                  
|                                                        |                                  |                                                                  
|Loss per share  basic and diluted                      | $       (0.003)                  | $       (0.002)                                                  
|                                                        |                                  |                                                                  
|Weighted average shares outstanding - basic and diluted | 6,850,000                        | 6,850,000                                                        





























See notes to consolidated financial statements.



15







ONLINE HOLDINGS, INC. AND SUBSIDIARIES

(a Development Stage Company)

Consolidated Statement of Stockholders Deficit

|                                                                | Common Stock | Additional Paid-In | Deficit Accumulated During the Development | Total Stockholders
|--------------------------------------------------------------- | ------------ | ------------------ | ------------------------------------------ | -------------------
|                                                                | Shares       | Amount             | Capital                                    | Stage              
|Balance, January 26, 2000 (inception)                           | -            | $
-                | $
-                                        | $
-                
|                                                                |              |                    |                                            |                    
|Issuance of common stock for cash                               | 10,000       | 1,000              | -                                          | -                  
|                                                                |              |                    |                                            |                    
|Net loss                                                        | -            | -                  | -                                          | (1,000)            
|                                                                |              |                    |                                            |                    
|Balance, December 31, 2000                                      | 10,000       | 1,000              | -                                          | (1,000)            
|                                                                |              |                    |                                            |                    
|Issuance of common stock in connection with reverse acquisition | 3,990,000    | 3,000              | -                                          | (3,108)            
|                                                                |              |                    |                                            |                    
|Issuance of common stock for cash                               | 2,200,000    | 2,200              | 10,800                                     | -                  
|                                                                |              |                    |                                            |                    
|Net loss                                                        | -            | -                  | -                                          | (15,607)           
|                                                                |              |                    |                                            |                    
|Balance, December 31, 2001                                      | 6,200,000    | 6,200              | 10,800                                     | (19,715)           
|                                                                |              |                    |                                            |                    
|Issuance of common stock for cash                               | 650,000      | 650                | 63,574                                     | -                  
|                                                                |              |                    |                                            |                    
|Net loss                                                        | -            | -                  | -                                          | (35,702)           
|                                                                |              |                    |                                            |                    
|Balance, December 31, 2002                                      | 6,850,000    | 6,850              | 74,374                                     | (55,417)           
|                                                                |              |                    |                                            |                    
|Net loss                                                        | -            | -                  | -                                          | (13,816)           
|                                                                |              |                    |                                            |                    
|Balance, December 31, 2003                                      | 6,850,000    | 6,850              | 74,374                                     | (69,233)           
|                                                                |              |                    |                                            |                    
|Net loss                                                        | -            | -                  | -                                          | (23,316)           
|                                                                |              |                    |                                            |                    
|Balance, December 31, 2004                                      | $  6,850,000 | $         6,850    | $          74,374                          | $       (92,549)   



See notes to consolidated financial statements.



16







ONLINE HOLDINGS, INC. AND SUBSIDIARIES

(a Development Stage Company)



Consolidated Statements of Cash Flows





|                                          | For the Years Ended December 31, | Cumulative from January 26, 2000 (inception) through December 31,
|----------------------------------------- | -------------------------------- | -----------------------------------------------------------------
|                                          | 2004                             | 2003                                                             
|                                          |                                  |                                                                  
|Cash flows from operating activities      |                                  |                                                                  
|Net loss                                  | $          (23,316)              | $          (13,816)                                              
|Changes in assets and liabilities         |                                  |                                                                  
|Accrued expenses                          | 567                              | -                                                                
|                                          |                                  |                                                                  
|Net cash used by operating activities     | (22,749)                         | (13,816)                                                         
|                                          |                                  |                                                                  
|Cash flows from investing activities      |                                  |                                                                  
|Liability assumed in acquisition          | -                                | -                                                                
|Net cash used in investing activities     | -                                | -                                                                
|                                          |                                  |                                                                  
|Cash flows from financing activities      |                                  |                                                                  
|Deferred offering costs                   | -                                | -                                                                
|Proceeds from note payable                | 15,000                           | -                                                                
|Principal payments on notes payable       | -                                | -                                                                
|Proceeds from issuance of common stock    | -                                | -                                                                
|Net cash provided by financing activities | 15,000                           | -                                                                
|                                          |                                  |                                                                  
|Net increase (decrease) in cash           | (7,749)                          | (13,816)                                                         
|                                          |                                  |                                                                  
|Cash, beginning of period                 | 11,991                           | 25,807                                                           
|                                          |                                  |                                                                  
|Cash, end of period                       | $             4,242              | $           11,991                                               



Supplemental disclosure of non-cash investing activities:



During the year ended December 31, 2001, the Company entered into a merger agreement, which has been accounted for as a reverse acquisition.



During the year ended December 31, 2002, deferred offering costs of $17,026 were netted against proceeds from the issuance of common stock.





See notes to consolidated financial statements.



17









ONLINE HOLDINGS, INC. AND SUBSIDIARIES

(a Development Stage Company)



Notes to Consolidated 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 a development stage company that has had only a small amount of revenue from operations since inception, which raises substantial doubt about the entitys ability to continue as a going concern.  There is no assurance that the Company will generate revenue or earn profit in the future.



Managements Plans



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.



Principles of Consolidation



The consolidated financial statements include the accounts of Online Holdings, Inc. and its wholly owned subsidiary, collectively referred to as the Company.  All significant intercompany transactions and balances have been eliminated.



Concentrations of Credit Risk



The Company grants credit in the normal course of business to customers in the United States.  The Company periodically performs credit analysis and monitors the financial condition of its customers to reduce credit risk.





18







ONLINE HOLDINGS, INC. AND SUBSIDIARIES

(a Development Stage Company)



Notes to Consolidated Financial Statements





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



Revenue Recognition



Website design revenue is recognized when all material services and conditions related to the design and performance of the website have been performed by the Company and accepted by the customer.  Retainers received up front by the Company, if any, are recorded as customer deposits and recognized as revenue as described above.



Website hosting fees are recognized when earned on a monthly basis.



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 assets is 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 States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.



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.  No diluted earnings per share are 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.





19







ONLINE HOLDINGS, INC. AND SUBSIDIARIES

(a Development Stage Company)



Notes to Consolidated 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 123R 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 exceptions. SFAS 123R also affects the pattern in which compensation cost is recognized, the accounting for employee share purchase plans, 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.



Note 2  Related Party Transactions



The Company has entered into a sublicense agreement with 1st Accredited Venture Capital LLLP (1st Accredited) to use certain technology used in the Companys website system solutions.  The President and primary stockholder of the Company is the general partner of 1st Accredited.  As part of the sublicense agreement, 1st Accredited receives either co-ownership of a clients contact management database or a fee of $20,000.  For the years ended December 31, 2003 and 2002, the Company paid no fees to 1st Accredited to develop or host a website for a customer of the Company.



Note 3  Note Payable  Stockholder



The Companys sole officer and primary stockholder made an unsecured demand loan to the Company bearing interest at 6% annually.  The balance outstanding at December 31, 2004 was $15,000.  The Company has also accrued $567 of interest on this note as of December 31, 2004.



20









ONLINE HOLDINGS, INC. AND SUBSIDIARIES

(a Development Stage Company)



Notes to Consolidated Financial Statements



Note 4  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 assets 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 and carryforwards, which give rise to a significant portion of deferred tax assets and liabilities are as follows:



|                                        | December 31,      
|--------------------------------------- | ------------------
|                                        | 2004              
|                                        |                   
|Loss carryforwards                      | $       13,350    
|Valuation allowance                     | (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 any 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, 2004, the company has net operating loss carry-forwards for tax purposes of approximately $89,000.  If not used, these carry-forwards will expire between 2020 and 2024.



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



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





21







ONLINE HOLDINGS, INC. AND SUBSIDIARIES

(a Development Stage Company)



Notes to Consolidated Financial Statements





Note 5  Stockholders Equity



Common Stock



The company completed its public offering in July of 2002.  The Company issued 650,000 shares of $0.001 par value common stock at $0.125 per share.  In connection with the public offering, the Company paid offering costs of $17,026, which were netted against the proceeds received.





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 shares of common stock, consisting of both incentive stock options and non-qualified options.  The exercise price is 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.









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