UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

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

For the fiscal year ended: December 31, 2005     Commission File Number: 0-32323


                           MOTORSPORTS EMPORIUM, INC.
                 (Name of Small Business Issuer in Its charter)

           Nevada                                                 20-1217659
(State or Other Jurisdiction of                                (I.R.S. Employer
 Incorporation or Organization)                              Identification No.)

             16055 N. Dial Blvd., Suite 5, Scottsdale, Arizona 85260
               (Address of Principal Executive Offices) (Zip Code)

                                 (480) 596-4002
                (Issuer's Telephone Number, including Area Code)

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

                                      None

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

                         Common Stock, $0.001 Par Value

     Check whether the registrant: (1) has filed all reports required to be
filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes [X] 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 [ ] No [X]

     The Issuer's revenues for the most recent fiscal year ended December 31,
2005, were approximately $222,025.

     The aggregate market value of the voting and non-voting common equity held
by non-affiliates of the Registrant on February 28, 2006, based upon the average
bid and ask price of the common stock on the Over the Counter Bulletin Board for
such date, was approximately $1,050,715.

     The number of shares of the Registrant's common stock issued and
outstanding on March 10, 2006, was 300,286,931

                    DOCUMENTS INCORPORATED BY REFERENCE: NONE

     Transitional Small Business Disclosure Format. Yes [ ] No [X]
<PAGE>
                                TABLE OF CONTENTS

ITEMS                                                                       PAGE
-----                                                                       ----
                                     PART I
Item 1.    Description of Business                                           1
Item 2.    Description of Property                                           7
Item 3.    Legal Proceedings                                                 8
Item 4.    Submission of Matters to a Vote of Security Holders               9

                                    PART II

Item 5.    Market For Common Equity, Related Stockholder Matters and         9
           Small Business Issuer Purchases of Equity Securities
Item 6.    Management's Discussion and Analysis or Plan of Operation         11
Item 7.    Financial Statements                                              14
Item 8.    Changes in and Disagreements with Accountants on                  14
           Accounting and Financial Disclosure
Item 8A.   Controls and Procedures                                           14
Item 8B.   Other Information                                                 14

                                    PART III

Item 9.    Directors, Executive Officers, Promoters and Control Persons
           of the Registrant; Compliance with Section 16(a) of the
           Exchange Act                                                      15
Item 10.   Executive Compensation                                            17
Item 11.   Security Ownership of Certain Beneficial Owners and               20
           Management and Related Stockholder Matters
Item 12.   Certain Relationships and Related Transactions                    22
Item 13.   Exhibits                                                          24
Item 14.   Principal Accountant Fees and Services                            24
<PAGE>
                              CAUTIONARY STATEMENT

     This Form 10-KSB contains "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. Some of the statements
contained in this Form 10-KSB for Motorsports Emporium, Inc. (the "Company")
discuss future expectations, contain projections of results of operation or
financial condition or state other "forward-looking" information. These
statements are subject to known and unknown risks, uncertainties, and other
factors that could cause the actual results to differ materially from those
contemplated by the statements. The forward-looking information is based on
various factors and is derived using numerous assumptions.

     Management expresses its expectations, beliefs and projections in good
faith and believes the expectations reflected in these forward-looking
statements are based on reasonable assumptions; however, Management cannot
assure current stockholders or prospective stockholders that these expectations,
beliefs and projections will prove to be correct. Such forward-looking
statements reflect the current views of Management with respect to the Company
and anticipated future events.

     Management cautions current stockholders and prospective stockholders that
such forward-looking statements, including, without limitation, those relating
to the Company's future business prospects, demand for its products, revenues,
capital needs, expenses, development and operation costs, wherever they occur in
this Form 10-KSB, as well as in the documents incorporated by reference herein,
are not guarantees of future performance or results, but are simply estimates
reflecting the best judgment of Management and involve a number of risks and
uncertainties that could cause actual results to differ materially from those
suggested by such forward-looking statements.

      Important factors that may cause actual results to differ from projections
include, for example:

     *    the success or failure of management's efforts to implement their
          business strategy;

     *    the ability of the Company to raise sufficient capital to meet
          operating requirements;

     *    the uncertainty of consumer demand for our product;

     *    the ability of the Company to protect its intellectual property
          rights;

     *    the ability of the Company to compete with major established
          companies;

     *    the effect of changing economic conditions;

     *    the ability of the Company to attract and retain quality employees;
          and

     *    other risks which may be described in future filings with the SEC.

     Words such as "anticipates," "expects," "intends," "plans," "believes,"
"seeks," "estimates," and variations of such words and similar expressions are
intended to identify such forward-looking statements. These statements are not
guarantees of future performance and are subject to certain risks, uncertainties
and assumptions that are difficult to predict. Therefore, actual results and
outcomes may differ materially from what is expressed or forecasted in any such
forward-looking statements. Such risks and uncertainties include those set forth
herein under "Certain Business Risks in Item 1," as well as those noted in the
documents incorporated herein by reference. Unless required by law, the Company
undertakes no obligation to update publicly any forward-looking statements,
whether as a result of new information, future events or otherwise.
<PAGE>
                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS.

BUSINESS DEVELOPMENT

     MotorSports Emporium, Inc. (the "Company") was incorporated as Ten Stix
Inc. on January 10, 1996 under the laws of the State of Colorado to engage in
the design, development and marketing of unique card games and other gaming
products for the gaming industry.

     During February 2004, the officers and directors of the Company formed Ten
Stix Gaming, Inc., on behalf of the Company.

     On August 10, 2004, Ten Stix, Inc. changed its domicile from Colorado to
Nevada.

     On August 26, 2004, the Company issued a total of 400,000 restricted shares
of common stock valued at $1,200. 200,000 shares were issued to each of Tony A.
Cranford and Thomas E. Sawyer in consideration and exchange for 1,100,000 shares
of common stock of Ten Stix Gaming, Inc., a Colorado corporation, thereby making
Ten Stix Gaming, Inc., a wholly owned subsidiary of the Company.

     On October 20, 2004, Ten Stix, Inc., announced that the Company is
evaluating multiple opportunities in the motor sports industry that could
provide a new direction for the company.

     On October 22, 2004, Ten Stix, Inc., announced that the Company is seeking
acquisition candidates with successful Internet or retail based operations in
the motorsports industry.

     On November 10, 2004, the Company formed a wholly owned subsidiary,
Scottsdale Diecast, Inc. in Arizona.

     The Company, through its wholly owned subsidiary, Scottsdale Diecast,
entered into an Asset Purchase Agreement (the "Agreement") with ScaleCars,
effective as of November 23, 2004, which acquisition closed on November 24,
2004. Pursuant to the terms of the Agreement, the Company acquired all of the
business assets of ScaleCars, in consideration of (a) $166,919.89, evidenced by
a Promissory Note executed by Scottsdale Diecast in favor of ScaleCars and (b)
4,900,000 restricted common shares of the Company.

     On November 30, 2004, the Company amended its Articles of Incorporation to
change its name to MotorSports Emporium, Inc. in order to bring the name of the
Company in line with its new business focus, targeting motor sports enthusiasts.

     On December 7, 2004, the Company announced that as a result of that change
of its name the stock-trading symbol has been changed to "MSEP."

     On December 20, 2004, the Company entered into an Assignment Agreement and
General Release with Thomas A. Sawyer, Tony Cranford and Ten Stix Gaming, Inc.,
a wholly-owned subsidiary of the Company.

     On December 21, 2004, the Company announced that the Company had completed
the divestiture of all interest in Ten Stix Gaming, Inc., and the gaming related
business, to Messrs. Thomas Sawyer and Tony Cranford. Pursuant to the terms of
the Assignment Agreement and General Release, in consideration of the assignment
of 100% of the issued and outstanding common stock of Ten Stix Gaming, Inc., by
the Company to Messrs. Sawyer and Cranford, with the exception of the provision
of the Management Severance Agreement which provides for the execution of
Consulting Agreements with Mr. Sawyer and Mr. Cranford, under which Mr. Sawyer
and Mr. Cranford were contractually entitled to receive an aggregate of $60,000
for consulting services, Ten Stix Gaming, Inc., Mr. Sawyer and Mr. Cranford,
released the Company, its assigns, officers, directors, attorneys, agents,
consultants, representatives, principals, predecessors and successors in
interest, from any and all claims, demands, obligations pursuant to any
agreement, liabilities, or causes of action of any nature whatsoever that Ten

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<PAGE>
Stix Gaming, Inc., Mr. Sawyer and Mr. Cranford may now have or hereinafter
acquire against the Company, including without limitation the payment of any
deferred and unpaid accrued salaries, compensation, loans to and on behalf of
the Company, reimbursement and/or any other claims. With the disposition of all
the common stock of Ten Stix Gaming, Inc., the Company completely divested
itself of any interest in Ten Stix Gaming, Inc., and the gaming related
business. The transaction was completed on December 20, 2004.

     The Company's principal executive offices are located at 16055 N. Dial
Blvd., Suite 5, Scottsdale, Arizona 85260. Its telephone number is (480)
596-4002 and its facsimile number is (480) 556-0831.

     The Company has generated limited revenues and has incurred substantial
selling, general and administrative expenses. The Company's auditors, HJ &
Associates, LLC, have expressed doubt about the Company's ability to continue as
a going concern, as evidenced in the auditor's report to the Financial
Statements. See "Part II. Item 7. Financial Statements."

BUSINESS OF ISSUER

     The Company, its wholly owned subsidiary ScaleCars.com, and the Company's
operating divisions, DriversDigs.com, PitStopStudios.com and Quadriga
MotorSports are in the motor sports industry targeting motor sports enthusiasts
who participate in automobile restoration, automobile racing, the collection of
die cast collectibles and other motor sports-related ventures. The Company sells
die cast automobiles, race related apparel, automotive art and has the exclusive
rights to manufacture and sell GS610(TM) Maximum Performance Brake Fluid(TM).
With exception of the brake fluid, items are sold in their retail storefront and
on line through various web sites including eBay(R). The GS610(TM) Maximum
Performance Brake Fluid(TM) will be sold both online and through national retail
specialty shops.

     Scalecars.com was formed in late 1999 by former Ferrari Challenge Driver,
Ron Adams who drove the #64 Ferrari 360 Modena in the North American Ferrari
Challenge Series. Scalecars.com has a retail location at 16055 North Dial Blvd,
Suite 5 in Scottsdale, Arizona and maintains an inventory of over 2,400 die cast
car models from the early Deuce Coupe to the Ferrari Enzo, as well as racing
related clothing and driver signature series.

     DriversDigs, an operational division of the Company, sells autographed
authentic apparel including racing suits, helmets, gloves and shoes worn by
professional race car drivers.

     PitStopStudios is another working division of the Company that sells
automotive related pictures, lithographs, drawings and race related artwork.

     Quadriga MotorSports is the Company's newest division and specializes in
high performance automotive parts and accessories. Under the Quadriga brand, the
Company has an exclusive license to manufacture and sell GS610(TM) Maximum
Performance Brake Fluid(TM).

PRODUCTS AND SERVICES

     The Company sells die cast replica cars, motor sports apparel and novelty
items through its subsidiary ScaleCars.com. The DriversDigs division of the
Company sells and promotes authentic memorabilia owned and autographed by racing
drivers. The Company also has an exclusive license to manufacture and distribute
a high quality performance brake fluid - GSs610(TM) Maximum Performance Brake
Fluid(TM).

     The Company's efforts in 2005 focused on securing third-party manufacturing
contracts and developing a sales and distribution infrastructure for the brake
fluid product.

MARKETING AND DISTRIBUTION

     The Company markets its diecast and collectible products through its retail
storefront that is open to the general public, via the Internet and through
email campaigns to opt-in customers and interested parties. The Company also
participates in vender events to include car shows, auctions and special venues.

                                       2
<PAGE>
The Company has a large distribution channel of existing customers and newly
registered participants to receive a quarterly product catalog and special email
campaign to showcase sales and offers.

     The Company intends to market its GS610(TM) Master Performance Brake
Fluid(TM) product line through racing sponsorships and internet advertising
beginning in 2006. The Company also intends to distribute its high performance
brake fluid product line through automotive and other retail outlets.

MARKETING STRATEGY

     Currently the Company is engaged in sponsoring several high profile racing
drivers who display the Company's subsidiaries and operational divisions' logos
on their race uniforms, helmets and/or racing cars. Additionally, the Company
has participated in in-kind sponsorship within NASCAR and IRL sanctioned racing
series. Additionally, the Company has utilized television, magazine, newspaper
and radio marketing for its specific industry. Moving forward, the Company plans
to enhance its marketing via the Internet and continue with television and
magazine advertising.

STRATEGIC ALLIANCES

     None.

COMPETITIVE BUSINESS CONDITIONS

     The Company competes with other automobile and sports-related collectible
and memorabilia businesses. The Company also competes with certain collectible
manufacturers that sell their products directly to consumers. The Company
believes that its competitive strength lies in its relationships with key
drivers and other individuals in the motorsports industry. However, the Company
is smaller and has fewer capital resources than many of its competitors.

RAW MATERIALS AND SUPPLIES

     The Company is a reseller of its collectible products and is not dependent
on raw material or supply agreements for those products. With respect to its
brake fluid business, the Company outsources all manufacturing and packaging to
third-party suppliers. While the Company has sole source arrangements for
certain facets of its brake fluid production, it attempts to minimize this risk
by engaging only large, well-established suppliers.

DEPENDENCE ON ONE OR A FEW MAJOR CUSTOMERS

     The Company believes that the diversity of the products and services it
offers helps alleviate the dependence on any one customer or limited group of
customers. Through the widespread use of the Company's products and services in
the motor sports industries, the Company will continue to increase its customer
base.

INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS

     The company owns a ten-year exclusive license to manufacture and distribute
GSs610(TM) Maximum Performance Brake Fluid(TM). The Company owns no patents,
franchises, royalty agreements or registered trademarks and is not a party to
any labor contracts.

EFFECT OF EXISTING OR PROBABLE GOVERNMENTAL REGULATIONS

     The Company's common stock is registered pursuant to Section 12(g) of the
Securities Exchange Act of 1934 (the "1934 Act"). As a result of such
registration, the Company is subject to Regulation 14A of the "1934 Act", which
regulates proxy solicitations. Section 14(a) requires all companies with
securities registered pursuant to Section 12(g) thereof to comply with the rules
and regulations of the Commission regarding proxy solicitations, as outlined in
Regulation 14A. Matters submitted to stockholders of the Company at a special or
annual meeting thereof or pursuant to a written consent will require the Company
to provide its stockholders with the information outlined in Schedules 14A or
14C of Regulation 14; preliminary copies of this information must be submitted

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<PAGE>
to the Commission at least 10 days prior to the date that definitive copies of
this information are forwarded to stockholders.

     The Company is also required to file annual reports on Form 10-KSB and
quarterly reports on Form 10-QSB with the Commission on a regular basis, and
will be required to disclose certain events in a timely manner, (e.g. changes in
corporate control; acquisitions or dispositions of a significant amount of
assets other than in the ordinary course of business; and bankruptcy) in a
Current Report on Form 8-K.

     Since the Company outsources the manufacturing, packaging and fulfillment
of its brake fluid product line, management is of the opinion that the Company
has no exposure to or from environmental laws and regulations (federal, state or
local).

     Aside from required compliance with federal and state securities laws,
regulations and rules, and federal, state and local tax laws, regulations and
rules, the Company is not aware of any other governmental regulations now in
existence or that may arise in the future that would have an effect on the
business of the Company.

CERTAIN BUSINESS RISKS

     The risks and uncertainties described below are not the only ones facing
the Company and there may be additional risks that are not presently known or
are currently deemed immaterial. All of these risks may impair business
operations.

RISK THAT THE COMPANY'S COMMON STOCK MAY BE DEEMED A "PENNY STOCK"

     The Company's common stock may be deemed to be a "penny stock" as that term
is defined in Rule 3a51-1 of the 1934 Act. Penny stocks are stocks (i) with a
price of less than five dollars per share; (ii) that are not traded on a
"recognized" national exchange; (iii) whose prices are not quoted on the NASDAQ
automated quotation system (NASDAQ-listed stocks must still meet requirement (i)
above); or (iv) of an issuer with net tangible assets of less than US$2,000,000
(if the issuer has been in continuous operation for at least three years) or
US$5,000,000 (if in continuous operation for less than three years), or with
average annual revenues of less than US$6,000,000 for the last three years.

     A principal exclusion from the definition of a penny stock is an equity
security that has a price of five dollars ($5.00) of more, excluding any broker
or dealer commissions, markups or markdowns. As of the date of this report the
Company's common stock has a price less than $5.00.

      If the Company's Common Stock is at any time deemed a penny stock, section
15(g) and Rule 3a51-1 of the 1934 Act would require broker-dealers dealing in
the Company's Common Stock to provide potential investors with a document
disclosing the risks of penny stocks and to obtain a manually signed and dated
written receipt of the document before effecting any transaction in a penny
stock for the investor's account. Potential investors in the Company's common
stock are urged to obtain and read such disclosure carefully before purchasing
any shares that are deemed to be "penny stock."

      Moreover, Rule 15g-9 of the 1934 Act requires broker-dealers in penny
stocks to approve the account of any investor for transactions in such stocks
before selling any penny stock to that investor. This procedure requires the
broker-dealer to (i) obtain from the investor information concerning his or her
financial situation, investment experience and investment objectives; (ii)
reasonably determine, based on that information, that transactions in penny
stocks are suitable for the investor and that the investor has sufficient
knowledge and experience as to be reasonably capable of evaluating the risks of
penny stock transactions; (iii) provide the investor with a written statement
setting forth the basis on which the broker-dealer made the determination in
(ii) above; and (iv) receive a signed and dated copy of such statement from the
investor, confirming that it accurately reflects the investor's financial
situation, investment experience and investment objectives. Compliance with
these requirements may make it more difficult for investors in the Company's
common stock to resell their shares to third parties or to otherwise dispose of
them.

                                       4
<PAGE>
COMPETITION

     To the Company's knowledge, there are no publicly held competitors;
however, Speedgear and Exoticcar are privately held companies that sell items
that compete with the offerings of the Company. The die cast car manufacturing
business is extremely competitive which is why the Company is a product
reseller. Since the Company is extremely diverse with the products it sells, the
Company has become selective in purchasing from manufacturers and is able to
secure better pricing. There is no guarantee, however, that these opportunities
will continue in the future and there is no guarantee that one of the Company's
competitors may not be able to secure a greater share of the market through
pricing.

VOLATILE AND LIMITED MARKET FOR COMMON STOCK

     As of December 31, 2005, the Company's common stock was quoted on the
"Bulletin Board" under the symbol "MSEP.OB." "OTC" or "Over The Counter"
securities are issued by companies that either choose not to, or are unable to,
meet the standards for listing on the NASDAQ or a national stock exchange. OTC
equity securities can be quoted on the Pink Sheets Electronic Quotation Service,
or, if the companies meet the SEC reporting requirements and eligibility
requirements established by the NASD, such equity securities may be quoted on
the NASD OTC Bulletin Board Service.

      The market price of the Company's Common Stock has been and is likely to
continue to be highly volatile and subject to wide fluctuations due to various
factors, many of which may be beyond the Company's control, including: annual
variations in operating results; announcements of technological innovations or
new products by the Company or its competitors; and changes in financial
estimates and recommendations by securities analysts. In addition, there have
been large price and volume fluctuations in the stock market, which have
affected the market prices of securities of many small companies, often
unrelated to the operating performance of such companies. These broad market
fluctuations, as well as general economic and political conditions, may
adversely affect the market price of the Company's Common Stock. In the past,
volatility in the market price of a company's securities has often led to
securities class action litigation. Such litigation could result in substantial
costs and diversion of the Company's attention and resources, which could have a
material adverse effect on the Company's business, financial condition and
operating results.

DEPENDENCE ON KEY EMPLOYEES AND NEED FOR ADDITIONAL MANAGEMENT AND PERSONNEL

      The Company is heavily dependent on the ability of David Keaveney who has
contributed essential technical and management experience. The loss of his
services would have a material adverse effect on the Company's business.
However, his interests are closely aligned with those of the Company. There can
be no assurance that the Company will be able to employ qualified persons on
acceptable terms to replace him should his services become unavailable.

      In the event of future growth in administration, marketing, manufacturing
and customer support functions, the Company may have to increase the depth and
experience of its management team by adding new members. The Company's success
will depend to a large degree upon the active participation of its key officers
and employees, as well as, the continued service of its key management personnel
and its ability to identify, hire and retain additional qualified personnel.
There can be no assurance that the Company will be able to recruit such
qualified personnel to enable it to conduct its proposed business successfully.

RISKS ASSOCIATED WITH SIGNIFICANT FLUCTUATIONS IN ANNUAL OPERATING RESULTS

      The Company could experience significant fluctuations in future annual
operating results that may be caused by many factors, including the timing of
introductions or enhancements to its products by the Company or its competitors;
market acceptance of such newly introduced or upgraded products; the pace of
development of the market for the Company's products; changes in strategy; the
success of or costs associated with acquisitions, joint ventures or other
strategic relationships; changes in key personnel; seasonal trends; changes in
the level of operating expenses to support projected growth; and general
economic conditions.

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<PAGE>
RISKS ASSOCIATED WITH DELAYS IN INTRODUCTION OF NEW SERVICES AND PRODUCTS

     The Company's future success depends in part on the Company's ability to
develop and enhance the Company's products. There are significant technical
risks in the development of new products or enhanced versions of existing
products. There can be no assurance that the Company will be successful in
achieving any of the following: effectively using new technologies; adapting the
Company's products to emerging industry standards; developing, introducing and
marketing product enhancements; or developing, introducing and marketing new
products. The Company may also experience difficulties that could delay or
prevent the development, introduction or marketing of these products.
Additionally, these new products may not adequately meet the requirements of the
marketplace or achieve market acceptance. If the Company is unable to develop
and introduce enhanced or new products quickly enough to respond to market or
customer requirements, or if they do not achieve market acceptance, the
Company's business, financial condition and operating results will be materially
adversely affected.

RISKS ASSOCIATED WITH DEPENDENCE ON INTELLECTUAL PROPERTY RIGHTS

     The Company presently holds no intellectual property rights. The Company
intends to seek copyright and trademark protection of its trade names and
products. The Company's success and ability to compete are dependent to a degree
on the Company's name and product recognition. Accordingly, the Company will
primarily rely on copyright, trade secret and trademark law to protect its
product and brand names of products or under which the Company conducts its
business. Effective trademark protection may not be available for the Company's
trademarks. There can be no assurance that the Company will be able to secure
significant protection for the Company's trademarks.

      The Company's competitors or others may adopt product or service names
similar to the Company's, thereby impeding the Company's ability to build brand
identity and possibly leading to customer confusion. The Company's inability to
adequately protect its product, brand, trade names and trademarks would have a
material adverse effect on the Company's business, financial condition and
operating results. Despite any precautions the Company takes, a third party may
be able to copy or otherwise obtain and use the Company's software or other
proprietary information without authorization or to develop similar software
independently.

      Policing unauthorized use of the Company's products are made especially
difficult by the global nature of the Internet and the difficulty in controlling
the ultimate destination or security of products or other data. The laws of
other countries may afford the Company little or no effective protection for the
Company's intellectual property.

RISKS ASSOCIATED WITH ENTERING NEW MARKETS

     One element of the Company's strategy is to leverage the Company's brand
names of products that the Company provides. No assurance can be given that the
Company will be able to compete successfully in any such new markets. There can
be no assurance that the Company's marketing efforts or the Company's pursuit of
any new opportunities will be successful. If the Company's efforts are not
successful, the Company could realize less than expected earnings, which, in
turn, could result in a decrease in the market value of the Company's Common
Stock. Furthermore, such efforts may divert management attention or
inefficiently utilize the Company's resources.

SUBSTANTIAL DOUBT THAT THE COMPANY CAN CONTINUE AS A GOING CONCERN

      The Company expects to continue to incur significant capital expenses in
pursuing its business plan to market its products and expand its product line,
while obtaining additional financing through stock offerings or other feasible
financing alternatives. In order for the Company to continue its operations at
its existing levels, the Company will require significant additional funds over
the next twelve months. Therefore, the Company is dependent on funds raised
through equity or debt offerings. Additional financing may not be available on
terms favorable to the Company, or at all. If these funds are not available the
Company may not be able to execute its business plan or take advantage of
business opportunities. The ability of the Company to obtain such additional
financing and to achieve its operating goals is uncertain. In the event that the
Company does not obtain additional capital or is not able to increase cash flow
through the increase of sales, there is a substantial doubt of its being able to
continue as a going concern.

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<PAGE>
FUTURE CAPITAL NEEDS; UNCERTAINTY OF ADDITIONAL FUNDING

     No assurance can be given that the Company will be able to conduct its
marketing and product development programs as planned or that change in the
Company's marketing and product development plans or other changes affecting the
Company's operating expenses will not result in the expenditure of such proceeds
before such time. Contingencies may arise that require the Company to obtain
additional funding before that time. The Company's future capital requirements
will depend on many factors, including continued product development programs,
the magnitude of these programs, the time and expense involved in obtaining new
customers, competing technological and market developments, the establishment of
additional collaborative arrangements, the costs involved in filing and
prosecuting and enforcing copyright and trademark claims, establishing marketing
programs and conducting commercialization activities and arrangements for new
products and services.

SUBSTANTIAL FUTURE SALES OF STOCK; DILUTION

     There may be substantial sales of the Company stock, common or preferred as
a result of stock option exercises, stock bonuses, public and/or private sales
of the Company stock.. Sales of substantial amounts of stock could have a
material dilutive effect on stockholders. Additionally, it may be necessary to
offer warrants or options to obtain strategic relationships or to raise
additional capital. All of these issuances will dilute the holdings of existing
stockholders, thereby reducing such holder's percentage ownership.

NO DIVIDENDS

     The Company anticipates that it will use any funds available to finance its
growth and that it will not pay cash dividends to stockholders in the
foreseeable future.

HISTORY OF LOSSES; UNCERTAINTY OF FUTURE PROFITABILITY

      As of December 31, 2005, the Company had accumulated significant net
losses. The development of the Company's products will require the commitment of
substantial resources to increase its advertising, marketing and distribution of
its existing products and to complete the testing, manufacturing, marketing and
distribution of new products. These expenditures are expected to result in
substantial and increasing losses over the next several months. There can be no
assurance that the Company will not incur substantial and continuing net losses
beyond the next six months or that the Company will ever reach profitability.
Furthermore, there can be no assurance the Company's products will meet the
expectations and effectiveness required to be competitive in the market place,
that the Company will enter into arrangements for product development and
commercialization, successfully market its products, or achieve customer
acceptance.

REPORTS TO SECURITY HOLDERS

     The public may view obtain copies of the Company's reports, as filed with
the Securities and Exchange Commission, at the SEC's Public Reference Room at
450 Fifth Street, N.W., Washington, D.C. 20549. Information on the Public
Reference Room is available by calling the SEC at 1-800-SEC-0330. Additionally,
copies of the Company's reports are available and can be accessed and downloaded
via the internet on the SEC's internet site at
http://www.sec.gov/cgi-bin/srch-edgar, by simply typing in "MotorSports
Emporium, Inc." Additional Company information is available on the Company's
internet site at http://www.motorsportsemporium.com.

EMPLOYEES

     As of December 31, 2005, the Company had 7 employees. No union or any other
form of collective bargaining unit represents any employee. David W. Keaveney,
the President, Chief Executive Officer and Chief Financial Officer, has an
employment agreement with the Company.

ITEM 2. DESCRIPTION OF PROPERTY.

     The Company does not own any real estate. The Company's principal office is
maintained at 16055 N. Dial Blvd. Suite 5, Scottsdale, Arizona 85260, which
consists of an office area, a show room and work area, storage space and

                                       7
<PAGE>
warehouse. The Company leases its office space at $2,500 per month from ABR
Group, an unaffiliated third party. The leasehold consists of approximately
2,800 square feet. The current lease expires in November 2006 and the Company
has an option to terminate the lease upon 90 days' notice. Management believes
that the Company's offices are adequate for its reasonable foreseeable needs.
The Company does not intend to acquire any properties at the current date.
Additionally, David W. Keaveney has dedicated a fully operating office within
his primary residency so that he may conduct business after hours and on the
weekends. This home office contains approximately 800 square feet and
Mr.Keaveney receives $2,000 per month from the Company. This home office lease
arrangement is covered in Mr. Keaveney's employment agreement with the Company

ITEM 3. LEGAL PROCEEDINGS.

     The Company is currently involved in a variety of legal matters. Based on
information currently available, Management does not believe that the ultimate
resolution of these matters will have a material adverse effect on our financial
condition, results of operations or cash flows.

PENDING LITIGATION:

CASE NUMBER 05CV5129 X-CLEARING CORPORATION V. MOTORSPORTS EMPORIUM, INC.

     During the third quarter of 2005, the Company was made a defendant in the
matter of X-Clearing Corporation, FKA Global Stock Transfer and Global
Securities Transfer v. Ten Stix, Inc., NKA MotorSports Emporium, Inc., filed on
July 1, 2005, in the District Court for the City and County of Denver Colorado,
case number 05CV5129. The plaintiff is alleging breach of contract, collection
of debts owed and bad faith and is seeking damages in excess of $35,000. The
Company denies any liability to the plaintiff, and intends to vigorously defend
the lawsuit. As of the date of this Annual Report, the Company, along with its
attorney, is investigating the various documents produced by the Plaintiff
pursuant to the Company's discovery motions and requests. . A court date is
scheduled for July 2006.

CASE NUMBER: CV-2005-052607 MOTORSPORTS EMPORIUM, INC. VS. MICHAEL WACHHOLZ

     On October 6, 2005, the Company filed an Application for Preliminary
Injunction and Order to Show Cause against Mr. Michael Wachholz with the
Superior Court in Maricopa County Arizona for breach of contract, breach of
fiduciary duty, intentional interference with existing and prospective business
relationships, bad faith, failure to repay a loan and preliminary and permanent
injunctions. The Company has received a court date for March 10, 2006 to show
cause. The Company feels confident that it will prevail on the merits in the
actions filed against Mr. Wachholz.

THREATENED LITIGATION:

     The Company received a certified demand letter on July 9, 2005, from
A-Squared Holdings, Inc., formally Damascus Group, LLC and Robert L. and Jodi K.
Stevens. A-Squared Holdings, Inc. claims that MotorSports Emporium, Inc. (FKA
Ten Stix, Inc.) owes a loan balance of $62,000 plus interest, the proceeds from
the interests in the purchase of the Bonus 6 table game by Jodi Stevens, as well
as interest (at 12%), court fees, legal fees, etc. which will continue to
accrue. The Company denies the above allegations and is currently reviewing its
options with regard to these claims. No further action has been taken as of the
date of this filing. However the Company anticipates A-Squared Holdings, Inc.
will file a lawsuit against the Company claiming damages as set forth in the
demand letter.

     The Company is not aware of any other pending or threatened claims or
assessments that may have a material adverse impact on the Company's financial
position or results of operations.

                                       8
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     No matter was submitted to a vote of our shareholders during the fourth
quarter of 2005.

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS
        ISSUER PURCHASES OF EQUITY SECURITIES.

     As of the date of this Annual Report, the Company's Common Stock trades on
the Over-the-Counter Bulletin Board under the symbol "MSEP.OB." The market for
the Company's Common Stock is limited, volatile and sporadic and the price of
the Company's Common Stock could be subject to wide fluctuations in response to
quarterly variations in operating results, news announcements, trading volume,
sales of Common Stock by officers, directors and principal shareholders of the
Company, general market trends, changes in the supply and demand for the
Company's shares, and other factors. The following table sets forth the high and
low sales prices for each quarter relating to the Company's Common Stock for the
last two fiscal years. These quotations reflect inter-dealer prices without
retail mark-up, markdown, or commissions, and may not reflect actual
transactions.

            Fiscal 2005                     High       Low
            -----------                     ----       ---
         First Quarter (1)                 $0.089     $0.003
         Second Quarter (1)                $0.035     $0.012
         Third Quarter (1)                 $0.016     $0.008
         Fourth Quarter (1)                $0.014     $0.005

            Fiscal 2004                     High       Low
            -----------                     ----       ---
         First Quarter (1)                 $1.10      $0.004
         Second Quarter (1)                $0.05      $0.005
         Third Quarter (1)                 $0.007     $0.0014
         Fourth Quarter (1)                $0.0095    $0.0009

----------
(1)  This represents the closing bid information for the stock on the Non-Nasdaq
     OTC. The bid and ask quotations represent prices between dealers and do not
     include retail markup, markdown or commission. They do not represent actual
     transactions and have not been adjusted for stock dividends or splits.

     All of the above information was listed as reported by the National
Association of Securities Dealers Composite feed or other qualified inter-dealer
quotation medium.

HOLDERS

     As of December 31, 2005, there were approximately 227 shareholders of
record of the Company's Common Stock, 96 shareholders of record of the Company's
Series A Preferred Stock, and four (4) shareholders of record of the Company's
Series B Preferred Stock.

DIVIDENDS

     The Company has not declared any cash dividends with respect to its common
stock or preferred stock during the last two fiscal years and does not intend to
declare dividends in the foreseeable future. There are no material restrictions
limiting or that are likely to limit the Company's ability to pay dividends on
its outstanding securities.

     For information regarding the Company's Equity Compensation Plans, see Part
III, Item 11.

                                       9
<PAGE>
RECENT ISSUANCE OF UNREGISTERED SECURITIES

     During the fourth quarter of 2005, the Company authorized and issued an
aggregate of 2,007,550 shares of its restricted common stock to Tracey Baron, a
Director of the Company, in exchange for services valued at $15,000. These
shares were issued pursuant to the exemption from registration under Section
4(2) of the Securities Act of 1933.

     On December 30, 2005, the Company authorized and issued 863,636 shares of
its restricted common stock to David Keaveney, President of the Company, for
services rendered to the Company. These shares were issued pursuant to the
exemption from registration under Section 4(2) of the Securities Act of 1933.

SUBSEQUENT ISSUANCE OF UNREGISTERED SECURITIES

     On January 4, 2006, the Company authorized and issued 1,315,790 shares of
its restricted common stock to Tracy Baron in exchange for services valued at
$7,500. These shares were issued pursuant to the exemption from registration
under Section 4(2) of the Securities Act of 1933.

     On February 22, 2006, the Company authorized and issued 2,500,000 shares of
its restricted common stock to investors in exchange for cash totaling $10,000.
These shares were issued pursuant to the exemption from registration under
Section 4(2) of the Securities Act of 1933.

     On March 1, 2006, the Company authorized and issued 1,250,000 shares of its
restricted common stock to an investor in exchange for cash totaling $5,000.
These shares were issued pursuant to the exemption from registration under
Section 4(2) of the Securities Act of 1933.

RECENT ISSUANCE OF REGISTERED SECURITIES

     During the fourth quarter of 2005, the Company authorized and issued
18,500,000 unrestricted shares of common stock to employees pursuant to the
terms of that certain MotorSports Emporium, Inc. 2004 Employee Stock Incentive
Plan No. 3. The securities were registered under Securities Act of 1933 on Form
S-8, which became effective on December 16, 2004, and pursuant to an Order of
Effective Registration by Qualification pursuant to Section 44-1891 of the
Securities Act of Arizona that was granted on January 13, 2005.

SUBSEQUENT ISSUANCE OF REGISTERED SECURITIES

     Subsequent to December 31, 2005, the Company authorized and issued
10,974,338 unrestricted shares of common stock to consultants and 20,000,000
shares of common stock to employees pursuant to the terms of that certain
MotorSports Emporium, Inc. 2006 Employee Stock Incentive Plan. The securities
were registered under Securities Act of 1933 on Form S-8, which became effective
on January 26, 2006, and pursuant to an Order of Effective Registration by
Qualification pursuant to Section 44-1891 of the Securities Act of Arizona that
was granted on February 27, 2006

     Subsequent to December 31, 2005, the Company authorized and issued
15,600,000 unrestricted shares of common stock to employees pursuant to the
terms of that certain MotorSports Emporium, Inc. 2004 Employee Stock Incentive
Plan No. 3. The securities were registered under Securities Act of 1933 on Form
S-8, which became effective on December 16, 2004 and pursuant to an Order of
Effective Registration by Qualification pursuant to Section 44-1891 of the
Securities Act of Arizona that was granted on January 13, 2005.

     The Company did not utilize or engage a principal underwriter in connection
with any of the above securities transactions.

                                       10
<PAGE>
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

CAUTIONARY FORWARD - LOOKING STATEMENT

     The following discussion should be read in conjunction with our financial
statements and related notes.

     Certain matters discussed herein may contain forward-looking statements
that are subject to risks and uncertainties. Such risks and uncertainties
include, but are not limited to, the following:

     *    the volatile and competitive nature of our industry,
     *    the uncertainties surrounding the rapidly evolving markets in which we
          compete,
     *    the uncertainties surrounding technological change of the industry,
     *    our dependence on its intellectual property rights,
     *    the success of marketing efforts by third parties,
     *    the changing demands of customers and
     *    the arrangements with present and future customers and third parties.

     Should one or more of these risks or uncertainties materialize or should
any of the underlying assumptions prove incorrect, actual results of current and
future operations may vary materially from those anticipated. See also the
disclosures under "Cautionary Statement" following the Table of Contents in this
Annual Report.

GENERAL

     The "Company,"formally known as "Ten Stix, Inc.," changed its name to
"Motorsports Emporium, Inc." on December 1, 2004, under the laws of the State of
Nevada to engage in the fast track motor sports industry targeting enthusiasts
participating in die cast collecting, automobile restoration, high-performance
accessories, motor sports-related collectibles, driver's apparel, race venues
and product licensing.

     Our shares of common stock are traded on the OTC Bulletin Board under the
symbol "MSEP.OB"

     Our principal executive offices are located at 16055 N. Dial Blvd. Suite 5,
Scottsdale, AZ 85260. Our telephone number is (480) 596-4002 and facsimile
number is (480) 556-0831. More information regarding our company and our
products is available on our website at www.motorsportsemporium.com

EXECUTIVE OVERVIEW

     During 2005, we transformed our business away from the gaming operations of
Ten Stix, Inc. and began to develop a diverse business entity in the motor
sports industry, targeting enthusiasts who participate in automobile racing, die
cast collectible cars, automobile restoration, high-performance accessories,
motor sports-related collectibles, automotive and racing art, as well as
driver's apparel, race venues and product licensing. We initiated operations by
selling die-cast collectibles in December 2004, under the name ScaleCars.com and
have been steadily expanding our product portfolio to include race worn
memorabilia from well known professional racing drivers and sell these products
through our DriversDigs.com division. We sell our automotive and race related
art work sold through PitStopStudios.com, another division of the Company.. We
also have expanded our product portfolio through our acquisition of an exclusive
license to manufacture and distribute GS610(TM) Maximum Performance Brake
Fluid(TM), a high quality performance brake fluid.

     We have focused our efforts on expanding our existing lines of business, as
well as developing our high performance brake fluid line. We have begun to
manufacture our brake fluid and develop our sales and distribution
infrastructure and expect to generate revenues from this business in 2006.

     We have been incurring selling, general and administrative expenses
primarily to develop our existing businesses, improve our current infrastructure
to address anticipated growth and identify and evaluate complementary business
development opportunities and marketing. The development of these businesses has

                                       11
<PAGE>
led to recent operating losses and cash outflows. However, we believe that the
actions taken in 2005 will allow us to generate positive operating results in
the future.

RESULTS OF OPERATIONS - YEAR ENDED DECEMBER 31, 2005 COMPARED TO YEAR ENDED
DECEMBER 31, 2004

     Our net loss for the year ended December 31, 2005 was approximately
($1,010,499) compared to a net loss of approximately ($1,691,109) for the year
ended December 31, 2004 (a decrease of $680,610). We divested from the gaming
industry in 2004 and now operate a completely separate entity. The net loss of
$1,691,109 during 2004 includes a loss from discontinued operations in the
amount of $1,129,225. Revenues and expenses associated with discontinued
operations are reported separately as "Loss from discontinued operations" in the
consolidated statement of operations included elsewhere in this report.

     Net revenues for the years ended December 31, 2005 and 2004 were $222,025
and $22,168 respectively (an increase of $199,857). The increase in revenue
during the twelve-month period ended December 31, 2005 was due primarily to the
length of time in which the core business has been operating, as revenues from
our motorsports- related operations did not begin until the fourth quarter of
2004. We generated $90,435 in revenue in 2004 from discontinued businesses.

     Our net revenues consisted primarily of retail sales of die cast
collectible cars and automobile racing related merchandise. While the Company
acquired a license to distribute high performance brake fluid during the third
quarter of 2005, sales related to this line of business were insignificant as we
devoted most of our efforts in 2005 toward developing our manufacturing,
distribution and marketing infrastructure.

     Cost of sales for the years ended December 31, 2005 and 2004 was $134,517
and $10,612, respectively (an increase of $123,905). This increase was due
primarily to the increase in net revenues. Gross profit, as a percentage of net
revenues, was 39% and 52% for 2005 and 2004, respectively. Our larger margin
percentage in 2004 was based only on a short period of time and, therefore, we
do not believe that it is representative of margins to be realized on an ongoing
basis.

     Operating expenses for the years ended December 31, 2005 and 2004 were
$1,058,936 and $343,233, respectively (an increase of $715,703), due primarily
to the length of time in which the current core business has been operating. A
significant amount of our operating expenses in 2005 were focused toward
increasing our brand awareness, developing our business infrastructure,
establishing relationships with sponsors, suppliers and customers. We incurred
total expenses of $1,129,255 in 2004 related to discontinued operations.

     Interest expense for the years ended December 31, 2005 and 2004 was $34,902
and $31,198, respectively (an increase of $3,704). This increase is attributable
to $17,394 of preferred stock dividends, partially offset by an elimination of a
significant portion of our debt during 2005, as further discussed below.

     Net loss before discontinued operations for the years ended December 31,
2005 and 2004 was ($1,010,499) and ($561,884), respectively (an increase of
$448,615). This increase is due primarily to the length of time in which the
core business has been operating, as we have incurred net operating losses
associated with our motorsports-related businesses since inception.

LIQUIDITY AND CAPITAL RESOURCES

     Our future success and viability is primarily dependent upon our ability to
increase operating cash flows and develop new business opportunities. We will
continue marketing, promoting and operating our die cast replica car business,
while seeking growth opportunities to develop a diverse business entity within
the motor sports industry. Our plan of operation for the next 12 months is to
develop existing business lines and to seek the acquisition of assets, property
or businesses that may benefit the Company and its shareholders. Because the
Company has minimal capital resources, management anticipates that to achieve
any such acquisition, it may be required to issue shares of its stock as
consideration for such acquisition. In the event that the Company contacts or is
contacted by a private company or other entity, which may be considering a
merger with or into the Company, it is possible that the Company would be
required to raise additional funds in order to accomplish the transaction. Such
transactions would be evaluated on a case by case basis.

                                       12
<PAGE>
     During the next 12 months, the Company's foreseeable cash requirements will
relate to continuing to develop the operations of its wholly owned subsidiary
and business divisions, maintaining the Company in good standing and making the
requisite filings with the Securities and Exchange Commission, and the payment
of expenses associated with reviewing or investigating any potential business
venture. Because the Company has not identified any such venture as of the date
of this Report, it is impossible to predict the costs. Additionally, the Company
may experience a liquidity predicament and be required to raise additional
capital. Historically, the Company has relied upon internally generated funds
and funds from the sale of shares of stock and loans from its shareholders and
private investors to finance its operations and growth. Management may raise
additional capital through future public or private offerings of its stock or
through loans from private investors, although there can be no assurance that
the Company will be able to obtain such financing. The Company's failure to do
so would have a material and adverse affect upon the Company and its
shareholders.

     The Company's financial statements have been prepared assuming that it will
continue as a going concern and, accordingly, do not include adjustments
relating to the recoverability and realization of assets and classifications of
liabilities that might be necessary should the Company be unable to continue in
operations.

YEAR ENDED DECEMBER 31, 2005

     As of December 31, 2005, the Company's current assets were $171,919 and its
current liabilities were $427,688, resulting in a working capital deficit of
$255,769. As of December 31, 2005, current assets were comprised of (i) $23,960
in cash; (ii) $1,267 in accounts receivable; (iii) $139,442 in inventory and
(iv) $7,250 in other current assets. The Company divested inventory from gaming
items in 2004. The Company's inventory consisted of $49,317 of diecast cars and
motorsports related memorabilia and $90,125 of brake fluid inventory at December
31, 2005. The $1,267 in accounts receivable consisted of credit card
transactions in transit at the end of the year. The Company sells all products
for immediate payment. The Company has continued to execute its business plan to
aggressively list inventory on the web site for immediate sale. Inventory is
generally listed on the web site for sale within hours of being received by the
Company. The Company is also using email addresses of customers to send
notification of new inventory and of sale prices and inventory clearances.
Additionally, the presence on eBay(R) has contributed significantly to the
Company's overall revenue.

     As of December 31, 2005, current liabilities were comprised of (i) $209,889
in notes payable to stockholders; and (ii) $116,299 in accounts payable and
accrued expenses and $101,500 of other amounts due to shareholders. Of these
amounts, approximately $97,000 are disputed amounts with vendors and individuals
associated with former management. For conservatism, these amounts are carried
as current liabilities in our consolidated balance sheet; however, it is likely
that we will not expend cash in the next twelve months to satisfy all of these
liabilities.

     As of December 31, 2005, the Company's total assets were $218,298 and its
total liabilities were $561,283, with a net stockholder's deficit of ($342,985).

     For the year ended December 31, 2005, net cash flows used in operating
activities was ($652,360) compared to net cash flows used in operating
activities of ($272,501) for the year ended December 31, 2004. The increase of
$379,859 during the twelve-month period ended December 31, 2005 was primarily
due to expenditures to promote and operate our die-cast and memorabilia
businesses and expenditures to develop our high-performance brake fluid line.
Net losses in 2005 exceeded net operating cash outflows as approximately
$315,000 of our operating expenses consisted of non-cash, stock-based
compensation to employees and third-parties.

     For the year ended December 31, 2005, net cash flows used in investing
activities was ($26,207) compared to ($261) during the year ended December 31,
2004. Cash outflows in 2005 consisted of expenditures for fixed assets and a
license to distribute high performance brake fluid.

     For the twelve-month period ended December 31, 2005, net cash flows
provided by financing activities was $689,795 compared to net cash flows
provided by financing activities of $281,880 for the twelve-month period ended
December 31, 2004. During 2005, the Company utilized a portion of its financing

                                       13
<PAGE>
cash inflows (consisting of proceeds from the issuance of common stock and the
exercise of stock options) to repay certain notes payable, with the remainder
used for operating and investing activities.

     As of the date of this Annual Report, the Company has generated little
revenue from operations, has a working capital deficit and a retained earnings
deficit. Therefore, the Company's auditors have expressed substantial doubt
about the Company's ability to continue as a going concern. Management believes
that it can maintain its status as a going concern based on its ability to raise
funds pursuant to future public and private offerings and to obtain advances and
minimize operating expenses by not duplicating or incurring needless expenses.

OFF-BALANCE SHEET ARRANGEMENTS

     As of the date of this Annual Report, the Company does not have any
off-balance sheet arrangements that have or are reasonably likely to have a
current or future effect on the Company's financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that are material to investors. The
term "off-balance sheet arrangement" generally means any transaction, agreement
or other contractual arrangement to which an entity unconsolidated with the
Company is a party, under which the Company has (i) any obligation arising under
a guarantee, contract, derivative instrument or variable interest; or (ii) a
retained or contingent interest in assets transferred to such entity or similar
arrangement that serves as credit, liquidity or market risk support for such
assets.

FUTURE COMMITMENTS

     As of the date of this Annual Report, the Company does not have any
material commitments nor does management anticipate any further material
commitments within the next twelve months.

ITEM 7. FINANCIAL STATEMENTS.

     The Financial Statements of MotorSports Emporium, Inc. are listed on the
Index to Financial Statements as set forth on page F-2.

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.

     David Keaveney, our Chief Executive Officer and Chief Financial Officer,
has evaluated the effectiveness of our disclosure controls and procedures
controls and procedures (as such term is defined in Rules 13a-15(e) and
15d-15(e) under the 1934 Act as of the end of the period covered by this annual
report (the "Evaluation Date"). Based on such evaluation, our Chief Executive
Officer and Chief Financial Officer has concluded that, as the Evaluation Date,
our disclosure controls and procedures are effective in alerting them on a
timely basis to material information relating to us (including our consolidated
subsidiaries) required to be included in our reports filed or submitted under
the 1934 Act.

(b) Changes in Internal Controls.

     In addition, no change in our internal control over financial reporting (as
defined in Rule 13a-15(f) under the 1934 Act occurred during the fourth quarter
of the year ended December 31, 2005, that has materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting.

ITEM 8B. OTHER INFORMATION.

     None.

                                       14
<PAGE>
                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS OF THE
        REGISTRANT.; SECTION 16(A) OF THE EXCHANGE ACT

     See Item 11 for information on the beneficial ownership of the Company's
securities.

IDENTITY OF DIRECTORS AND EXECUTIVE OFFICERS

          Name             Age                  Position
          ----             ---                  --------
     Tracey S. Baron*      37    Director

     David Keaveney**      36    Director, President, Chief Executive Officer
                                 and Chief Financial Officer

     Rhonda Keaveney***    39    Director, Chief Operating Officer and Secretary

----------
*     On August 11, 2005, Mr. Baron was elected to the Board of Directors.
**     On September 25, 2004, David Keaveney was elected to the Board of
       Directors and to the offices of President, Chief Executive Officer and
       Chief Financial Officer of the Company.
***    On October 13, 2004, Rhonda Keaveney, the wife of David Keaveney, was
       elected to the Board of Directors and to the office of Secretary of the
       Company. In March 2005, Rhonda was elected to the office of Chief
       Operating Officer of the Company.
****   All Company officers serve at the pleasure of the Board of Directors. All
       current members of the Board of Directors will serve as such until the
       next annual meeting of stockholders or until their successors are duly
       elected. Mr. Keaveney has an employment agreement with the Company as
       described in Item 10 of this Annual Report.

     TRACEY S. BARON - Mr. Baron is a Washington State University graduate with
a degree in Business and English. After graduating in 1991, Mr. Baron started in
an entry level position for a nationwide boutique financial planning firm that
specialized in financial solutions and strategies for affluent clientele. In
1998, he became the Director of Planning, where he modeled complex issues for
his clients in the area of finance, taxation and security monetization,
charitable planning and mergers and acquisitions. In the spring of 2000, Tracey
decided to pursue his entrepreneurial dreams and left the financial planning
field to start several businesses, including restaurants, night clubs and a 65
acre planned development community in Portland, Oregon. Tracey's success can
also be traced to a physical fitness company he founded that licensed fitness
products to several major athletic companies. Tracey has served on the boards of
directors of several companies and continues to assist in developing business
plans for start up ventures.

     DAVID W. KEAVENEY - Mr. Keaveney joined the Company in 2004. Prior to
joining the Company, Mr. Keaveney was founder of a private business and
management consulting firm where he functioned as a strategic business
consultant; mentoring senior level executives on core competency, marketing,
reengineering and value growth. Early in his business career, Mr. Keaveney
worked at Dean Witter and Merrill Lynch before serving as Sr. Vice President of
Investments for a private financial services firm in Arizona where he
specialized in business structure, investment education and corporate valuation.
Mr. Keaveney has held senior executive positions with several private start-up
companies and consulted extensively in the public market place on marketing,
finance and management development. Mr. Keaveney earned his Management
Certificate (mini-MBA) from Loyola University in Chicago where he studied
marketing, financial management and corporate restructuring. He is working
towards a CPD from the Wharton School of Business at the University of
Pennsylvania with a concentration in critical thinking, management, negotiations
and mergers and acquisitions. Mr. Keaveney is studying economics at Harvard
University. Mr. Keaveney participates in "What Do You Think?" an ongoing
dialogue between Harvard Business School professor Jim Heskett and HBS WORKING
KNOWLEDGE.

                                       15
<PAGE>
     RHONDA KEAVENEY - Rhonda Keaveney joined the Company in October 2004.,
Prior to joining the Company, Ms Keaveney functioned as Compliance Officer for
an Arizona Investment Banking firm and more recently as a director of operations
for a private investment partnership. Rhonda has a strong background in case
management, office administration and the securities industry where she's held
NASD Series 7, 63 and 24 licenses. Rhonda attended Arizona State University
where she studied Psychology and Business. Recently Rhonda received a Masters
Certificate in Project Management from Villanova University.

     There are no arrangements or understandings between any of the directors or
executive officers, or any other person or person pursuant to which they were
selected as directors and/or officers.

DIRECTORSHIPS

     No Director of the Company or person nominated or chosen to become a
Director holds any other directorship in any company with a class of securities
registered pursuant to Section 12 of the 1934 Act or subject to the requirements
of Section 15(d) of such Act or any other company registered as an investment
company under the Investment Company Act of 1940.

SIGNIFICANT EMPLOYEES

     No other significant employees exist.

FAMILY RELATIONSHIPS

     David Keaveney, the Company's President, Chief Executive Officer and Chief
Financial Officer, and Rhonda Keaveney, the Company's Secretary and Chief
Operating Officer, are husband and wife.

INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

     During the past five years, no present or former director, executive
officer or person nominated to become a director or an executive officer of the
Company:

     (1)  was a general partner or executive officer of any business against
          which any bankruptcy petition was filed, either at the time of the
          bankruptcy or two years prior to that time;

     (2)  was convicted in a criminal proceeding or named subject to a pending
          criminal proceeding (excluding traffic violations and other minor
          offenses);

     (3)  was subject to any order, judgment or decree, not subsequently
          reversed, suspended or vacated, of any court of competent
          jurisdiction, permanently or temporarily enjoining, barring,
          suspending or otherwise limiting his involvement in any type of
          business, securities or banking activities; or

     (4)  was found by a court of competent jurisdiction (in a civil action),
          the Securities and Exchange Commission or the Commodity Futures
          Trading Commission to have violated a Federal or state securities or
          commodities law, and the judgment has not been reversed, suspended or
          vacated.

AUDIT COMMITTEE FINANCIAL EXPERT AND IDENTIFICATION OF AUDIT COMMITTEE

     The Company has no separately designated standing audit committee or other
committee performing similar functions. The Board of Directors acts as the audit
committee. None of the directors qualifies as an Audit Committee Financial
Expert.

MATERIAL CHANGES TO THE METHOD BY WHICH THE SHAREHOLDERS MAY RECOMMEND NOMINEES
TO THE BOARD OF DIRECTORS

     None.

                                       16
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP COMPLIANCE

     Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers, directors and persons who own more than ten percent of the
Company's Common Stock, to file initial reports of beneficial ownership on Form
3, changes in beneficial ownership on Form 4 and an annual statement of
beneficial ownership on Form 5, with the SEC. Such executive officers, directors
and greater than ten percent shareholders are required by SEC rules to furnish
the Company with copies of all such forms that they have filed.

     Based on its review of the copies of such forms filed with the SEC
electronically, received by the Company and representations from certain
reporting persons, the Company believes that during the fiscal year ended
December 31, 2004, all the officers, directors and more than 10% beneficial
owners have complied with the above described filing requirements. However,
David Keaveney, a Director and President of the Company, inadvertently filed his
Form 5 a few days late in February 2006. Mr. Keaveney also inadvertently filed a
Form 4 a few days late for a transaction in February 2006. Tracey Baron, a
Director and 10% holder, inadvertently filed his Form 5 a few days late. Mr.
Baron also inadvertently filed a Form 4 a few days late for a transaction in
February 2006.

CODE OF ETHICS

     The Company has adopted a Code of Ethics applicable to its officers,
including its principal executive officer, principal financial officer,
principal accounting officer or controller and any other persons performing
similar functions. The Code of Ethics will be provided free of charge by the
Company to interested parties upon request. Requests should be made in writing
and directed to the Company at the following address: 16055 N. Dial Blvd., Suite
5, Scottsdale, Arizona 85260

ITEM 10. EXECUTIVE COMPENSATION.

     The following table sets forth the aggregate compensation paid by the
Company for services rendered during the periods indicated:

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                   Long Term Compensation
                                                                             ----------------------------------
                                               Annual Compensation             Awards       Payouts
                                   ---------------------------------------   ----------    ----------
                                                                 Other                     Securities                 All
    Name and           Year or                                   Annual      Restricted    Underlying               Other
    Principal          Period                                    Compen-       Stock       Options/     LTIP       Compen-
    Position            Ended      Salary($)       Bonus($)     sation)($)     Awards      SAR's(#)   Payouts($)   sation($)
    --------            -----      ---------       --------     ----------     ------      --------   ----------   ---------
<S>                    <C>        <C>            <C>          <C>                <C>          <C>         <C>        <C>
David W. Keaveney(1)    2005       $114,000       11,000(5)    $52,801(6)         0            0           0          0
President and CEO       2004       $ 28,500            0       $     0            0            0           0          0
                        2003       $      0            0       $     0            0            0           0          0

Rhonda Keaveney(2)      2005       $ 40,000(7)    11,000(5)    $     0            0            0           0          0
Secretary               2004       $      0            0       $     0            0            0           0          0
                        2003       $      0            0       $     0            0            0           0          0

Thomas E. Sawyer(3)     2005       $      0            0       $     0            0            0           0          0
President and CEO       2004       $ 28,500            0       $     0            0            0           0          0
                        2003       $ 43,500            0       $ 9,384(4)         0            0           0          0

Tony A. Cranford(4)     2005       $      0            0       $     0            0            0           0          0
Vice President          2004       $ 28,500            0       $     0            0            0           0          0
                        2003       $ 43,500            0       $     0            0            0           0          0
</TABLE>

                                       17
<PAGE>
----------
(1)  On September 25, 2004 David Keaveney was elected to the Board of Directors
     and to the offices of President, Chief Executive Officer and Chief
     Financial Officer of the Company.
(2)  On October 13, 2004 Rhonda Keaveney, wife of President, David Keaveney, was
     elected to the Board of Directors and to the office of Secretary of the
     Company. In March 2005, Rhonda was elected to the office of Chief Operating
     Officer of the Company.
(3)  On September 26, 2004, both Tony A Cranford and Thomas E. Sawyer resigned
     as officers and directors of the corporation.
(4)  On December 28, 2000, Mr. Sawyer assigned the distributorship rights to
     market a card game called "Bonus 6" within the United States, excluding
     Colorado, to the Company and the Company assumed the obligations under Mr.
     Sawyer's distribution agreement with the owner of Bonus 6. Pursuant to the
     terms of the assignment agreement, Mr. Sawyer maintained the marketing and
     distribution rights within the State of Colorado and receives a 40%
     commission on gross revenues generated from the sale or lease of "Bonus 6"
     to the casinos located in Colorado, on a monthly basis. During 2003, Mr.
     Sawyer received commissions of $9,384 from the Company. During 2003, the
     Company allowed its distribution rights to "Bonus 6" to expire.
(5)  On September 7, 2005, the Company issued 1,000,000 shares of restricted
     common stock to each of the three members of the Board of Directors,
     including David Keaveney and Rhonda Keaveney. These shares were valued at
     $.011 per share.
(6)  During the fiscal year ended December 31, 2005, David Keaveney received
     (pursuant to his employment agreement with the Company) an automobile
     allowance of $17,310, $24,000 for renting a home office to the Company,
     $11,431 in medical expense reimbursements and $60 for a life insurance
     premium.
(7)  During the fiscal year ended December 31, 2005, Rhonda Keaveney received a
     cash salary of $5,000 for the month of December, 200,000 shares of
     restricted common stock valued at $.03 per share in lieu of $6,000 in
     salary. Ms. Keaveney earns a salary of $5,000 per month,, of which $35,000
     was unpaid at year-end. Ms. Keaveney, as the wife of David Keaveney, was an
     obvious beneficiary of the automobile allowance, home office rent and
     medical expenses attributed to David Keaveney and as described in note 6,
     above.

EMPLOYMENT CONTRACTS

     On October 25, 2004 the Company entered into an Executive Employment
Agreement with its President, Chief Executive Officer and Chief Financial
Officer, David Keaveney. The initial term of the Agreement commenced on October
25, 2004, and continued in effect until October 25, 2005, when the Agreement was
renewed for two years ending in October 2007. The Agreement grants Keaveney a
base salary of $114,000 per year. During the term of the Agreement, Company
agrees to pay all costs of Keaveney's medical/dental expenses up to a maximum of
$20,000 per year. Company shall also provide an automobile allowance of $1,000
per month. Company shall pay a monthly rent of $2,000 while it maintains an
offsite operation at Keaveney's place of residency. Not withstanding the
employment term, the Agreement may be terminated by either party. If the Company
desires to terminate the Agreement for any reason, other than reasonable cause
or event of permanent disability, Keaveney shall be entitled to 100% of the
balance of payments due under the contract payable, at the Company's option,
either on a bi-weekly basis or in a lump sum discounted by 10% and payable 30
days after said termination.

OTHER CONTRACTS

     None.

STOCK OPTIONS AND WARRANTS

     On September 11, 2003, the Company's 2003 Stock Plan was adopted and
approved by the Board of Directors. The Plan had authorized 15,000,000 shares of
common stock of the Company to be granted to employees, officers and directors
of the Company in the form of both incentive and non-qualified stock options.

     On June 15, 2004 the Company's 2004 Stock Plan was adopted and approved by
the Board of Directors. The Plan had authorized 13,500,000 shares of common
stock of the Company to be granted to employees, officers and directors of the
Company in the form of both incentive and non-qualified stock options.

                                       18
<PAGE>
     On July 28, 2004, the Ten Stix Inc. Non-Employee Directors and Consultant
Retainer Stock Plan for 2004 was adopted and approved by the Board of Directors.
The Plan had authorized 20,500,000 shares of common stock of the Company to be
granted to non-employee directors and consultants of the Company.

     On September 8, 2004, the Ten Stix Inc. 2004 Employee Stock Incentive Plan
No. 2 was adopted and approved by the Board of Directors. The Plan had
authorized 50,000,000 shares of common stock of the Company to be granted to
employees, officers and directors of the Company in the form of both incentive
and non-qualified stock options.

     On September 8, 2004, the Ten Stix, Inc. 2004 Non-Employee Directors and
Consultants Retainer Stock Plan No. 2 was adopted and approved by the Board of
Directors. The Plan had authorized 18,000,000 shares of common stock of the
Company to be granted to non-employee directors and consultants of the Company.

     On December 6, 2004, the Motorsports Emporium, Inc. 2004 Employee Stock
Incentive Plan No. 3 was adopted and approved by the Board of Directors. The
Plan authorized 70,000,000 shares of common stock of the Company to be granted
to employees, officers and directors of the Company in the form of both
incentive and non-qualified stock options.

     On January 18, 2006, the Motorsports Emporium, Inc. 2006 Employee Stock
Incentive Plan was adopted and approved by the Board of Directors. The Plan
authorizes 150,000,000 shares of common stock of the Company to be granted to
employees, officers, consultants and directors of the Company.

OPTION/SAR GRANTS TABLE

     There were no stock options/SARS granted under the Company's stock option
plans to executive officers and directors during fiscal 2005.

AGGREGATE OPTION/SAR EXERCISES AND FISCAL YEAR-END OPTION/SAR VALUE TABLE

     There were no exercises of stock options/SAR by executive officers during
fiscal 2005.

LONG-TERM INCENTIVE PLAN AWARDS

     There were no long-term incentive plan awards made in the last fiscal year.

COMPENSATION OF DIRECTORS

     The Company has no formal or standard compensation arrangement with the
members of its Board of Directors or with committee members. However, the
Company has entered into a consulting agreement with Tracy S. Baron, a Director
of the Company, that pays Mr. Baron $7,500 per month through February 9, 2007,
in return for advice regarding mergers, acquisitions, joint ventures, strategic
partnerships, management, marketing and expansion of services and business
opportunities. During 2006, Mr. Baron will not be engaged in any capital raising
transactions for the Company or in any promotion of the Company's securities.

REPRICING OPTIONS

     During the fiscal year ended December 31, 2005, the Company did not reprice
any stock options.

                                       19
<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS.

(a) Security Ownership of Certain Beneficial Owners

     The Company has three (3) classes of voting securities outstanding (Common
Stock, Class A Preferred Stock and Class B Preferred Stock). The following table
sets forth security ownership information as of the close of business on
February 28, 2006, for any person or group, known by the Company to own more
than five percent (5%) of the Company's common stock and Class B Preferred
Stock. No table is included for the Company's Series A Preferred Stock due to
the fact that only 96 shares of same are outstanding and such shares represent a
de minimus number of votes that could be cast on any matter presented for a vote
of stockholders.

<TABLE>
<CAPTION>
                                                              Amount and
                                                              Nature of
    Name and Address                   Title Of               Beneficial       Percent of
  of Beneficial Owner                    Class                  Owner            Class
  -------------------                    -----                  -----            -----
<S>                                <C>                        <C>             <C>
Intercontinental Assets Corp.       Series B Preferred(1)      1,421,897       53.20% (2)
(Robert Brehm) (2)                  Common Stock               6,118,400        2.04% (2)
6965 El Camino Road
Suite105-279
Carlsbad, CA 92009

David Keaveney (3)
16055 N. Dial Blvd., Suite 5        Series B Preferred(1)        625,000       23.40% (3)
Scottsdale, Arizona  85260          Common Stock              11,702,170        3.90% (3)

Tracey Baron (4)
Sunnydale, LLC
16055 N. Dial Blvd., Suite 5        Series B Preferred(1)        625,000       23.40% (4)
Scottsdale, Arizona  85260          Common Stock              38,898,995       12.95% (4)
</TABLE>

----------
1.   The Series B Preferred Stock is entitled to vote on all matters submitted
     to the stockholders for a vote, including the election of any directors,
     together with the holders of Series A Preferred Stock and the holders of
     the Common Stock, $0.001 par value per share, of the Company, voting
     together as a single class. Pursuant to Section 2(a) of the Certificate of
     Designation, each share of the Series B Preferred Stock shall be entitled
     to one vote for each share of the Common Stock into which the Series B
     Preferred Stock is convertible as of the record date for such vote or, if
     no record date is specified, as of the date of such vote. Pursuant to the
     terms of the Certificate of Designation of Series B Preferred Stock, the
     stated Par Value of each shares of Series B Preferred Stock is $0.05.
     Pursuant to Section 5(a) of the Certificate of Designation, the holder of
     the Series B Preferred Stock may convert said shares to common stock at its
     option. Pursuant to such Section 5(a), in the event of a conversion, the
     number of shares of Common Stock to be issued on account of each share of
     the Series B Preferred Stock shall be determined by dividing (i) the
     Adjusted Face Value plus the amount of any accrued but unpaid dividends
     thereon by (ii) $0.0005. Accordingly, each share of Series B Preferred
     Stock is convertible into 100 shares of common stock at option of the
     holder of the Series B Preferred Stock, for an aggregate of 250,000,000
     shares of common stock.
2.   Mr. Brehm is a control person of Intercontinental Assets Corp. and is
     deemed to be the beneficial owner of the Series B Preferred Stock owned of
     record by Intercontinental Assets Corp. Assuming the conversion of such
     Series B Preferred Stock into the Company's common stock, Mr. Brehm would
     be the benificial owner of 39.30% of the Company's voting securities.

                                       20
<PAGE>
3.   Assuming Mr. Keaveney converted his Series B Preferred Stock into the
     Company's common stock, Mr. Keaveney would be the beneficial owner of
     22.18% of the Company's voting securities.

4.   Assuming Mr. Baron converted his Series B Preferred Stock into the
     Company's common stock, Mr. Baron would be the beneficial owner of 29.50%
     of the Company's voting securities.

(b) Security Ownership of Management

     The following table sets forth security ownership information as of the
close of business on February 28, 2006, of all directors, executive officer
listed in the "Summary Compensation Table" set forth herein, and all directors
and executive officers as a group.

<TABLE>
<CAPTION>
                                                              Amount and
                                                              Nature of
    Name and Address                   Title Of               Beneficial       Percent of
  of Beneficial Owner                    Class                  Owner            Class
  -------------------                    -----                  -----            -----
<S>                                <C>                        <C>             <C>
David Keaveney (1)                  Common                    11,702,170        3.90% (1)
16055 N. Dial Blvd. Suite 5         Series B Preferred           625,000       23.40% (1)
Scottsdale, Arizona 85260

Rhonda Keaveney                     Common                     1,200,000       Less than 1 %
16055 N. Dial Blved. Suite 5
Scottsdale, Arizona 85260

Tracey Baron (2)                    Common                    38,898,995       14.51% (2)
16055 N. Dial Blvd., Suite 5        Series B Preferred           625,000       23.40% (2)
Scottsdale, Arizona 85260

Officers and Directors              Common                    51,800,995       19.30%
 as a Group (3 persons)             Series B Preferred         1,250,000       46.80%
</TABLE>
----------
1.   Assuming Mr. Keaveney converted his Series B Preferred Stock into the
     Company's common stock, Mr. Keaveney would be the bendficial owner of
     22.18% of the Company's voting securities.
2.   Assuming Mr. Baron converted his Series B Preferred Stock into the
     Company's common stock, Mr. Baron would be the beneficial owner of 29.50%
     of the Company's voting securities.

(c) Changes in Control

     On August 26, 2004, the Company issued 2,500,000 shares of Series B
Preferred Stock to Intercontinental Assets Corp., a Nevada corporation, in full
satisfaction of and pursuant to the terms of certain $15,000 promissory note
dated June 30, 2004, and amended as of August 26, 2004, and that certain
Management Severance Agreement dated June 30, 2004, and amended August 26, 2004.

     Pursuant to Section 2(a) of the Certificate of Designation, each share of
the Series B Preferred Stock shall be entitled to one vote for each share of the
Common Stock into which the Series B Preferred Stock is convertible as of the
record date for such vote or, if no record date is specified, as of the date of
such vote.

     Pursuant to the terms of the Certificate of Designation of Series B
Preferred Stock, the stated Par Value of each share of Series B Preferred Stock
is $0.05. Pursuant to Section 5(a) of the Certificate of Designation, the holder
of the Series B Preferred Stock may convert said shares to common stock at his
option. Pursuant to Section 5(a), in the event of a conversion, the number of
shares of Common Stock to be issued on account of each share of the Series B

                                       21
<PAGE>
Preferred Stock shall be determined by dividing (i) the Adjusted Face Value plus
the amount of any accrued but unpaid dividends thereon by (ii) $0.0005. At
December 31, 2005, the outstanding Preferred Series B stock, together with
accrued dividends of $17,394, were convertible into 301,976,725 shares of common
stock.

(d) Securities Authorized for Issuance Under Equity Compensation Plans

<TABLE>
<CAPTION>
                                                                                    Number of securities
                               Number of securities                                remaining available for
                                 to be issued upon         Weighted-average         future issuance under
                                    exercise of           exercise price of       equity compensation plans
                               outstanding options,      outstanding options,       (excluding securities
                               warrants, and rights      warrants and rights       reflected in column (a))
                               --------------------      -------------------       ------------------------
                                      (a)                        (b)                         (c)
<S>                            <C>                       <C>                      <C>
Equity compensation plans
approved by security holders           0                         n/a                              0

Equity compensation plans not
approved by security holders           0                         n/a                     15,300,000

Total                                  0                         n/a                     15,300,000
</TABLE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     On July 1, 2004, Ten Stix, Inc. entered into a Convertible Debenture with
Edify Capital in the amount of $185,000 with interest from the date of issuance
at the rate of 8% per annum, compounded and payable quarterly. Under the terms
of the Convertible Debenture the Company promises to pay the loan in full on or
before the first anniversary date of the issuance, Pursuant to the terms of the
Convertible Debenture, Edify Capital, at its option at any time, may convert all
or part of the unpaid principal balance, plus accrued interest thereon into the
common stock of the Company. In the event of a conversion, the number of shares
of the common stock to be issued shall be determined by dividing the unpaid
principal balance of the Convertible Debenture, plus any accrued interest by 80%
of the average of the lowest three closing bid prices in past twenty trading
days immediately preceding any such conversion. As of the date of this filing
$150,000 has been paid.

     On August 16, 2004, Ten Stix, Inc. entered into an agreement with Robert C.
Brehm for the amount of $4,000 plus 12% percent annual interest.Mr. Brehm can
convert note at pay off into Series B Preferred Stock of the Company at the rate
of $.05 per share. This note is still outstanding as of the date of this filing
and Mr. Brehm has not exercised his conversion right.

     On September 14, 2004, Ten Stix, Inc. entered into an agreement with Robert
C. Brehm for the amount of $3,600 plus 12% percent annual interest. Mr. Brehm
can convert note at pay off into Series B Preferred Stock of the Company at the
rate of $.05 per share. This note is still outstanding.

     On September 27, 2004, the Company entered into a Promissory Note with its
previous auditing firm AJ Robbins, PC for the principal amount of $16,693, with
no interest. The balance is an overdue accounting bill for services performed
during their tenure. Six equal payments of $2,782.16 shall be due and payable on
the 30th day of each calendar month, with the first payment commencing on
October 30, 2004 and final payment on March 30, 2005.

     On October 18, 2004, the Company granted David Keaveney the option to
convert the unpaid balance of $56,352 acknowledged in the Letter of
Understanding into Common Stock of the Company, par value $0.0001 per share, at
rate to be determined by dividing the unpaid balance by 20% of the prior day's
closing bid price.

                                       22
<PAGE>
     On November 4, 2004, the Company's President, David Keaveney, exercised his
right to convert $2,280 (part of a $56,352 debt) into 1,500,000 shares of
restricted common stock. The remaining outstanding balance was reduced
accordingly to $54,072.

     On November 16, 2004, the Company's President, David Keaveney, exercised
his right to convert $3,000 (part of a $54,072 debt) into 1,000,000 shares of
restricted common stock. The remaining outstanding balance was reduced
accordingly and is now $51,072. These shares were issued pursuant to the
exemption from registration under Section 4(2) of the Securities Act of 1933.

     The Company, through its wholly-owned subsidiary, Scottsdale Diecast, Inc.,
entered into an Asset Purchase Agreement with ScaleCars, Ltd., a Nevada
corporation, effective as of November 23, 2004, which acquisition closed on
November 24, 2004. Pursuant to the terms of the Agreement, the Company acquired
all of the business assets of ScaleCars, in consideration of approximately (a)
$166,920, evidenced by a Promissory Note executed by Scottsdale Diecast in favor
of ScaleCars and (b) 4,900,000 shares of restricted common stock of the Company.

     Concurrently with the execution of the above Agreement, Scottsdale Diecast
executed a Commercial Lease, effective as of November 23, 2004, under which
Scottsdale Diecast leased from Ron Adams approximately 2,800 square feet of
retail space in the building where the ScaleCars business is conducted for a
term of one year commencing on December 1, 2004. As set forth above, in
conjunction with the purchase of the assets of Scalecars through its
wholly-owned subsidiary, Scottsdale Diecast, the Company issued 4,900,000
restricted shares of common stock to Scalecars. The shares were issued pursuant
to the exemption from registration under Section 4(2) of the Securities Act of
1933. On December 2, 2004, the Company filed a Certificate of Amendment to the
Articles of Incorporation with the Secretary of State of Nevada changing its
name from Ten Stix, Inc. to "Motorsports Emporium, Inc."

     On December 20, 2005, the Company entered into certain Assignment Agreement
and General Release with Ten Stix Gaming, Thomas Sawyer and Tony Cranford, the
Corporations former directors and officers.

     During 2005, the Company issued 7,338,534 shares of common stock to David
Keaveney, the Company's President and CEO, for payment of debt totaling $80,304.
A loss of $544 was recorded on this transaction based on the difference between
the fair market value of the stock and the debt balance on the date of the
transactions.

     During 2005, the Company issued 7,510,047 shares of common stock to an
existing shareholder for payment of debt totaling $66,243. A loss of $2,171 was
recorded on this transaction based on the difference between the fair market
value of the stock and the debt balance on the date of the transactions.

     On November 16, 2005, the Company entered into a one year consulting
agreement with Robert Brehm, a major stockholder in the Company, that pays Mr.
Brehm $10,000 per month in exchange for consulting services relating to
management advisement, strategic planning and marketing in connection with the
Company's business, as well as consulting services related to stockholder
management and public relations. Mr. Brehm is not engaged in any capital raising
transactions for the Company or in any promotion of the Company's securities.

     The Company has entered into a consulting agreement with Tracy S. Baron, a
Director of the Company, that pays Mr. Baron $7,500 per month through February
9, 2007, in return for advice regarding mergers, acquisitions, joint ventures,
strategic partnerships, management, marketing and expansion of services and
business opportunities. During 2006, Mr. Baron will not be engaged in any
capital raising transactions for the Company or in any promotion of the
Company's securities.

     See Notes 8 and 10 to the Company's Consolidated Financial Statements of
this Annual Report.

                                       23
<PAGE>
ITEM 13. EXHIBITS.

     List of Exhibits attached or incorporated by reference pursuant to Item 601
of Regulation S-B

Exhibit                           Description
-------                           -----------
3.1 (1)    Amendment to Articles of Incorporation dated January 22, 2001
           and filed with the Colorado Secretary of State on January 22,
           2001.
3.2 (2)    Statement of Correction to the Articles of Incorporation dated
           and filed with the Secretary of State of Colorado on August 27,
           2003.
3.3 (1)    By-laws of the Company;
14 (3)     Code of Ethics
21 **      Subsidiaries of the Company
31.1 **    Certification of Principal Executive Officer Pursuant to 18 U.S.C.
           Section 1350
31.2 **    Certification of Principal Financial Officer Pursuant to 18 U.S.C.
            Section 1350
32 **      906 Certification
99.1 (3)   Advisory Board Agreement with Arie Luyendyk, Jr. dated March 4, 2005
99.2 (3)   Advisory Board Agreement with Arie Luyendyk, Sr. dated March 14, 2005

----------
(1)  Incorporated by reference to Form 10SB filed February 8, 2001.
(2)  Incorporated by reference to Form 8-K filed October 31, 2003.
(3)  Incorporated by reference to Form 10-KSB filed April 1, 2005.
**   Filed Herewith

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

INDEPENDENT PUBLIC ACCOUNTANTS

     The Company's independent accountants during the fiscal year ending
December 31, 2005 were HJ & Associates, LLC

     (1) Audit Fees. During the fiscal years ended December 31, 2005 and 2004,
the aggregate fees billed by the Company's auditors, for services rendered for
the audit of our annual financial statements and the review of the financial
statements included in our quarterly reports on Form 10-QSB and for services
provided in connection with the statutory and regulatory filings or engagements
for those fiscal years, was $27,500 and $29,000 respectively.

     (2) Audit-Related Fees. During fiscal years ended December 31, 2005 and
2004 our auditors did not receive any fees for any audit-related services other
than as set forth in paragraph (a) above.

     (3) Tax Fees. Our auditors did not provide tax compliance, tax advice, or
tax planning advice during the fiscal year ended December 31, 2005. During the
fiscal year-ended December 31, 2004, aggregate fees billed by the Company's
auditors for services rendered for tax-related matters totaled $1,500.

     (4) All Other Fees. None.

     (5) Audit Committee's Pre-Approval Policies and Procedures. The Company had
no audit committee during the fiscal years ended December 31, 2005 and 2004;
hence, there were no pre-approval policies or procedures in effect during such
fiscal years.

                                       24
<PAGE>
                                   SIGNATURES

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

                                    Motorsports Emporium, Inc.


Dated: March 16, 2006                   /s/ David W. Keaveney
                                        --------------------------------------
                                    By:  David W. Keaveney
                                    Its: President and Chief Executive Officer

         In accordance with the Securities Exchange Act of 1934, this report has
been signed below by the following persons on behalf of the Registrant and in
the capacities and on the dates indicated.


Dated:  March 16, 2006                  /s/  David W. Keaveney
                                        --------------------------------------
                                    By:  David W. Keaveney
                                    Its: President, Chief Executive Officer,
                                         Treasurer Director
                                         (Principal Executive Officer, Principal
                                         Financial Officer and Principal
                                         Accounting Officer)


Dated: March 16, 2006                   /s/ Rhonda Keaveney
                                        --------------------------------------
                                    By:  Rhonda Keaveney
                                    Its: Chief Operating Officer, Secretary and
                                         Director

Dated: March 16, 2006                   /s/ Tracey S. Baron
                                        --------------------------------------
                                    Its: Director

                                       25
<PAGE>






                    MOTORSPORTS EMPORIUM INC. AND SUBSIDIARY

                        CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 2005





                                      F-1
<PAGE>
                                    CONTENTS


Report of Independent Registered Public Accounting Firm ..................  F-3

Consolidated Balance Sheet................................................  F-4

Consolidated Statements of Operations.....................................  F-6

Consolidated Statements of Stockholders' Equity (Deficit).................  F-7

Consolidated Statements of Cash Flows.....................................  F-8

Notes to the Consolidated Financial Statements............................  F-10

                                      F-2
<PAGE>
         REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


Board of Directors
Motorsports Emporium, Inc. & Subsidiary
Scottsdale, Arizona

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

We conducted  our audits in  accordance  with  auditing  standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain  reasonable  assurance about whether the
consolidated  financial statements are free of material  misstatement.  An audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the  consolidated  financial  statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall consolidated  financial statement
presentation.  We believe that our audits  provided 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  Motorsports
Emporium, Inc. and Subsidiary, as of December 31, 2005 and 2004, and the results
of their operations and their cash flows for the years then ended, in conformity
with United States generally accepted accounting principles.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2 to the
consolidated  financial  statements,  the Company has suffered  recurring losses
from operations and has a working capital deficit that raises  substantial doubt
about its ability to continue as a going concern.  Management's  plans in regard
to those  matters are also  described  in Note 2 to the  consolidated  financial
statements. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.


/s/ HJ & Associates, LLC
-------------------------------
Salt Lake City, Utah
March 6, 2006

                                      F-3
<PAGE>
                    MOTORSPORTS EMPORIUM, INC. AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEET

                                                                    December 31,
                                                                       2005
                                                                    -----------
                                     ASSETS

Cash                                                                $    23,960
Accounts receivable                                                       1,267
Inventory                                                               139,442
Other current assets                                                      7,250
                                                                    -----------
     Total current assets                                               171,919
                                                                    -----------
Fixed assets, net                                                        14,464
Deposits                                                                    295
Intangible assets, net                                                   31,620
                                                                    -----------
     Total assets                                                   $   218,298
                                                                    ===========

                       LIABILITIES & STOCKHOLDERS' DEFICIT

Accounts payable and accrued expenses                               $   116,299
Accrued expenses - related parties                                      101,500
Notes payable to shareholders                                           209,889
                                                                    -----------
     Total current liabilities                                          427,688
Preferred B stock, $.05 par value, 3,000,000 shares authorized;
 2,671,897 shares issued and outstanding                                133,595
                                                                    -----------
     Total liabilities                                                  561,283
                                                                    -----------
Preferred A stock, $250 par value, 100,000 shares authorized;
 96 shares issued and outstanding                                        24,000
Common stock; $.001 par value, 500,000,000 shares authorized;
 248,646,803 issued and outstanding                                     248,647
Additional paid-in capital                                            3,586,123
Stock subscription receivable                                           (26,775)
Accumulated deficit                                                  (4,174,980)
                                                                    -----------
     Total stockholders' deficit                                       (342,985)
                                                                    -----------
     Total liabilities and stockholders' deficit                    $   218,298
                                                                    ===========

        The accompanying notes are an integral part of these consolidated
                             financial statements.

                                      F-4
<PAGE>
                    MOTORSPORTS EMPORIUM, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                             Year Ended December 31,
                                                     -------------------------------------
                                                         2005                    2004
                                                     -------------           -------------
<S>                                                  <C>                     <C>
Retail sales                                         $     222,025           $      22,168
Cost of sales                                              134,517                  10,612
                                                     -------------           -------------
Gross profit                                                87,508                  11,556
                                                     -------------           -------------
Operating expenses:
  Selling, general and administrative                    1,043,426                 342,316
  Depreciation and amortization                             15,510                     917
                                                     -------------           -------------
      Total operating expenses                           1,058,936                 343,233
                                                     -------------           -------------
Operating loss                                            (971,428)               (331,677)
Other income (expense):
  Interest income                                               15                      --
  Interest expense                                         (34,902)                (31,198)
  Rapid Funding settlement expense                              --                (200,000)
  Other income (expense)                                    (4,184)                    991
                                                     -------------           -------------
      Total other income (expense)                         (39,071)               (230,207)
                                                     -------------           -------------

Loss before discontinued operations                     (1,010,499)               (561,884)
Loss from discontinued operations                               --              (1,129,225)
                                                     -------------           -------------
Net loss                                             $  (1,010,499)          $  (1,691,109)
                                                     =============           =============
Net loss per common share:
  Basic:
     Loss from continuing operations                 $       (0.01)          $       (0.01)
     Loss from discontinued operations               $          --           $       (0.02)
     Net loss applicable to common stock             $       (0.01)          $       (0.03)

  Diluted:
     Loss from continuing operations                 $       (0.01)          $       (0.01)
     Loss from discontinued operations               $          --           $       (0.02)
     Net loss applicable to common stock             $       (0.01)          $       (0.03)

Weighted average common shares outstanding:
  Basic                                                194,307,736              59,114,712
                                                     =============           =============
  Diluted                                              194,307,736              59,114,712
                                                     =============           =============
</TABLE>

        The accompanying notes are an integral part of these consolidated
                             financial statements.

                                      F-5
<PAGE>
                    MOTORSPORTS EMPORIUM, INC. AND SUBSIDIARY

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
<TABLE>
<CAPTION>
                                                                  Common Stock           Preferred Stock A
                                                              ---------------------      -----------------       Paid-In
                                                              Shares         Amount      Shares     Amount       Capital
                                                              ------         ------      ------     ------       -------
<S>                                                          <C>           <C>           <C>       <C>         <C>
Balance, December 31, 2003                                   21,018,228    $  21,018         96    $ 24,000    $ 1,187,031
  Common stock issued for services                          120,662,500      120,662                               655,494
  Sale of stock for cash                                     15,337,500       15,338                                77,288
  Stock issued for debt                                       5,000,000        5,000                                11,150
  Stock issued for assets                                     4,900,000        4,900                                20,580
  Cancellation of shares Rapid Funding Settlement           (36,962,100)     (36,962)                               36,962
  Stock issued for prepaid advertising and promotions         6,000,000        6,000                                30,600
  Preferred stock beneficial conversion feature                                                                     15,000
  Recognition of beneficial conversion feature on
   convertible notes                                                                                                67,600
  Gain on disposition of segment - related party                                                                   289,659
  Preferred stock issued for conversion of note payable                                                           (110,000)
  Amortization of expenses prepaid with common stock
  Net income (loss)
                                                           ------------    ---------    -------    --------    -----------
Balance, December 31, 2004                                  135,956,128      135,956         96      24,000      2,281,364
                                                           ------------    ---------    -------    --------    -----------
  Common stock issued for services                            5,742,845        5,743                               126,745
  Common stock issued for repayment of debt                  19,444,471       19,444                               187,602
  Preferred stock issued for repayment of debt
  Common stock issued for stock option grants                54,700,000       54,700                               733,438
  Sale of stock for cash                                     28,939,723       28,940                               216,060
  Stock issued to executives, officers and directors          3,863,636        3,864                                40,914
  Net income (loss)
  Amortization of expenses prepaid with common stock
                                                           ------------    ---------    -------    --------    -----------
Balance, December 31, 2005                                  248,646,803    $ 248,647         96    $ 24,000    $ 3,586,123
                                                           ============    =========    =======    ========    ===========
                                                                              Stock
                                                             Deferred     Subscriptions      Retained
                                                           Compensation     Receivable       Earnings         Total
                                                           ------------     ----------       --------         -----
Balance, December 31, 2003                                   $      --       $      --     $ (1,458,372)   $   (226,323)
  Common stock issued for services                                                                              776,156
  Sale of stock for cash                                                                                         92,626
  Stock issued for debt                                                                                          16,150
  Stock issued for assets                                                                                        25,480
  Cancellation of shares Rapid Funding Settlement                                                                    --
  Stock issued for prepaid advertising and promotions          (36,600)                                              --
  Preferred stock beneficial conversion feature                                                 (15,000)             --
  Recognition of beneficial conversion feature on
   convertible notes                                                                                             67,600
  Gain on disposition of segment - related party                                                                289,659
  Preferred stock issued for conversion of note payable                                                        (110,000)
  Amortization of expenses prepaid with common stock            17,080                                           17,080
  Net income (loss)                                                                          (1,691,109)     (1,691,109)
                                                             ---------       ---------     ------------    ------------
Balance, December 31, 2004                                     (19,520)             --       (3,164,481)       (742,681)
                                                             ---------       ---------     ------------    ------------
  Common stock issued for services                                                                              132,488
  Common stock issued for repayment of debt                                                                     207,046
  Preferred stock issued for repayment of debt                                                                       --
  Common stock issued for stock option grants                                  (26,775)                         761,363
  Sale of stock for cash                                                                                        245,000
  Stock issued to executives, officers and directors                                                             44,778
  Net income (loss)                                                                          (1,010,499)     (1,010,499)
  Amortization of expenses prepaid with common stock            19,520                                           19,520
                                                             ---------       ---------     ------------    ------------
Balance, December 31, 2005                                   $      --       $ (26,775)    $ (4,174,980)   $   (342,985)
                                                             =========       =========     ============    ============
</TABLE>
        The accompanying notes are an integral part of these consolidated
                             financial statements.

                                      F-6
<PAGE>
                    MOTORSPORTS EMPORIUM, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                       Year Ended December 31,
                                                                  ---------------------------------
                                                                     2005                  2004
                                                                  -----------           -----------
<S>                                                               <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                        $(1,010,499)          $(1,691,109)
  Adjustments to reconcile net income to net cash
   provided by operating activities:
    Depreciation and amortization                                      15,510                54,839
    Amortization of debt discounts                                     10,594                 6,742
    Non-cash loss on extinguishment of debt                             7,618                    --
    Non-cash interest expense associated with beneficial
     conversion feature                                                    --                67,600
    Employee stock based compensation                                 162,999                    --
    Common stock issued to third parties for services                 152,008               793,236
  Changes in assets and liabilities:
    Accounts receivable                                                  (312)                2,945
    Inventory                                                          (5,026)               12,258
    Prepaid expenses                                                   (6,183)               (3,145)
    Accounts payable and accrued expenses                             (80,569)              484,133
    Accrued expenses - related parties                                101,500                    --
                                                                  -----------           -----------
        Net cash used in operating activities                        (652,360)             (272,501)
                                                                  -----------           -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Spin off of Ten Stix Gaming                                              --                  (261)
  Expenditures for intangible assets                                  (15,000)                   --
  Purchases of fixed assets                                           (11,207)                   --
                                                                  -----------           -----------
        Net cash used in investing activities                         (26,207)                 (261)
                                                                  -----------           -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from notes payable                                              --               197,600
  Repayments of notes payable                                        (198,347)               (8,346)
  Proceeds from issuance of common stock                              245,000                92,626
  Proceeds from exercise of stock options                             643,142                    --
                                                                  -----------           -----------
        Net cash provided by financing activities                     689,795               281,880
                                                                  -----------           -----------

INCREASE (DECREASE) IN CASH                                            11,228                 9,118

CASH, beginning of period                                              12,732                 3,614
                                                                  -----------           -----------
CASH, end of period                                               $    23,960           $    12,732
                                                                  ===========           ===========
</TABLE>

        The accompanying notes are an integral part of these consolidated
                             financial statements.

                                      F-7
<PAGE>
                    MOTORSPORTS EMPORIUM, INC. AND SUBSIDIARY

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

<TABLE>
<CAPTION>
                                                                    For the Years Ended
                                                                         December 31,
                                                                 --------------------------
                                                                   2005              2004
                                                                 --------          --------
<S>                                                              <C>               <C>
SUPPLEMENTAL SCHEDULE OF CASH FLOW ACTIVITIES:
  Cash paid for interest                                         $     --          $  3,190
  Cash paid for income taxes                                     $     --          $     --

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES:
  Common stock issued for services                               $152,008          $793,236
  Common stock issued for extinguishment of debt and
   other liabilities                                             $207,046          $ 16,150
  Common stock issued for intangible assets                      $     --          $ 25,480
  Preferred stock issued for conversion of note payable          $  8,595          $ 15,000
  Gain on disposal of Tex-Stix Gaming                            $     --          $289,659
  Common stock issued for prepaid services                       $     --          $ 36,600
</TABLE>

        The accompanying notes are an integral part of these consolidated
                             financial statements.

                                      F-8
<PAGE>
                           MOTORSPORTS EMPORIUM, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1: NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS

Motorsports Emporium,  Inc. ("The Company") was incorporated on January 10, 1996
under the laws of the State of Colorado.  During 2004,  the Company  changed its
name  and  stock-trading  symbol  to  Motorsports   Emporium,   Inc.  and  MSEP,
respectively.  On  February  6, 2004,  Ten Stix  Gaming,  Inc.,  a wholly  owned
subsidiary of the Company was formed.  On November 10, 2004,  the Company formed
Scottsdale  Diecast,  Inc., a wholly owned subsidiary.  The Company divested its
efforts to market and develop  unique  card and other  gaming  products  for the
gaming industry by spinning off Ten Stix Gaming, Inc. in 2004 (See Note 5)

During 2004, and through its wholly-owned subsidiary,  Scottsdale Diecast, Inc.,
the Company  purchased  certain  assets from  Scalecars Ltd. In exchange for the
website  www.scalecars.com,  inventory items,  customer lists, and furniture and
fixtures  at its retail  location in  Scottsdale,  Arizona,  the Company  issued
4,900,000   shares  of  common  stock  and  entered  into  a  note  payable  for
approximately $166,920. As a result of this purchase, the Company is now devoted
to selling die cast scale cars and motor sports accessories.

CONCENTRATIONS OF CREDIT RISK

The Company  maintains all cash in deposit  accounts,  which at times may exceed
federally insured limits.

RECLASSIFICATION

Certain amounts  reported in the Company's  financial  statements for the period
ended December 31, 2004 have been  reclassified to conform to the current period
presentation.

CASH AND CASH EQUIVALENTS

Cash and cash  equivalents  include cash on hand and  investments  with original
maturities of three months or less.

INVENTORY

Inventory  is valued at the  lower of cost or  market.  At  December  31,  2005,
inventory  consisted of die cast scale cars,  motorsports  accessories and brake
fluid and related packaging  materials.  At December 31, 2004, the inventory was
made up of die cast scale cars and motor sports accessories.

EQUIPMENT

As a result of the spin off of the Company's  wholly owned  subsidiary  Ten Stix
Gaming,  Inc.,  the  Company  no longer  holds any of the  equipment  it held at
December 31, 2003. Depreciation expense for 2004 was for the portion of the year
the Company still retained title the equipment.  Total depreciation  expense was
$4,867 and $44,898 for the years ended December 31, 2005 and 2004, respectively.
The costs and accumulated  depreciation  of assets  retired,  sold, or otherwise
disposed of were eliminated from the accounts and any resulting gain or loss was
credited or charged to income, or applied to equity, as appropriate.

INTANGIBLE ASSETS

Intangible  assets  consist  of a website  development  costs and a  capitalized
license agreement. The website is being amortized over a three year life and the
license agreement is being amortized over its contractual life.

IMPAIRMENT OF LONG-LIVED ASSETS

The Company  evaluates its  long-lived  assets in accordance  with  Statement of
Financial  Accounting  Standard  No.  144,  "Accounting  for the  Impairment  or
Disposal  of Long Lived  Assets" by  measuring  the  carrying  amounts of assets
against the estimated  undiscounted  future cash flows  associated with them. At
the time  the  carrying  value of such  assets  exceeds  the fair  value of such
assets,  impairment is recognized. To date, no adjustments to the carrying value
of the assets have been made.

                                      F-9
<PAGE>
                           MOTORSPORTS EMPORIUM, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


ADVERTISING EXPENSE

The Company expenses advertising costs as incurred.  Advertising expense for the
years ended December 31, 2005 and 2004 was $120,668 and $4,315, respectively.

REVENUE RECOGNITION

Revenues  derived  from retail sales are  recognized  when shipped and title has
passed to the customer. The Company's sales are executed at its retail location,
through its website, and at certain motor sports events.

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
and assumptions.

INCOME TAXES

The Company recognizes income taxes under the liability method.  Deferred income
taxes are recognized  for  differences  between the financial  reporting and tax
bases of assets and liabilities at enacted statutory tax rates in effect for the
years in which the differences are expected to reverse.  Deferred tax assets are
reduced by a valuation allowance when, in the opinion of management,  it is more
likely than not that some  portion or all of the deferred tax assets will not be
realized.  Deferred tax assets and  liabilities  are adjusted for the effects of
changes in tax laws and rates on the date of enactment.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of cash,  accounts  payable,  accrued  expenses,  and notes
payable approximate fair value because of the short maturity of these items.

EARNINGS PER COMMON SHARE

The computation of basic loss per share of common stock is based on the weighted
average number of shares outstanding during the period.

STOCK-BASED COMPENSATION

The Company's  stock options  awarded to employees  contain a variable  exercise
price that is dependent  upon the market price of the Company's  common stock at
the date of exercise  and,  therefore,  are  accounted  for as variable  awards.
During the year ended  December 31,  2005,  the Company  recognized  $162,999 of
compensation  expense  associated with stock options.  Under FASB Statement 123,
the expense  recognition  for  variable  awards is the same under the  intrinsic
value  and the  fair  value  methods.  Accordingly,  the pro  forma  disclosures
required under FASB Statement 123 are not applicable.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In December 2004, the Financial  Accounting Standards Board ("FASB") issued SFAS
No.  123R,  "Share-Based  Payment"  ("SFAS  123R").  Under  this  new  standard,
companies  will no  longer  be  able to  account  for  share-based  compensation
transactions  using the  intrinsic  method in accordance  with APB 25.  Instead,
companies will be required to account for such  transactions  using a fair-value
method and to recognize the expense over the service  period.  SFAS 123R will be
effective  for periods  beginning  after  December  15, 2005.  As the  Company's
share-based  compensation  transactions  consist  of  variable  awards  that are
treated  the same under the  intrinsic  method and the  fair-value  method,  the
Company  does not  expect  the  adoption  of SFAS 123R to impact  its  financial
condition or results of operations.

                                      F-10
<PAGE>
                           MOTORSPORTS EMPORIUM, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


In November  2004, the FASB issued SFAS No. 151 (SFAS 151),  "Inventory  Costs".
SFAS 151 amends ARB No. 43, Chapter 4. This  statement  clarifies the accounting
for abnormal  amounts of idle facility  expense,  freight,  handling costs,  and
wasted  material  (spoilage).  SFAS 151 is the result of a broader effort by the
FASB and the IASB to improve financial  reporting by eliminating  certain narrow
differences  between their  existing  accounting  standards.  This  statement is
effective for inventory  costs incurred during fiscal years beginning after June
15, 2005. The adoption of SFAS 151 is not expected have a material impact on the
results of operations or financial position of the Company.

In  December  2004,  the FASB  issued  SFAS No.  153  (SFAS  153)  "Exchange  of
Non-monetary  assets". This statement was a result of a joint effort by the FASB
and the IASB to  improve  financial  reporting  by  eliminating  certain  narrow
differences between their existing accounting standards. One such difference was
the exception from fair value  measurement in APB Opinion No. 29, Accounting for
Non-Monetary  Transactions,  for  non-monetary  exchanges of similar  productive
assets.  SFAS 153 replaces this  exception  with a general  exception  from fair
value  measurement  for  exchanges  of  non-monetary  assets  that  do not  have
commercial  substance.  A non-monetary  exchange has commercial substance if the
future cash flows of the entity are expected to change significantly as a result
of the exchange.  This statement is effective for non-monetary  assets exchanges
occurring in fiscal periods  beginning after June 15, 2005. The adoption of SFAS
153 did not have a  material  effect  on the  Company's  financial  position  or
results of operations.

In May 2005, the Financial  Accounting Standards Board ("FASB") issued Statement
of Financial  Accounting  Standards  ("SFAS") No. 154,  "Accounting  Changes and
Error Corrections".  SFAS No. 154 replaces  Accounting  Principles Board ("APB")
No. 20,  "Accounting  Changes" and SFAS No. 3, "Reporting  Accounting Changes in
Interim Financial Statements" and establishes  retrospective  application as the
required  method for  reporting a change in accounting  principle.  SFAS No. 154
provides guidance for determining whether retrospective  application of a change
in  accounting  principle  is  impracticable  and for  reporting  a change  when
retrospective application is impracticable.  The reporting of a correction of an
error by restating  previously  issued  financial  statements is also addressed.
SFAS No. 154 is effective for accounting  changes and corrections of errors made
in fiscal  years  beginning  after  December  15,  2005.  The  Company  does not
anticipate  that the adoption of SFAS No. 154 will have a material impact on its
financial condition or results of operations.

NOTE 2: GOING CONCERN

The Company's  financial  statements  are prepared using  accounting  principles
generally  accepted  in the  United  States  of  America  applicable  to a going
concern,  which  contemplates  the  realization  of assets and  satisfaction  of
liabilities in the normal course of business.  The Company's  continuation  as a
going  concern is dependent  upon its ability to generate  sufficient  cash flow
from  operations  to meet  its  obligations  on a  timely  basis  and/or  obtain
financing  as  may be  required.  The  Company  has  incurred  net  losses  from
operations  since  inception and has an accumulated  deficit of $4,174,980 and a
working capital deficit of $255,769 as of December 31, 2005.

The Company has developed a strategic  expansion  plan for 2005.  Entering motor
sports  events,  upgrading  its website,  increased  advertising,  and obtaining
licensing  agreements  with  professional  race  drivers  are all a part of this
strategic plan.  Management  believes that through its strategic  plan,  minimal
amounts of cash outlay will produce substantial growth.

Although the Company has obtained  short-term loans, in the absence of long-term
financial  support,  there can be no assurance that additional  financing can be
obtained from conventional sources.

NOTE 3: FIXED ASSETS

Fixed assets consists of the following at December 31, 2005:

                                                                    2005
                                                                  --------
     Furniture, fixtures and equipment (at cost)                  $ 19,331
     Less accumulated depreciation                                  (4,867)
                                                                  --------
     Fixed assets, net                                            $ 14,464
                                                                  ========

Depreciation expense for continuing  operations for the years ended December 31,
2005 and 2004 was $4,867 and $0, respectively.

                                      F-11
<PAGE>
                           MOTORSPORTS EMPORIUM, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 4: INTANGIBLE ASSETS

Intangible assets consists of the following at December 31, 2005:

     Capitalized website development costs                        $ 28,180
     License                                                        15,000
                                                                  --------
     Less accumulated amortization                                 (11,560)
                                                                  --------
                                                                  $ 31,620
                                                                  ========

Amortization expense from continuing operations for year ended December 31, 2005
and 2004 was $10,643 and $917, respectively.

As a part of the purchase of Scalecars.com,  the company issued 4,900,000 shares
of common stock,  with a market value of $25,480.  The value of these shares was
attributed to the website  obtained by the Company.  Capital  expenditures  have
increased the value of this website. Both the website and the improvements to it
are being amortized over a three year life.

During 2005, the Company  acquired a license for the exclusive rights to produce
and distribute a high performance  brake fluid.  This license was capitalized at
cost and is being amortized over its estimated useful life of ten years.

NOTE 5:  DISCONTINUED OPERATIONS

On December 20, 2004,  the Company,  Motorsports  Emporium,  Inc.  (formerly Ten
Stix, Inc.) entered into an Assignment Agreement and General Release with Thomas
A. Sawyer, Tony Cranford and Ten Stix Gaming, Inc., a wholly-owned subsidiary of
the Company.

Pursuant  to the terms of the  Assignment  Agreement  and  General  Release,  in
consideration  of the  assignment of 100% of the issued and  outstanding  common
stock of Ten Stix Gaming,  Inc., by the Company to Messrs.  Sawyer and Cranford,
with the exception of the provision of the Management  Severance Agreement which
provides for the  execution of  Consulting  Agreements  with Mr.  Sawyer and Mr.
Cranford,  under which Mr. Sawyer and Mr. Cranford shall receive an aggregate of
$60,000 for consulting services which shall survive this agreement and remain in
full force,  Ten Stix Gaming,  Inc., Mr. Sawyer and Mr.  Cranford,  released the
Company,  its assigns,  officers,  directors,  attorneys,  agents,  consultants,
representatives,  principals,  predecessors and successors in interest, from any
and all claims, demands, obligations pursuant to any agreement,  liabilities, or
causes of action of any nature whatsoever that Ten Stix Gaming, Inc., Mr. Sawyer
and Mr.  Cranford  may now have or  hereinafter  acquire  against  the  Company,
including  without  limitation  the payment of any deferred  and unpaid  accrued
salaries,  compensation,  loans to and on behalf of the  Company,  reimbursement
and/or any other claims.

 With the  disposition  of all the common  stock of Ten Stix Gaming,  Inc.,  the
Company has completely divested itself of any interest in Ten Stix Gaming, Inc.,
and the gaming related business. The gain of $289,658 during 2004 resulted in an
increase to  additional  paid in capital since the assets and  liabilities  were
transferred to related parties.

The following is a summary of the discontinued operations:

                                      F-12
<PAGE>
                           MOTORSPORTS EMPORIUM, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                                    For the Years Ended
                                                        December 31,
                                              --------------------------------
                                                  2005                 2004
                                              -----------          -----------

     Net sales                                $        --          $    90,435
     Total expenses                                    --           (1,163,902)
                                              -----------          -----------

     Operating loss                                    --           (1,073,467)
                                              -----------          -----------

     Other income (expense)
     Other income                                      --                   --
     Interest expense                                  --              (55,758)
                                              -----------          -----------
     Total other income (expense)                      --              (55,758)
                                              -----------          -----------

     Loss from discontinued operations        $        --          $(1,129,225)
                                              ===========          ===========

NOTE 6: NOTES PAYABLE

     1)   Note  payable to  individual,  bearing  interest at zero
          (0)%,  due on demand, unsecured                               14,500

     2)   Note payable to Damascus Group,  LLC,  bearing  interest
          at zero (0)%, due on demand, unsecured                        62,000

     3)   Note payable to shareholder,  due February 16, 2006,
          interest imputed at 8.00% per  annum,  for  payments
          of $7,500 due  quarterly  and the balance due on the
          due date, unsecured, net of unamortized discount of
          $3,531                                                       133,389
                                                                     ---------
                                                                       209,889

             Less current portion                                     (209,889)
                                                                     ---------
             Long term portion                                       $      --
                                                                     =========

Future maturities of long term debt are as follows:

               Year Ended December 31,
               -----------------------
                        2006                                           209,889
                                                                     ---------
                                                                     $ 209,889
                                                                     =========

Notes 1, 2, and 3 are considered to be due to shareholders.

NOTE 7: PREFERRED STOCK CLASSIFIED AS A LIABILITY

During 2004 the Company  established  Preferred  Series B stock.  The holders of
Series B Preferred  Stock shall be entitled to receive  cumulative  dividends at
the rate of ten percent (10%) per annum on the face value ($.05 per share).  All
dividends  when paid shall be payable in cash  unless any holder of the Series B
Preferred  Stock  elects to have the  dividends  paid in shares of the  Series B
Preferred  Stock.  Each share of Preferred  Series B Stock can be converted into
common stock.  The rate at which they can be converted is determined by dividing
the face  value  plus the  amount of any  accrued  but  unpaid  fees  thereon by
$0.0005. No dividends had been declared by the Company at December 31, 2004.

During 2005,  the Company  issued an  aggregate  of 171,897  shares of Preferred
Series B stock to an existing stockholder for satisfaction of long-term debt and
accrued interest totaling $8,595.

                                      F-13
<PAGE>
                           MOTORSPORTS EMPORIUM, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


At December 31, 2005, the outstanding  Preferred  Series B stock,  together with
accrued dividends of $17,394, were convertible into 301,976,725 shares of common
stock.  The Company has classified the Series B Preferred  shares as a liability
in accordance  with the  provisions  of EITF 00-19,  ACCOUNTING  FOR  DERIVATIVE
FINANCIAL  INSTRUMENTS  INDEXED TO, AND POTENTIALLY  SETTLED IN, A COMPANY'S OWN
STOCK,  as it does not have  sufficient  authorized  shares of  common  stock to
provide for the conversion of all Series B Preferred shares. The Company expects
to increase its authorized  shares of common stock in the future and, upon doing
so,  expects to  reclassify  the Series B Preferred  shares  into  stockholder's
equity.  However  there can be no  assurance  that  such  measures  will  obtain
shareholder approval.

The $17,394 of accrued  dividends  were  recognized  in interest  expense in the
accompanying  consolidated  statements  of  operations  and  included in accrued
expenses in the accompanying consolidated balance sheet.

NOTE 8: STOCKHOLDERS' EQUITY

PREFERRED STOCK

Each  share of  Preferred  A Series  stock may be  converted  into 200 shares of
common stock. No dividend has been designated to preferred shares.  During 2004,
the par value of the Preferred Series A was changed from $0.01 per share to $250
per share.

COMMON STOCK

On August 10, 2005, the Company issued  26,470,588  shares of restricted  common
stock to an entity  controlled by a Director of the Company for an investment of
$225,000.  On  September  27,  2005,  the  Company  issued  2,469,135  shares of
restricted  common  stock  to an  Investor  for an  investment  of  $20,000.  No
underwriters  were used for either of these offerings.  These shares were issued
pursuant to the exemption from registration under Section 4(2) of the Securities
Act of 1933.

During 2005, the Company  entered into various  transactions  with third parties
and  related  parties,  whereby  the Company  issued  shares of common  stock to
satisfy  amounts owed. The Company  issued an aggregate of 19,444,471  shares of
common stock  (including  7,338,534 to the Company's CEO) to satisfy  $30,000 of
long-term debt and $169,428 of accrued expenses. The Company recorded the shares
of  common  stock  based  on the  closing  price  on the  transaction  date  and
recognized  an  aggregate  loss  of  $7,618  (including  a $544  related  to the
transaction  with the Company's CEO) that is included in other income  (expense)
in the consolidated statement of operations.

During 2005, the Company issued an aggregate of 3,000,000 shares of common stock
to the Company's board of directors as  compensation  for services and issued an
additional  863,636  shares of common  stock to the  Company's  CEO for services
rendered.  The Company also issued an  aggregate  of 5,742,845  shares of common
stock to various third parties and related parties  (including  2,742,845 shares
to a Director of the Company) for services rendered to the Company.  The Company
has recorded expense associated with these grants equal to the fair value of the
common stock based on the closing price on the date of grant.

NOTE 9: INCOME TAXES

Net deferred tax assets  consist of the following  components as of December 31,
2005 and 2004:

                                            2005                  2004
                                         -----------           -----------
     Deferred tax assets:
       NOL Carryover                     $ 1,030,901           $   640,138

     Deferred tax liabilities:
       Depreciation                               --                    --

     Valuation allowance                  (1,030,901)             (640,138)
                                         -----------           -----------
     Net deferred tax asset              $        --           $        --
                                         ===========           ===========

                                      F-14
<PAGE>
                           MOTORSPORTS EMPORIUM, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


The income tax  provision  differs from the amount of income tax  determined  by
applying  the U.S.  federal and state  income tax rates of 39% to pretax  income
from continuing operations for the years ended December 31, 2005 and 2004 due to
the following:

                                          2005                   2004
                                       -----------            ----------
Book income                            $ (394,095)  39%       $ (659,530)  39%
Stock for services/option expense              --    0%          302,700  -18%
Settlement                                     --    0%            5,850    0%
Beneficial conversion                          --    0%           26,364   -2%
Other                                       3,331    0%              247    0%
Valuation allowance                       390,763  -39%          324,369  -19%
                                       -----------            ----------
                                       $       --    0%       $       --    0%
                                       ===========            ==========

At December  31,  2005,  the Company had net  operating  loss  carryforwards  of
approximately  $2,600,000  that may be offset against future taxable income from
the year 2006 through 2025. No tax benefit has been reported in the December 31,
2005  financial  statements  since  the  potential  tax  benefit  is offset by a
valuation allowance of the same amount.

Due to the change in  ownership  provisions  of the Tax Reform Act of 1986,  net
operating  loss  carryforwards  for Federal  income tax  reporting  purposes are
subject to annual limitations. Should a change in ownership occur, net operating
loss carryforwards may be limited as to use in future years.

NOTE 10: RELATED PARTY TRANSACTIONS

The Company obtained loans from stockholders in totaling $7,600 during 2004. The
notes entered into during 2004 were interest  bearing and principal and interest
were  convertible  into  Preferred  Series B Stock.  The  Company  recognized  a
beneficial  conversion  feature of $7,262  associated with these loans which was
expensed in 2004. During 2005, the Company issued 171,897 shares of common stock
upon conversion of these loans.

During 2005, the Company issued an aggregate of 7,338,534 shares of common stock
to David Keaveney, the Company's President and CEO, for payment of debt totaling
$80,304. A loss of $544 was recorded on this transaction based on the difference
between the fair market  value of the stock and the debt  balance on the date of
the transactions.

During 2005, the Company issued an aggregate of 7,510,047 shares of common stock
to an existing  shareholder  for  payment of debt  totaling  $66,243.  A loss of
$2,171 was recorded on this transaction based on the difference between the fair
market value of the stock and the debt balance on the date of the transactions.

During 2005, the Company issued an aggregate of 2,742,845 shares of common stock
to a member of the Board of  Directors  in exchange  for  non-director  services
valued at $23,088 based on the fair market value of the stock on the date of the
transactions. Such amounts were expensed as incurred.

During 2005,  the Company  incurred  expenses  totaling  $90,000 for  consulting
services  rendered by a  significant  shareholder,  of which $56,000 was paid by
December 31, 2005.

NOTE 11: COMMITMENTS AND CONTINGENCIES

ROYALTIES

Under the terms of the  license  agreement  described  in Note 4, the Company is
obligated to pay to the licensee a royalty equal to 7% of all revenues generated
through the sale of products under this license.  No significant  royalties were
generated in 2005.

LITIGATION

Case Number 05CV5129 X-Clearing Corporation v. MotorSports Emporium, Inc.

                                      F-15
<PAGE>
                           MOTORSPORTS EMPORIUM, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


During the third quarter of 2005, the Company was made a defendant in the matter
of  X-Clearing  Corporation,  FKA Global Stock  Transfer  and Global  Securities
Transfer v. Ten Stix,  Inc., NKA MotorSports  Emporium,  Inc.,  filed on July 1,
2005,  in the District  Court for the City and County of Denver  Colorado,  case
number 05CV5129.  X-Clearing is claiming breach of contract, collection of debts
owed,  and bad faith and is seeking  damages in excess of  $35,000.  The Company
denies any  liability to the  plaintiff,  and intends to  vigorously  defend the
lawsuit.  As of the date of this filing the Company  along with its  attorney is
investigating  the disclosed  documents  provided by X-Clearing  Corporation.  A
court date is scheduled for July 2006.

DEMAND LETTER

During the third quarter of 2005, the Company received a certified demand letter
July 9, 2005 from A-Squared  Holdings,  Inc.,  formally  Damascus Group, LLC and
Robert L. and Jodi K. Stevens.  A-Squared Holdings, Inc. claims that MotorSports
Emporium,  Inc.  (FKA Ten  Stix,  Inc.)  owes a loan  balance  of  $62,000  plus
interest,  the proceeds  from the interests in the purchase of the Bonus 6 table
game by Jodi Stevens, as well as interest (at 12%), court fees, legal fees, etc.
which will continue to accrue.  The Company denies the above  allegations and is
currently  reviewing its options with regard to these claims.  No further action
has been taken as of the date of this  filing.  However the Company  anticipates
A-Squared  Holdings,  Inc. to include this demand letter in its lawsuit  against
the Company.

CASE NUMBER: CV-2005-052607 MOTORSPORTS EMPORIUM, INC. VS. MICHAEL WACHHOLZ

On October 6, 2005, the Company filed an Application for Preliminary  Injunction
and Order to Show Cause against Mr. Michael  Wachholz with the Superior Court in
Maricopa County Arizona.  The law suit filed by the Company against Mr. Wachholz
is for Breach of Contract,  Breach of Fiduciary Duty,  Intentional  Interference
with Existing and  Prospective  Business  Relationships,  Bad Faith,  Failure to
Repay a Loan and Preliminary and Permanent Injunctions. The Company has received
a court date for March 10, 2006 to show cause.  The Company feels very confident
that they will prevail in the actions filed against Mr. Wachholz.

NOTE 12: STOCK OPTIONS

A summary  of the  status  of the  Company's  outstanding  stock  options  as of
December  31, 2005 and  December  31, 2004 and changes  during the periods  then
ended is presented below:

<TABLE>
<CAPTION>
                                                   2005                       2004
                                          ----------------------       ----------------------
                                                        Weighted                     Weighted
                                                        Average                      Average
                                                        Exercise                     Exercise
                                           Shares        Price         Shares         Price
                                           ------        -----         ------         -----
<S>                                      <C>                <C>      <C>               <C>
Outstanding, beginning of period                 --                          --
Granted                                  54,700,000       0.01       65,337,500        0.01
Expired/Cancelled                                --                          --
Exercised                               (54,700,000)      0.01      (65,337,500)       0.01
                                        -----------                 -----------
Outstanding, end of period                       --                          --
                                        ===========                 ===========
</TABLE>

                                      F-16