UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-KSB

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
                                                                   
For the fiscal year endedDecember 31,
2005

[ ] TRANSITION REPORT UNDER SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from[ ]to[ ]Commission file number000-49891

|THE ELECTRIC
      NETWORK.COM, INC.                                
|--------------------------------------------------------------------
|                                                                    
|(Name of small business issuer in its
      charter)                
|Delaware                                                            
|                                                                    
|(State or other jurisdiction of
      incorporation or organization)
|#1400-1500 West Georgia Street,
      Vancouver                     
|British Columbia,
      Canada                                      
|                                                                    
|(Address of principal executive
      offices)                      

Issuer's telephone number(604) 684-3027

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

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

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

|Shares of Common Stock,
      par value $0.001
|----------------------------------------------
|                                              
|(Title of class)                              

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

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

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

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- 2 -

State the aggregate market value of the
voting and non-voting common equity held by non-affiliates computed by reference
to the price at which the common equity was sold, or the average bid and asked
prices of such common equity, as of a specified date within 60 days.

10,538,000 common shares @ $2.64(1)= $27,820,320

(1)Average of bid and ask closing prices on February 14, 2006.

State the number of shares outstanding
of each of the issuers classes of equity stock, as of the latest practicable
date.

19,043,000 shares of common stock
issued and outstanding as of February 14, 2006.

Transitional Small Business Disclosure
Format (Check one): Yes [ ]; No [X]

Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
(Check one): Yes [X] No [ ]

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- 3 -

PART I

Item 1. Description of
Business.

This annual report contains
forward-looking statements as that term is defined in the Private Securities
Litigation Reform Act of 1995. These statements relate to future events or our
future financial performance. In some cases, you can identify forward-looking
statements by terminology such as "may", "should", "expects", "plans",
"anticipates", "believes", "estimates", "predicts", "potential" or "continue" or
the negative of these terms or other comparable terminology. These statements
are only predictions and involve known and unknown risks, uncertainties and
other factors, including the risks in the section entitled "Risk Factors", that
may cause our or our industry's actual results, levels of activity, performance
or achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by these
forward-looking statements.

Although we believe that the
expectations reflected in the forward-looking statements are reasonable, we
cannot guarantee future results, levels of activity, performance or
achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results.

Our financial statements are stated in
United States Dollars (US$) and are prepared in accordance with United States
Generally Accepted Accounting Principles.

In this annual report, unless otherwise
specified, all dollar amounts are expressed in United States dollars. All
references to "CDN$" refer to Canadian dollars and all references to "shares of
common stock " refer to the common shares in our capital stock.

As used in this annual report, the
terms "we", "us", "our", and "Electric Network" mean The Electric Network.com
Inc., unless otherwise indicated.



|Business Development During Last
      Three Years
|--------------------------------------------------

We were incorporated in Nevada on
February 3, 1999. Effective March 31, 2004, we changed our state of domicile to
Delaware. Our change of domicile was effected through the merger of The Electric
Network.com, Inc., a Nevada corporation, with and into The Electric Network.com,
Inc., a Delaware corporation that was formed specifically for this purpose and
which, prior to the merger, was the wholly-owned subsidiary of the Nevada
corporation. The Delaware corporation was the surviving corporation in this
merger.

Our principal executive office is
located at Suite 1400-1500 West Georgia Street, Vancouver, British Columbia,
Canada V6G 2Z6. The telephone number of our principal executive office is (604)
684-3027.

We are a development stage business
that has only recently commenced operations. We have had only nominal revenues
from operations and we have few assets. We have not yet produced any significant
revenues.

Since the date of our incorporation, we
have not made any significant purchases or sales of assets, nor have we been
involved in any mergers, acquisitions or consolidations other than the merger
described above that we effected on March 31, 2004, in order to change our state
of domicile from Nevada to Delaware.

We are in the process of establishing
ourselves as an internet marketplace, where consumers and entrepreneurs within a
specific geographic area, initially Vancouver, British Columbia, can meet to
buy, sell or exchange almost anything with a perceived value that can be sold
over the internet.



|Our Current
    Business
|------------------------

Our principal business activity
consists of the operation of an internet-based auction website over which users
can advertise and buy and sell goods and services for a fee.

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- 4 -

Our server is now and will for the
foreseeable future be co-located in the offices of Binary Environments Ltd., a
Vancouver, B.C.-based company that specializes in server co-location and web
hosting over their T1 connection. "Co-location" is the term used to describe the
placement of a customer's equipment in an organization's facility and, in our
case, it means simply that Binary will keep and maintain our server, and our
connection to the internet, at their business premises. A T1 connection is a
telephone connection capable of transmitting 1.544 megabits per second (Mbps) of
voice and data, which we believe is adequate for our planned operations. We have
signed a month-to-month agreement with Binary pursuant to which our company has
agreed to pay Binary a monthly payment of CDN$85 in consideration of their
hosting our server on their T1 connection.

We purchased PHP XL auction software
from PHP Auction for $411. This software, which we have installed and configured
on our server, is capable of enabling our users to advertise on our website and
post, browse for and bid on items for sale or exchange.

We reserved the domain name
electricnetwork.com and we commenced our soft launch during the period ended
September 30, 2004. We intended to limit our operations to a "friends and
family" soft launch while we marketed our website and raised brand awareness
among local residents and businesses in Vancouver, B.C., but a lack of operating
funds has prevented us from implementing an effective marketing campaign. As a
result of our limited marketing efforts, we have not yet been able to attract
the volume of users necessary to be successful in the online auction business.
During the year ended December 31, 2005, no new users registered for our
service. We did not host any auctions during 2005, nor did we earn any
revenue.

Over the past year it has become
increasingly clear to us that we were not having much success in pursuing our
business plan. We believe that this was primarily due to the inability of Brad
Rudover, our past president, to source adequate financing to support the
implementation of our business plan. During the period ended September 30, 2005,
Mr. Rudover concluded that it would be in the best interest of our company and
its shareholders if he were to step aside in favour of a public company veteran
with a strong track record of fundraising and business model execution who might
be better qualified to create shareholder value for us.

On November 8, 2005, we joined in a
share purchase agreement between Mr. Brad W. Rudover and Dr. John Veltheer in
order to evidence our consent to the sale of Mr. Rudovers shares to Dr.
Veltheer. In the share purchase agreement, Mr. Rudover agreed to resign from his
office of president of our company and from his seat on our board of directors
in order to make way for Dr. Veltheers appointment to our board of directors
and as our president. Pursuant to the agreement, John Veltheer purchased all
4,500,000 shares of our common stock that were owned by Brad W. Rudover on
November 8, 2005.

Also on November 8, 2005, Dr. Veltheer
agreed to loan $10,000 to our company by way of an unsecured simple demand
promissory note that will mature on November 8, 2006, Brad W. Rudover resigned
as our president and a member of our board of directors and Dr. John E. Veltheer
was appointed as our new president and a member of our board of
directors.

Dr. Veltheer has had experience at the
executive level of a number of public and private companies over the past nine
years, including both established businesses and start-up adventures. He is also
familiar with the regulatory compliance and corporate governance requirements
imposed by the Securities and Exchange Commission. We pay Dr. Veltheer a nominal
salary of $2,000 per month.

Dr. Veltheer has reviewed the current
state of our business in detail and he commissioned Evans & Evans, Inc. a
Canadian boutique investment banking firm to evaluate our current internet
auction business and our future prospects. Evans & Evans offers a range of
independent and advocate services to its clients including valuation and
fairness opinions, business planning and research, mergers and acquisitions
advice, business due diligence, market and competitive research and capital
formation assistance.

During November and December 2005,
Evans & Evans conducted an evaluation of our past and present management,
our financial results and regulatory filings, our website, our software and our
hosting arrangements.

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- 5 -

Evans & Evans concluded that we
need to modify our business plan to focus on a specific niche auction market.
Examples of successful niche internet auction businesses include CigarBid.com,
GolfClubExchange.com, and WineBid.com. Based on discussions with Evans &
Evans, and having considered the current state of our business, including our
current lack of capitalization and revenues, our management is currently
rethinking our business plan to focus on and serve a unique marketplace whereby
like-minded individuals can buy and sell good in which they have a significant
interest. It is our opinion that eclectic collectors and consumers interested in
highly specific product niches would prefer to buy and sell amongst themselves
than be mixed in with the masses at eBay or one of our other
competitors.

Management is currently in the process
of raising sufficient capital to further delineate a viable niche market auction
site to launch to the public during 2006.

We intend to continue to develop our
current business under Dr. Veltheers guidance. We will continue to maintain our
server, website and Internet connection.

As a result of our failure to generate
substantial revenues, we have not been satisfied with our initial business plan
and have actively been seeking to create shareholder value with a more defined
business plan in the niche internet auction arena. Simultaneously, in an effort
to substantiate stockholder value, we will continue to seek compatible or
alternative business opportunities. Should we be able to locate and negotiate
with an established business entity for the merger of a target business or
alternatively acquire a business it may be compatible with our revised business
plan or it may be a business unrelated to our current business. We can provide
no assurance that we will be able to locate any such business
opportunities.

We may seek a business opportunity with
entities which have recently commenced operations or wish to utilize the public
marketplace in order to raise additional capital in order to expand business
development activities or develop a new product or service. We may acquire
assets and establish wholly-owned subsidiaries in various businesses or acquire
existing businesses as subsidiaries. No assurances can be given that we will be
successful in locating or negotiating with any startups or find any assets to
acquire.

The search for and analysis of new
business opportunities will be undertaken by our President, who is not a
professional business analyst. In seeking or analyzing prospective business
opportunities, Dr. Veltheer may utilize the services of outside consultants or
advisors.

Management does not have the capacity
to conduct as extensive an investigation of a target business as might be
undertaken by a venture capital fund or similar institution. As a result,
management may elect to merge with a target business which has one or more
undiscovered shortcomings and may, if given the choice to select among target
businesses, fail to enter into an agreement with the most investment-worthy
target business. Likewise, no assurances can be given that we will be able to
enter into a business combination, as to the terms of a business combination, or
as to the nature of the target business.

As of the date hereof, management has
not made any decisions concerning or entered into any written agreements for a
business combination. When any such agreement is reached or other material fact
occurs, we will file notice of such agreement or fact with the Securities and
Exchange Commission on Form 8-K. Persons reading this Report are advised to
determine if we have subsequently filed a Form 8-K.

Our chief financial officer, J. David
Brow, will continue to consult for our company on an uncompensated as-needed
basis during the next few fiscal periods. Mr. Brow, who is currently Regional
Manager for the Americas' Retail and Electronic Sales Distribution Channels for
Symantec Corporation's Enterprise Administration Business Unit, has extensive
experience with online sales and marketing strategies and he will provide Dr.
Veltheer with insight into establishing procedures, strategies and business
development.



|Industry
  Background
|---------------------

The exchange of goods among individuals
and small dealers has traditionally been conducted on a mostly regional basis
through classified newspaper advertisements, collectibles shows, garage sales,
flea markets and brick and

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- 6 -

mortar auctions. These markets tend
towards relatively high transaction costs, especially where brick and
mortar-based auctions are involved, as these are usually regional,
owner-operated businesses that with significant investments in real estate,
personnel, inventory, and marketing for each location. The communication media
relied on by these markets, usually classified newspaper advertising and direct
mail, is both expensive and inefficient.

The internet has become an increasingly
significant global interactive medium for communications, information, and
commerce. In this regard, the internet is increasingly attractive to businesses
that facilitate these exchanges of goods among individuals and small dealers
because it provides an efficient and inexpensive marketplace for people to meet,
communicate and trade. On a properly configured website, sellers can post
photographs of the items they wish to sell, post and modify advertisements or
product descriptions; buyers can inquire and sellers can react to inquiries
promptly, all on a 24-hour per day seven day per week basis. The operator of
this internet website can provide these facilities to buyers and sellers at a
fraction of the cost charged by traditional intermediaries (auction houses,
newspapers, flea markets, etc.), because the internet-based business does not
carry the costly overheads of the traditional retail facilities, such as costly
office or warehousing facilities, utilities or employees.

There are many companies that currently
provide these online consumer-to-consumer trading facilities. Some of these
companies, such as eBay.com, uBid.com and Amazon.com, are well known and
established. Most of these companies offer users the ability to buy and sell
almost anything of value while others, such as CigarBid.com, Winebid.com and
Golfclubexchange.com, distinguish themselves by specializing in specific
products and services.

Although we have historically proposed
to offer a full range of products and services through our online auction
website, we have recently decided to follow the example set by companies like
CigarBid.com, Winebid.com and Golfclubexchange.com. We originally intended to
further distinguish ourselves from our competition by limiting the availability
of our services to residents of specific regions but we are currently
reconsidering this decision. Although we believe that limiting our services to a
specific geographic area will result in lower marketing and startup costs, we
believe that our new focus on a market niche may require that we look to a
larger geographic area.



|Our Current Internet Auction
      Site
|---------------------------------------

Our website is located at
www.electricnetwork.com. Our websites home page contains a listing of product
categories that will allow buyers to explore current auctions. Users can browse
through a list of current auctions within a category or subcategory and then
"click through" to a detailed description for a particular item. They also can
search specific categories or the entire database of auction listings using
keywords to describe the types of products in which they are interested. Each
auction is assigned a unique identifier so that users can easily search for and
track specific auctions. Users also can search for a particular buyer or seller
by name in order to review his or her auction and feedback history.

Once a buyer has found an item of
interest, they must register. After registration, buyers can bid for the item by
entering the maximum amount they are willing to pay. In the event of competitive
bids, our software will automatically increase bidding in increments based upon
the then current highest bid for the item, up to the bidder's maximum price.
Bidders wishing additional information about a listed item can access the
seller's email address and contact the seller for additional information. Our
software will automatically confirm a bid via email to the bidder, and will send
an outbid notice to the next highest bidders. During the course of the auction,
our software will automatically update the item's status as bids are received
and will immediately notify bidders of their bids status via email. Bidders are
not charged for making bids or purchases through our website.

Sellers interested in selling an item
on our website must register before they can list it, which they can do online
by completing a short form. The seller can then select a minimum price for
opening bids, a reserve price if they so desire, and an auction length. A
reserve price is the minimum price at which the seller is willing to sell, and
it is not disclosed to bidders.

Sellers are required to pay a fee to
list items for sale. The amount of this fee will range depending on the opening
bid for the item, with a fee of $0.25 for items with an opening bid price of
less than $1.00, $0.30 for an opening bid price of $1.00 to $9.99, $0.50 for
items with an opening bid price of $10.00 to $29.99, $1.00 for items with an
opening bid price of $30.00 to $49.99, $2.00 for items with an opening bid price
of $50.00 to $199.99 and $4.00 for items with an opening bid price of $200.00 or
more. In addition, sellers can pay additional fees to feature items in

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- 7 -

various ways, including a Home Page
Feature for $10.00, a Category Feature for $5.00, bold font for $1.00, and a
highlighted font for $3.00. Sellers are required to pay a Sellers Final Value
fee in the amount shown on the chart below:

Item Value:
    Percentage Fee$0.01 - $49.99
    8%$50.00  - $999.99
    6%$1,000  +
    5%


At the end of an auction period, if a
bid exceeds the minimum price and, if one is set, the reserve price, our
software will automatically notify the buyer and seller via email that the
auction has closed and that the buyer was the high bid. The buyer and seller can
then consummate the transaction independently. At the time of the email
notification, we will charge the seller a success fee equal to 8% of the first
$50 of the purchase price, 6% of that portion of the purchase price from $50 to
$1,000, and 5% of that portion of the purchase price over $1,000. At no point
during the process do we take possession of either the item being sold or the
buyer's payment for the item. Rather, the buyer and seller must independently
arrange for the shipment of and payment for the item, with the buyer typically
paying for shipping. A seller can view the buyer's feedback rating and then
determine whether to ship the item before or after the payment is received.
Under the terms of our user agreement with the seller, a seller that receives
one or more bids above the stated minimum or reserve price, whichever is higher,
is obligated to complete a transaction, although we have no power to force the
seller or bidder to complete the transaction. In the event the buyer and seller
are unable to complete the transaction and the seller notifies our company, we
will credit the seller the amount of the success fee. Invoices for placement
fees, additional listing fees, final value fees and success fees are sent via
email to sellers on a monthly basis.



|Message
  Boards
|----------------

We offer a message board feature that
will encourage users to post feedback about buyers and sellers and their
transaction experience. We intend to create a feedback profile for every
registered user containing compliments, criticisms and other comments by users
who have conducted business or interacted with the person. Users may review a
person's feedback profile before deciding to bid on an item listed by that
person or in determining how to complete the payment for and delivery of the
item.



|Customer
  Support
|------------------

We provide personalized customer
service and support on a 24-hour per day, seven day per week basis via
email.



|Our
  Technology
|----------------

We purchased from PHP Auction a robust,
scalable user interface and transaction processing system that is based on their
proprietary software. The PHP Auction software will handle all aspects of the
auction process, including notifying users via email when they initially
register for the service, place a successful bid, are outbid, place an item for
sale and when an auction ends. It will also send daily status updates to any
active sellers and bidders regarding the state of their current auctions. The
system will maintain user registration information, billing accounts, current
auctions and historical listings. Complete listings of all items for sale are
generated every hour. Every time an item is listed on the service, a listing
enhancement option is selected by a seller, or an auction closes with a bid in
excess of the seller-specified minimum bid, the system will make an entry into
the seller's billing account. The system sends electronic invoices to all
sellers via email when their account owes a minimum of $1.00.

The PHP Auction system has been
designed around industry standard architectures and has been designed to reduce
downtime in the event of outages or catastrophic occurrences. Our system
hardware is co-hosted at Binary in Vancouver, British Columbia, which provides
redundant communication lines and emergency power backup. Our system consists of
a dual Intel Pentium 450 Mhz server running MySQL Database on a Linux operating
system.

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- 8 -

We anticipate that we will devote
significant resources to product development in the future in a continuous
effort to add new features and functionality to our auction service. The market
in which we will compete is characterized by rapidly changing technology,
evolving industry standards, frequent new service and product announcements,
introductions and enhancements and changing customer demands.



|Competition
|-----------

The market for person-to-person trading
over the internet is new, rapidly evolving and intensely competitive, and we
expect competition to intensify in the future. Barriers to entry are relatively
low, and current and new competitors can launch new websites at relatively low
cost using commercially available software. Our direct competitors include
various online person-to-person auction services, including eBay, Ubid, Yahoo
and various other lesser-known online auctions. A number of traditional auction
companies, including Butterfield & Butterfield and Sotheby's, are offering
or have announced plans to create internet auction sites. We may also face
competition from a number of large online communities and services that have
expertise in developing online commerce and in facilitating online
person-to-person interaction. Some of these potential competitors, including
AOL, Lycos, Inc. and Microsoft Corporation, currently offer business-to-consumer
trading services and classified ad services. Some of these companies also may
introduce person-to-person trading to their large user populations.

Niche market internet auction sites
have gained popularity in recent years as users prefer the focused offerings and
higher level of sophistication amongst both buyers and sellers. Like their
larger competitors, niche auction sites act as hosts or facilitators and
provide the necessary structure for listing, displaying, bidding, and paying for
goods and services online. Their differentiator is that they focus solely on one
type of product. For example, Golfclubexchange.com deals in golf equipment,
WineBid.com deals in fine wine and CigarBid.com deals in cigars. We must choose
a niche that is not already serviced by an internet auction site if we hope to
succeed.

Other forums traditionally used for
buying and selling goods, such as printed media and auction houses, have begun
to expand their operations to the internet. For example, almost every newspaper
and trade magazine has a website that allows users to post and browse sale
items. Many newspapers are seeking alternative means of selling merchandise over
the internet through their website and online auction software may become the
desired format. This market will continue to grow as more newspapers build their
own websites. Also, local auction houses have begun to offer online bidding
through the use of their website.

Many of these competitors have greater
resources, and more experience in research and development, than us. These
resources may enable our competitors to finance acquisition and development
opportunities, pay higher prices for the same opportunities or develop and
support their own operations. In addition, many of these companies can offer
bundled, value-added or additional services not provided by us. Almost all of
them currently enjoy greater name recognition. Our competitors may have the
luxury of sacrificing profitability in order to capture a greater portion of the
market for business consulting activities. They may also be in a position to pay
higher prices than we would for the same expansion and development
opportunities. Consequently, we may encounter significant competition in our
efforts to achieve our internal and external growth objectives.



|Marketing
|---------

We market our business and draw traffic
to our website on a word-of-mouth basis and by email direct marketing. As we
look to develop and advertise a niche auction site we can target users by e-mail
direct marketing. E-mail direct marketing campaigns send targeted direct email
to recipients on opt-in email lists maintained by online communities, clubs or
organizations.



|Research and
      Development
|------------------------------

We are not currently conducting any
research and development activities except for the ongoing development of our
website and the design of our software and services, nor do we anticipate
conducting any such activities in the near future. To date, we have not expended
any funds on research and development activities, rather, the research and
development activities conducted by our management have been services donated to
us.

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- 9 -



|Government
    Regulation
|-------------------------

Online commerce is new and rapidly
changing, and federal and state regulations relating to the internet and online
commerce are relatively new and evolving. Due to the increasing popularity of
the internet, it is possible that laws and regulations will be enacted to
address issues such as user privacy, pricing, content, copyrights, distribution,
antitrust matters and the quality of products and services. The adoption of
these laws or regulations could reduce the rate of growth of the internet. If
these regulations make the operation of a website such as ours more expensive
than we anticipate, or more unwieldy than potential bidders and sellers are
willing to tolerate, then these regulations could potentially decrease the usage
of our website and could otherwise harm our business. For example, if internet
transactions are taxed, monitored or restricted by local, state, provincial or
federal authorities more than these transactions currently are, or if consumers
or businesses begin to favor other ways of doing business instead of online
transactions, then there might be less demand for a site and services such as
ours.

In addition, the applicability to the
internet of existing laws governing issues such as trademarks, copyrights and
other intellectual property issues is uncertain. We cannot be sure what effect
the use of our trade name on our website might have on any future trademark
applications domestically or abroad. For example, we have applied for trademark
registration of our trade name The Electricnetwork.com for use in conjunction
with our website, since our reserved domain name uses the same name. The United
States Patent and Trademark Office registered our trade name on June 22, 2004.
If another company challenges our trademark, we would either need to expend
resources to either defend that use, or identify another name to use, and change
our domain name and other materials to conform to that new name. Additionally,
we might have to defend copyright infringement suits because of material posted
to our site by sellers or bidders. Even if such suits are baseless, or we have
disclaimed such uses by others, we might still have to expend resources to
arrive at that determination. The uncertainty of the internet and how it affects
intellectual property rights could adversely affect our ability to protect the
intellectual property rights we may acquire in the future. Most of these laws
were adopted prior to the advent of the internet and do not contemplate or
address the unique issues of the internet.

New laws applicable to the internet may
impose substantial burdens on companies conducting online commerce. In addition,
the growth and development of online commerce may prompt calls for more
stringent consumer protection laws in the United States, Canada and abroad.
Specifically, the way we advertise our proposed services will likely be affected
by more stringent laws in that we, or users of our site, could be prevented from
making certain representations about our services or products or services
offered by third-party users of our site. The cost of complying with such laws
could increase our cost of doing business, drive up prices and harm our ability
to earn revenues. For example, if we were required by future regulations to
verify or reveal the identity of bidders and buyers, or if we are required to
monitor or verify the quality of goods or services offered on our site by third
party sellers, our costs would increase and we would not be able to handle more
than a minimal number of exchanges on our site, which would limit the revenues
we would be capable of generating. Moreover, stricter laws regarding the
reporting of online auction-style exchange of goods or services will likely
increase the cost of doing business because we will need to comply with such
laws. For example, if we begin offering a forum for the exchange of goods or
services obtained by means of an online auction in jurisdictions that
stringently regulate or monitor such activities, we could be forced to expend
additional funds to meet such standards. The additional cost will harm our
ability to earn revenues.

Taxing authorities in a number of
states are currently reviewing the appropriate tax treatment of companies
engaged in internet commerce. New state tax regulations may subject us to
additional state sales, use and income taxes. The adoption of any of these laws
or regulations may decrease the growth of internet usage or the acceptance of
internet commerce which could, in turn, decrease the demand for our services,
increase costs and otherwise have a material adverse effect on our ability to
earn revenues. For example, if state or local agencies begin taxing internet
transactions, sites such as ours may experience lower levels of traffic and
therefore, lower levels of revenues. To date, we have not spent significant
resources on lobbying or related government affairs issues, but we may need to
do so in the future.

Several telecommunications carriers
have asked the Federal Communications Commission, commonly referred to as the
FCC, to regulate telecommunications over the internet. Due to the increasing use
of the internet and the burden it has placed on the telecommunications
infrastructure, telephone carriers have requested that the FCC regulate internet
and online service providers and impose access fees on those providers. If the
FCC imposes access fees, the

---

- 10 -

costs of using the internet could
increase dramatically. In this event, our margins could be negatively impacted
because we rely solely on internet traffic to generate revenues.

Finally, various state and provincial
jurisdictions, including the province of British Columbia where we are building
our first community auction, regulate the manner in which auctions may be
conducted and the liability of auctioneers for conducting auctions that are not
properly held. These regulations are relatively new and, as a consequence, we
cannot predict their effect, if any, on our company.



|Employees
|---------

At present, we have no employees other
than our officers and directors, both of whom have management services
agreements with us. Dr. John Veltheer, our president and chief executive
officer, and J. David Brow, our chief financial officer and secretary each
devote approximately 10 to 20 hours per week of their time to the affairs of our
company. We presently do not have pension, health, annuity, insurance, stock
options, profit sharing or similar benefit plans although we may adopt such
plans in the future.



|RISK
  FACTORS
|--------------

This annual report contains
forward-looking statements as that term is defined in the Private Securities
Litigation Reform Act of 1995. These statements relate to future events or our
future financial performance. In some cases, you can identify forward-looking
statements by terminology such as "may", "should", "expects", "plans",
"anticipates", "believes", "estimates", "predicts", "potential" or "continue" or
the negative of these terms or other comparable terminology. These statements
are only predictions and involve known and unknown risks, uncertainties and
other factors, including the risks in the section entitled "Risk Factors", that
may cause our or our industry's actual results, levels of activity, performance
or achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by these
forward-looking statements.

Although we believe that the
expectations reflected in the forward-looking statements are reasonable, we
cannot guarantee future results, levels of activity, performance or
achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results. Our forward-looking
statements involve various risks and uncertainties, some but not all of which
are as outlined below. We caution readers of this annual report that important
factors in some cases have affected and, in the future, could materially affect
actual results and cause actual results to differ materially from the results
expressed in any of our estimates, projections or other forward-looking
statements. In evaluating us, our business and any investment in our business,
readers should carefully consider the following factors:

Our company is in the early
development stage. The fact that we have only generated nominal revenues since
our incorporation raises substantial doubt about our ability to continue as a
going concern, as indicated in our independent auditors' opinion given in
connection with our audited financial statements for the year ended December 31,
2005 and in the notes to the financial statements included with this annual
report on Form 10-KSB.

Our company is in the early development
stage. We have only generated nominal revenues since we were incorporated on
February 3, 1999. We incurred a loss of $59,610 for the year ended December 31,
2005 and we have an accumulated deficit of $319,991 since inception. We
anticipate that we will operate in a deficit position for the foreseeable
future. We will require additional financing in order to fund our marketing
efforts and our monthly overhead. To date, our primary source of funds has been
the sale of our common stock but there can be no assurance that we will be able
to raise additional working capital through the sale of our common stock or
through any other means. If we cannot raise the working capital required for the
development of our business, our business will fail. These circumstances raise
substantial doubt about our ability to continue as a going concern as expressed
in an explanatory note that forms part of our independent auditors' report on
our financial statements for the year ending December 31, 2005 and is included
in the notes to the financial statements included with this annual report on
Form 10-KSB.

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- 11 -

There is a limited public market for
shares of our common stock, which will make it difficult for you to sell your
shares. If you cannot sell your shares, you may lose all of your
investment.

There is a limited public market for
our common stock and we can give no assurance that one will develop or be
sustained. Although our common stock received approval for quotation on the
National Association of Securities Dealers Inc.'s OTC Bulletin Board on November
23, 2004, it has traded less than ten times. If a broader public market for our
common stock does not develop, then you may not be able to resell your shares of
our common stock and you may lose all of your investment.

Even if a significant market for our
shares of common stock should develop, the market price for our shares of common
stock may be significantly affected by the current stage of our business and our
lack of any more than nominal operating revenues and our financial and
operations results from time-to-time. Further, equity markets in general and the
OTC Bulletin Board in particular can experience extreme volatility that can
affect the market price of equity securities in ways that are often unrelated or
disproportionate to the operating performance of the issuer companies. You
should not invest in our company unless you are prepared to hold onto your
securities for a significant period of time.

Our directors and officers are
engaged in other full-time business activities and they may not devote
sufficient time to our business, which could have an adverse effect on our
ability to conduct operations and generate revenues.

Our directors and officers are involved
in other business activities. Dr. John Veltheer, our president, chief executive
officer and one of our directors is employed full-time as the chief executive
officer of Vecten Corporation, a startup private equity fund. J. David Brow, our
chief financial officer, secretary, treasurer and one of our directors is
employed full-time as a regional manager of Symantec Corporation. As a result,
our directors and officers may not be able to devote sufficient time to our
business affairs, which may negatively affect our ability to market our proposed
business and conduct both our current and our proposed operations.

Because our officers, directors and
principal shareholders control a majority of our common stock, investors will
have little or no control over our management or other matters requiring
shareholder approval.

Our officers and directors and their
affiliates, in the aggregate, beneficially own 44.7% of the issued and
outstanding shares of our common stock. As a result, they have the ability to
control matters affecting minority shareholders, including the election of our
directors, the acquisition or disposition of our assets, and the future issuance
of our shares. Because our officers, directors and principal shareholders
control the company, investors will not be able to replace our management if
they disagree with the way our business is being run. Because control by these
insiders could result in management making decisions that are in the best
interest of those insiders and not in the best interest of the investors, you
may lose some or all of the value of your investment in our common
stock.

We rely on third parties to ensure
that our website and our software are operating properly. If our website or our
software fail to operate properly and these third parties fail to perform as
expected, our website will not operate as intended and our business will be
adversely affected.

We rely on contractors to correct
errors in our software and make changes to our auction website in a timely
manner. These contractors may be unable or unwilling to correct problems with
our software or website in a timely manner. If we experience technical problems
with our software or our website, or if we lose our connection to the internet,
and these problems are not corrected immediately, our service could be adversely
affected. We have already experienced periodic system interruptions and we
believe that these will continue to occur from time to time. These outages have
stemmed from a variety of causes, including third-party hardware and software
problems and human error. If our users become frustrated with our level of
service, they may switch to a competitor's service. If any of these events
occur, our business could be adversely affected.

In addition, we may add new features
and functionality to our services that may result in the need to develop or
license additional technologies. If we are unable to add additional software
and/or hardware or upgrade our technology, transaction processing systems or
network infrastructure to accommodate increased traffic or transaction volume,
our business could suffer adverse consequences including unanticipated system
disruptions, slower

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- 12 -

response times, degradation in levels
of customer support, impaired quality of the users' experience on its service
and delays in reporting accurate financial information. These consequences could
harm or limit our ability to expand our business.

Competition is strong in the market
for online exchanges of goods and services. If we cannot compete in this market,
our ability to earn revenues will be limited and our business may
fail.

The market for online exchanges of
goods and services is highly competitive and consists of a number of established
companies. We compete for internet users that currently are familiar with more
established online auction sites, such as eBay, uBid.com, Yahoo! Auctions,
Winebid.com, Golfclubexchange.com and others who have more financial resources,
operating experience and brand awareness among internet users than we have. This
industry is also highly fragmented, and is subject to rapidly changing consumer
demands and preferences.

The online auction industry requires
that a marketer recognize trends and adequately provide services to meet such
trends. To compete effectively, our services have to be competitive in terms of
quality, price, service, style and, with respect to branded product lines,
consumer recognition. We believe that our success depends in large part upon our
ability to anticipate, gauge and respond to changing consumer demands in a
timely manner, generating brand awareness. If we do not generate sufficient
brand awareness, or if we cannot anticipate, gauge and respond to consumer
demands, we will not be able to compete in this industry and our ability to earn
revenues will be harmed.

In addition, the widespread adoption of
new internet, networking or telecommunications technologies or other
technological changes could require substantial expenditures by our company to
modify or adapt our services or infrastructure. If we cannot raise the money
required to effect these changes, we will not be able to compete with other
businesses engaged in the internet auction business that are able to effect
these changes.

If we are unable to protect our
intellectual property, our efforts to create and thereafter to increase public
recognition of our brand may be impaired.

We currently hold the internet domain
name "www.electricnetwork.com". The acquisition and maintenance of domain names
generally is regulated by governmental agencies and their designees. The
regulation of domain names in the United States and Canada, as well as in other
foreign countries, is subject to change. As a result, we may be unable to
acquire or maintain relevant domain names in all countries where we intend to do
business. This could impair our efforts to build brand recognition and increase
traffic to our website. In addition, we may be unable to prevent third parties
from acquiring domain names that are similar to, infringe upon or otherwise
decrease the value of our domain name.

We have applied for trademark
registration with the United States Patent and Trademark Office of the mark "The
Electricnetwork.com" for use in conjunction with our website. Our application
for trademark registration has been granted, and the trademark was registered on
June 22, 2004. We have not applied for similar trademark registration in Canada
or in any other country. If we cannot protect our trademark in Canada or in
other countries where we propose to do business, we would either need to expend
resources to defend that use, or identify another name to use, and change our
domain name and other materials to conform to that new name. In such an event,
our efforts to build brand awareness and attract traffic to our website would be
adversely affected.

Government regulation of the
internet could have adverse impacts on our business.

The applicability to the internet of
existing laws governing taxation of products and services sold over the
internet, the protection of intellectual property, user privacy, pricing,
content, distribution, antitrust and the quality of products and services is
rapidly evolving. The application of these laws to the internet and the adoption
of new laws or regulations pertaining to these matters could reduce the rate of
growth of the internet. If these regulations make the operation of a website
such as ours more expensive than we anticipate, or more unwieldy than potential
bidders and sellers are willing to tolerate, then these regulations could
potentially decrease the usage of our website and could otherwise harm our
business.

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- 13 -

We may be required to expend
resources defending our reputation or assets from liability for claims arising
from users listing for sale items that it is unlawful to list.

Laws relating to the liability of
providers of online services for the activities of their users on their service
is currently unsettled. We are aware that certain goods, such as firearms, other
weapons, adult material, tobacco products, alcohol and other goods that may be
subject to regulation by local, state or federal authorities, may be listed and
traded on our website. We may be unable to prevent the sale of unlawful goods,
or the sale of goods in an unlawful manner, by users of our website and we may
be subject to civil or criminal liability for unlawful activities carried out by
users through its service. Any costs incurred as a result of liability or
asserted liability relating to the sale of unlawful goods or the unlawful sale
of goods could harm our business.

Fraudulent activities by persons
using our website could harm our reputation and our business.

Our success will depend largely upon
sellers reliably delivering and accurately representing their listed goods and
buyers paying the agreed purchase price. We will not take responsibility for
delivery of payment or goods to any buyer or seller but we anticipate that we
may receive communications from users who did not receive the purchase price or
the goods that were to have been exchanged. While we anticipate that we will be
able suspend the accounts of users who fail to fulfil their obligations to other
users, we will not have the ability to otherwise require users to make payments
or deliver goods. We may also periodically receive complaints from buyers as to
the quality of the goods purchased. Any negative publicity generated as a result
of fraudulent or deceptive conduct by users of our website could damage our
reputation and diminish the value of our brand. We may in the future receive
additional requests from users requesting reimbursement or threatening legal
action against us if no reimbursement is made. Any resulting litigation could be
costly for our company, divert management attention, result in increased costs
of doing business, lead to adverse judgments or could otherwise harm our
reputation and our business.



|We depend on the continued growth of
      online commerce.
|-----------------------------------------------------------

The business of selling goods over the
internet, particularly through online trading, is dynamic and relatively new.
Acceptance of and growth in use of the internet as a medium for consumer
commerce may not continue. Concerns about fraud, privacy, and other problems may
discourage additional consumers from adopting the internet as a medium of
commerce. In particular, our website will require users to make publicly
available personal information that some potential users may be unwilling to
provide. These concerns may increase if and as additional publicity over privacy
issues over the internet increases. Market acceptance for recently introduced
services and products over the internet is highly uncertain, and there are few
proven services and products. In order to build and continuously expand our user
base, we must appeal to and acquire consumers who historically have used
traditional means of commerce to purchase goods. If these consumers prove to be
less active than we anticipate, and we are unable to establish efficiencies in
our operating costs, including our cost of acquiring and retaining customers,
our business could be adversely impacted.

Because we can issue additional
shares of common stock, and there is a substantial likelihood that we will do so
in order to finance the completion of our website, our marketing and our monthly
operations requirements, purchasers of our common stock may suffer immediate
dilution of their interest in our company.

The most likely source of future funds
presently available to us is through the sale of equity. Any sale of our shares
will result in dilution to existing shareholders. Furthermore, there is no
assurance that we will not incur debt in the future, that we will have
sufficient funds to repay our future indebtedness or that we will not default on
our future debts, jeopardising our business viability. Finally, we may not be
able to borrow or raise additional capital in the future to meet our needs or to
otherwise provide the capital necessary to conduct business and explore our
properties, which might result in the loss of some or all of your investment in
our common stock.

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- 14 -

Because some of our officers and
directors are located in non-U.S. jurisdictions, you may have no effective
recourse against the management for misconduct and may not be able to enforce
judgement and civil liabilities against our officers, directors, experts and
agents.

Our president is a resident of Canada,
and all or a substantial portion of our assets and those of our president are
located outside the United States. As a result, it may be difficult for
investors to enforce within the United States any judgments obtained against our
company, our officers or directors, including judgments predicated upon the
civil liability provisions of the securities laws of the United States or any
state thereof.

Trading of our common stock may be
restricted by the United States Securities and Exchange Commission's penny stock
regulations, which may limit the development of a liquid public market for our
common stock and may limit a shareholder's ability to buy and sell our common
stock.

Shares of our common stock are subject
to rules adopted by the Securities and Exchange Commission that regulate
broker-dealer practices in connection with transactions in "penny stocks".
"Penny stock" is defined to be any equity security that has a market price (as
defined) less than $5.00 per share or an exercise price of less than $5.00 per
share, subject to certain exceptions. If we establish a trading market for our
common stock, our common stock will most likely be covered by the penny stock
rules, which impose additional sales practice requirements on broker-dealers who
sell to persons other than established customers and "accredited investors." The
term "accredited investor" refers generally to institutions with assets in
excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or
annual income exceeding $200,000 or $300,000 jointly with their spouse. The
penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from the rules, to deliver a standardized risk
disclosure document in a form prepared by the SEC which provides information
about penny stocks and the nature and level of risks in the penny stock market.
The broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction and monthly account statements showing the market
value of each penny stock held in the customer's account. The bid and offer
quotations, and the broker-dealer and salesperson compensation information, must
be given to the customer orally or in writing prior to effecting the transaction
and must be given to the customer in writing before or with the customer's
confirmation. In addition, the penny stock rules require that prior to a
transaction in a penny stock not otherwise exempt from these rules, the
broker-dealer must make a special written determination that the penny stock is
a suitable investment for the purchaser and receive the purchaser's written
agreement to the transaction. These disclosure requirements may have the effect
of reducing the level of trading activity in the secondary market for the stock
that is subject to these penny stock rules. Consequently, these penny stock
rules may affect the ability of broker-dealers to trade our
securities.



|Item 2. Description of
      Property.
|--------------------------------------

Our corporate and operational offices
are located at Suite 1400  1500 West Georgia Street, Vancouver, British
Columbia, Canada V6G 2Z6, where we lease office space under a month-to-month
lease at a rental rate of $175 a month. We believe that this space is sufficient
at this time. However, we may move to expanded office space when and if our
business expands. We do not have any material assets and, as such, we do not own
any real or personal property.

Item 3. Legal
Proceedings.

We know of no material, active or
pending legal proceedings against us, nor are we involved as a plaintiff in any
material proceedings or pending litigation. There are no proceedings in which
any of our directors, officers or affiliates, or any registered beneficial
shareholder are an adverse party or has a material interest adverse to
us.

Item 4. Submissions of Matters to a
Vote of Security Holders.

None.

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- 15 -

PART II

Item 5. Market for Common Equity and
Related Stockholder Matters.

On November 23, 2004, our common stock
received approval for quotation on the National Association of Securities
Dealers Inc.'s Over-the-Counter Bulletin Board under the name "The Electric
Network.com, Inc." and under the symbol "ETNW". To date, our stock has not yet
traded.

Our shares of common stock are issued
in registered form. Interwest Transfer Co. Inc., 1981 East Murray Holladay Road,
Suite 100, Salt Lake City, Utah, 84117. (Telephone: 801.272.9294; Fax:
801.277.3147 is the registrar and transfer agent for our shares of common
stock.

On February 14, 2006 the shareholders'
list of our shares of common stock showed 47 registered shareholders and
19,043,000 shares of common stock outstanding.

There are no outstanding options or
warrants to purchase, or securities convertible into, our shares of common
stock. All of our issued and outstanding shares can be sold pursuant to Rule 144
of the Securities Act of 1933.

We have not declared any dividends
since incorporation and we do not anticipate that we will do so in the
foreseeable future. Although there are no restrictions that limit our ability to
pay dividends on our shares of common stock, our intention is to retain future
earnings for use in our operations and the expansion of our business.



|Recent Sales of Unregistered
      Securities
|---------------------------------------------

There were no sales of unregistered
securities during the year ended December 31, 2005.

Item 6. Management Discussion and
Analysis and Plan of Operation.

Our principal business activity
consists of the operation of an internet-based auction website over which users
can advertise and buy and sell goods and services for a fee.

Over the past year it has become
increasingly clear to us that we were not having much success in pursuing our
business plan. We believe that this was primarily due to the inability of Brad
Rudover, our past president, to source adequate financing to support the
implementation of our business plan. During the period ended September 30, 2005,
Mr. Rudover concluded that it would be in the best interest of our company and
its shareholders if he were to step aside in favour of a public company veteran
with a strong track record of fundraising and business model execution who might
be better qualified to create shareholder value for us.

On November 8, 2005, we joined in a
share purchase agreement between Mr. Brad W. Rudover and Dr. John Veltheer in
order to evidence our consent to the sale of Mr. Rudovers shares to Dr.
Veltheer. In the share purchase agreement, Mr. Rudover agreed to resign from his
office of president of our company and from his seat on our board of directors
in order to make way for Dr. Veltheers appointment to our board of directors
and as our president. Pursuant to the agreement, John Veltheer purchased all
4,500,000 shares of our common stock that were owned by Brad W. Rudover on
November 8, 2005.

Also on November 8, 2005, Dr. Veltheer
agreed to loan $10,000 to our company by way of an unsecured simple demand
promissory note that will mature on November 8, 2006, Brad W. Rudover resigned
as our president and a member of our board of directors and Dr. John E. Veltheer
was appointed as our new president and a member of our board of
directors.

Dr. Veltheer has had experience at the
executive level of a number of public and private companies over the past nine
years, including both established businesses and start-up adventures. He is also
familiar with the regulatory compliance and corporate governance requirements
imposed by the Securities and Exchange Commission. We pay Dr. Veltheer a nominal
salary of $2,000 per month.

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- 16 -

Dr. Veltheer has reviewed the current
state of our business in detail and he commissioned Evans & Evans, Inc., a
Canadian boutique investment banking firm to evaluate our current business and
our future prospects. Evans & Evans offers a range of independent and
advocate services to its clients including valuation and fairness opinions,
business planning and research, mergers and acquisitions advice, business due
diligence, market and competitive research and capital formation
assistance.

During November and December 2005,
Evans & Evans conducted an evaluation of our past and present management,
our financial results and regulatory filings, our website, our software and our
hosting arrangements.

Evans & Evans concluded that we
need to modify our business plan to focus on a specific niche auction market.
Examples of successful niche internet auction businesses include CigarBid.com,
GolfClubExchange.com, and WineBid.com. Based on discussions with Evans &
Evans, and having considered the current state of our business, including our
current lack of capitalization and revenues, our management is currently
rethinking our business plan to focus on and serve a unique marketplace whereby
like-minded individuals can buy and sell good in which they have a significant
interest. It is our opinion that eclectic collectors and consumers interested in
highly specific product niches would prefer to buy and sell amongst themselves
than be mixed in with the masses at eBay or one of our other
competitors.

Management is currently in the process
of raising sufficient capital to further delineate a viable nice market auction
site to launch to the public during 2006.

We intend to continue to develop our
current business under Dr. Veltheers guidance. We will continue to maintain our
server, website and Internet connection.

As a result of our failure to generate
substantial revenues, we have not been satisfied with our initial business plan
and have actively been seeking to create shareholder value with a more defined
business plan in the niche internet auction arena. Simultaneously, in an effort
to substantiate stockholder value, we will continue to seek compatible or
alternative business opportunities. Should we be able to locate and negotiate
with an established business entity for the merger of a target business or
alternatively acquire a business it may be compatible with our revised business
plan or it may be a business unrelated to our current business. We can provide
no assurance that we will be able to locate any such business
opportunities.

We may seek a business opportunity with
entities which have recently commenced operations or wish to utilize the public
marketplace in order to raise additional capital in order to expand business
development activities or develop a new product or service. We may acquire
assets and establish wholly-owned subsidiaries in various businesses or acquire
existing businesses as subsidiaries. No assurances can be given that we will be
successful in locating or negotiating with any startups or find any assets to
acquire.

The search for and analysis of new
business opportunities will be undertaken by our President, who is not a
professional business analyst. In seeking or analyzing prospective business
opportunities, Dr. Veltheer may utilize the services of outside consultants or
advisors.

Management does not have the capacity
to conduct as extensive an investigation of a target business as might be
undertaken by a venture capital fund or similar institution. As a result,
management may elect to merge with a target business which has one or more
undiscovered shortcomings and may, if given the choice to select among target
businesses, fail to enter into an agreement with the most investment-worthy
target business. Likewise, no assurances can be given that we will be able to
enter into a business combination, as to the terms of a business combination, or
as to the nature of the target business.

As of the date hereof, management has
not made any decisions concerning or entered into any written agreements for a
business combination. When any such agreement is reached or other material fact
occurs, we will file notice of such agreement or fact with the Securities and
Exchange Commission on Form 8-K. Persons reading this Report are advised to
determine if we have subsequently filed a Form 8-K.

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- 17 -

Our chief financial officer, J. David
Brow, will continue to consult for our company on an uncompensated as-needed
basis during the next few fiscal periods. Mr. Brow, who is currently Regional
Manager for the Americas' Retail and Electronic Sales Distribution Channels for
Symantec Corporation's Enterprise Administration Business Unit, has extensive
experience with online sales and marketing strategies and he will provide Dr.
Veltheer with insight into establishing procedures, strategies and business
development.

Once we have developed a concept for a
niche internet auction site we will target users (both buyers and sellers)
primarily through direct email marketing. Direct email marketing campaigns send
targeted direct email to recipients on opt-in email lists maintained by online
communities, clubs, organizations etc. Campaigns can vary tremendously in cost
but we believe that these campaigns will provide us with a cost effective means
of reaching our target market. Our initial budget for email marketing is
$10,000-$15,000. We plan to conduct direct email marketing campaigns when we
have a niche auction site delineated.

We believe that we will need to
advertise our website, our products and our services to attract users as we ramp
up operations into our full launch but we appreciate that our advertising budget
will not permit extensive or expensive methods of advertising. We intend to
focus our advertising efforts on online advertising campaigns with 24/7 Canada,
Inc., a subsidiary of 24/7 Real Media, Inc. 24/7 Canada uses permission-based
email and segmented and targeted website advertising based on targeted location,
and is capable of targeting users by language, age, time of day and interest. We
believe that using 24/7 Canada as an advertising medium will permit our company
to present to our target audience (Vancouver area residents and businesses). We
have budgeted approximately $15,000 for advertising over the next 12
months.

Our current president and chief
executive officer, John Veltheer, is currently handling our operations on a
part-time consulting basis, for which we pay him $2,000 per month. Mr. Veltheer
is in charge of overall business development and will look to consultants to
test our PHP Auction software and manage our marketing and advertising efforts
as required. He will also ensure that Binary continues to maintain our server,
website and internet connection. Our chief financial officer, J. David Brow,
will consult for our company on an uncompensated as-needed basis during the next
few fiscal periods. Mr. Brow, who is currently regional manager for the
Americas' Retail and Electronic Sales Distribution Channels for Symantec
Corporation's Enterprise Administration Business Unit, has extensive experience
with on-line sales and marketing strategies and he will provide our company with
insight into establishing procedures, strategies and business development during
our launch process.

Purchase or Sale of
Equipment

As discussed above, we have purchased a
server from our past president, Brad Rudover for $500. This server is an
essential part of our business as this connects our website to the internet and
allows our users to buy and sell items in our online marketplace.

In the future, if we are generating
revenue we anticipate on purchasing an Apple iBook G4 notebook computer.
Macintosh has become the standard for graphics editing and we believe this will
allow us to improve the appearance of our website and any auction items listed
on it. Along with graphics this notebook will also act as a database in which we
can store all usr and transaction information. As a development company with
limited resources we will rely on our ability to generate revenue prior to
making this purchase.

Personnel

As of February 14, 2006, our chief
executive officer, John Veltheer, and our chief financial officer, J. David
Brow, continue to consult for our company and we do not have any employees. Both
Messrs. Veltheer and Brow handle all of the responsibilities in the area of
corporate administration, business development and research. We do not currently
have or plan to add any other employees or consultants during the next twelve
months.

In addition to the costs of our
operations outlined above, we expect to incur administrative and professional
charges associated with preparing, reviewing, auditing and filing our financial
statements and our periodic and other disclosure documents. For the 12 months
ending December 31, 2006, we have budgeted $35,000 for accountants

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- 18 -

and lawyers fees for our periodic
filing requirements, and an additional $8,000 for miscellaneous office and
filing fees and expenses.

Research and
Development

As we are currently in the process of
developing our business, we do not plan to spend any time or money on research
and development of additional products during the next 12 months. In addition,
we do not anticipate that we will implement any formal research and development
effort. We anticipate that we will constantly research our competitors' products
and services and that this effort will result in constant improvement of our own
website and product offerings. We anticipate that Dr. Veltheer, our president
and chief executive officer, will perform these services for us in the normal
course of performing his consulting duties, and we have not budgeted any
additional funds for this purpose.

Going Concern

We incurred a loss of $59,610 for the
year ended December 31, 2005, and we have incurred an accumulated deficit since
inception of $319,991. At December 31, 2005, we had $1,437 in cash and $73,831
in current liabilities resulting in a working capital deficiency of $72,394. As
we have only recently commenced operations, we have only generated nominal
revenues and there can be no assurance that we can generate any significant
revenues from operations. Our management believes that our company cannot
sustain its operations from existing working capital and operations over the
next 12 months. Therefore, we believe that the only source of funds available to
us to finance our operating and capital requirements will be to raise capital as
needed on a private placement basis. As described in more detail above, we
estimate that we will need $35,000 to satisfy our cash requirements for the next
twelve months.

On November 8, 2005, Dr. John Veltheer,
our president and chief executive officer, agreed to loan $10,000 to our company
by way of an unsecured simple demand promissory note indicating that the
principal amount plus simple interest calculated at a rate of 12% per annum,
will be repayable in full on the first anniversary of the promissory
note.

On November 22, 2005, Dr. John
Veltheer, our president and chief executive officer, agreed to loan $20,000 to
our company by way of an unsecured simple demand promissory note indicating that
the principal amount plus simple interest calculated at a rate of 12% per annum,
will be repayable in full on the first anniversary of the promissory
note.

On January 19, 2006, a shareholder
agreed to loan $50,000 to our company by way of an unsecured simple demand
promissory note indicating that the principal amount plus simple interest
calculated at a rate of 8% per annum, with no specific date of
repayment.

The financial statements included with
this annual report have been prepared on the going concern basis which assumes
that adequate sources of financing will be obtained as required and that our
assets will be realized and liabilities settled in the ordinary course of
business. Accordingly, the audited financial statements do not include any
adjustments related to the recoverability of assets and classification of assets
and liabilities that might be necessary should we be unable to continue as a
going concern.

In order to continue as a going
concern, we require additional financing. There can be no assurance that
additional financing will be available to us when needed or, if available, that
it can be obtained on commercially reasonable terms.

Due to the uncertainty of our ability
to meet our current operating and capital expenses, in their report on the
consolidated financial statements for the year ended December 31, 2005, our
independent auditors included an explanatory paragraph regarding concerns about
our ability to continue as a going concern. Our financial statements contain
additional note disclosures describing the circumstances that lead to this
disclosure by our independent auditors.

---

- 19 -

Recently Issued Accounting
Standards

In May 2005, the Financial Accounting
Standards Board (FASB) issued SFAS No. 154, Accounting Changes and Error
Corrections  A Replacement of APB Opinion No. 20 and SFAS No. 3. SFAS 154
changes the requirements for the accounting for and reporting of a change in
accounting principle and applies to all voluntary changes in accounting
principle. It also applies to changes required by an accounting pronouncement in
the unusual instance that the pronouncement does not include specific transition
provisions. SFAS 154 requires retrospective application to prior periods
financial statements of changes in accounting principle, unless it is
impracticable to determine either the period-specific effects or the cumulative
effect of the change. The provisions of SFAS No. 154 are effective for
accounting changes and correction of errors made in fiscal years beginning after
December 15, 2005. The adoption of this standard is not expected to have a
material effect on the Companys results of operations or financial
position.

In March 2005, the SEC staff issued
Staff Accounting Bulletin No. 107 (SAB No. 107) to give guidance on the
implementation of SFAS 123R. The Company will consider SAB No. 107 during
implementation of SFAS 123R.

In December 2004, the Financial
Accounting Standards Board (FASB) issued Statement of Financial Accounting
Standard (SFAS) No. 123R, Share Based Payment. SFAS 123R is a revision of SFAS
No. 123 Accounting for Stock-Based Compensation, and supersedes APB Opinion
No. 25, Accounting for Stock Issued to Employees and its related
implementation guidance. SFAS 123R establishes standards for the accounting for
transactions in which an entity exchanges its equity instruments for goods or
services. It also addresses transactions in which an entity incurs liabilities
in exchange for goods or services that are based on the fair value of the
entitys equity instruments or that may be settled by the issuance of those
equity instruments. SFAS 123R focuses primarily on accounting for transactions
in which an entity obtains employee services in share-based payment
transactions. SFAS 123R does not change the accounting guidance for share-based
payment transactions with parties other than employees provided in SFAS 123 as
originally issued and Emerging Issues Task Force Issue No. 96-18, Accounting
for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or
in Conjunction with Selling, Goods or Services. SFAS 123R does not address the
accounting for employee share ownership plans, which are subject to AICPA
Statement of Position 93-6, Employers Accounting for Employee Stock Ownership
Plans. SFAS 123R requires a public entity to measure the cost of employee
services received in exchange for an award of equity instruments based on the
grant-date fair value of the award (with limited exceptions). That cost will be
recognized over the period during which an employee is required to provide
service in exchange for the award the requisite service period (usually the
vesting period). SFAS 123R requires that the compensation cost relating to
share-based payment transactions be recognized in financial statements. That
cost will be measured based on the fair value of the equity or liability
instruments issued. The scope of SFAS 123R includes a wide range of share-based
compensation arrangements including share options, restricted share plans,
performance-based awards, share appreciation rights, and employee share purchase
plans. Public entities (other than those filing as small business issuers) will
be required to apply SFAS 123R as of the first interim or annual reporting
period that begins after June 15, 2005. Public entities that file as small
business issuers will be required to apply SFAS 123R in the first interim or
annual reporting period that begins after December 15, 2005. For nonpublic
entities, SFAS 123R must be applied as of the beginning of the first annual
reporting period beginning after December 15, 2005. The adoption of this
standard is not expected to have a material effect on the Companys results of
operations or financial position.

In December 2004, FASB issued SFAS No.
153, Exchanges of Nonmonetary Assets - An Amendment of APB Opinion No. 29. The
guidance in APB Opinion No. 29, Accounting for Nonmonetary Transactions, is
based on the principle that exchanges of nonmonetary assets should be measured
based on the fair value of the assets exchanged. The guidance in that Opinion,
however, included certain exceptions to that principle. SFAS No. 153 amends
Opinion No. 29 to eliminate the exception for nonmonetary exchanges of similar
productive assets and replaces it with a general exception for exchanges of
nonmonetary assets that do not have commercial substance. A nonmonetary exchange
has commercial substance if the future cash flows of the entity are expected to
change significantly as a result of the exchange. The provisions of SFAS No. 153
are effective for nonmonetary asset exchanges occurring in fiscal periods
beginning after June 15, 2005. Early application is permitted and companies must
apply the standard prospectively. The adoption of this standard is not expected
to have a material effect on the Companys results of operations or financial
position.

---

- 20 -

APPLICATION OF CRITICAL ACCOUNTING
POLICIES

Our financial statements and
accompanying notes are prepared in accordance with generally accepted accounting
principles in the United States. Preparing financial statements requires
management to make estimates and assumptions that affect the reported amounts of
assets, liabilities, revenue, and expenses. These estimates and assumptions are
affected by managements application of accounting policies. We believe that
understanding the basis and nature of the estimates and assumptions involved
with the following aspects of our financial statements is critical to an
understanding of our financials.

Revenue
Recognition

We receive and recognize revenue as
users post items for sale and also when items are purchased on the website.
Users will be obligated to pay a listing fee for their items to be placed in the
auction directory. This fee is determined by the price of the item with a larger
priced item reflecting a larger listing fee. When an item is sold through the
auction website, the buyer must pay a premium in the form of a percentage of the
final sale, with a higher percentage charged for higher priced items.

The listing fee and commission revenue
is recognized in the period the fee or commission is earned. Although we have
not generated any revenue from the final value fee, we have recognized revenue
from listing fees. We do not expect difficulty collecting accounts receivable as
amounts are to be received from PayPal.

Stock-based
Compensation

We do not have a stock option plan,
however, issues shares of common stock to non-employees for services. We account
for shares of common stock issued for services to non-employees in accordance
with SFAS No. 123 Accounting for Stock-Based Compensation. Compensation
expense is based on the fair market value of the stock award or fair market
value of the good and services received whichever is more reliably
measurable.

Item 7. Financial
Statements.

Our financial statements are stated in
United States Dollars (US$) and are prepared in accordance with United States
Generally Accepted Accounting Principles.

The Report of Independent Registered
Public Accounting Firm, Manning Elliott LLP, Chartered Accountants is included
herein immediately preceding the audited financial statements for the years
ended December 31, 2005 and 2004 and Accumulated for the period from February 3,
1999 (date of inception) to December 31, 2005.

---

- 20 -



|The Electric Network.com,
      Inc.(A Development Stage
      Company)(Expressed in U.S.
      dollars)
|--------------------------------------------------------------------------------------------------------

IndexReport of Independent
      Registered Public Accounting Firm
    
    F-1Balance Sheet
    
    F-2Statements of
      Operations
    
    F-3Statements of Cash
      Flows
    
    F-4Statement of Stockholders
      Equity (Deficit)
    
    F-5Notes to the Financial
      Statements
    
    F-6


---



| | Report of Independent Registered
      Public Accounting Firm
| | -------------------------------------------------------------



|To the Board of Directors and
      Stockholders ofThe Electric
      Network.com, Inc.(A Development Stage
      Company)
|--------------------------------------------------------------------------------------------------------------------------

We have audited the accompanying
balance sheets of The Electric Network.com, Inc. (A Development Stage Company)
as of December 31, 2005 and 2004 and the related statements of operations, cash
flows and stockholders equity (deficit) accumulated for the period from
February 3, 1999 (Date of Inception) to December 31, 2005 and the years ended
December 31, 2005 and 2004. These financial statements are the responsibility of
the Companys management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance
with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial
statements referred to above present fairly, in all material respects, the
financial position of The Electric Network.com, Inc. (A Development Stage
Company), as of December 31, 2005 and 2004, and the results of its operations
and its cash flows accumulated for the period from February 3, 1999 (Date of
Inception) to December 31, 2005 and the years ended December 31, 2005 and 2004,
in conformity with accounting principles generally accepted in the United
States.

The accompanying financial statements
have been prepared assuming the Company will continue as a going concern. As
discussed in Note 1 to the financial statements, the Company has not generated
any significant revenues and has accumulated operating losses since inception
and will need additional equity financing to begin realizing upon its business
plan. These factors raise substantial doubt about the Companys ability to
continue as a going concern. Managements plans in regard to these matters are
also discussed in Note 1. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.



|/s/ Manning Elliott
      LLP
|-------------------------------



|Vancouver, CanadaJanuary 27, 2006
|---------------------------------

F-1

---

|The Electric Network.com, Inc.                                               |  |              |  |             
|---------------------------------------------------------------------------- |  | ------------ |  | ------------
|(A Development Stage Company)                                                |  |              |  |             
|Balance Sheets                                                               |  |              |  |             
|(Expressed in U.S. dollars)                                                  |  |              |  |             
|                                                                             |  | December 31, |  | December 31,
|                                                                             |  | 2005         |  | 2004        
|                                                                             |  | $            |  | $           
|Assets                                                                       |  |              |  |             
|Current Assets                                                               |  |              |  |             
|Cash                                                                         |  | 1,437        |  | 111         
|Accounts receivable                                                          |  |             |  | 207         
|                                                                            
|Total Assets                                                                 |  | 1,437        |  | 318         
|                                                                            
|Liabilities and Stockholders Equity (Deficit)                               |  |              |  |             
|Current Liabilities                                                          |  |              |  |             
|Accounts payable (Note 3(e) and
      (h))                                   |  | 5,561        |  | 10,102      
|Accrued liabilities (Note 5)                                                 |  | 13,170       |  | 7,900       
|Advances payable (Notes 3(a), (b), (f), and (i))                             |  | 55,100       |  | 15,100      
|                                                                            
|Total Liabilities                                                            |  | 73,831       |  | 33,102      
|                                                                            
|Commitments and Contingencies (Note 1)                                       |  |              |  |             
|Stockholders Equity (Deficit)                                               |  |              |  |             
|Common Stock, 100,000,000 common shares authorized with a par
      value of |  |              |  |             
|$0.001; 19,043,000 and 18,963,000 issued and outstanding,
      respectively |  | 19,043       |  | 18,963      
|Additional Paid in Capital                                                   |  | 213,154      |  | 193,234     
|Donated Capital                                                              |  | 15,400       |  | 15,400      
|Deficit Accumulated During the Development Stage                             |  | (319,991)    |  | (260,381)   
|                                                                            
|Total Stockholders Equity (Deficit)                                         |  | (72,394)     |  | (32,784)    
|                                                                            
|Total Liabilities and Stockholders Equity
      (Deficit)                   |  | 1,437        |  | 318         
|                                                                            

(The accompanying notes are an integral
part of the financial statements.)

F2

---

|The Electric Network.com,
      Inc.      |  |                     |  |                         |  |           
|----------------------------------------- |  | ------------------- |  | ----------------------- |  | ----------
|(A Development Stage
      Company)       |  |                     |  |                         |  |           
|Statements of
      Operations            |  |                     |  |                         |  |           
|(Expressed in U.S.
      dollars)         |  |                     |  |                         |  |           
|                                          |  | Accumulated         |  |                         |  |           
|                                          |  | For the Period From |  |                         |  |           
|                                          |  | February 3, 1999    |  |                         |  |           
|                                          |  | (Date of Inception) |  | Years EndedDecember 31,
|                                          |  | to December 31,     | 
|                                          |  | 2005                |  | 2005                    |  | 2004      
|                                          |  | $                   |  | $                       |  | $         
|Revenue                                   |  | 475                 |  |                        |  | 475       
|                                         
|Expenses                                  |  |                     |  |                         |  |           
|Accounting and
      audit                |  | 42,187              |  | 12,065                  |  | 11,544    
|Consulting
      (Note 3(c), (d) and (g)) |  | 148,546             |  | 25,576                  |  | 22,582    
|Donated
      overhead                    |  | 5,800               |  |                        |  |          
|Donated
      services                    |  | 9,600               |  |                        |  |          
|Interest
      (Notes 3(b) and (i))       |  | 1,638               |  | 888                     |  | 500       
|Legal and
      organizational            |  | 79,871              |  | 14,286                  |  | 38,190    
|Office                                    |  | 19,349              |  | 4,968                   |  | 8,643     
|Transfer agent                            |  | 13,475              |  | 1,827                   |  | 5,993     
|                                         
|                                          |  | 320,466             |  | 59,610                  |  | 87,452    
|                                         
|Net Loss for the Period                   |  | (319,991)           |  | (59,610)                |  | (86,977)  
|                                         
|Basic and Diluted Loss Per Share          |  |                     |  |                        |  |          
|                                         
|Weighted Average Shares Outstanding       |  |                     |  | 19,026,000              |  | 18,860,000
|                                         

(The accompanying notes are an integral
part of the financial statements.)

F3

---

|The Electric Network.com, Inc.                   |  |                     |  |                               |  |         
|------------------------------------------------ |  | ------------------- |  | ----------------------------- |  | --------
|(A Development Stage Company)                    |  |                     |  |                               |  |         
|Statements of Cash Flows                         |  |                     |  |                               |  |         
|(Expressed in U.S. dollars)                      |  |                     |  |                               |  |         
|                                                 |  | Accumulated         |  |                               |  |         
|                                                 |  | For the Period From |  |                               |  |         
|                                                 |  | February 3, 1999    |  |                               |  |         
|                                                 |  | (Date of Inception) |  | Years
      EndedDecember 31,
|                                                 |  | To December 31,     | 
|                                                 |  | 2005                |  | 2005                          |  | 2004    
|                                                 |  | $                   |  | $                             |  | $       
|Operating Activities                             |  |                     |  |                               |  |         
|Net Loss for the Period                          |  | (319,991)           |  | (59,610)                      |  | (86,977)
|Adjustments to reconcile net loss to
      cash  |  |                     |  |                               |  |         
|Donated
      overhead                           |  | 5,800               |  |                              |  |        
|Donated
      services                           |  | 9,600               |  |                              |  |        
|Non-cash expenses settled
      with issuance of |  |                     |  |                               |  |         
|common shares                                    |  | 80,000              |  |                              |  | 6,667   
|Change in operating assets and
      liabilities |  |                     |  |                               |  |         
|Decrease (increase) in
      accounts receivable |  |                    |  | 207                           |  | (207)   
|Increase in accounts
      payable and accrued   |  |                     |  |                               |  |         
|liabilities                                      |  | 18,731              |  | 729                           |  | 8,847   
|                                                
|Net Cash Used by Operating Activities            |  | (205,860)           |  | (58,674)                      |  | (71,670)
|                                                
|Financing Activities                             |  |                     |  |                               |  |         
|Proceeds from issuance of shares, net
      of   |  |                     |  |                               |  |         
|offering costs                                   |  | 152,197             |  | 20,000                        |  | 39,500  
|Proceeds from related party
      advances       |  | 55,100              |  | 40,000                        |  |        
|                                                
|Net Cash Provided by Financing Activities        |  | 207,297             |  | 60,000                        |  | 39,500  
|                                                
|Increase (Decrease) in Cash                      |  | 1,437               |  | 1,326                         |  | (32,170)
|Cash  Beginning of Period                       |  |                    |  | 111                           |  | 32,281  
|                                                
|Cash  End of Period                             |  | 1,437               |  | 1,437                         |  | 111     
|                                                
|Supplemental Disclosures                         |  |                     |  |                               |  |         
|Interest paid                                    |  |                    |  |                              |  |        
|Income tax paid                                  |  |                    |  |                              |  |        
|                                                

(The accompanying notes are an integral
part of the financial statements.)

F4

---

|The Electric Network.com,
      Inc.                                             |  |              |  |         |  |            |  |          |  |              |  |             |  |          
|-------------------------------------------------------------------------------- |  | ------------ |  | ------- |  | ---------- |  | -------- |  | ------------ |  | ----------- |  | ---------
|(A Development Stage
      Company)                                              |  |              |  |         |  |            |  |          |  |              |  |             |  |          
|Statement of Stockholders
      Deficit                                         |  |              |  |         |  |            |  |          |  |              |  |             |  |          
|From February 3, 1999 (Date of
      Inception) to December 31, 2005             |  |              |  |         |  |            |  |          |  |             
|(Expressed in U.S.
      dollars)                                                |  |              |  |         |  |            |  |          |  |              |  |             |  |          
|                                                                                 |  |              |  |         |  |            |  |          |  |              |  | Deficit     |  |          
|                                                                                 |  |              |  |         |  |            |  |          |  |              |  | Accumulated |  |          
|                                                                                 |  |              |  |         |  | Additional |  |          |  |              |  | During the  |  |          
|                                                                                 |  | Common Stock |  | Paid-In |  | Donated    |  | Deferred |  | Development  |  |            
|                                                                                 |  | Shares       |  | Amount  |  | Capital    |  | Capital  |  | Compensation |  | Stage       |  | Total    
|                                                                                 |  | #            |  | $       |  | $          |  | $        |  | $            |  | $           |  | $        
|Balance  February 3, 1999
      (Date of                                        |  |              |  |         |  |            |  |          |  |              |  |             |  |          
|Inception)                                                                       |  |             |  |        |  |           |  |         |  |             |  |            |  |         
|Stock issued
      for cash pursuant to a                                        |  |              |  |         |  |            |  |          |  |              |  |             |  |          
|Regulation D,
      Rule 504 offering at                                         |  |              |  |         |  |            |  |          |  |              |  |             |  |          
|$0.001 per
      share                                                           |  | 10,000,000   |  | 10,000  |  |           |  |         |  |             |  |            |  | 10,000   
|Value of
      services and overhead donated                                     |  |              |  |         |  |            |  |          |  |              |  |             |  |          
|by a related
      party                                                         |  |             |  |        |  |           |  | 3,300    |  |             |  |            |  | 3,300    
|Net loss for the
      period                                                    |  |             |  |        |  |           |  |         |  |             |  | (8,014)     |  | (8,014)  
|                                                                                
|Balance  December 31,
      1999                                                |  | 10,000,000   |  | 10,000  |  |           |  | 3,300    |  |             |  | (8,014)     |  | 5,286    
|Value of
      services and overhead donated                                     |  |              |  |         |  |            |  |          |  |              |  |             |  |          
|by a related
      party                                                         |  |             |  |        |  |           |  | 3,600    |  |             |  |            |  | 3,600    
|Net loss for the
      year                                                      |  |             |  |        |  |           |  |          |  |             |  | (7,804)     |  | (7,804)  
|                                                                                
|Balance  December 31,
      2000                                                |  | 10,000,000   |  | 10,000  |  |           |  | 6,900    |  |             |  | (15,818)    |  | 1,082    
|Value of
      services and overhead donated                                     |  |              |  |         |  |            |  |          |  |              |  |             |  |          
|by a related
      party                                                         |  |             |  |        |  |           |  | 3,600    |  |             |  |            |  | 3,600    
|Net loss for the
      year                                                      |  |             |  |        |  |           |  |         |  |             |  | (5,194)     |  | (5,194)  
|                                                                                
|Balance  December 31,
      2001                                                |  | 10,000,000   |  | 10,000  |  |           |  | 10,500   |  |             |  | (21,012)    |  | (512)    
|Stock issued
      for cash, net of offering                                     |  |              |  |         |  |            |  |          |  |              |  |             |  |          
|costs                                                                            |  | 600,000      |  | 600     |  | 33,400     |  |         |  |             |  |            |  | 34,000   
|Value of
      services and overhead donated                                     |  |              |  |         |  |            |  |          |  |              |  |             |  |          
|by a related
      party                                                         |  |             |  |        |  |           |  | 3,600    |  |             |  |            |  | 3,600    
|Net loss for the
      year                                                      |  |             |  |        |  |           |  |         |  |             |  | (43,142)    |  | (43,142) 
|                                                                                
|                                                                                 |  |             |  |        |  |           |  |          |  |              |  |             |  |          
|Balance  December 31,
      2002                                                |  | 10,600,000   |  | 10,600  |  | 33,400     |  | 14,100   |  |             |  | (64,154)    |  | (6,054)  
|Stock issued
      for services rendered                                         |  |              |  |         |  |            |  |          |  |              |  |             |  |          
|during the
      current year and the                                            |  |              |  |         |  |            |  |          |  |              |  |             |  |          
|following
      year                                                             |  | 8,000,000    |  | 8,000   |  | 72,000     |  |         |  | (80,000)     |  |            |  |         
|Common stock
      issued, net of offering                                       |  |              |  |         |  |            |  |          |  |              |  |             |  |          
|costs of
      $2,053                                                            |  | 203,000      |  | 203     |  | 48,494     |  |         |  |             |  |            |  | 48,697   
|Value of
      services and overhead donated                                     |  |              |  |         |  |            |  |          |  |              |  |             |  |          
|by a related
      party                                                         |  |             |  |        |  |           |  | 1,300    |  |             |  |            |  | 1,300    
|Amortization
      of deferred stock                                             |  |              |  |         |  |            |  |          |  |              |  |             |  |          
|compensation                                                                     |  |             |  |        |  |           |  |         |  | 73,333       |  |            |  | 73,333   
|Net loss for the
      year                                                      |  |             |  |        |  |           |  |         |  |             |  | (109,250)   |  | (109,250)
|                                                                                
|Balance  December 31,
      2003                                                |  | 18,803,000   |  | 18,803  |  | 153,894    |  | 15,400   |  | (6,667)      |  | (173,404)   |  | 8,026    
|Stock issued
      for cash, net of offering                                     |  |              |  |         |  |            |  |          |  |              |  |             |  |          
|costs                                                                            |  | 160,000      |  | 160     |  | 39,340     |  |         |  |             |  |            |  | 39,500   
|Amortization
      of deferred stock                                             |  |              |  |         |  |            |  |          |  |              |  |             |  |          
|compensation                                                                     |  |             |  |        |  |           |  |         |  | 6,667        |  |            |  | 6,667    
|Net loss for the
      year                                                      |  |             |  |        |  |           |  |         |  |             |  | (86,977)    |  | (86,977) 
|                                                                                
|Balance  December 31,
      2004                                                |  | 18,963,000   |  | 18,963  |  | 193,234    |  | 15,400   |  |             |  | (260,381)   |  | (32,784) 
|Stock issued for
      cash                                                      |  | 80,000       |  | 80      |  | 19,920     |  |         |  |             |  |            |  | 20,000   
|Net loss for the
      year                                                      |  |             |  |        |  |           |  |         |  |             |  | (59,610)    |  | (59,610) 
|                                                                                
|Balance  December 31,
      2005                                                |  | 19,043,000   |  | 19,043  |  | 213,154    |  | 15,400   |  |             |  | (319,991)   |  | (72,394) 
|                                                                                
|(The accompanying notes
      are an integral part of the financial statements.)
|F5                                                                             

---



|The Electric Network.com,
      Inc.(A Development Stage
      Company)Notes to the Financial
      Statements(Expressed in U.S.
      dollars)
|-----------------------------------------------------------------------------------------------------------------------------------------------

1. Development Stage
Company

The Electric Network.com, Inc. herein
(the Company) was incorporated in the State of Nevada, U.S.A. on February 3,
1999. Effective March 31, 2004, the Company changed the state of domicile to
Delaware. The change of domicile was effected through the merger of The Electric
Network.com, Inc., a Nevada corporation, with and into The Electric Network.com,
Inc., a Delaware corporation that had been formed specifically for this purpose.
Prior to the merger, the surviving Delaware corporation was a wholly-owned
subsidiary of the Nevada corporation.

The Company is based in Vancouver,
British Columbia. During the year ended December 31, 2004, the Company commenced
a preliminary launch of its online Internet Web Site on which users can browse
through listed items in a fully automated, topically arranged, online service
provided on a twenty-four hours a day, seven days a week basis. The Company
generates revenue from the operation of its online auction by charging nominal
listing fees to users that post items on the website. During this preliminary
launch, over fifty users registered as members. The Company generated nominal
revenue from this business and did not generate any revenue during the year
ended December 31, 2004. There is no guarantee that any revenue will be
generated in the future. The Company is dependent upon its successful efforts to
raise additional equity financing and/or attain profitable operations. There is
no guarantee that the Company will be able to raise any equity financing or sell
any of its products and services at a profit. These factors raise substantial
doubt regarding the Companys ability to continue as a going concern.

The Company filed an SB-2 Registration
Statement with the United States Securities and Exchange Commission which was
declared effective July 1, 2004. The Company registered 8,213,000 common shares
by selling shareholders and planned to sell up to 500,000 common shares at $0.25
per share. In March 2005, the Company issued 80,000 shares of common stock at
$0.25 per share for cash proceeds of $20,000. The Company is listed on the
Over-The-Counter Bulletin Board under the trading symbol ETNW.

In January 2006, the Company issued a
promissory note for $50,000 to a shareholder for funds advanced to the Company.
The advance is unsecured, bears interest at 8% per annum, and is payable on
demand.

2. Summary of Significant Accounting
Policies (a) Year End

The Companys fiscal year end is
December 31. (b) Cash and Cash Equivalents

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

(c) Use of Estimates

The preparation of financial statements
in conformity with accounting principles generally accepted in the United States
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 periods. Actual results could differ from those
estimates.

(d) Comprehensive Loss

The Company applies SFAS No. 130
Reporting Comprehensive Income. As at December 31, 2005 and 2004, the company
has no items that represent comprehensive loss and, therefore, has not included
a schedule of comprehensive loss in the financial statements.

F6

---



|The Electric Network.com,
      Inc.(A Development Stage
      Company)Notes to the Financial
      Statements(Expressed in U.S.
      dollars)
|-----------------------------------------------------------------------------------------------------------------------------------------------

2. Summary of Significant Accounting
Policies (continued) (e) Fair Value of Financial Instruments

The carrying amounts of the Companys
financial instruments, which include cash equivalents, accounts payable, accrued
expenses and advances to related parties, approximate their fair
value.

(f) Net Loss Per Share

The Company computes net loss per share
in accordance with SFAS No. 128, Earning per Share (SFAS 128). SFAS 128
requires presentation of both basic and diluted net loss per share (EPS) on the
face of the income statement. Basic net loss per share is computed by dividing
the net loss for the year by the weighted average number of shares of common
stock outstanding during the year. Diluted net loss per share is computed by
dividing the net loss for the year by the weighted average number of shares of
common stock and potential common stock outstanding during the year, if
dilutive.

(g) Revenue Recognition

The Company receives and recognizes
revenue as users post items for sale and also when items are purchased on the
website. Users will be obligated to pay a listing fee for their items to be
placed in the auction directory. This fee is determined by the price of the item
with a larger priced item reflecting a larger listing fee. When an item is sold
through the auction website, the buyer must pay a premium in the form of a
percentage of the final sale, with a higher percentage charged for higher priced
items.

The listing fee and commission revenue
is recognized in the period the fee or commission is earned. Although the
Company has not generated any revenue from the final value fee, the Company has
recognized revenue from listing fees.

(h) Stock-Based Compensation

The Company does not have a stock
option plan, however, issues stock to non-employees for services. The company
accounts for stock issued for services to non-employees in accordance with SFAS
No. 123 Accounting for Stock-Based Compensation. Compensation expense is based
on the fair market value of the stock award or fair market value of the good and
services received whichever is more reliably measurable.

(i) Recent Accounting
Pronouncements

In May 2005, the Financial Accounting
Standards Board (FASB) issued SFAS No. 154, Accounting Changes and Error
Corrections  A Replacement of APB Opinion No. 20 and SFAS No. 3. SFAS 154
changes the requirements for the accounting for and reporting of a change in
accounting principle and applies to all voluntary changes in accounting
principle. It also applies to changes required by an accounting pronouncement in
the unusual instance that the pronouncement does not include specific transition
provisions. SFAS 154 requires retrospective application to prior periods
financial statements of changes in accounting principle, unless it is
impracticable to determine either the period-specific effects or the cumulative
effect of the change. The provisions of SFAS No. 154 are effective for
accounting changes and correction of errors made in fiscal years beginning after
December 15, 2005. The adoption of this standard is not expected to have a
material effect on the Companys results of operations or financial
position.

In March 2005, the SEC staff issued
Staff Accounting Bulletin No. 107 (SAB No. 107) to give guidance on the
implementation of SFAS 123R. The Company will consider SAB No. 107 during
implementation of SFAS 123R.

F7

---



|The Electric Network.com,
      Inc.(A Development Stage
      Company)Notes to the Financial
      Statements(Expressed in U.S.
      dollars)
|-----------------------------------------------------------------------------------------------------------------------------------------------

2. Summary of Significant Accounting
Policies (continued) (i) Recent Accounting Pronouncements (continued)

In December 2004, the Financial
Accounting Standards Board (FASB) issued Statement of Financial Accounting
Standard (SFAS) No. 123R, Share Based
Payment. SFAS 123R is a revision of SFAS No.
123 Accounting for Stock-Based
Compensation, and supersedes APB Opinion No.
25, Accounting for Stock Issued to
Employees and its related implementation
guidance. SFAS 123R establishes standards for the accounting for transactions in
which an entity exchanges its equity instruments for goods or services. It also
addresses transactions in which an entity incurs liabilities in exchange for
goods or services that are based on the fair value of the entitys equity
instruments or that may be settled by the issuance of those equity instruments.
SFAS 123R focuses primarily on accounting for transactions in which an entity
obtains employee services in share-based payment transactions. SFAS 123R does
not change the accounting guidance for share-based payment transactions with
parties other than employees provided in SFAS 123 as originally issued and
Emerging Issues Task Force Issue No. 96-18, Accounting for Equity Instruments That Are Issued to Other Than Employees
for Acquiring, or in Conjunction with Selling, Goods or Services. SFAS 123R does not address the accounting for employee
share ownership plans, which are subject to AICPA Statement of Position 93-6,
Employers Accounting for Employee Stock
Ownership Plans. SFAS 123R requires a public
entity to measure the cost of employee services received in exchange for an
award of equity instruments based on the grant-date fair value of the award
(with limited exceptions). That cost will be recognized over the period during
which an employee is required to provide service in exchange for the award  the
requisite service period (usually the vesting period). SFAS 123R requires that
the compensation cost relating to share-based payment transactions be recognized
in financial statements. That cost will be measured based on the fair value of
the equity or liability instruments issued. The scope of SFAS 123R includes a
wide range of share-based compensation arrangements including share options,
restricted share plans, performance-based awards, share appreciation rights, and
employee share purchase plans. Public entities (other than those filing as small
business issuers) will be required to apply SFAS 123R as of the first interim or
annual reporting period that begins after June 15, 2005. Public entities that
file as small business issuers will be required to apply SFAS 123R in the first
interim or annual reporting period that begins after December 15, 2005. For
nonpublic entities, SFAS 123R must be applied as of the beginning of the first
annual reporting period beginning after December 15, 2005. The adoption of this
standard is not expected to have a material effect on the Companys results of
operations or financial position.

In December 2004, FASB issued SFAS No.
153, Exchanges of Nonmonetary Assets - An
Amendment of APB Opinion No. 29. The
guidance in APB Opinion No. 29, Accounting
for Nonmonetary Transactions, is based on
the principle that exchanges of nonmonetary assets should be measured based on
the fair value of the assets exchanged. The guidance in that Opinion, however,
included certain exceptions to that principle. SFAS No. 153 amends Opinion No.
29 to eliminate the exception for nonmonetary exchanges of similar productive
assets and replaces it with a general exception for exchanges of nonmonetary
assets that do not have commercial substance. A nonmonetary exchange has
commercial substance if the future cash flows of the entity are expected to
change significantly as a result of the exchange. The provisions of SFAS No. 153
are effective for nonmonetary asset exchanges occurring in fiscal periods
beginning after June 15, 2005. Early application is permitted and companies must
apply the standard prospectively. The adoption of this standard is not expected
to have a material effect on the Companys results of operations or financial
position.

F8

---



|The Electric Network.com,
      Inc.(A Development Stage
      Company)Notes to the Financial
      Statements(Expressed in U.S.
      dollars)
|-----------------------------------------------------------------------------------------------------------------------------------------------

3. Related Party
Transactions/Balances

(a) Advances payable include $5,100 due
to a former President of the Company. This advance is unsecured, non-interest
bearing and payable on demand.

(b) A company controlled by a former
President of the Company advanced $10,000 during fiscal 2003. This amount is
unsecured, bears non-compounded interest of 5% per annum and is due on demand.
Interest expense of $500 was charged to operations during the year ended
December 31, 2005 (2004: $500). (c) Consulting expense for the year
ended December 31, 2005 includes $nil (2004: $6,667) of stock-based compensation
related to the Companys issuance of common stock to a former President and also
to a related party of the Company for consulting services (see Note
5(a)).

(d) Commencing in February, 2004 the
former President of the Company, received $1,000 per month for consulting
services rendered up to and including September, 2005. The former President
resigned effective November, 2005.

(e) Accounts payable includes an amount
of $nil (December 31, 2004: $3,368) owing to the former President of the
Company. For the year ended December 31, 2005 this related party was paid $4,591
(2004: $1,315) for expenses incurred on behalf of the Company.

(f) A company controlled by the former
President of the Company advanced $10,000 during the current year. The advance
is unsecured, non-interest bearing and payable on demand.

(g) Commencing in November, 2005 the
President of the Company receives $1,500 per month for consulting services
rendered.

(h) Accounts payable includes an amount
of $3,000 (December 31, 2004: NIL) owing to the President of the Company.

(i) The President of the Company
advanced $30,000 in November, 2005. The advances are unsecured, bearing simple
interest at 12% per annum and payable in November, 2006.

4. Common Shares

(a) The Board of Directors approved the
issuance of 8,000,000 common shares for consulting services to be provided by
the Companys President and a related party. The consulting services, with a
fair value of $80,000, were provided for a term of 12 months from February 1,
2003 through January 31, 2004. As at December 31, 2005, the Company has recorded
stock-based compensation expense of $nil (2004 - $6,667) related to this
issuance.

(b) In September, 2004, the Company
issued 160,000 common shares at $0.25 per share for cash proceeds of $39,500,
net of offering costs of $500.

(c) In March, 2005 the Company issued
80,000 common shares pursuant to a private placement at $0.25 per share for cash
proceeds of $20,000.

5. Accrued Liabilities

The amount accrued at year end relates
to $10,982 in professional fees (2004: $7,150), $550 in transfer agent fees
(2004: $nil), and $1,638 of accrued interest expense (2004: $750).

F9

---



|The Electric Network.com,
      Inc.(A Development Stage
      Company)Notes to the Financial
      Statements(Expressed in U.S.
      dollars)
|-----------------------------------------------------------------------------------------------------------------------------------------------

6. Income Tax

Potential benefits of income tax losses
are not recognized in the accounts until realization is more likely than not.
The Company has adopted Statement of Financial Accounting Standards No. 109
(SFAS 109) as of its inception. The Company has incurred net operating losses
of $224,000, which expire starting in 2014. Pursuant to SFAS 109 the Company is
required to compute tax asset benefits for net operating losses carried forward.
Potential benefit of net operating losses have not been recognized in these
financial statements because the Company cannot be assured it is more likely
than not it will utilize the net operating losses carried forward in future
years.

The components of the net deferred tax
asset at December 31, 2005 and 2004, and the statutory tax rate, the effective
tax rate and the elected amount of the valuation allowance are scheduled
below:

2005
    
    2004$
    
    $Net Operating
      Loss
    
    224,000
    
    165,000Statutory Tax
      Rate
    
    34%
    
    34%Effective Tax
      Rate
    
    
    
    Deferred Tax
      Asset
    
    76,100
    
    56,100Valuation
      Allowance
    
    (76,100)
    
    (56,100)Net Deferred Tax
      Asset
    
    
    
    


7. Subsequent Event

In January, 2006 the Company issued a
promissory note for $50,000 for funds advanced to the Company. The advance is
unsecured, bears interest of 8% per annum and is payable on demand.

F10

---

- 21 -

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

None.

Item 8A. Controls and
Procedures.

As required by Rule 13a-15 under the
Securities Exchange Act of 1934, as of the end of the period covered by the
annual report, being December 31, 2005, we have carried out an evaluation of the
effectiveness of the design and operation of our companys disclosure controls
and procedures. This evaluation was carried out under the supervision and with
the participation of our companys management, including our companys president
and chief executive officer and our companys chief financial officer. Based
upon that evaluation, our companys president and chief executive officer and
our companys chief financial officer concluded that our companys disclosure
controls and procedures are effective as at the end of the period covered by
this report. There have been no changes in our internal controls over financial
reporting that occurred during our most recent fiscal quarter that have
materially affected, or are reasonably likely to materially affect our internal
controls over financial reporting.

Disclosure controls and procedures and
other procedures that are designed to ensure that information required to be
disclosed in our reports filed or submitted under the Securities Exchange Act of
1934 is recorded, processed, summarized and reported, within the time period
specified in the Securities and Exchange Commissions rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed in our
reports filed under the Securities Exchange Act of 1934 is accumulated and
communicated to management including our president and chief executive officer
and our chief financial officer as appropriate, to allow timely decisions
regarding required disclosure.

Item 8B. Other
Information

None.

PART III

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

Directors and Executive Officers,
Promoters and Control Persons

Our directors, executive officers and
other significant employees, their ages, positions held and duration each person
has held that position, are as follows:

Name
    Position Held
      with the Company
    Age
    Date First Elected  or AppointedJohn
      Veltheer
    President, Chief Executive Officer and Director
    40
    November 7, 2005J.
      David Brow
    Chief
      Financial Officer, Secretary, Treasurer and Director
    39
    May
      31, 2002




| | Business
  Experience
| | ---------------------

The following is a brief account of the
education and business experience of each director, executive officer and key
employee during at least the past five years, indicating each person's principal
occupation during the period, and the name and principal business of the
organization by which he was employed.

---

- 22 -

John Veltheer, Director, President
and Chief Executive Officer

Dr. John Veltheer has had experience at
the president, officer and director levels for the past eight years. From 1999
to 2000, Dr. Veltheer was president and director of SUMmedia.com Inc. (OTC-BB:
ISUM), a U.S. reporting company, where, in addition to significant fundraising,
he oversaw the running of one of the internets first eCoupon portals. From 2002
to 2003, Dr. Veltheer was the president and a director of Rapidtron, Inc.
(OTC-BB: RPDT), a U.S. reporting company and a leading provider of Radio
Frequency Smart access control and ticketing/membership systems, where he was
responsible for SEC compliance and corporate governance. From 2003 to 2005, Dr.
Veltheer was vice-president, business development and later chief operating
officer and director of House of Brussels Chocolates, Inc. (OTC-BB: HBSL), a
U.S. reporting company whose primary business is gourmet chocolate wholesaling.
Dr. Veltheer is currently the chief executive officer, secretary, treasurer and
a director of Vecten Corporation, a startup private equity fund. Dr. Veltheer
continues to serve as the president and a director of Iridium Capital Inc., a
private Canadian company that provides its clients with start-up consulting
services. Dr. Veltheer received his B.Sc. (Honours) from Queens University in
1988 and his Ph.D. from the University of British Columbia in 1993.

J. David Brow, Director, Chief
Financial Officer, Secretary and Treasurer

Mr. Brow graduated from the University
of British Columbia in 1990 with a Bachelor of Arts Degree. Upon graduating, Mr.
Brow completed both the Canadian Securities course and the Registered
Representative exams for licensing as a securities trader and financial advisor.
From June 1995 to May 1996, Mr. Brow consulted to Syncronys Softcorp, a computer
software manufacturer, and supervised their Canadian operations. In 1996 Mr.
Brow formed Willow Run Software Marketing Inc., a high tech sales and marketing
consulting firm that worked with numerous software manufacturers, both public
and private. Consulting services provided by Willow Run Software Marketing Inc.
included product and market analyses, product launch programs, marketing
initiatives and sales strategies. In 1999 Mr. Brow formed another high tech
consulting firm, Point of Presence Marketing Inc. This firm concentrated on
emerging technology sectors and assisted companies with all aspects of the
sales, marketing and launch process, including funding issues. Point of Presence
Marketing was purchased by EDventure Capital Inc. in October 2000 where Mr. Brow
was a director until April 2002. Mr. Brow presently resides in Los Angeles,
California where he is the Regional Manager for the Americas Retail and
Electronic Sales Distribution Channels for Symantec Corporations Enterprise
Administration Business Unit. In this position, Mr. Brow is responsible for
overseeing all aspects of the sales and marketing processes that drive the
revenue for these channels within the business unit, including product launch
programs, marketing development fund spending procedures, sales funnel
strategies, contract negotiation, new business development and strategic channel
planning.

Our directors, executive officers and
control persons have not been involved in any of the following events during the
past five years:

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

(2) any conviction in a criminal
proceeding or being subject to a pending criminal proceeding (excluding traffic
violations and other minor offenses);

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

(4) being found by a court of competent
jurisdiction (in a civil action), the 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.

---

- 23 -



|Audit Committee Financial
      Expert
|--------------------------------------

Our board of directors has determined
that it does not have a member of its audit committee that qualifies as an
audit committee financial expert as defined in Item 401(e) of Regulation S-B,
and is independent as the term is used in Item 7(d)(3)(iv) of Schedule 14A
under the Securities Exchange Act of 1934, as amended.

We believe that the members of our
board of directors are collectively capable of analyzing and evaluating our
financial statements and understanding internal controls and procedures for
disclosure and for financial reporting. In addition, we believe that retaining
an independent director who would qualify as an audit committee financial
expert would be overly costly and burdensome and is not warranted in our
circumstances given the early stages of our development and the fact the we have
not generated any revenues to date.



|Code of
  Ethics
|----------------

Effective March 21, 2005, our company's
board of directors adopted a Code of Business Conduct and Ethics that applies
to, among other persons, our company's president (being our principal executive
officer) and our company's secretary (being our principal financial and
accounting officer and controller), as well as persons performing similar
functions. As adopted, our Code of Business Conduct and Ethics sets forth
written standards that are designed to deter wrongdoing and to
promote:

(1) honest and ethical conduct,
including the ethical handling of actual or apparent conflicts of interest
between personal and professional relationships;

(2) full, fair, accurate, timely, and
understandable disclosure in reports and documents that we file with, or submit
to, the Securities and Exchange Commission and in other public communications
made by us;

(3) compliance with applicable
governmental laws, rules and regulations;

(4) the prompt internal reporting of
violations of the Code of Business Conduct and Ethics to an appropriate
person

or persons identified in the Code of
Business Conduct and Ethics; and

(5) accountability for adherence to the
Code of Business Conduct and Ethics.

Our Code of Business Conduct and Ethics
requires, among other things, that all of our company's personnel shall be
accorded full access to our president and secretary with respect to any matter
which may arise relating to the Code of Business Conduct and Ethics. Further,
all of our company's personnel are to be accorded full access to our company's
board of directors if any such matter involves an alleged breach of the Code of
Business Conduct and Ethics by our president or secretary.

In addition, our Code of Business
Conduct and Ethics emphasizes that all employees, and particularly managers
and/or supervisors, have a responsibility for maintaining financial integrity
within our company, consistent with generally accepted accounting principles,
and federal, provincial and state securities laws. Any employee who becomes
aware of any incidents involving financial or accounting manipulation or other
irregularities, whether by witnessing the incident or being told of it, must
report it to his or her immediate supervisor or to our company's president or
secretary. If the incident involves an alleged breach of the Code of Business
Conduct and Ethics by the president or secretary, the incident must be reported
to any member of our board of directors. Any failure to report such
inappropriate or irregular conduct of others is to be treated as a severe
disciplinary matter. It is against our company policy to retaliate against any
individual who reports in good faith the violation or potential violation of our
company's Code of Business Conduct and Ethics by another.

Our Code of Business Conduct and Ethics
is filed with the Securities and Exchange Commission as Exhibit 14.1 to our
annual report on Form 10-KSB for the year ended December 31, 2004 filed on March
31, 2005. We will provide a copy of the Code of Business Conduct and Ethics to
any person without charge, upon request. Requests can be sent to: The Electric
Network.com, Inc., 1400-1500 West Georgia Street, Vancouver, British Columbia,
Canada, V6G 2Z6.

---

- 24 -

Section 16(a) Beneficial Ownership
Compliance

Section 16(a) of the Securities
Exchange Act of 1934, as amended, requires our executive officers and directors
and persons who own more than 10% of a registered class of our equity securities
to file with the Securities and Exchange Commission initial statements of
beneficial ownership, reports of changes in ownership and annual reports
concerning their ownership of our common stock and other equity securities, on
Forms 3, 4 and 5 respectively. Executive officers, directors and greater than
10% shareholders are required by the Securities and Exchange Commission
regulations to furnish us with copies of all Section 16(a) reports they
file.

To the best of our knowledge, all
executive officers, directors and greater than 10% shareholders filed the
required reports in a timely manner.

Item 10. Executive
Compensation.

The following table summarizes the
compensation awarded to, earned by, or paid to our current president and chief
executive officer, past president and chief executive officer and other officers
and directors who received annual compensation in excess of $100,000 during the
years ended December 31, 2005, 2004 and 2003.

SUMMARY COMPENSATION
TABLE

|Name and Principal  Position                                                           | Year                   |                                      |                                                   |                                                      | Long
      Term  Compensation(1) | Pay-outs  LTIP  Pay- 
      outs | All 
      Other  Compen-  sation
|-------------------------------------------------------------------------------------- | ---------------------- | ------------------------------------ | ------------------------------------------------- | ---------------------------------------------------- | -------------------------------- | -------------------------------- | ---------------------------------
|Annual
      Compensation                                                             
|Salary                                                                                 | Bonus                  | Other 
      Annual  Compen-  sation | Securities 
      Under  Options/  SAR's  Granted | Restricted 
      Shares or  Restricted  Share Units
|
|
|
|
|John Veltheer
      (1)  president, chief
      executive  officer and director        | 2005 
      2004  2003 | 3,500 
      Nil  Nil                | Nil  Nil 
      Nil                               | Nil  Nil 
      Nil                                  | Nil  Nil 
      Nil              | Nil  Nil 
      Nil              | Nil  Nil 
      Nil              
|
|
|Brad W.
      Rudover(2)  past president, chief 
      executive officer and  director | 2005 
      2004  2003 | Nil  Nil 
      Nil                  | Nil  Nil 
      Nil                               | Nil  Nil 
      Nil                                  | Nil  Nil 
      Nil              | Nil  Nil 
      Nil              | Nil  Nil 
      Nil              
|
|
|
|Stephen Hanson
      (3)  past president and 
      director                           | 2005 
      2004  2003 | Nil  Nil 
      Nil                  | Nil  Nil 
      Nil                               | Nil  Nil 
      36,667 (3)                           | Nil  Nil 
      Nil              | Nil  Nil 
      Nil              | Nil  Nil 
      Nil              
|
|

(1)Dr.
John Veltheer became our president, chief executive officer and a director on
November 7, 2005. We pay Dr. Veltheer $2,000 per month. Refer to Item 12 
Certain Relationships and Related Transactions in this annual
report.]

(2)Brad
W. Rudover resigned as our president, chief executive officer and a director
effective November 7, 2005.

(3)Pursuant to the terms of a management service agreement with Stephen
Hanson dated February 1, 2003, we issued to Mr. Hanson4,000,000 shares of our common stock at a deemed price of $0.01 per share
in exchange for management and business development services to be rendered to
us valued at $40,000. The services were rendered during the period beginning on
February 1, 2003 and ending on January 1, 2004. Accordingly, we recorded a
stock-based compensation expense related to this issuance for the year ended
December 31, 2003 of $36,667 with the balance of $3,333 deferred to the
following year. Mr. Hanson resigned as our president and a director effective
January 27, 2004.

There are no arrangements or plans in
which we provide pension, retirement or similar benefits for directors or
executive officers. Our directors and executive officers may receive stock
options at the discretion of our board of directors in the future. We do not
have any material bonus or profit sharing plans pursuant to which cash or
non-cash compensation is or may be paid to our directors or executive officers,
except that stock options may be granted at the discretion of our board of
directors.

Each of our current chief executive
officer and chief financial officer are compensated pursuant to management
services agreements. Refer to Item 12  Certain Relationships and Related
Transactions in this annual report.

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- 25 -



|Directors
    Compensation
|--------------------------

We reimburse our directors for expenses
incurred in connection with attending board meetings but did not pay director's
fees or other cash compensation for services rendered as a director for the year
ended December 31, 2005.

We have no formal plan for compensating
our directors for their service in their capacity as directors. We may grant to
our directors in the future options to purchase shares of common stock as
determined by our board of directors or a compensation committee which may be
established in the future. Directors are entitled to reimbursement for
reasonable travel and other out-of-pocket expenses incurred in connection with
attendance at meetings of our board of directors. The board of directors may
award special remuneration to any director undertaking any special services on
behalf of our company other than services ordinarily required of a director.
Other than indicated in this prospectus, no director received and/or accrued any
compensation for his or her services as a director, including committee
participation and/or special assignments.

There were no grants of stock options
or stock appreciation rights made during the fiscal years ended December 31,
2005 and 2004 to our executive officers and directors. There were no stock
options outstanding as at December 31, 2005. To date, we have not granted stock
options or stock appreciation rights to any of our employees, consultants,
directors or executive officers.

We have no plans or arrangements in
respect of remuneration received or that may be received by our executive
officers to compensate such officers in the event of termination of employment
(as a result of resignation, retirement, change of control) or a change of
responsibilities following a change of control, where the value of such
compensation exceeds $60,000 per executive officer.

There are no arrangements or plans in
which we provide pension, retirement or similar benefits for directors or
executive officers. We have no material bonus or profit sharing plans pursuant
to which cash or non-cash compensation is or may be paid to our directors or
executive officers, except that stock options may be granted at the discretion
of the board of directors or a committee thereof.

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



|Beneficial
    Ownership
|------------------------

The following table sets forth, as of
February 14, 2006, certain information with respect to the beneficial ownership
of our shares of common stock by each shareholder known to us to be the
beneficial owner of 5% of our shares of common stock, and by each of our
officers and directors. Each person has sole voting and investment power with
respect to the shares of common stock, except as otherwise indicated. Beneficial
ownership consists of a direct interest in the shares of common stock, except as
otherwise indicated.

|Name
      and Address of Beneficial Owner                                                   | Amount and Nature of  Beneficial
      Ownership | Percentage  of Class(1)
|-------------------------------------------------------------------------------------------- | ------------------------------------------------ | -----------------------
|
|John Veltheer 
      2957 W. 21stAvenue  Vancouver, BC V6L 1K7                               | 4,505,000(2)                                     | 23.7%                  
|
|
|J. David Brow 
      421 9th Street  Manhattan Beach, CA 90266                               | 4,000,000                                        | 21.0%                  
|
|
|Muir Woods Investment
      Group IBC  PO Box 156 Hibiscus Square  Turks &
      Caicos, BVI | 985,000(3)                                       | 5.2%                   
|
|
|Directors and Executive Officers as a Group                                                  | 8,505,000                                        | 44.7%                  

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- 26 -

(1) Based on 19,043,000 shares of
common stock issued and outstanding as of February 14, 2006. Beneficial
ownership is determined in accordance with the rules of the SEC and generally
includes voting or investment power with respect to securities. Except as
otherwise indicated, we believe that the beneficial owners of the common stock
listed above, based on information furnished by such owners, have sole
investment and voting power with respect to such shares, subject to community
property laws where applicable.

(2) Includes 2,500 shares of common
stock owned by his wife, Cristina Veltheer.

(3) Ervine Quilch is the authorized
signatory of Muir Woods Investment Group IBC and exercises voting and
dispositive control over theshares of common
stock of our company that are owned by Muir Woods Investment Group
IBC.

Changes in
Control

We are unaware of any contract or other
arrangement the operation of which may at a subsequent date result in a change
in control of our company.

Item 12. Certain Relationships and
Related Transactions.

On February 1, 2003, we entered into a
management services agreement with J. David Brow, our chief financial officer,
secretary, treasurer and a director of our company, pursuant to which we issued
4,000,000 shares of our common stock to Mr. Brow at deemed price of $0.01 per
share in exchange for management and business development services to be
rendered to us valued at $40,000. The services were rendered during the period
beginning on February 1, 2003 and ending on January 1, 2004.

On November 8, 2005, we joined in a
share purchase agreement between Brad W. Rudover, our past president, and Dr.
John Veltheer, our current president in order to evidence our consent to the
sale of Mr. Rudovers shares of common stock to Dr. Veltheer, and Mr. Rudovers
agreement to resign from his office of president of our company and from his
seat on our board of directors in order to make way for Dr. Veltheers
appointment to our board of directors and as our president. Pursuant to the
agreement, Dr. Veltheer purchased 4,500,000 shares of our common stock from Mr.
Rudover in consideration of the purchase price of $20,000. As a result of the
share transfer, Dr. Veltheer now beneficially owns in excess of 10% of our
shares of common stock.

Pursuant to a Management Services
Agreement dated January 27, 2004, with Brad Rudover, our current chief executive
officer, president and a director of our company, we agreed to appoint Mr.
Rudover as our president, chief executive officer and a director for a period of
12 months beginning February 1, 2004. Mr. Rudover agreed to spend some of his
time developing our companys current business model and to review and evaluate
investment opportunities for our company during the term of this agreement. For
these services, we agreed to pay to Mr. Rudover the sum of $1,000 per month
during the term of this agreement, and to give him a business expense allowance
from which he will be reimbursed for expenses incurred on our behalf, subject to
the prior approval of both the expense allowance and the items for reimbursement
by our board. We terminated this agreement with Mr. Rudover on November 8,
2005.

On November 8, 2005, we entered into an
oral agreement with Dr. Veltheer to provide services as our president and chief
executive officer. We agreed to pay Dr. Veltheer $2,000 per month. This oral
agreement may be terminated at any time by either party upon written
notice.

On November 8, 2005, Dr. Veltheer
agreed to loan $10,000 to our company by way of an unsecured simple demand
promissory note indicating that the principal amount plus simple interest
calculated at a rate of 12% per annum, will be repayable in full on the first
anniversary of the promissory note.

On November 22, 2005, Dr. Veltheer
agreed to loan an additional $20,000 to our company by way of an unsecured
simple demand promissory note indicating that the principal amount plus simple
interest calculated at a rate of 12% per annum, will be repayable in full on the
first anniversary of the promissory note.

As at the date of this annual report,
we do not have any policies in place with respect to whether we will enter into
agreements with related parties in the future.

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- 27 -

Item 13. Exhibits.

Exhibits required by Item 601 of
Regulation S-B

Exhibit No. Document
Description

(3) Articles of Incorporation and
Bylaws

3.1 Articles of Incorporation
(incorporated by reference from our Registration Statement on Form 10-SB filed
on June 27, 2002).

3.2 Bylaws (incorporated by reference
from our Registration Statement on Form 10-SB filed on June 27,
2002).

(10) Material
Contracts

10.1 Management Services Agreement
between The Electric Network.com, Inc. and J. David Brow dated February 1, 2003
(incorporated by reference from our Annual Report on Form 10-KSB filed on April
9, 2004).

10.2 Management Services Agreement
dated January 27, 2004 between The Electric Network.com, Inc. and Brad W.
Rudover (incorporated by reference from our Annual Report on Form 10-KSB filed
on April 9, 2004).

10.3 Shareholder Rights Agreement
between The Electric Network.com, Inc. and Muir Woods Investment Group IBC dated
December 2, 2003 (incorporated by reference from our Annual Report on Form
10-KSB filed on April 9, 2004).

10.4 Management Services Agreement
dated February 1, 2003 between The Electric Network.com Inc. and J. David Brow
(incorporated by reference from our Annual Report on Form 10-KSB filed on April
9, 2004).

10.5 Services Agreement dated May 1,
2004 between The Electric Network.com, Inc. and Binary Environments Ltd.
(incorporated by reference from our Quarterly Report on Form 10-QSB filed on May
17, 2004).

10.6 Promissory Note dated November 2,
2005 between The Electric Network.com Inc. and Dr. John Veltheer (incorporated
by reference from our Current Report on Form 8-K filed on November 28,
2005).

10.7 Promissory Note dated January 19,
2006 between The Electric Network.com Inc. and IFG Trust Services Inc. (filed
herewith).

(14) Code of Ethics

14.1 Code of Ethics (incorporated by
reference from our Annual Report on Form 10-KSB filed on March 31,
2005).

(31) Section 302
Certifications

31.1 Section 302 Certification (filed
herewith).

31.2 Section 302 Certification (filed
herewith).

(32) Section 906
Certifications

32.1 Section 906 Certification (filed
herewith).

32.2 Section 906 Certification (filed
herewith).

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- 28 -



|Item 14. Principal Accountant Fees
      and Services
|-----------------------------------------------------

Audit Fees

The aggregate fees billed by Manning
Elliott LLP, Chartered Accountants (Manning Elliott) for professional services
rendered for the audit of our annual financial statements included in our Annual
Report on Form 10-KSB for the fiscal years ended December 31, 2005 and 2004 were
$8,250 and $6,650, respectively.

Audit Related
Fees

For the fiscal years ended December 31,
2005 and 2004, the aggregate fees billed for assurance and related services by
Manning Elliott relating to the performance of the audit of our financial
statements which are not reported under the caption Audit Fees above, was
$nil.

Tax Fees

For the fiscal years ended December 31,
2005 and 2004, the aggregate fees billed by Manning Elliott for other non-audit
professional services, other than those services listed above, totalled $nil and
$nil, respectively.

We do not use Manning Elliott for
financial information system design and implementation. These services, which
include designing or implementing a system that aggregates source data
underlying the financial statements or generates information that is significant
to our financial statements, are provided internally or by other service
providers. We do not engage Manning Elliott to provide compliance outsourcing
services.

Effective May 6, 2003, the Securities
and Exchange Commission adopted rules that require that before Manning Elliott
is engaged by us to render any auditing or permitted non-audit related service,
the engagement be:

·approved by our audit committee (which consists of our entire board of
directors); or

·entered into pursuant to pre-approval policies and procedures established
by the audit committee, provided the policies and procedures are detailed as to
the particular service, the audit committee is informed of each service, and
such policies and procedures do not include delegation of the audit committees
responsibilities to management.

The audit committee pre-approves all
services provided by our independent auditors. The pre-approval process has just
been implemented in response to the new rules, and therefore, the audit
committee does not have records of what percentage of the above fees were
pre-approved. However, all of the above services and fees were reviewed and
approved by the audit committee either before or after the respective services
were rendered.

The audit committee has considered the
nature and amount of fees billed by Manning Elliott and believes that the
provision of services for activities unrelated to the audit is compatible with
maintaining Manning Elliotts independence.

---

SIGNATURES

Pursuant to the requirements of 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.



|THE ELECTRIC NETWORK.COM,
      INC.
|------------------------------------



|By:
|---



|/s/ John VeltheerJohn VeltheerPresident, Chief Executive officer and Director(Principal Executive
Officer)
|----------------------------------------------------------------------------------------------------------



|By:
|---



|/s/ J. David BrowJ. David Brow,Chief
      Financial Officer, Secretary, Treasurer and Director(Principal Financial and Accounting
    Officer)
|-----------------------------------------------------------------------------------------------------------------------------------------------



|Dated February 17,
  2006
|-------------------------

Pursuant to the requirements of 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.

|Signature               | Title                                                 | Date             
|----------------------- | ----------------------------------------------------- | -----------------
|/s/ John
      Veltheer |                                                       |                  
|John Veltheer           | President, Chief Executive
      Officer and Director | February 17, 2006
|/s/ J. David
      Brow |                                                       |                  
|J. David Brow           | Chief Financial Officer,
      Secretary, Treasurer   | February 17, 2006
|                        | and Director                                          |                  

---