U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

(Mark One)

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

                      For Fiscal Year Ended: June 30, 2006

                                       OR

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

      For the transition period from __________________ to __________________

                         Commission file number 0-50236

                           HORNBY INTERNATIONAL, INC.
        (Exact name of small business issuer as specified in its charter)

                 Delaware                                         95-4708001
       (State or other jurisdiction                             (IRS Employer
    of incorporation or organization)                        Identification No.)

    1701 Broadway 255, Vancouver, WA                                98663
(Address of principal executive offices)                          (Zip Code)

Issuer's telephone number: (775) 588-1575

Securities registered under Section 12(b) of the Exchange Act: None

Name of each Exchange on Which Registered: None

Securities registered under Section 12(g) of the Exchange Act: Common Stock,
$0.0001 par value

      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 issuer was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes |X| No |_|

      Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of issuer'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. None

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

      As of September 14, 2006 there were 121,000 issued and outstanding shares
of our common stock, $0.0001 par value, held by non-affiliates. The aggregate
value of the securities held by non-affiliates on September 14, 2006 was $-0- as
our common stock does not presently trade.

      State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date. 1,121,000 shares of common
stock, $0.0001 par value, as of September 14, 2006.

      Transitional Small Business Disclosure Format (check one):

      Yes |_| No |X|

                       DOCUMENTS INCORPORATED BY REFERENCE

                                 Not Applicable

<PAGE>

                                TABLE OF CONTENTS

Item Number and Caption                                                     Page
------------------------------------------------------------------------    ----
Forward Looking Statements .............................................       3
PART 1
  Item 1.   Description of Business ....................................       3
  Item 2:   Description of Property ....................................       4
  Item 3.   Legal Proceedings ..........................................       4
  Item 4.   Submission of Matters to Vote of Security Holders ..........       4
PART II
  Item 5.   Market for Common Equity and Related Stockholders ..........       4
  Item 6.   Plan of Operation ..........................................       6
  Item 7.   Financial Statements .......................................       8
  Item 8.   Changes in and Disagreements with Accountants on Accounting
    And Financial Disclosure ...........................................      18
  Item 8A.  Controls and Procedure .....................................      18
  Item 8B.  Other Information ..........................................      19
PART III
  Item 9.   Directors, Executive Officers, Promoters and Control Person;
    Compliance with Section 16(a) of the Exchange Act ..................      19
  Item 10.  Executive Compensation .....................................      21
  Item 11.  Security Ownership of Certain Beneficial Owners and
    Management .........................................................      22
  Item 12.  Certain Relationships and Related Transactions .............      24
  Item 13.  Exhibits ...................................................      25
  Item 14.  Principal Accountant Fees and Services .....................      26


                                        2

<PAGE>

                           FORWARD-LOOKING STATEMENTS

Except for historical information, this report contains forward-looking
statements within the meaning of Section 21E of the Securities Exchange Act of
1934. Such forward-looking statements involve risks and uncertainties,
including, among other things, statements regarding our business strategy,
future revenues and anticipated costs and expenses. Such forward-looking
statements include, among others, those statements including the words
"expects," "anticipates," "intends," "believes" and similar language. Our actual
results may differ significantly from those projected in the forward-looking
statements. Factors that might cause or contribute to such differences include,
but are not limited to, those discussed in the sections "Plan of Operation" and
"Business". You are cautioned not to place undue reliance on the forward-looking
statements, which speak only as of the date of this report. We undertake no
obligation to publicly release any revisions to the forward-looking statements
or reflect events or circumstances taking place after the date of this document.

                                     PART I

                         ITEM 1. DESCRIPTION OF BUSINESS

Business Development

We were formed in Delaware on August 26, 1998 to create an online proofreading
and editing service specializing in improving text for business plans, term
papers, theses, manuscripts, novels, promotional literature, screenplays,
marketing documents, and similar documents. We conducted minimal operations in
this area and discontinued all such operations in July 2006 in conjunction with
a change in control.

Our management is presently searching for ventures of merit for corporate
participation to enhance shareholder value. These ventures may involve sales of
our debt or equity securities in merger or acquisition transactions.

Patents, Trademarks and Licenses, Franchises, Concessions, Royalty Agreements or
Labor Contracts

We presently utilize no patents, licenses, franchises, concessions, royalty
agreements or labor contracts in connection with our business.

Research and Development

During the fiscal years ended June 30, 2006 and June 30, 2005 we made no
expenditures on research and development.

Employees

As of September 14, 2006 our only employee is our one executive officer.


                                        3

<PAGE>

                         ITEM 2. DESCRIPTION OF PROPERTY

We are currently conducting our business operations using a "virtual office"
located in Vancouver, Washington. It is contemplated that at such future time as
our business warrants, we will secure commercial office space.

                            ITEM 3. LEGAL PROCEEDINGS

No legal proceedings are presently pending or threatened.

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

No matter was submitted during the fourth quarter of the fiscal year covered by
this report to a vote of security holders.

                                     PART II

        ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information.

Our common stock is not presently traded and has not traded since our inception.
Accordingly, there is no present market for our securities. Following the
successful completion of an acquisition or business combination, if any, we
intend to file an application for the purpose of commencing trading of our stock

Holders

As of September 14, 2006, there were approximately 28 record holders of our
common stock.

Dividends

We have never declared any cash dividends with respect to our common stock.
Future payment of dividends is within the discretion of our board of directors
and will depend on our earnings, capital requirements, financial condition and
other relevant factors. Although there are no material restrictions limiting, or
that are likely to limit, our ability to pay dividends on our common stock, we
presently intend to retain future earnings, if any, for use in our business and
have no present intention to pay cash dividends on our common stock.


                                        4

<PAGE>

Recent Sales of Unregistered Securities

We made no sales of unregistered securities during the fiscal year ended June
30, 2006.

Securities Authorized For Issuance Under Equity Compensation Plans

We have no authorized equity compensation plans and no outstanding options,
warrants, or similar rights.

                            ITEM 6. PLAN OF OPERATION

We were incorporated in Delaware on August 26, 1998. We intended to create an
online proofreading and editing service but were never able to commence material
operations in this area. In July 2006 we determined to discontinue our efforts
in this area and to look at other ventures of interest. These ventures may
involve sales of our debt or equity securities in merger, acquisition, or
similar transactions.

In its report dated August 16, 2006, our auditors, Chang G. Park, CPA expressed
an opinion that there is substantial doubt about our availability to continue as
a going concern. Our financial statements do not include any adjustments that
may result from the outcome of this uncertainty. We have been in the development
stage and have had no revenues since inception. For the period from August 26,
1998 (inception) to June 30, 2006, we recorded a net loss of $43,973. Our
continuation as a going concern is dependent upon future events, including our
ability to raise additional capital and to generate positive cash flows.

We have minimal operating costs and expenses at the present time due to our
limited business activities. Accordingly, absent changed circumstances, we will
not be required to raise additional capital over the next twelve months,
although we may do so in connection with or in anticipation of possible
acquisition transactions. We do not currently engage in any product research and
development and have no plans to do so in the foreseeable future. We have no
present plans to purchase or sell any plant or significant equipment. We also
have no present plans to add employees although we may do so in the future if we
engage in any merger or acquisition transactions.


                                        5

<PAGE>

                          ITEM 7. FINANCIAL STATEMENTS

                          Index to Financial Statements

                                                                            Page
                                                                           -----
Report of Independent Registered Public Accounting Firm. ...............       7
Balance Sheets as at June 30, 2006 and June 30, 2005 ...................       8
Statement of Operations for the years ended June 30, 2006 and
  June 30, 2005 and for the period from August 26, 1998 (inception)
  Through June 30, 2006 ................................................       9
Statement of Changes in Stockholders' Equity (Deficit) from
  August 26, 1998 (inception) through June 30, 2006 ....................      10
Statements of Cash Flows for the years ended June 30, 2006 and
  June 30, 2005 and for the period from August 26, 1998 (inception)
  through June 30, 2006 ................................................      11
Notes to Financial Statements ..........................................   12-15


                                        6

<PAGE>

                           Chang G. Park, CPA, Ph. D.
              o 371 E STREET o CHULA VISTA o CALIFORNIA 91910-2615 o
       o TELEPHONE (858)722-5953 o FAX (858) 408-2695 o FAX (619) 422-1465
                         o E-MAIL changgpark@gmail.com o

             Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders
Hornby International, Inc.

We have audited the accompanying balance sheet of Hornby International, Inc. as
of June 30, 2006 and the related statements of operation, changes in
shareholders' equity and cash flows for the year then ended. 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 audit. The financial statements of Hornby International, Inc. as of June 30,
2005, and for the period August 26, 1998 (inception) to June 30, 2005 were
audited by other auditors whose report dated August 16, 2005, expressed an
unqualified opinion on those statements. Their report included an explanatory
paragraph regarding going concern.

We conducted our audit 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 audit provides 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 Hornby International, Inc. as
of June 30, 2006, and the results of its operation and its cash flows for the
year then ended in conformity with U.S. generally accepted accounting
principles.

The financial statements have been prepared assuming that the Company will
continue as a going concern. As discussed in Note 5 to the financial statements,
the Company's losses from operations raise substantial doubt about its ability
to continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.


/s/ Chang G. Park, CPA
-------------------------------------
CHANG G. PARK, CPA

August 16, 2006
San Diego, CA. 91910

        Member of the California Society of Certified Public Accountants
          Registered with the Public Company Accounting Oversight Board


                                        7

<PAGE>

                           HORNBY INTERNATIONAL, INC.
                          (A Development Stage Company)
                                 Balance Sheets

                                                            As of      As of
                                                           June 30,   June 30,
                                                             2006       2005
                                                           --------   --------
ASSETS
Current Assets
    Cash                                                   $  1,667   $     63
                                                           --------   --------
Total Current Assets                                          1,667         63
                                                           --------   --------
    TOTAL ASSETS                                           $  1,667   $     63
                                                           ========   ========
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
    Loans payable (a related party)                        $ 10,363   $  6,613
                                                           --------   --------
Total Current Liabilities                                    10,363      6,613
                                                           --------   --------
    TOTAL LIABILITIES                                        10,363      6,613
Stockholders' Equity (Deficit)
    Preferred stock, ($.0001 par value, 20,0000
      shares authorized; none issued and outstanding.)           --         --
    Common stock ($.0001 par value, 80,000,000
      shares authorized; 1,121,000 shares issued and
      outstanding as of June 30, 2006 and 2005)                 112        112
    Paid-in capital                                          35,165     30,165
    Deficit accumulated during development stage            (43,973)   (36,827)
                                                           --------   --------
Total Stockholders' Equity (Deficit)                         (8,696)    (6,550)
                                                           --------   --------
      TOTAL LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)   $  1,667   $     63
                                                           ========   ========

See Notes to Financial Statements

                                        8

<PAGE>

                           HORNBY INTERNATIONAL, INC.
                          (A Development Stage Company)
                            Statements of Operations

<TABLE>
<CAPTION>
                                                                    August 26, 1998
                                                                      (inception)
                                          Year Ended   Year Ended       through
                                           June 30,     June 30,        June 30,
                                             2006         2005           2006
                                          ----------   ----------   ---------------
<S>                                       <C>          <C>              <C>
Revenues
    Revenues                              $       --   $      200       $    200
                                          ----------   ----------       --------
Total Revenues                                    --          200            200
General & Administrative Expenses              7,146       11,062         44,173
                                          ----------   ----------       --------
Total General & Administrative Expenses        7,146       11,062         44,173
                                          ----------   ----------       --------
Net Loss                                  $   (7,146)  $  (10,862)      $(43,973)
                                          ==========   ==========       ========
Basic loss per share                      $    (0.01)  $    (0.01)
                                          ==========   ==========
Weighted average number of
  common shares outstanding                1,121,000    1,121,000
                                          ==========   ==========
</TABLE>

See Notes to Financial Statements

                                       9

<PAGE>

                           HORNBY INTERNATIONAL, INC.
                          (A Development Stage Company)
             Statement of Changes in Stockholders' Equity (Deficit)
             From August 26, 1998 (inception) through June 30, 2006

<TABLE>
<CAPTION>
                                                                            Deficit
                                                                          Accumulated
                                                    Common   Additional      During
                                         Common      Stock     Paid-in    Development
                                          Stock     Amount     Capital       Stage        Total
                                        ---------   ------   ----------   -----------   --------
<S>                                     <C>          <C>      <C>           <C>         <C>
Stock issued for cash on August 26,
  1998 @ $0.001 per share               1,000,000    $100     $    900      $     --    $  1,000
Stock issued from sale of private
  placement (note 1) on February 17,
  1999 @ $0.10 per share                  121,000      12       12,088                    12,100
Net loss, August 26, 1998 (inception)
  through June 30, 1999                                                       (5,628)     (5,628)
                                        ---------    ----     --------      --------    --------
Balance, June 30, 1999                  1,121,000     112       12,988        (5,628)      7,472
                                        ---------    ----     --------      --------    --------
Net loss, June 30, 2000                                                      (7,143)     (7,143)
                                        ---------    ----     --------      --------    --------
Balance, June 30, 2000                  1,121,000     112       12,988       (12,771)        329
                                        ---------    ----     --------      --------    --------
Net loss, June 30, 2001                                                       (2,176)     (2,176)
                                        ---------    ----     --------      --------    --------
Balance, June 30, 2001                  1,121,000     112       12,988       (14,947)     (1,847)
                                        ---------    ----     --------      --------    --------
Net loss, June 30, 2002                                                       (2,094)     (2,094)
                                        ---------    ----     --------      --------    --------
Balance, June 30, 2002                  1,121,000     112       12,988       (17,041)     (3,941)
                                        ---------    ----     --------      --------    --------
Net loss, June 30, 2003                                                       (3,697)     (3,697)
                                        ---------    ----     --------      --------    --------
Balance, June 30, 2003                  1,121,000     112       12,988       (20,738)     (7,638)
                                        ---------    ----     --------      --------    --------
Contributed Capital                                              8,049                     8,049
Contributed Capital                                              1,628                     1,628
Net loss, June 30, 2004                                                       (5,227)     (5,227)
                                        ---------    ----     --------      --------    --------
Balance, June 30, 2004                  1,121,000     112       22,665       (25,965)     (3,188)
                                        ---------    ----     --------      --------    --------
Contributed Capital                                              7,500                     7,500
Net loss, June 30, 2005                                                      (10,862)    (10,862)
                                        ---------    ----     --------      --------    --------
Balance, June 30, 2005                  1,121,000    $112     $ 30,165      $(36,827)   $ (6,550)
                                        =========    ====     ========      ========    ========
Contributed Capital                                              5,000                     5,000
Net loss, June 30, 2006                                                       (7,146)     (7,146)
                                        ---------    ----      -------      --------    --------
Balance, June 30, 2006                  1,121,000     112       35,165      $(43,973)   $ (8,696)
                                        =========    ====     ========      ========    ========
</TABLE>

See Notes to Financial Statements

                                       10

<PAGE>

                           HORNBY INTERNATIONAL, INC.
                          (A Development Stage Company)
                            Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                      August 26, 1998
                                                                                        (inception)
                                                            Year Ended   Year Ended       through
                                                             June 30,     June 30,        June 30,
                                                               2006         2005           2006
                                                            ----------   ----------   ---------------
<S>                                                           <C>         <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Net income (loss)                                         $(7,146)    $(10,862)      $(43,973)
    Amortization                                                   --           --            351
    (Increase) decrease in organization costs                      --           --           (351)
    Increase (decrease) in accounts payable                        --          (87)            --
    Increase (decrease) in loans payable                        3,750        3,087         10,363
                                                              --------    ---------      --------
    Net cash provided by (used in) operating activities        (3,396)      (7,862)       (33,610)
CASH FLOWS FROM INVESTING ACTIVITIES
    Net cash provided by (used in) investing activities            --           --             --
CASH FLOWS FROM FINANCING ACTIVITIES
    Proceeds from issuance of commons stock                        --           --            112
    Proceeds from issuance of paid in capital                   5,000        7,500         35,165
                                                              --------    ---------      --------
    Net cash provided by (used in) financing activities         5,000        7,500         35,277
                                                              --------    ---------      --------
    Net increase (decrease) in cash                             1,604         (362)         1,667
    Cash at beginning of year                                      63          425             --
                                                              --------    ---------      --------
    Cash at end of year                                       $ 1,667     $     63       $  1,667
                                                              =======     ========       ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Interest paid                                                 $    --     $     --
                                                              =======     ========
Income taxes paid                                             $    --     $     --
                                                              =======     ========
</TABLE>

See Notes to Financial Statements

                                       11
<PAGE>

                           HORNBY INTERNATIONAL, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                          As of June 30, 2006 and 2005

NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS

The Company was incorporated on August 26, 1998, under the laws of the State of
Delaware, as Hornby International, Inc. The Company is engaged in the business
of online proofreading and editing services, including copyediting, rewriting,
format correction and copyrighting. As of November 2004, the Company has begun
its initial operations and in accordance with SFAS # 7, the Company is
considered a development stage company.

On August 26, 1998, the Company issued 1,000,000 shares of its $0.001 par value
common stock for cash of $1,000.

On February 22, 1999 the Company completed a private placement of securities
without registration under the Securities Act of 1933, as amended (The "Act"),
in reliance upon the exemption from registration afforded by sections 4(2) of
the securities Act. The Company sold 121,000 shares of common stock at a price
of $0.10 per share for a total amount raised of $12,100.

As of June 30, 2006 and 2005 the Company had 1,121,000 shares of common stock
outstanding.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Basis of Accounting

The financial statements have been prepared using the accrual basis of
accounting. Under the accrual basis of accounting, revenues are recorded as
earned and expenses are recorded at the time liabilities are incurred. The
Company has adopted a June 30, year-end.

b. Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period. In
the opinion of management, all adjustments necessary in order to make the
financial statements not misleading have been included. Actual results could
differ from those estimates.

c. Cash Equivalents

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


                                       12

<PAGE>

                           HORNBY INTERNATIONAL, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                          As of June 30, 2006 and 2005

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)

d. Basic Earnings (Loss) per Share

In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share", which
specifies the computation, presentation and disclosure requirements for earnings
(loss) per share for entities with publicly held common stock. SFAS No. 128
supersedes the provisions of APB No. 15, and requires the presentation of basic
earnings (loss) per share and diluted earnings (loss) per share. The Company has
adopted the provisions of SFAS No. 128 effective August 26, 1998 (inception).

Basic net loss per share amounts is computed by dividing the net income by the
weighted average number of common shares outstanding. Diluted earnings per share
are the same as basic earnings per share due to the lack of dilutive items in
the Company.

e. Income Taxes

Income taxes are provided in accordance with Statement of Financial accounting
Standards No. 109 (SFAS 109), Accounting for Income Taxes. A deferred tax asset
or liability is recorded for all temporary differences between financial and tax
reporting and net operating loss carryforwards. Deferred tax expense (benefit)
results from the net change during the year of deferred tax assets and
liabilities.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion of all of the deferred
tax assets will be realized. Deferred tax assets and liabilities are adjusted
for the effects of changes in tax laws and rates on the date of enactment.

NOTE 3. WARRANTS AND OPTIONS

There are no warrants or options outstanding to acquire any additional shares of
common or preferred stock.


                                       13

<PAGE>

                           HORNBY INTERNATIONAL, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                          As of June 30, 2006 and 2005

NOTE 4. GOING CONCERN

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company generated net losses of
$43,973 and $36,827 during the period from August 26, 1998 (inception) through
June 30, 2006 and 2005, respectively. This condition raises substantial doubt
about the Company's ability to continue as a going concern. The Company's
continuation as a going concern is dependent on its ability to meet its
obligations, to obtain additional financing as may be required and ultimately to
attain profitability. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

Management plans to raise additional funds through debt or equity offerings.
Management has yet to decide what type of offering the Company will use or how
much capital the Company will raise. There is no guarantee that the Company will
be able to raise any capital through any type of offerings.

NOTE 5. RELATED PARTY TRANSACTION

The Company's neither owns nor leases any real or personal property. A director
without charge provides office services. Such costs are immaterial to the
financial statements and, accordingly, have not been reflected therein. The
officers and directors of the Company are involved in other business activities
and may, in the future, become involved in other business opportunities. If a
specific business opportunity becomes available, such persons may face a
conflict in selecting between the Company and their other business interests.
The Company has not formulated a policy for the resolution of such conflicts.

The note payable represents a loan from a related party. Currently there are no
repayment terms nor is there interest being charged.


                                       14

<PAGE>

                           HORNBY INTERNATIONAL, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                          As of June 30, 2006 and 2005

NOTE 6. INCOME TAXES

                                  As of June 30, 2006   As of June 30, 2005
                                  -------------------   -------------------
Deferred tax assets:
Net operating tax carryforwards         $ 6,596               $ 5,524
Other                                       -0-                   -0-
                                        -------               -------
Gross deferred tax assets                 6,596                 5,524
Valuation allowance                      (6,596)               (5,524)
                                        -------               -------
Net deferred tax assets                 $   -0-               $   -0-
                                        =======               =======

Realization of deferred tax assets is dependent upon sufficient future taxable
income during the period that deductible temporary differences and carryforwards
are expected to be available to reduce taxable income. As the achievement of
required future taxable income is uncertain, the Company recorded a valuation
allowance.

NOTE 7. SCHEDULE OF NET OPERATING LOSSES

1998  Net Operating Loss   $ (5,628)
1999  Net Operating Loss     (7,143)
2000  Net Operating Loss     (2,176)
2001  Net Operating Loss     (2,094)
2002  Net Operating Loss     (3,697)
2003  Net Operating Loss     (5,227)
2004  Net Operating Loss    (10,862)
2005  Net Operating Loss     (7,146)
                           --------
Net Operating Loss         $(43,973)
                           ========

As of June 30, 2006 and 2005, the Company has a net operating loss carryforward
of approximately $43,973 and $36,827, respectively, which will expire 20 years
from the date the loss was incurred.


                                       15

<PAGE>

                           HORNBY INTERNATIONAL, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                          As of June 30, 2006 and 2005

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

Armando C. Ibarra, CPA, was our principal independent accountant for the fiscal
years ended June 30, 2005 and 2004. On August 8, 2006, they resigned and on
August 9, 2006 we engaged Chang G. Park, CPA, as our principal independent
accountant for the fiscal year ending June 30, 2006. The resignation of Armando
C. Ibarra, CPA and appointment of Chang G. Park, CPA was approved by our board
of directors.

The report of Armando C. Ibarra, CPA on our financial statements for the years
ended June 30, 2005 and 2004 contained no adverse opinion or disclaimer of
opinion, nor was it qualified or modified as to uncertainty, audit scope or
accounting principle except that such report was modified to include an
explanatory paragraph with respect to our ability, in light of our lack of
revenues and history of losses, to continue as a going concern.

In connection with the audit for the fiscal years ended June 30, 2005 and 2004
and during the subsequent interim period through August 8, 2006, there were no
disagreements between us and Armando C. Ibarra, CPA on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedures, which disagreements, if not resolved to their satisfaction, would
have caused Armando C. Ibarra, CPA to make reference to the subject matter of
the disagreement in connection with their reports.

In connection with the audit of the fiscal years ended June 30, 2005 and 2004
and during the subsequent interim period through August 8, 2006, Armando C.
Ibarra, CPA did not advise us that:

      o     internal controls necessary for us to develop reliable financial
            statements did not exist;

      o     information had come to their attention that led them to no longer
            be able to rely on our management's representations or made them
            unwilling to be associated with the financial statements prepared by
            our management;

      o     there was a need to expand significantly the scope of their audit,
            or that information had come to their attention during such time
            periods that if further investigated might materially impact the
            fairness or reliability of either a previously issued audit report
            or the underlying financial statement; or the financial statements
            issued or to be issued covering the fiscal periods subsequent to the
            date of the most recent financial statements covered by an audit
            report; or

      o     information had come to their attention that they had concluded
            materially impacted the fairness or reliability of either (i) a
            previously issued audit report or the underlying financial
            statements, or (ii) the financial statements issued or to be issued
            covering the fiscal periods subsequent to the date of the most
            recent financial statements covered by an audit report.


                                       16

<PAGE>

Prior to the engagement of Chang G. Park, CPA we had no consultations or
discussions with Chang G. Park, CPA regarding the application of accounting
principles to a specific completed or contemplated transaction, or the type of
audit opinion that might be rendered by them on or financial statements.
Further, prior to their engagement, we received no oral or written advice from
Chang G. Park, CPA of any kind.

                        ITEM 8A. CONTROLS AND PROCEDURES

Our principal executive and financial officer evaluated the effectiveness of our
disclosure controls and procedures as of the end of the period covered by this
report. Based on this evaluation, our principal executive and financial officer
concluded that our disclosure controls and procedures are effective for
gathering, analyzing and disclosing the information we are required to disclose
in the reports we file under the Securities Exchange Act of 1934, within the
time periods specified in the Commission rules and forms. Such evaluation did
not identify any change in the year ended June 30, 2006 that has materially
affected or is reasonably likely to materially affect our internal control over
financial reporting.

                           ITEM 8B. OTHER INFORMATION

Not applicable.

                                    PART III

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

Executive Officers and Directors

The following table sets forth certain information, as of September 14, 2006,
with respect to our directors and executive officers.

Directors serve until the next annual meeting of the stockholders; until their
successors are elected or appointed and qualified, or until their prior
resignation or removal. Officers serve for such terms as determined by our board
of directors. Each officer holds office until such officer's successor is
elected or appointed and qualified or until such officer's earlier resignation
or removal. No family relationships exist between any of our present directors
and officers.


                                       17

<PAGE>

                                                               Date of Election
                                                                or Appointment
Name             Positions Held                          Age      as Director
--------------   -------------------------------------   ---   ----------------
John Probandt    President, Secretary, Treasure, Chief   52      July 7, 2006
                 Executive and Financial Officer
Maureen Brogan   Director                                43     August 26, 1998

The following is a brief account of the business experience of each of our
directors and executive officers during the past five years or more.

John Probandt has served as our sole executive officer and as a director since
July 7, 2006. Mr. Probandt has a varied business career spanning approximately
25 years. His work experience has included owning manufacturing concerns, real
estate development, venture capital investments, producing movies and records,
and money management. He is the co-founder and has been the Managing Director of
Rising Star Holdings from 1999 to the present. Rising Star Holdings is an
international investment company that creates and seeks to capitalize on
opportunities that take advantage of synergies between the United States and
Asia.

Maureen Brogan has served as a director of ours since our inception and served
as our sole executive officer from inception until July 7, 2006. From 2001 to
the present she has worked as the copy manager and senior copywriter for TBWA /
Chiat / Day, a Los Angeles, California based advertising agency. From 1995
through 2000 she held various positions with other advertising agencies.

Board of Directors

None of our directors receive any remuneration for acting as such. Directors may
however be reimbursed their expenses, if any, for attendance at meetings of the
Board of Directors. Our Board of Directors may designate from among its members
an executive committee and one or more other committees. No such committees have
been appointed to date. Accordingly, we do not have an audit committee financial
expert.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Exchange Act, as amended, requires that our directors,
executive officers and persons who own more than 10% of a class of our equity
securities which are registered under the Exchange Act to file with the
Commission initial reports of ownership and reports of changes of ownership of
such registered securities.


                                       18

<PAGE>

To our knowledge, based solely on a review of copies of such reports, no person
required to file such a report failed to file a required report with respect to
the fiscal year covered by this report.

Code of Ethics

On September 1, 2006 we adopted a Code of Ethics that applies to our principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions. A copy of our Code of
Ethics will be provided to any person requesting same without charge. To request
a copy of our Code of Ethics please make written request to our President c/o
Hornby International, Inc. at 1701 Broadway 255, Vancouver, WA 98663.

                         ITEM 10. EXECUTIVE COMPENSATION

The following table sets forth information concerning the total compensation
paid or accrued by us during the three fiscal years ended July 31, 2006 to (i)
all individuals that served as our chief executive officer or acted in a similar
capacity for us at any time during the fiscal year ended July 31, 2006 and (ii)
all individuals that served as executive officers of ours at any time during the
fiscal year ended July 31, 2006 that received annual compensation during the
fiscal year ended July 31, 2006 in excess of $100,000.

                           Summary Compensation Table

<TABLE>
<CAPTION>
                                   Annual Compensation                           Long-Term Compensation
                     -------------------------------------------   ------------------------------------------------
                     Fiscal Year
Name and                Ended                           Other      Options/    Restricted      LTIP      All Other
Principal Position     July 31,    Salary   Bonus   Compensation     SARs     Stock Awards   Payouts   Compensation
------------------   -----------   ------   -----   ------------   --------   ------------   -------   ------------
<S>                     <C>           <C>     <C>         <C>          <C>          <C>         <C>          <C>
Maureen Brogan,         2006          0       0           0            0            0           0            0
Chief Executive         2005          0       0           0            0            0           0            0
Officer                 2004          0       0           0            0            0           0            0
</TABLE>

Option/SAR Grants In Last Fiscal Year

No stock options or stock appreciation rights were granted to the named
executive during the fiscal year ended July 31, 2006.

Stock Option Plans

The named executive did not participate in any Company stock option plans during
the fiscal year ended July 31, 2006.

Aggregate Option/SAR Exercises and Fiscal Year End Option/SAR Values

During the fiscal year ended July 31, 2006 there were no exercises of stock
options by the named executive. As at July 31, 2006 the named executive owned no
stock options. The named executive has never received stock appreciation rights.


                                       19

<PAGE>

Long Term Incentive Plan Awards

We made no long-term incentive plan awards to the named executive officer during
the fiscal year ended July 31, 2006.

Employment Contracts, Termination of Employment, and Change-in-Control
Arrangements

During the fiscal year ended July 31, 2006 we had no employment agreements,
compensation plans or arrangements with respect to the named executive officer
which would in any way result in payments being made to such executive officer
because of his resignation, retirement or other termination of employment with
us or our subsidiaries, or because of any change in control or a change in such
executive officer's responsibilities following a change in control.

Compensation of Directors

Ralph Brown is paid $333 per month for serving as a director. None of our other
directors receive any compensation for serving as such, for serving on
committees of the board of directors or for special assignments. During the
fiscal year ended July 31, 2006 there were no other arrangements between us and
our directors that resulted in our making payments to any of our directors for
any services provided to us by them as directors.

Report on Repricing of Options/SARs

During the fiscal year ended July 31, 2006 we did not adjust or amend the
exercise price of stock options or SARs previously awarded to the named
executive.

                ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
                              OWNERS AND MANAGEMENT

The following table sets forth information with respect to the beneficial
ownership of our common stock known by us as of September 14, 2006 by (i) each
person or entity known by us to be the beneficial owner of more than 5% of our
common stock, (ii) each of our directors, (iii) each of our executive officers,
and (iv) all of our directors and executive officers as a group. The percentages
in the table have been calculated on the basis of treating as outstanding for a
particular person, all shares of our common stock outstanding on such date and
all shares of our common stock issuable to such holder in the event of exercise
of outstanding options, warrants, rights or conversion privileges owned by such
person at said date which are exercisable within 60 days of such date. Except as
otherwise indicated, the persons listed below have sole voting and investment
power with respect to all shares of our common stock owned by them, except to
the extent such power may be shared with a spouse.


                                       20

<PAGE>

           Name and Address            Shares of Common Stock    Percentage
         of Beneficial Owner             Beneficially Owned     Ownership (1)
------------------------------------   ----------------------   -------------

China Sea Holdings LLC (2)                    1,000,000             89.2%
1701 Broadway 255
Vancouver, WA 98663

John Probandt (3)                             1,000,000             89.2%
1701 Broadway 255
Vancouver, WA 98663

Maureen Brogan                                        0                0%
1701 Broadway 255
Vancouver, WA 98663

All directors and executive officers          1,000,000             89.2%
  as a group (2 persons)

----------
(1)   Based upon 1,121,000 shares issued and outstanding as at September 14,
      2006.

(2)   The beneficial owner of China Sea Holdings, LLC is John Probandt.

(3)   John Probandt is the beneficial owner of 1,000,000 shares R.N.O China Sea
      Holdings LLC.

Changes in Control

Effective July 7, 2006 China Sea Holdings LLC, a Nevada limited liability
company ("China Sea") purchased 1,000,000 shares of our common stock from
Maureen Brogan for $300,000. The beneficial owner of China Sea Holdings LLC is
John Probandt. Following such purchase, China Sea owned 1,000,000 of our
1,121,000 outstanding common shares representing approximately 89.2% of our
outstanding common shares. China Sea paid for the share purchase from its
working capital.

            ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Effective June 26, 2006 Elaine Sulima resigned her position as a director. Her
resignation did not result from any disagreement with us.

Effective July 7, 2006 Maureen Brogan resigned her position as our sole
executive officer. She is continuing to serve as a director. Her officer
resignation did not result from ay disagreement with us.


                                       21

<PAGE>

Effective July 7, 2006 John Probandt was appointed as a director to fill the
position vacated by Elaine Sulima and was appointed as our sole executive
officer to fill the position vacated by Maureen Brogan. In connection therewith,
Mr. Probandt is presently serving as our President, Chief Executive Officer,
Chief Financial Officer and Secretary.

Since our inception, Maureen Brogan has periodically made loans to us which we
have used as working capital. As at June 30, 2006 we had a loan payable to Ms.
Brogan in the amount of $10,363. Ms. Brogan forgave this loan in July 2006.

                                ITEM 13. EXHIBITS

Exhibits

      The following Exhibits are being filed with this Annual Report on Form
10-KSB:

Exhibit        SEC Report
   No.      Reference Number                      Description
---------   ----------------   -------------------------------------------------
3.1               2.1          Certificate of Incorporation of Registrant filed
                               August 26, 1998 (1)

3.2               2.2          By-Laws of Registrant. (1)

14                             Code of Ethics(2)

21                             List of Subsidiaries of Registrant(2)

31.1/31.2                      Rule 13(a) - 14(a)/15(d) - 14(a) Certification of
                               Principal Executive and Financial Officer(2)

32.1/32.2                      Rule 1350 Certification of Chief Executive and
                               Financial Officer(2)

----------
(1)   Filed with the Securities and Exchange Commission on April 3, 2007 as an
      exhibit, numbered as indicated above, to the Registrant's registration
      statement on Form 10-SB, which exhibit is incorporated herein by
      reference.

(2)   Filed herewith.


                                       22

<PAGE>

                ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Audit Fees.

      The aggregate fees billed to us by our principal accountant for services
rendered during the fiscal years ended June 30, 2006 and 2005 are set forth in
the table below:

                         Fiscal year ended   Fiscal year ended
Fee Category                June 30, 2006      June 30, 2005
----------------------   -----------------   -----------------
Audit fees (1)                 $2,500             $2,000
Audit-related fees (2)              0                  0
Tax fees (3)                        0                  0
All other fees (4)                  0                  0
Total fees                     $2,500             $2,000

(1)   Audit fees consists of fees incurred for professional services rendered
      for the audit of consolidated financial statements, for reviews of our
      interim consolidated financial statements included in our quarterly
      reports on Form 10-QSB and for services that are normally provided in
      connection with statutory or regulatory filings or engagements.

(2)   Audit-related fees consists of fees billed for professional services that
      are reasonably related to the performance of the audit or review of our
      consolidated financial statements, but are not reported under "Audit
      fees."

(3)   Tax fees consists of fees billed for professional services relating to tax
      compliance, tax planning, and tax advice.

(4)   All other fees consists of fees billed for all other services.

Audit Committee's Pre-Approval Practice.

      Insomuch as we do not have an audit committee, our board of directors
performs the functions of an audit committee. Section 10A(i) of the Securities
Exchange Act of 1934 prohibits our auditors from performing audit services for
us as well as any services not considered to be "audit services" unless such
services are pre-approved by the board of directors (in lieu of the audit
committee) or unless the services meet certain de minimis standards.


                                       23

<PAGE>

                                   SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

Date: September 19, 2006               HORNBY INTERNATIONAL, INC.


                                       By: /s/ John Probandt
                                           -------------------------------------
                                           John Probandt,
                                           President and Chief Executive Officer

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

       SIGNATURE                          TITLE                      DATE
------------------------   --------------------------------   ------------------


/s/ John Probandt          President, Treasurer Chief         September 19, 2006
------------------------   Executive Officer, Chief
John Probandt              Financial and Accounting Officer

Board of Directors


/s/ John Probandt          Director                           September 19, 2006
------------------------
John Probandt


/s/ Maureen Brogan         Director                           September 19, 2006
------------------------
Maureen Brogan


                                       24