|UNITED STATES                                                   
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|SECURITIES AND EXCHANGE COMMISSION                              
|Washington, D.C. 20549                                          
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|Form 10-KSB                                                     
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|[   ]                                                           
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|Commission File Number 333-118799                               
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|EXPERT SYSTEMS, INC.                                            
|(Name of small business issuer in its charter)                  
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|Nevada                                                          
|(State or other jurisdiction of incorporation or organization)  
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|6900 E. Princess Drive #2176
Phoenix, Arizona                   
|(Address of principal executive offices)                        
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|Issuers telephone number: (480) 659-8036                       
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|Securities Registered Pursuant to Section 12(b) of the Act: NONE
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|Title of each class                                             
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|Securities Registered Pursuant to Section 12(g) of the Act: None
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|(Title of class)                                                
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|(Title of class)                                                
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Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.xYes [   ] 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.x



Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). o



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



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:$43,750 as of December 31, 2005.



The number of shares outstanding of each of the issuers classes of common equity, as of December 31, 2005 was15,000,000.



DOCUMENTS INCORPORATED BY REFERENCE



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



|Transitional Small Business Disclosure Format (Check one): Yes [ | ] Nox
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PART I

ITEM 1. DESCRIPTION OF BUSINESS.

ITEM 2. DESCRIPTION OF PROPERTY

ITEM 3. LEGAL PROCEEDINGS

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

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

ITEM 6. MANAGEMENTS PLAN OF OPERATION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

ITEM 7. FINANCIAL STATEMENTS

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

ITEM 8A. CONTROLS AND PROCEDURES

ITEM 8B. OTHER INFORMATION

PART III

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

ITEM 10. EXECUTIVE COMPENSATION

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

ITEM 13. EXHIBITS

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

SIGNATURES







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FORWARD LOOKING STATEMENTS



This Annual Report contains forward-looking statements about our business, financial condition and prospects that reflect our managements assumptions and beliefs based on information currently available. We can give no assurance that the expectations indicated by such forward-looking statements will be realized. If any of our assumptions should prove incorrect, or if any of the risks and uncertainties underlying such expectations should materialize, Expert Systems actual results may differ materially from those indicated by the forward-looking statements.



The key factors that are not within our control and that may have a direct bearing on operating results include, but are not limited to, acceptance of our services, our ability to expand its customer base, managements ability to raise capital in the future, the retention of key employees and changes in the regulation of our industry.



There may be other risks and circumstances that management may be unable to predict. When used in this Report, words such as,believes,expects, intends,plans,anticipates,estimatesand similar expressions are intended to identify and qualify forward-looking statements, although there may be certain forward-looking statements not accompanied by such expressions.



PART I



ITEM 1. DESCRIPTION OF BUSINESS.



Business Development



Expert Systems, Inc. was incorporated in the State of Nevada on April 16, 2002. ESI, a development stage company, plans to distribute golf-related merchandise in the retail golf industry. The primary market for ESIs services will be Arizona because the companys headquarters is located in that State, and our officers and directors have potential business contacts in the Arizona golf community. ESI has yet to commence planned operations. As of the date of this Annual report, ESI has had only limited start-up operations and has not generated any revenues.



On January 13, 2004, we entered into a license agreement with Swing Plane Enterprises, LLC to distribute the Plane Stick Training System. The agreement provided us with a non-exclusive license to sell the Plane Stick in North America. Unfortunately, Swing Plane Enterprises has ceased operations. As a result, our licensing agreement is no longer valid and we cannot obtain additional quantities of the Swing Plane, Plane Stick. We do not have any products in inventory nor relationships with distributors to obtain additional inventory items. As a result, we currently have limited revenue generating potential.



The Company has $4,070 in cash on hand as of December 31, 2005. We do not believe these funds are sufficient to continue operating as a going concern for the foreseeable future. We are currently seeking avenues to obtain additional capital or to pursue a secondary line of business.



ESIs administrative office is located at 6900 E. Princess Dr. #2176, Phoenix, AZ 85054, telephone (480) 659-8036.



ESIs fiscal year end is December 31.



Business of Issuer



Principal Products and Services and Principal Markets



Expert Systems, Inc. intends to market golf improvement and learning products designed to promote proper training, fitness and swing mechanics for beginning golfers who want to learn how to play golf, as well as advanced golfers who wish to improve their skills and technique. ESI believes the sport of golf is growing in popularity, particularly among women and senior players. In certain foreign markets, particularly Japan, Germany and Sweden, golf has also experienced significant growth over the last decade. The golf instruction business is premised on a golfers continuing desire to improve his or her game, as well as the instruction desired by new golfers. Historically, instruction has been conducted primarily by local golf professionals. In recent years, technological improvements and the interests of both the golf professional and consumer have created a shift towards
instructional products and programs.



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We previously had a distribution agreement with Swing Plane Enterprises, which has since ceased operations. Currently, we do not have access to any additional products for sale. We plan to seek to evaluate new products to introduce them to the market. Significantly all evaluations will be conducted by our officers and directors. We do not intend to develop any golf merchandise internally. We will rely solely upon the efforts of outside sources to research, develop and refine all products. ESI has no exclusive arrangements with third parties to develop merchandise specifically for us. However, due to our limited operations and lack of significant operating assets, we may be unable to enter into any distribution relationships, or if we do, may be unable to purchase material inventory with which to generate sufficient revenues to meet our ongoing financial obligations.



Distribution Methods of the Products or Services



ESI initially plans to market its products domestically. Our objective is to develop and institute a plan to market our company and products mainly via the Internet. We have established a website at www.expertsystems.us for customers to be able to gain information about us. However, due to the demise of Swing Plane Enterprises, our sole source of marketable product, we have decided to indefinitely suspend any proposed marketing plan until we are able to acquire additional product lines.



Competitive Business Conditions and the Issuers Competitive Position



ESI is in a highly competitive market segment. Competitors include several larger and more established companies. All of ESIs actual and potential competitors have longer operating histories, significantly greater financial, technical and marketing resources and greater name recognition. Therefore, these competitors have a significantly greater ability to attract clients. In addition, many of these competitors are able to devote greater resources than ESI to the development, promotion and sale of services. There can be no assurance that ESIs current or potential competitors will not develop products and services comparable or superior to those to be offered by ESI. Increased competition could result in price reductions, reduced margins or loss of market share, any of which will materially and adversely affect ESIs business, results of operation and financial condition.
However, the loss of our sole distributor has significantly negatively affected our competitive position.

Sources and availability of raw materials and the names of principal suppliers



The manufacturer of our sole product line has ceased its operations. As a result, we have no relationships to distribute any products and cannot assure you that we will be able to develop any in the future.



Employees



ESI is currently in the development stage. During the development stage, we plan to rely exclusively on the services of our officers and directors to set up our business operations. We believe that our operations are currently on a small scale that is manageable by a these individuals. Currently, Brandon Winton, President  & CEO, and William Brent Griffin, Vice-President and Secretary, are involved in ESIs business on a part time basis. Each devotes an average of 20-40 hours per month to our operations, as our operations dictate. There are no other full- or part-time employees. We plan to outsource the production of our products, thus our managements responsibilities are mainly administrative. While we believe that the  addition of  employees  is not  required  over the next 12 months,  we intend to contract  sales  representatives  to market our  products for us on an
independent contractor basis. Thus, these representatives are not intended to be employees of our company.



Reports to Security Holders



| | 1. | After this offering, we will furnish our shareholders with audited annual financial reports certified by our independent accountants.
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| | 2. | After this offering, we will file periodic and current reports, which are required in accordance with Section 15(d) of the Securities Act of 1933, with the Securities and Exchange Commission to maintain the fully reporting status.
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| | 3. | The public may read and copy any materials Salon Impressions files with the SEC at the SECs Public Reference Room at 100 F Street, N.E., Washington, D.C. 20002. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Our SEC filings will be
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available on the SEC Internet site, located at http://www.sec.gov.

Risk Factors

Investors May Lose Their Entire Investment If ESI Fails To Commence Its Planned Operations.

ESI was formed in April 2002. ESI has no demonstrable operations record, on which you can evaluate the business and its prospects. ESIs prospects must be considered in light of the risks, uncertainties, expenses and difficulties frequently encountered by companies in their early stages of development. ESI cannot guarantee that it will be successful in accomplishing its objectives. To date, ESI has not generated any revenues and may incur losses in the foreseeable future.

ESI May Not Be Able To Attain Profitability Without Additional Funding, Which May Be Unavailable.

ESI has limited capital resources. To date, we have funded our operations from the sale of equity securities and have not generated cash from operations. No alternative sources of funds are available to us in the event ESI does not have adequate proceeds from this offering. Unless ESI begins to generate sufficient revenues from distributing golf products to finance operations as a going concern, ESI may experience liquidity and solvency problems. Such liquidity and solvency problems may force ESI to go out of business if additional financing is not available.

ESIs Independent Auditors Have Qualified Their Report To Express Substantial Doubt About Our Companys Ability To Continue As A Going Concern.

ESI has yet to commence its planned operations. As of the date of this Prospectus, ESI has had only limited start-up operations and generated no revenues. Taking these facts into account, the independent auditors of ESI have expressed substantial doubt about ESIs ability to continue as a going concern in the independent auditors report to the financial statements included in this annual report. If ESIs business fails, the investors in this offering may face a complete loss of their investment.

Seasonality And Fluctuations In Our Business Could Make It Difficult For You To Evaluate Our Operations On A Period By Period Basis.

Our future operating results may fluctuate significantly from period to period due to our reliance on a sport with an intrinsic seasonality. Golfers are typically active during the second and third calendar quarters of the year, as compared to the first and fourth quarters, due to more temperate weather conditions. This seasonality, along with other factors that are beyond our control, including general economic conditions, changes in consumer behavior and periodic weather anomalies, could adversely affect our operations and cause our results of operations to fluctuate. Results of operations in any period should not be considered indicative of the results to be expected for any future period.

The sale of our products is also subject to substantial cyclical fluctuation. If our revenues in a particular quarter are lower than we anticipate, we may be unable to reduce spending in that quarter. As a result, any shortfall in revenues would likely adversely affect our quarterly operating results. Specifically, in order to attract and retain a larger customer base, we may plan to significantly increase our expenditures on sales and marketing, content development, technology and infrastructure. Many of these expenditures are planned or committed in advance and in anticipation of future revenues.

If ESI Fails To Establish And Maintain Relationships With Distributors And Manufacturers To Obtain Sufficient Quantities Of Quality Merchandise On Acceptable Commercial Terms, Our Sales And Profitability Could Suffer.

We intend to rely primarily on product manufacturers and third-party distributors to supply the products we offer. Our business will be seriously harmed if we are unable to develop and maintain relationships with suppliers that allow us to obtain sufficient quantities of quality merchandise on acceptable terms. Additionally, we may be unable to establish alternative sources of supply for any products to ensure delivery of merchandise in a timely and efficient manner or on terms acceptable to us.



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Because Of Competitive Pressures From Competitors With More Resources ESI May Fail To Implement Its Business Model Profitably.

ESI is entering a highly competitive market segment. Our expected competitors include several larger and more established companies in the instructional golf product niche or the market for golf merchandise in general. Generally, ESIs actual and potential competitors have longer operating histories, significantly greater financial, technical and marketing resources and greater name recognition. Therefore, these competitors have a significantly greater ability to attract clients. In addition, many of these competitors are able to devote greater resources than ESI to the development, promotion and sale of services. There can be no assurance that ESIs current or potential competitors will not develop products and services comparable or superior to those to be offered by ESI. Increased competition could result in price reductions, reduced margins or loss of market share, any of
which will materially and adversely affect ESIs business, results of operation and financial condition. However, the loss of our sole distributor has significantly negatively affected our competitive position.

Conflicts Of Interest Faced By The Top Management Of ESI May Jeopardize The Business Continuity Of ESI.

The operations of ESI depend substantially on the skills and experience of Brandon Winton and William Brent Griffin. Without employment contracts, ESI may lose Messrs. Winton and/or Griffin to other pursuits without a sufficient warning and, consequently, go out of business.

Either Mr. Winton or Mr. Griffin may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, these two individuals may face a conflict in selecting between ESI and their other business interests. ESI has not formulated a policy for the resolution of such conflicts.



ITEM 2. DESCRIPTION OF PROPERTY



Description of Property



Our headquarters are in Phoenix, Arizona. Our mailing address is Expert Systems, Inc., 6900 E. Princess Drive #2176, Phoenix, Arizona  85054, phone: (480) 659-8036. This office space is provided at no cost to us by our officers and directors. There are currently no proposed programs for the renovation, improvement or development of the facilities we currently use. We believe that this arrangement is suitable given the nature of our current operations, and also believe that we will not need to lease additional administrative offices for at least the next 12 months.



Investment Policies



Our management does not currently have policies regarding the acquisition or sale of real estate assets primarily for possible capital gain or primarily for income. We do not presently hold any investments or interests in real estate, investments in real estate mortgages or securities of or interests in persons primarily engaged in real estate activities.



ITEM 3. LEGAL PROCEEDINGS



We are not currently involved in any legal proceedings nor do we have any knowledge of any threatened litigation.



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



On December 8, 2005, Expert Systems, Inc., a Nevada corporation (the Issuer or EXSM), filed an amendment to its articles of incorporation, whereby the Issuer increased the number of common shares it is authorized to issue from 25,000,000 shares, par value $0.001, to 100,000,000 shares.



Additionally, effective December 30, 2005 Expert Systems, Inc., a Nevada corporation (the Issuer or EXSM), effected a forward stock split on a 2.5:1 (two-and one-half to one) basis. There is no mandatory recall and certificates will be payable upon surrender.





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PART II



ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS



Market information



There is no established public trading market for our securities and a regular trading market may not develop, or if developed, may not be sustained. A shareholder in all likelihood, therefore, will not be able to resell his or her securities should he or she desire to do so when eligible for public resale. Furthermore,  it  is unlikely  that a lending institution will accept our securities  as pledged  collateral  for  loans unless  a  regular  trading  market develops. We have no plans, proposals, arrangements or understandings with any person with regard to the development of a trading market in any of our securities.



Shares Available Under Rule 144

As of December 31, 2005, there were 12,812,500 shares of common stock that are considered restricted securities under Rule 144 of the Securities Act of 1933. Of the 12,187,500 shares, 12,500,500 shares are held by Brandon Winton and 312,500 are held by William Brent Griffin, both of whom are our affiliates,  as  that term is defined in Rule 144(a)(1).



In  general, under  Rule  144  as  amended,  a  person  who  has beneficially  owned and held restricted securities for at least one year,  including  affiliates,  may  sell  publicly  without registration  under  the  Securities Act,  within  any  three-month period,  assuming compliance with other provisions of the  Rule,  a number  of shares that do not exceed the greater of (i) one percent of  the  common stock then outstanding or, (ii) the average  weekly trading  volume in the common stock during the four calendar  weeks preceding  such sale. A person who is not deemed an affiliate of our Company and who has beneficially owned shares for at least two years would be entitled to unlimited resales of such restricted securities under Rule 144 without regard to the volume and other limitations described above.



Holders



As of December 31, 2005, we have 15,000,000 shares of $0.001 par value common stock issued and outstanding held by 24 shareholders of record. Our transfer agent is Holladay Stock Transfer, Inc., 2939 N. 67th Place, Suite C, Scottsdale, Arizona 85251, phone (480) 481-3940.



Dividends



We have never declared or paid any cash dividends on our common stock. For the foreseeable future, we intend to retain any earnings to finance the development and expansion of our business, and we do not anticipate paying any cash dividends on its common stock. Any future determination to pay dividends will be at the discretion of the Board of Directors and will be dependent upon then existing conditions, including our financial condition and results of operations, capital requirements, contractual restrictions, business prospects, and other factors that the board of directors considers relevant.



Securities Authorized for Issuance Under Equity Compensation Plans



The following table provides the following information as of December 31, 2005, for equity compensation plans previously approved by security holders, as well as those not previously approved by security holders:



| | 1. | The number of securities to be issued upon the exercise of outstanding options, warrants and rights (column (a));
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| | 2. | The weighted-average exercise price of the outstanding options, warrants and rights (column (b)); and
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| | 3. | Other than securities to be issued upon the exercise of the outstanding options, warrants and rights, the number of securities remaining available for future issuance under the plan (column (c)).
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|Plan Category                                              |  | Number of Securities to be issued upon exercise of outstanding options, warrants and rights |  | Weighted average exercise price of outstanding options, warrants and rights |  | Number of securities remaining available for future issuance | 
|---------------------------------------------------------- |  | ------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------- |  | ------------------------------------------------------------ | 
|                                                           |  | (a)                                                                                         |  | (b)                                                                         |  | (c)                                                          | 
|Equity compensation plans approved by security holders     |  |                                                                                            |  |                                                                            |  |                                                             | 
|                                                           |  |                                                                                             |  |                                                                             |  |                                                              | 
|Equity compensation plans not approved by security holders |  |                                                                                            |  |                                                                            |  |                                                             | 
|                                                           |  |                                                                                             |  |                                                                             |  |                                                              | 
|Total                                                      |  |                                                                                            |  |                                                                            |  |                                                             | 



Recent Sales of Unregistered Securities



Sales conducted under an exemption from registration provided under Section 4(2).



In December 2005, the Board of Directors of ESI authorized a 2.5 to 1 forward stock split. All reference to the common stock of ESI have been adjusted to reflect post-split amounts.



In July 2002, we issued 5,000,000 shares of our common stock to Brandon Winton, our founding shareholder and an officer and director. This sale of stock did not involve any public offering, general advertising or solicitation. The shares were issued in exchange for services performed by the founding shareholder on our behalf in the amount of $5,000. Mr. Winton received compensation in the form of common stock for performing services related to the formation and organization of our Company, including, but not limited to, designing and implementing a business plan and providing administrative office space for use by the Company; thus, these shares are considered to have been provided as founders shares. Additionally, the services are considered to have been donated, and have resultantly been expensed and recorded as a contribution to capital. At the time of the issuances,
Mr. Winton had fair access to and was in possession of all available material information about our company, as his is an officer and director of ESI. The shares bear a restrictive transfer legend in accordance with Rule 144 under the Securities Act. On the basis of these facts, we claim that the issuance of stock to our founding shareholder qualifies for the exemption from registration contained in Section 4(2) of the Securities Act of 1933.



In December 2003, we issued 5,000,000 shares of our common stock to William Griffin, an officer and director. Subsequently, in November of 2004, 4,875,000 of these shares were cancelled by us, resulting in Mr. Griffin holding the remaining 125,000 shares of common stock. The shares bear a restrictive transfer legend. This sale of stock did not involve any public offering, general advertising or solicitation. The shares were issued in exchange for services performed by Mr. Griffin valued at $5,000. Mr. Griffin received compensation in the form of common stock for performing services related to product line and merchandising consultation, as well as introducing us to potential clients. The services are considered to have been donated, and have resultantly been expensed and recorded as a contribution to capital. At the time of the issuance, Mr. Griffin had fair access to
and was in possession of all available material information about our company, as his is an officer and director of ESI. The shares bear a restrictive transfer legend in accordance with Rule 144 under the Securities Act. On the basis of these facts, we claim that the issuance of stock to William Griffin qualifies for the exemption from registration contained in Section 4(2) of the Securities Act of 1933.



In December 2003, we issued 250,000 shares of restricted common stock to Corporate Communications Network, an unrelated third party entity, in exchange for cash in the amount of $10,000, which is the equivalent of $0.04 per share. This sale of stock did not involve any public offering, general advertising or solicitation. At the time of the issuance, Corporate Communications Network was given fair access and was in possession of all available material information about ESI. Also, Corporate Communications Network has a degree of financial sophistication, which allowed that company to make an independent assessment of the investment merits of ESI. On the basis of these facts, we claim that the issuance of stock to Corporate Communications Network was qualified for the exemption from registration contained in Section 4(2) of the Securities Act of 1933.





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In May 2004, we issued 125,000 shares of restricted common stock at a price per share of $0.04 to Lynn-Cole Capital, an unrelated third-party entity, in exchange for cash in the amount of $5,000. This issuance of stock did not involve any public offering, general advertising or solicitation. At the time of purchase, Lynn-Cole Capital was in possession of all available material information about ESI. Furthermore, Lynn-Cole Capital has a degree of financial sophistication and is able to make an independent assessment of the investment merits of our company. On the basis of these facts, we believe the issuance of stock to Lynn-Cole Capital was qualified for the exemption from registration contained in Section 4(2) of the Securities Act of 1933.



We believe that the transactions delineated above are exempt from the registration provisions of Section 5 of the Securities Act as such exemption is provided under Section 4(2) because:



| | 1. | None of these issuances involved underwriters, underwriting discounts or commissions;
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| | 2. | Restrictive legends are placed on all certificates issued;
| | -- | ----------------------------------------------------------



| | 3. | The distribution did not involve general solicitation or advertising; and
| | -- | -------------------------------------------------------------------------



| | 4. | The distributions were made only to insiders, accredited investors or investors who were sophisticated enough to evaluate the risks of the investment. All sophisticated investors were given access to all information about our business and the opportunity to ask questions and receive answers about our business from our management prior to making any investment decision.
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Recent Registered Offering



The Form SB-2 Registration Statement filed by ESI and deemed effective by the U.S. Securities and Exchange Commission as of February 1, 2005 (SEC File No. 333-118799), offered a minimum of 400,000 and a maximum of 2,000,000 shares of the Companys $0.001 par value common stock at a price of $0.05 per share pursuant to a self-underwritten offering. A total of 500,000 shares were sold by the Company to 20 investors in conjunction with the registered offering for an aggregate of $25,000.00. On February 23, 2005, we closed the offering and deregistered the unsold shares.



ITEM 6. MANAGEMENTS PLAN OF OPERATION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION



ESI was incorporated in the State of Nevada on April 16, 2002. Our efforts to date have focused primarily on the development and implementation of our business plan. No development related expenses have been or will be paid to affiliates of ESI. ESI is a startup company and has not realized any revenues. We had an agreement with Swing Plane Enterprises to distribute a golf instructional tool, the Plane Stick, which we carry in our inventory. In the fourth quarter of 2005, we were made aware that Swing Plane Enterprises has ceased to operate and our distribution agreement can no longer be enforced.



Total expenses for the year ended December 31, 2005 were $25,771, consisting solely of professional fees in the amount of $22,316 and $3,455 in general and administrative expenses. For the year ended December 31, 2004, we incurred total operating expenses of $11,609, consisting of $9,082 in professional fees and $2,527 in general and administrative expenses. The significant increase in expenses from 2004 to 2005 is mainly attributable to our efforts to execute our planned principal operations. Total expenses since our inception in April 16, 2002 were $50,786, all of which is attributable to professional fees and general and administrative expenses. Although we expect to continue to incur general and administrative expenses for the foreseeable future, we cannot estimate the extent of these costs.



As a result of our lack of revenues and continued expenditures in pursuit of our business objectives, we incurred net losses since our inception. For the years ended December 31, 2005 and 2004, our aggregate loss was $25,771 and $11,609, respectively. From the date of our inception to December 31, 2005, we had a retained deficit of $50,786. We expect to incur ongoing losses for the foreseeable future, as we currently have no suppliers from whom we may obtain saleable merchandise.



Since our incorporation, we have raised capital through sales of our common equity. All told, we raised $40,000 in cash from sales of our common stock. In addition, we issued 5,125,000 shares of our common stock in lieu of cash to pay for services rendered to us in the amount of $10,000. Please refer to Part II, Item 5 Market for



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Common Equity and Related Stockholder Matters on page 8 for additional information with regard to these issuances. Additionally, on through December 31, 2005, we have notes payable in the amount of $5,000. This balance does not bear interest and is due on demand.



We believe that our cash on hand as of December 31, 2005 of $4,070 is not sufficient to continue operations for the next at least 12 months. Additionally, we carry a limited amount of inventory, ($274), which will severely hamper our ability to generate a significant amount of revenues with which to meet our financial obligations. Furthermore, our current cash balance may be insufficient to purchase additional inventory with which to generate sales. Unless we are able to obtain additional capital infusions, we will be forced to cease operations.



We expect to have negative cash flows for the fiscal year 2005, as we have a limited ability to realize cash flows from sales. In addition, if our costs of operations increase unexpectedly, we may need to raise additional capital by issuing equity or debt securities in exchange for cash. There can be no assurance that we will be able to secure additional funds in the future to stay in business. Our principal accountants have expressed substantial doubt about our ability to continue as a going concern because we have limited operations and have not fully commenced planned principal operations.



There are no known trends, events or uncertainties that have had or that are reasonably expected to have a material impact on our revenues from continuing operations. Our future operating results may fluctuate significantly from period to period due to our reliance on a sport with an intrinsic seasonality. Golfers  are typically  active during the second and third calendar  quarters of the year, as compared  to the  first  and  fourth  quarters,  due to more  temperate  weather conditions.



Our management does not expect to incur research and development costs.



ESI does not have any off-balance sheet arrangements.



We currently do not own any significant plant or equipment that we would seek to sell in the near future.



Our management does not anticipate the need to hire additional full- or part- time employees over the next 12 months, as the services provided by our officers and directors appear sufficient at this time. We believe that our operations are currently on a small scale that is manageable by a few individuals.



We have not paid for expenses on behalf of any of our directors. Additionally, we believe that this fact shall not materially change.



We currently do not have any material contracts and or affiliations with third parties. ESI expects to build affiliations in the first six months after the completion of the offering.



ITEM 7. FINANCIAL STATEMENTS



The following documents (pages F-1 to F-8) form part of the report on the Financial Statements



|                                                        |  | PAGE | 
|------------------------------------------------------- |  | ---- | 
|                                                        |  |      | 
|Report of Independent Registered Public Accounting Firm |  | F-1  | 
|                                                        |  |      | 
|Balance Sheets                                          |  | F-2  | 
|                                                        |  |      | 
|Statements of Operations                                |  | F-3  | 
|                                                        |  |      | 
|Statement of Stockholders Equity  (Deficit)            |  | F-4  | 
|                                                        |  |      | 
|Statements of Cash Flows                                |  | F-5  | 
|                                                        |  |      | 
|Footnotes                                               |  | F-6  | 





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EXPERT SYSTEMS, INC.

(A DEVELOPMENT STAGE COMPANY)

FINANCIAL STATEMENTS

DECEMBER 31, 2005 AND 2004





11



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EXPERT SYSTEMS, INC.

(A DEVELOPMENT STAGE COMPANY)

INDEX TO FINANCIAL STATEMENTS

DECEMBER 31, 2005 AND 2004





|                                                           |  | PAGE |  
|---------------------------------------------------------- |  | ---- | -
|                                                           |  |      |  
|Report of Independent Registered Public Accounting Firm    |  | 1    |  
|                                                           |  |      |  
|Financial Statements:                                      |  |      |  
|Balance Sheets as of December 31, 2005 and 2004            |  | 2    |  
|                                                           |  |      |  
|Statements of Operations for the Years Ended               |  |      |  
|December 31, 2005 and 2004 with Cumulative                 |  |      |  
|Totals Since Inception                                     |  | 3    |  
|                                                           |  |      |  
|Statements of Changes in Stockholders Equity              |  |      |  
|(Deficit) for the Years Ended December 31, 2005            |  |      |  
|and 2004 and the Period April 16, 2002 (Inception) through |  |      |  
|December 31, 2005                                          |  | 4    |  
|                                                           |  |      |  
|Statements of Cash Flow for the Years Ended                |  |      |  
|December 31, 2005 and 2004 with Cumulative                 |  |      |  
|Totals Since Inception                                     |  | 5    |  
|                                                           |  |      |  
|Notes to the Financial Statements                          |  | 6-   | 9







12



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BAGELL, JOSEPHS, LEVINE & COMPANY, L.L.C.

Certified Public Accountants

High Ridge Commons

Suites 400-403

200 Haddonfield Berlin Road

Gibbsboro, New Jersey 08026

(856) 346-2828  Fax (856) 346-2882



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Stockholders of

Expert Systems, Inc.

Phoenix, Az



We have audited the accompanying balance sheets of Expert Systems, Inc., a development stage company (the Company) as of December 31, 2005 and 2004, and the related statements of operations, changes in stockholders equity (deficit), and cash flows for the years then ended with cumulative totals since the Companys inception April 16, 2002 (inception) for the statements of operations, changes in stockholders equity (deficit), and cash flows. These financial statements are the responsibility of management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.



We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits 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 Expert Systems, Inc., a development stage company as of December 31, 2005 and 2004, and the results of its operations, and cash flows for the years then ended, and the cumulative totals since the Companys inception, in conformity with accounting principles generally accepted in the United States of America.



The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 4 to the financial statements, the Company has sustained operating losses and capital deficits that raise substantial doubt about its ability to continue as a going concern. Managements operating and financing plans in regards to these matters are also discussed in Note 4. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.



/S/BAGELL, JOSEPHS & COMPANY, L.L.C.

BAGELL, JOSEPHS & COMPANY, L.L.C.

Gibbsboro, New Jersey



January 24, 2006

F-1



13



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EXPERT SYSTEMS, INC.

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS

DECEMBER 31, 2004 AND 2003





|                                                             |  | 2005 |         | 2004 |  
|------------------------------------------------------------ |  | ---- | ------- | ---- | -
|                                                             |  |      |         |      |  
|ASSET                                                        |  |      |         |      |  
|                                                             |  |      |         |      |  
|Current assets:                                              |  |      |         |      |  
|Cash and cash equivalents                                    |  | $    | 4,070   |      | $
|Inventory                                                    |  |      | 274     |      |  
|                                                             |  |      |         |      |  
|Total current assets                                         |  |      | 4,344   |      |  
|                                                             |  |      |         |      |  
|TOTAL ASSET                                                  |  | $    | 4,344   |      | $
|                                                             |  |      |         |      |  
|                                                             |  |      |         |      |  
|                                                             |  |      |         |      |  
|LIABILITIES AND STOCKHOLDERS EQUITY  (DEFICIT)              |  |      |         |      |  
|                                                             |  |      |         |      |  
|LIABILITIES                                                  |  |      |         |      |  
|Current liabilities:                                         |  |      |         |      |  
|Accounts Payable                                             |  | $    | 130     |      | $
|Note Payable                                                 |  |      | 5,000   |      |  
|                                                             |  |      |         |      |  
|Total Current Liabilities                                    |  |      | 5,130   |      |  
|                                                             |  |      |         |      |  
|Total Liabilities                                            |  |      | 5,130   |      |  
|                                                             |  |      |         |      |  
|STOCKHOLDERS EQUITY (DEFICIT)                               |  |      |         |      |  
|Common stock, $0.001 Par Value, 10,000,000 shares authorized |  |      |         |      |  
|15,000,000 and 13,750,000 shares issued and outstanding      |  |      | 15,000  |      |  
|Additional paid in capital                                   |  |      | 35,000  |      |  
|Deficit accumulated during the development stage             |  |      | (50,786 | )    |  
|                                                             |  |      |         |      |  
|Total Stockholders Equity (Deficit)                         |  |      | (786    | )    |  
|                                                             |  |      |         |      |  
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)         |  | $    | 4,344   |      | $
|                                                             |  |      |         |      |  



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



F-2





14



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EXPERT SYSTEMS, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004



(WITH CUMULATIVE TOTALS SINCE INCEPTION)







|                                      |  |      |            |      |   | Cumulative Totals      |  
|------------------------------------- |  | ---- | ---------- | ---- | - | ---------------------- | -
|                                      |  |      |            |      |   | April 16, 2002 through |  
|                                      |  | 2005 |            | 2004 |   | December 31, 2005      |  
|OPERATING REVENUES                    |  |      |            |      |   |                        |  
|Sales                                 |  | $    |           |      | $ |                       |  
|                                      |  |      |            |      |   |                        |  
|COST OF SALES                         |  |      |           |      |   |                       |  
|                                      |  |      |            |      |   |                        |  
|GROSS PROFIT (LOSS)                   |  |      |           |      |   |                       |  
|                                      |  |      |            |      |   |                        |  
|OPERATING EXPENSES                    |  |      |            |      |   |                        |  
|Professional Fees                     |  |      | 22,316     |      |   | 9,082                  |  
|General & administrative expenses     |  |      | 3,455      |      |   | 2,527                  |  
|Total Operating Expenses              |  |      | 25,771     |      |   | 11,609                 |  
|                                      |  |      |            |      |   |                        |  
|                                      |  |      |            |      |   |                        |  
|NET LOSS                              |  | $    | (25,771    | )    | $ | (11,609                | )
|                                      |  |      |            |      |   |                        |  
|WEIGHTED AVERAGE COMMON SHARES        |  |      |            |      |   |                        |  
|OUTSTANDING                           |  |      | 14,818,493 |      |   | 13,626,195             |  
|                                      |  |      |            |      |   |                        |  
|NET LOSS PER COMMON SHARE OUTSTANDING |  | $    | (0.00      | )    | $ | (0.00                  | )
|                                      |  |      |            |      |   |                        |  



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



F-3





15



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EXPERT SYSTEMS, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY (DEFICIT)

FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004 AND PERIOD APRIL 16, 2002(INCEPTION)

THROUGH DECEMBER 31, 2005



|                                                          |              |         |             | Deficit     |         
|--------------------------------------------------------- | ------------ | ------- | ----------- | ----------- | --------
|                                                          |              |         |             | Accumulated |         
|                                                          |              |         | Additional  | During      |         
|                                                          | Common Stock | Paid-in | Development |            
|Description                                               | Shares       | Amount  | Capital     | Stage       | Total   
|                                                          |              |         |             |             |         
|Balance, April 16, 2002                                   | -            | $-      | $-          | $-          | $-      
|                                                          |              |         |             |             |         
|Issuance of shares  for services                          | 5,000,000    | $5,000  | -           | -           | 5,000   
|                                                          |              |         |             |             |         
|Net (loss)for the period April 16, 2002                   |              |         |             |             |         
|through December 31, 2002                                 | -            | -       | -           | (5,000)     | (5,000) 
|                                                          |              |         |             |             |         
|Balance, December 31, 2002, as restated                   | 5,000,000    | 5,000   | -           | (5,000)     | -       
|                                                          |              |         |             |             |         
|Issuance of shares for services , net of shares cancelled | 125,000      | 125     | 4,875       | -           | 5,000   
|                                                          |              |         |             |             |         
|Issuance of shares for cash                               | 250,000      | 250     | 9,750       | -           | 10,000  
|                                                          |              |         |             |             |         
|Retroactive restatement of forward stock split            |              |         |             |             |         
|of 2.5 to 1 in December 2005                              | 8,062,500    | 8,063   | (8,063)     |             | -       
|                                                          |              |         |             |             |         
|Net loss for the year ended December 31, 2003             | -            | -       | -           | (8,406)     | (8,406) 
|                                                          |              |         |             |             |         
|Balance, December 31, 2003, as restated                   | 13,437,500   | 13,438  | 6,562       | (13,406)    | 6,594   
|                                                          |              |         |             |             |         
|Issuance of shares for cash                               | 125,000      | 125     | 4,875       | -           | 5,000   
|                                                          |              |         |             |             |         
|Retroactive restatement of forward stock split            |              |         |             |             |         
|of 2.5 to 1 in December 2005                              | 187,500      | 187     | (187)       |             | -       
|                                                          |              |         |             |             |         
|Net loss for the year ended December 31, 2004             | -            | -       | -           | (11,609)    | (11,609)
|                                                          |              |         |             |             |         
|Balance, December 31, 2004                                | 13,750,000   | 13,750  | 11,250      | (25,015)    | (15)    
|                                                          |              |         |             |             |         
|Issuance of shares for cash                               | 500,000      | 500     | 24,500      | -           | 25,000  
|                                                          |              |         |             |             |         
|Effect of forward stock split of 2.5 to 1                 | 750,000      | 750     | (750)       | -           | -       
|                                                          |              |         |             |             |         
|Net loss for the year ended December 31, 2005             | -            | -       | -           | (25,771)    | (25,771)
|                                                          |              |         |             |             |         
|Balance, December 31, 2005                                | 15,000,000   | $15,000 | $35,000     | $(50,786)   | $(786)  



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



F-4





16



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EXPERT SYSTEMS, INC.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOW

FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

(WITH CUMULATIVE TOTALS SINCE INCEPTION)



|                                                |  |      |         |      |   | Cumulative Totals      |  
|----------------------------------------------- |  | ---- | ------- | ---- | - | ---------------------- | -
|                                                |  |      |         |      |   | April 16, 2002 through |  
|                                                |  | 2005 |         | 2004 |   | December 31, 2005      |  
|CASH FLOWS FROM OPERATING ACTIVITIES            |  |      |         |      |   |                        |  
|Net loss                                        |  | $    | (25,771 | )    | $ | (11,609                | )
|Adjustments to reconcile net loss to net cash   |  |      |         |      |   |                        |  
|used in operating activities                    |  |      |         |      |   |                        |  
|                                                |  |      |         |      |   |                        |  
|Common stock issued for services                |  |      |        |      |   |                       |  
|                                                |  |      |         |      |   |                        |  
|Changes in assets and liabilities               |  |      |         |      |   |                        |  
|Increase in inventory                           |  |      | (274    | )    |   |                       |  
|Increase (decrease) in accounts payable         |  |      | 5       |      |   | (66                    | )
|                                                |  |      |         |      |   |                        |  
|Total adjustments                               |  |      | (269    | )    |   | (66                    | )
|                                                |  |      |         |      |   |                        |  
|Net cash (used in) operating activities         |  |      | (26,040 | )    |   | (11,675                | )
|                                                |  |      |         |      |   |                        |  
|CASH FLOWS FROM FINANCING ACTIVITIES            |  |      |         |      |   |                        |  
|Issuance of common stock                        |  |      | 25,000  |      |   | 5,000                  |  
|Proceeds from note payable                      |  |      | 4,000   |      |   | 1,000                  |  
|                                                |  |      |         |      |   |                        |  
|Net cash provided by financing activities       |  |      | 29,000  |      |   | 6,000                  |  
|                                                |  |      |         |      |   |                        |  
|NET INCREASE (DECREASE) IN                      |  |      |         |      |   |                        |  
|CASH AND CASH EQUIVALENTS                       |  |      | 2,960   |      |   | (5,675                 | )
|                                                |  |      |         |      |   |                        |  
|CASH AND CASH EQUIVALENTS-                      |  |      |         |      |   |                        |  
|BEGINNING OF YEAR                               |  |      | 1,110   |      |   | 6,785                  |  
|                                                |  |      |         |      |   |                        |  
|CASH AND CASH EQUIVALENTS-END OF YEAR           |  | $    | 4,070   |      | $ | 1,110                  |  
|                                                |  |      |         |      |   |                        |  
|SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION |  |      |         |      |   |                        |  
|                                                |  |      |         |      |   |                        |  
|CASH PAID DURING THE YEAR FOR:                  |  |      |         |      |   |                        |  
|Interest                                        |  | $    |        |      | $ |                       |  
|Income Taxes                                    |  | $    |        |      | $ |                       |  
|                                                |  |      |         |      |   |                        |  
|NONCASH FINANCING AND INVESTING ACTIVITIES:     |  |      |         |      |   |                        |  
|Common stock issued for services                |  | $    |        |      | $ |                       |  

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

F-5





17



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EXPERT SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2005 AND 2004



|NOTE 1 - | NATURE OF BUSINESS
|-------- | ------------------



The Company, a development stage company, was incorporated in the State of Nevada on April 16, 2002. The Company is engaged in the business of bringing various golf products to the retail golf market. The first product the Company will bring to market will be the Swing Plane, Plane Stick a golf swing trainer. The Company will bring the Swing Plane, Plane Stick to the retail golf market through direct response marketing, along with a retail rollout strategy through chain sporting good stores, golf retail and pro shops. Invented by a Swing Plane Enterprises LLC. founder and a PGA Member, the Swing Plane, Plane Stick swing trainer helps golfers cure a number one swing fault in golf, the dreaded over the top swing, which produces slices, pulls and numerous other poor golf shots. Due to its unique design features, the Swing Plane, Plane Stick can
also aid in eliminating a wide array of other swing faults. In fact, The Swing Plane, Plane Stick in its short existence has already evolved into what is now known as the Swing Plane, Plane Stick Training System consisting of over twenty different uses.



Currently, many instructors nationwide and over 50 of Golf Magazines Top 100 Instructors are using the Swing Plane, Plane Stick as an integral part of their teaching curriculums. With approximately 65,000,000 golfers worldwide the Company has yet to even scratch the surface of the market potential. The Company plans on capitalizing on its distribution network in the specialty golf market and retail sporting goods stores, to bring Swing Plane, Plane Stick and other proprietary golf products, to the retail golf market.



|NOTE 2- | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|------- | ------------------------------------------



Development Stage Company



The Company is considered to be in the development stage as defined in Statement of Financial Accounting Standards (SFAS) No. 7, Accounting and Reporting by Development Stage Enterprises. The Company has devoted substantially all of its efforts to business planning, research and development. Additionally, the Company has allocated a substantial portion of their time and investment in bringing their product to the market, and the  raising of capital.



Cash and Cash Equivalents



For financial statement presentation purposes, the Company considers short-term, highly liquid investments with original maturities of three months or less to be cash and cash equivalents.



F-6





18



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EXPERT SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2005 AND 2004



|NOTE 2- | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|------- | ------------------------------------------------------



The Company maintains cash and cash equivalent balances at a financial institution that is insured by the Federal Deposit Insurance Corporation up to $100,000.

Use of Estimates



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



Revenue Recognition



The Companys financial statements are prepared under the accrual method of accounting. Revenues are recognized in the period the services are performed and costs are recorded in the period incurred rather than paid for.



Fair Value of Financial Instruments



The Companys financial instruments are all carried at amounts that approximate their estimated fair value as of December 31, 2005 and 2004.



Income Taxes



The provision for income taxes includes the tax effects of transactions reported in the financial statements. Deferred taxes would be recognized for differences between the basis for assets and liabilities for financial statement and income tax purposes. The major difference relate to the net operating loss carryforwards generated by sustaining deficits during the development stage.



Advertising Costs



Advertising and promotion costs are expensed as incurred. The Company incurred no such expenses since inception.





F-7







19



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EXPERT SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2005 AND 2004



|NOTE 2- | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  (CONTINUED)
|------- | -------------------------------------------------------



Reclassifications



Certain reclassifications have been made to the 2004 financial statements to conform with the current year presentation. These reclassifications have no effect on net loss or stockholders deficiency as previously reported.



Recent Accounting Pronouncements



In December 2004, the FASB issued Financial Accounting Standards No. 123 (revised 2004) (FAS 123R), Share-Based Payment,  FAS 123R replaces FAS No. 123, Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees. FAS 123R requires compensation expense, measured as the fair value at the grant date, related to share-based payment transactions to be recognized in the financial statements over the period that an employee provides service in exchange for the award. The Company intends to adopt FAS 123R using the modified prospective transition method as defined in FAS 123R. Under the modified prospective method, companies are required to record compensation cost prospectively for the unvested portion, as of the date of adoption, of previously issued and outstanding awards over the remaining
vesting period of such awards. FAS 123R is effective January 1, 2006. The Company is evaluating the impact of FAS 123R on its results and financial position.



On December 16, 2004, FASB issued Financial Accounting Standards No. 153, Exchanges of Non-monetary Assets, an amendment of APB Opinion No. 29, Accounting for Non-monetary Transactions (FAS 153). This statement amends APB Opinion 29 to eliminate the exception for non-monetary exchanges of similar productive assets and replaces it with a general exception for exchanges of non-monetary assets that do not have commercial substance. Under FAS 153, if a non-monetary exchange of similar productive assets meets a commercial-substance criterion and fair value is determinable, the transaction must be accounted for at fair value resulting in recognition of any gain or loss. FAS153 is effective for non-monetary transactions in fiscal periods that begin after June 15, 2005. The Company does not anticipate that the implementation of this standard will have a material impact on its financial
position, results of operations or cash flows.



F-8





20



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EXPERT SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2005 AND 2004



|NOTE 2- | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|------- | ------------------------------------------------------



Net (Loss) Per Share of Common Stock



The following table sets forth the computation of basic and diluted earnings per share:





|                               |  | FOR THE YEARS ENDED |           
|------------------------------ |  | ------------------- | ----------
|                               |  | DECEMBER 31,        |           
|                               |  | 2005                |           
|                               |  |                     |           
|Net loss                       |  | $                   | (25,771   
|                               |  |                     |           
|Weighted average common shares |  |                     |           
|outstanding (Basic)            |  |                     | 14,818,493
|                               |  |                     |           
|Options                        |  |                     |          
|Warrants                       |  |                     |          
|                               |  |                     |           
|Weighted average common shares |  |                     |           
|outstanding (Diluted)          |  |                     | 14,818,493



Net (Loss) Per Share of Common Stock (Continued)



Historical net (loss) per common share is computed using the weighted average number of common shares outstanding. Diluted earnings per share (EPS) include additional dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants.



All dilutive securities were not included in the calculation of dilutive earnings per share because the effect would be anti-dilutive when the Company has incurred a loss from operations. The Company currently has no potentially dilutive securities outstanding.





F-9





21



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EXPERT SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2005 AND 2004





|NOTE 2- | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|------- | ------------------------------------------------------



Stock-Based Compensation



Employee stock awards under the Companys compensation plans are accounted for in accordance with Accounting Principles Board Opinion No. 25 (APB 25), Accounting for Stock Issued to Employees, and related interpretations. The Company provides the disclosure requirements of SFAS No. 123, Accounting for Stock-Based Compensation (SFAS 123), and related interpretations. Stock-based awards to non-employees are accounted for under the provisions of SFAS 123 and the Company adopted the enhanced disclosure provisions of SFAS No. 148 Accounting for Stock-Based Compensation- Transition and Disclosure, an amendment of SFAS No. 123.



The Company measures compensation expense for its employee stock-based compensation using the intrinsic-value method. Under the intrinsic-value method of accounting for stock-based compensation, when the exercise price of options granted to employees is less than the estimated fair value of the underlying stock on the date of grant, deferred compensation is recognized and is amortized to compensation expense over the applicable vesting period.



The Company measures compensation expense for its non-employee stock-based compensation under the Financial Accounting Standards Board (FASB) Emerging Issues Task Force (EITF) 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. The fair value of the option issued is used to measure the transaction, as this is more reliable than the fair value of the services received. Fair value is measured as the value of the Companys common  stock on the date that the commitment for performance by the counterparty has been reached or the counterpartys performance is complete. The fair value of the equity instrument is charged directly to compensation expense and additional paid-in capital.







F-10







22



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EXPERT SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2005 AND 2004





|NOTE 3- | NOTES PAYABLE
|------- | -------------



On December 14, 2004 and January 11, 2005, the Company entered into two agreements with Corporate Communications Network, Inc. for $1,000 and $4,000, respectively. These notes do not bear interest and are due on demand. These notes have been reflected as a current liability on the balance sheet as of December 31, 2005 and 2004.



|NOTE 4- | STOCKHOLDERS DEFICIT
|------- | ---------------------



On April 16, 2002 the Company was formed with one class of common stock, par value $.001. The Company authorized 25,000,000 shares of common stock. In December 2005, increased the number of authorized shares to 100,000,000. Also in December 2005, the Company authorized a 2.5 to 1 forward stock split. All shares are reflected on a post-split basis.



In July 2002, the Company issued 12,500,000 shares of stock to its officer for services related to the formation of the Company. Theses shares were issued at par value ($5,000), the fair value of the Companys common stock at the time of issuance.



In December 2003, the Company issued 12,500,000 shares to its officer for services. In November of 2004, the Company canceled 12,187,500 of these shares. The services were valued at $5,000. The Company has retroactively reflected the cancellation of these shares back to 2003.



In December 2003, the Company issued 625,000 shares for cash of $10,000.



In May 2004, the Company issued 312,500 shares of common stock for cash of $5,000.



In February 2005, the Company issued 1,250,000 shares of common stock for cash of $25,000.



In December 2005, the Company authorized a 2.5 to 1 forward stock split.







F-11







23



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EXPERT SYSTEMS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2005 AND 2004





|NOTE 5- | GOING CONCERN
|------- | -------------



As shown in the accompanying condensed financial statements, as is typical of companies going through the development stage, the Company has incurred net losses since its inception and for the years ended December 31, 2005 and 2004. The Company is currently in the development stage, and there is no guarantee whether the Company will be able to generate enough revenue and/or raise capital to support current operations and generate anticipated sales. This raises substantial doubt about the Companys ability to continue as a going concern.



Management believes that the Companys capital requirements will depend on many factors including the success of the Companys product development efforts.



The financial statements do not include any adjustments relating to the recoverability or classification of recorded assets and liabilities that might result should the Company be unable to continue as a going concern.



|NOTE 6- | PROVISION FOR INCOME TAXES
|------- | --------------------------



Deferred income taxes will be determined using the liability method for the temporary differences between the financial reporting basis and income tax basis of the Companys assets and liabilities. Deferred income taxes will be measured based on the tax rates expected to be in effect when the temporary differences are included in the Companys tax return. Deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases.



At December 31, 2005 and 2004, deferred tax assets consist of the following:



|                           | 2005         | 2004        
|-------------------------- | ------------ | ------------
|Deferred tax assets        | $   7,731    | $  7,500    
|Less:  valuation allowance | (7,731)      | (7,500)     
|                           | $        -0- | $        -0-





At December 31, 2005 and 2004, the Company had federal net operating loss carryforwards in the approximate amounts of $25,771 and $25,015 available to offset future taxable income through 2020. The Company established valuation allowances equal to the full amount of the deferred tax assets due to the uncertainty of the utilization of the operating losses in future periods.





F-12







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ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS



We have had no disagreements with our independent accountants.



ITEM 8A. CONTROLS AND PROCEDURES



The Company maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed by the Company in the reports filed under the Securities Exchange Act, is recorded, processed, summarized and reported within the time periods specified by the SECs rules and forms. Disclosure controls are also designed with the objective of ensuring that this information is accumulated and communicated to the Companys management, including the Companys chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.



Based upon their evaluation as of the end of the period covered by this report, the Companys chief executive officer and chief financial officer concluded that, the Companys disclosure controls and procedures are not effective to ensure that information required to be included in the Companys periodic SEC filings is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms.



The Companys board of directors were advised by Bagell, Josephs & Company, L.L.C., the Companys independent registered public accounting firm, that during their performance of audit procedures for 2005 Bagell, Josephs & Company, L.L.C. identified a material weakness as defined in Public Company Accounting Oversight Board Standard No. 2 in the Companys internal control over financial reporting.



This deficiency consisted primarily of inadequate staffing and supervision that could lead to the untimely identification and resolution of accounting and disclosure matters and failure to perform timely and effective reviews. However, the size of the Company prevents us from being able to employ sufficient resources to enable us to have adequate segregation of duties within our internal control system. Management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.



ITEM 8B. OTHER INFORMATION



None.



PART III



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



The following table sets forth certain information with respect to each of our executive officers or directors.



|NAME                  | AGE | POSITION                | PERIOD SERVING    | TERM     
|--------------------- | --- | ----------------------- | ----------------- | ---------
|                      |     |                         |                   |          
|Brandon Winton        | 29  | President               | April 2005 - 2006 | 1 year(1)
|                      |     |                         |                   |          
|William Brent Griffin | 34  | Treasurer and Secretary | April 2005 - 2006 | 1 year(1)



Footnotes:



| | (1) | Directors hold office until the next annual stockholders meeting to be held in 2006 or until a successor or successors are elected and appointed.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------



Directors, Executive Officers and Significant Employees



Set forth below are summary descriptions containing the name  of our  directors and officers, all positions and offices  held  with us, the period during which such officer or director has served as such,  and the business and educational experience of each  during at least the last five years:



Brandon Winton, President and CEO:Mr. Winton is experienced in retail operations, specializing in merchandising, daily course operations, tournament and promotional preparations. He is also attempting to become a



25



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PGA member. From 2004 to the present, Mr. Winton is the Assistant Golf Professional at Whisper Rock Country Club. He assists in monitoring and adjusting the annual business plan, is responsible for daily golf shop operations, merchandising and tournament preparations. In addition, Mr. Winton teaches private lessons to players of all skill levels. From 2000 to 2004, Mr. Winton was the Assistant Golf Professional of Fire Rock Country Club, a private country club in Fountain Hills, Arizona, where he taught private lessons to players of all skill levels. From 1998 to 2000, he was the Outside Services/Players Assistant for The Phoenician Golf and Resort in Scottsdale, Arizona, where he operated and managed daily tee sheets and pace of play log.



William Brent Griffin, Vice President and Secretary:William Griffin is golf professional, trained in daily course management operations. From 2002 to the present, Mr. Griffin has been the Apprentice Golf Professional at Fire Rock Country Club in Fountain Hills, Arizona, where he supervises and manages the golf operations. He is trained in daily golf shop operations including the sale and display of retail merchandise, inventory control, point of sale entries and starting time reservations. In 2002, Mr. Griffin was the Apprentice Golf Professional at Bulls Bay Golf Club in South Carolina. From 1997 to 2000, he was the Apprentice Golf Professional at the Tournament Players Club at Sugarloaf, Georgia, which is a private facility managed by the PGA Tour. During his tenure there, Mr. Griffin was involved with merchandising procedures for three
PGA Tour events.



Family Relationships



None.



Board Committees



We currently have no compensation committee or other board committee performing equivalent functions. Currently, all members of our board of directors participate in discussions concerning executive officer compensation.



Involvement on Certain Material Legal Proceedings During the Last Five Years



No director, officer, significant employee or consultant has been convicted in a criminal proceeding, exclusive of traffic violations.



No bankruptcy petitions have been filed by or against any business or property of any director, officer, significant employee or consultant of the Company nor has any bankruptcy petition been filed against a partnership or business association where these persons were general partners or executive officers.



No director, officer, significant employee or consultant has been permanently or temporarily enjoined, barred, suspended or otherwise limited from involvement in any type of business, securities or banking activities.



No director, officer or significant employee has been convicted of violating a federal or state securities or commodities law.



Section 16(a) Beneficial Ownership Reporting Compliance



Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Companys directors and executive officers, and persons who beneficially own more than 10% of a registered class of the Companys equity securities, to file reports of beneficial ownership and changes in beneficial ownership of the Companys securities with the SEC on Forms 3 (Initial Statement of Beneficial Ownership), 4 (Statement of Changes of Beneficial Ownership of Securities) and 5 (Annual Statement of Beneficial Ownership of Securities). Directors, executive officers and beneficial owners of more than 10% of the Companys Common Stock are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms that they file. Except as otherwise set forth herein, based solely on review of the copies of such forms furnished to the Company, or written representations
that no reports were required, the Company believes that for the fiscal year ended December 31, 2004 beneficial owners did not comply with Section 16(a) filing requirements applicable to them to the extent they filed all form required under Section 16(a) in February 2005 and had no trading activity in 2004.



Code of Ethics



We have not adopted a Code of Business Conduct and Ethics that applies to our principal executive officer,



26



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principal financial officer, principal accounting officer or controller, or persons performing similar functions in that our sole officer and director serves in all the above capacities.



ITEM 10. EXECUTIVE COMPENSATION



Remuneration of Directors, Executive Officers and Significant Employees



We   do   not have employment agreements with our executive officers.  We have yet to determine the appropriate terms needed for the creation of employment agreements for our officers. There has  been  no  discussion  with any of our officers  regarding  any potential  terms  of  these agreements, nor have  such  terms  been determined  with any specificity. We plan to have these agreements completed by the beginning of the next year. We have no proposal, understanding or arrangement concerning accrued earnings to be paid in the future. In the meanwhile, none of our executive officers have been drawing salaries since they were appointed to their positions.





|Summary Compensation Table | 
|-------------------------- | 
|                           | 
|                           | 
|                           | 
|Name andPrincipal Position | 
|                           | 
|Brandon Winton             | 
|President                  | 
|                           | 
|                           | 
|                           | 
|William Brent Griffin      | 
|Treasurer and              | 
|Secretary                  | 
|                           | 



Directors Compensation



We have no formal or informal arrangements or agreements to compensate our directors for services they provide as directors of our company.



Employment Contracts and Officers Compensation



Since our incorporation, we have not entered into employment agreements with any of our officers, directors or employees.  Any future  compensation  to  be  paid to  these  individuals  will  be determined  by  our  Board of Directors, and employment  agreements will  be  executed.  We do not currently have plans to pay any

compensation to our officers or directors until such time as we are cash flow positive.



Stock Option Plan And Other Long-term Incentive Plan



We currently do not have existing or proposed option/SAR grants.



ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT



Security Ownership of Certain Beneficial Owners and Management



The following table sets forth as of December 31, 2005 certain information regarding the beneficial ownership of our common stock by:





27



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1.  Each person who is known us to be the beneficial owner of more than 5% of the common stock,



2.  Each of our directors and executive officers and



3. All of our directors and executive officers as a group.



Except  as  otherwise indicated, the persons or  entities  listed below  have  sole voting and investment power with respect  to  all shares  of common stock beneficially owned by them, except  to  the extent  such  power  may be shared with a  spouse.  No change in control is currently being contemplated.



|Title Of Class  | Name, Title and Address of Beneficial Owner of Shares(1) | Amount of Beneficial Ownership | Percent of Class |       
|--------------- | -------------------------------------------------------- | ------------------------------ | ---------------- | ------
|Before Offering | After Offering                                          
|                |                                                          |                                |                  |       
|Common          | Brandon Winton, President and CEO                        | 12,500,000                     | 90.91%           | 83.33%
|                |                                                          |                                |                  |       
|Common          | William Brent Griffin, Vice-President and Secretary      | 312,500                        | 2.27%            | 2.08% 
|                |                                                          |                                |                  |       
|                | All Directors and Officers as a group (2 persons)        | 12,812,500                     | 93.18%           | 85.41%
|                |                                                          |                                |                  |       



Footnotes:



|(1) | The address of officers and directors in the table is c/o Expert Systems, Inc., 6900 E. Princess Drive #2176,
|--- | -------------------------------------------------------------------------------------------------------------
|    | Phoenix, AZ 85054                                                                                            
|    |                                                                                                              



Change in Control



No arrangements exist that may result in a change of control of Expert Systems, Inc.



ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS



In July 2002, ESI issued 5,000,000 shares of $0.001 par value common stock to Brandon Winton, an officer and director, in exchange for services performed valued at $5,000.



In December 2003, we issued 5,000,000 shares of our common stock to William Griffin, an officer and director, for services rendered in the amount of $5,000. Subsequently, in November 2004, 4,875,000 of these shares were cancelled by us, resulting in Mr. Griffin holding the remaining 125,000 shares of common stock.



ESI uses office space and services provided without charge by Brandon Winton, a director and shareholder.





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ITEM 13. EXHIBITS



|Exhibit Number | Name and/or Identification of Exhibit                                                                                                                                 
|-------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |                                                                                                                                                                       
|3              | Articles of Incorporation & By-Laws                                                                                                                                   
|               | a. Articles of Incorporation filed on April 16, 2002, incorporated by reference to the Registration Statement on Form SB-2, as amended, previously filed with the SEC.
|               | b. Bylaws adopted on July 8, 2002, incorporated by reference to the Registration Statement on Form SB-2, as amended, previously filed with the SEC.                   
|               |                                                                                                                                                                       
|10             | License Agreement with Swing Plane Enterprises, LLC, incorporated by reference to the Registration Statement on Form SB-2, as amended, previously filed with the SEC. 
|               |                                                                                                                                                                       
|31             | Rule 13a-14(a)/15d-14(a) Certifications                                                                                                                               
|               | a. Brand Winton                                                                                                                                                       
|               | b. William Brent Griffin                                                                                                                                              
|               |                                                                                                                                                                       
|32             | Certification under Section 906 of the Sarbanes-Oxley Act (18 U.S.C. Section 1350)                                                                                    
|               | a. Brand Winton                                                                                                                                                       
|               | b. William Brent Griffin                                                                                                                                              



ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES



The following table sets forth fees billed to us by our independent auditors for the year ended December 31, 2005 and December 31, 2004 for (i) services rendered for the audit of our annual financial statements and the review of our quarterly financial statements, (ii) services rendered that are reasonably related to the performance of the audit or review of our financial statements that are not reported as Audit Fees, and (iii) services rendered in connection with tax preparation, compliance, advice and assistance.



|SERVICES           | 2005         | 2004        
|------------------ | ------------ | ------------
|                   |              |             
|Audit fees         | $  4,166.00  | $  2,950.00 
|Audit-related fees | $     303.75 | $     303.75
|Tax fees           | $     250.00 | $     250.00
|All other fees     | $  798.00    | $  1,157.76 
|                   |              |             
|Total fees         | $  5,517.75  | $  4,661.51 





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SIGNATURES



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



|Expert Systems, Inc.    
|------------------------
|                        
|Signature               
|                        
|/s/ Brandon Winton      
|Brandon Winton          
|                        
|/s/William Brent Griffin
|William Brent Griffin   
|                        



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.



|Expert Systems, Inc.    
|------------------------
|                        
|Signature               
|                        
|/s/ Brandon Winton      
|Brandon Winton          
|                        
|/s/William Brent Griffin
|William Brent Griffin   
|                        













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