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CURRENT REPORT FOR ISSUERS SUBJECT TO THE

1934 ACT REPORTING REQUIREMENTS



FORM 10-KSB



SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549





Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act



For the Fiscal Year Ended December 31, 2005



S.E. ASIA TRADING COMPANY, INC.

(Exact name of registrant as specified in its charter)



| |  |  | Nevada                                         | 333-118898               | 20-0507518                       
| |  |  | ---------------------------------------------- | ------------------------ | ---------------------------------
| |  |  | (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.)





1545 E. Interstate 30, Rockwall, Texas 75087

(Address of principal executive offices (zip code))



972-722-3300

(Registrants telephone number, including area code)











Securities registered pursuant to Section 12(b) of the Act:  NONE

Securities registered pursuant to Section 12(g) of the Act:  NONE



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Act of 1934 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 requirement for the past 90 days.

|[X] YES | [  ] NO
|------- | -------



Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934.

|[X] YES | [  ] NO
|------- | -------



Aggregate market value of the voting stock held by non-affiliates of the registrant as of December 31, 2005:  $416,560



Shares of common stock outstanding at December 31, 2005:  6,441,400









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PART I.



ITEM 1.

DESCRIPTION OF BUSINESS



We were incorporated on January 28, 2004 in the State of Nevada as S.E. Asia Trading Company, Inc.  to sell jewelry and home accessories. We purchase jewelry directly from wholesalers in Thailand, thus cutting out some middlemen in the import of jewelry and we purchase home accessories from local importers and distributors. We opened our store in February 2004.



Sales in 2005 were $134,347, compared to sales in 2004 of $33,382.  We sell imported jewelry such as rings, toe rings, necklaces, bracelets, hair ties and bands, and other costume jewelry. Jewelry items are imported from both China and Thailand. In addition to the lower priced costume styled jewelry, we also sell Sterling silver items, 24 carat gold plated items, pearls, and semi-precious stones. Home accessory items are imported solely from China and include clocks, lamps, hutches, accent pieces, and mirrors. All framed art for sale are produced and obtained locally.



We are an independent retailer of home accessories, framed art and jewelry. Our product offerings include:



Product

Manufacturing origin

Jewelry

Thailand

Home accessories

Domestic and Imported from China

Framed art

Local Texas wholesaler



We provide our customers with a wide selection of home accessories, jewelry and framed art. Our store is in a 3,000 square foot building in Rockwall, Texas.  The stores convenient location and size, the low price of key product categories, and the quality of our products create an advantage over our competitors. We have approximately $70,000 of inventory on hand.



Business Strategy



We serve a target customer in the middle to upper-middle income ranges. We target these customers by focusing on what we believe to be the key elements of retailing: convenient and appealing stores, merchandise value and selection, advertising, and customer service. We intend to expand into new markets and strengthen our position in our current market areas utilizing existing and planned distribution infrastructure.



We hope that expansion will occur primarily within our present geographic market area and will be focused in small to medium sized bedroom communities surrounding the Dallas/Ft. Worth Metroplex SMSA. We may, in the future, expand into the urban markets of Dallas and Ft. Worth if we deem there to be sufficient profit potential.











Principal Products or Services and Their Markets:



We offer a broad and competitive range of jewelry, home accessories, and framed art. We seek to meet the home merchandise needs of our immediate market area by offering a wide variety of quality merchandise and a more attractive price-to-value relationship than comparable home accessory and jewelry stores. This is achieved by:

---





1.

Wide variety of imported home accessories such as rugs, lamps, occasional tables, decorative trunks, and the like.

2.

Wide variety of imported jewelry.

3.

Wide variety of high-end quality framed art.

4.

Competitive pricing:  Due to our direct relationship with overseas manufacturers, markups are generally less than in those stores that buy through brokers and import agents.  This enables us to offer more aggressive pricing on comparable quality merchandise.

5.

Convenient shopper-friendly environment: We are located in a well-traveled area in close proximity to a major Intestate with ample parking.



Merchandising and Marketing:



We created a distinctive niche for ourselves by offering a wide variety of quality imported merchandise. We believe that our knowledge of our regional and local customer preferences enables us to compete effectively in our region.



Marketing activities have been restricted by cash flow and funds from our offering and as

such have been limited to building signage and word of mouth advertising. As noted in Note 1 to the financial statements, we have incurred $48,217 and $38,034 in advertising/promotion for 2005 and 2004 respectively. Going forward, through the proceeds of this offering, we intend to increase marketing activities through printed circulars, newspapers, trade magazines and local television and radio commercial spots.



Purchasing:



Our President directs and coordinates our buying activities.  Buying activities are facilitated by visits to Southeast Asia for sterling jewelry and local suppliers for home accessories and framed art. We anticipate more visits to these suppliers in the future to supplement our inventory.



Highly Competitive Pricing Strategy:



We engage in a highly competitive pricing strategy that enables us to offer high quality home accessories, jewelry and framed art at attractive prices. We can offer aggressive pricing and maintain acceptable profit margins since we buy directly from the manufacturer in the case of jewelry and home accessories, thereby eliminating middlemen, which tend to increase retail prices. In addition, we have been able to purchase our framed art inventory at below wholesale prices through bulk buying.



Competition:



The retail sale of home accessories, jewelry and framed art is a highly fragmented and competitive business. We believe that the primary elements of competition in our industry are merchandise (quality, style, selection, price and display), consumer credit offers, customer service, image and product oriented advertising and store location and design. The degree and source of competition vary by geographic area. We compete with numerous individual retail stores as well as chains and the better department stores. Department stores benefit competitively from more established name recognition in specific markets, a larger customer base due to their non-furnishings product lines and proprietary credit cards. Furniture manufacturers have also

---

accelerated the opening of their own dedicated retail stores in an effort to control and protect the distribution prospects of their merchandise.



Employees



At December 31, 2005, we had 1 full time employee.



Our employee is not represented by a labor union and we consider our relationships with him to be good.







ITEM 2.

DESCRIPTION OF PROPERTY



We rent a 3,000 square foot facility on a three year lease at the rate of $1,500 per month from a company controlled by a shareholder. The facility is located at 1545 East Interstate 30, Rockwall, Texas 75087.  The lease expires in July 2007.





ITEM  3.

LEGAL PROCEEDINGS



We are not involved in any legal proceedings.



ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS



On December 23, 2005, a majority of our shareholders (77.21%) consented, via written consent in lieu of a meeting, to allow our Board, in its sole discretion, to effect a forward or reverse stock split of our common stock based upon a ratio of up to 40:1 or 1:40; and, to change our corporate name if it becomes in the Companys best interest to do so.



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PART II



ITEM 5.

MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS



FISCAL 2005

HIGH

LOW

Quarter ended March 31, 2004

n/a

n/a

Quarter ended June 30, 2004

n/a

n/a

Quarter ended September 30, 2004

n/a

n/a

Quarter ended December 31, 2004

n/a

n/a

Quarter ended March 31, 2005

n/a

n/a

Quarter ended June 30, 2005

$0.40

$0.40

Quarter ended August 31, 2005

$0.40

$0.40



Shareholders



As of December 31, 2005, there were approximately 100 record holders of the Common Stock. This number excludes any estimate by us of the number of beneficial owners of shares held in street name, the accuracy of which cannot be guaranteed.



Dividends



We have not paid cash dividends on any class of common equity since formation and we do not anticipate paying any dividends on our outstanding Common Stock in the foreseeable future.



Warrants



We do not have any warrants outstanding.





Recent Sales of Unregistered Securities



On October 17, 2005, we entered into a consulting agreement with Tripoint Capital Advisors, LLC, a business consultant, in order to assist us in our business development, with the structuring of capital transactions, to provide mergers and acquisition support services, and corporate compliance support.  As consideration for their services under the agreement, we agreed to issue Tripoint 144,000 shares of our common stock.  We recorded an expense of $72,000 based on the IPO stock price of $.50 per share.  The shares were issued pursuant to the exemption from registration provided by Section 4(2) of the Securities Act for issuances not involving a public offering.















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ITEM 6 .

MANAGEMENT DISCUSSIONS AND ANALYSIS OR PLAN OF OPERATION



Overview



We currently plan to expand to our operations into new markets and strengthen our position in our current market areas utilizing existing and planned distribution infrastructure.  However, because we were unable to generate sufficient funds from our offering and it appears that we may not have sufficient revenue from our operations to finance our expenses, we will be forced to either seek additional financing, which may not be available upon terms acceptable to us, or at all.  If we are unable to raise additional funds, we may be forced to curtail our expansion plans.



We have also begun considering a merger or acquisition with a third party company either in our industry or in another industry.  Our majority shareholder recently approved by written consent our Board of Directors ability to split or reverse split our stock, our ability to change our corporate name and our ability to redomicile to a foreign jurisdiction, if the Board feels, in its discretion, that such changes would be necessary and proper in order to attract a merger candidate or consummate a merger with a third party company upon terms which are favorable to us and our shareholders.  To date, we have had limited discussions with potential merger candidates but have not entered into any formal or informal agreements with any such candidate.



Results for the Period Ended December 31, 2005 compared to December 31, 2004



Revenues for the year ended December 31, 2005 were $134,348 compared to sales for the period ended December 31, 2004 of $33,382.



Cost of goods sold were $61,473 in 2005 compared to $14,703 in 2004, thus giving us a gross profit of $72,875 in 2005 or 54% compared to $18,678 in 2004 or 56%. We expect that over time our gross profit percentage will remain similar as that is a reasonable expectation of our average gross margin.



Total operating expenses for 2005 were $224,139 compared to the prior year of $150,481. Our highest expenses were advertising of $48,217 and $38,034 in 2005 and 2004 respectively, and rent of $18,000 in both years.



In 2005, we also had a one time expense of $72,000 of consulting fees, paid for by the issuance of common stock, to help us raise capital or advise us on recapitalizing the business.



Net loss for 2005 was $154,324 compared to the prior year loss of $150,455.



Liquidity and capital resources



In 2004 the Company filed a Registration statement under Form SB-1 with the U.S. Securities & Exchange Commission which became effective in December 2004, under which we raised $138,423 with offering expenses of $8,562 for a net of $129,861, for the year ended December 31, 2005.  At December 31, 2005 the Company had $677 of cash.



---

SE Asia has an accumulated deficit through December 31, 2005 totaling $304,779, and at December 31, 2005 had negative capital of $12,668. Because of these recurring losses, SE Asia will require additional working capital to develop its business operations.



SE Asia intends to raise additional working capital either through private placements, public offerings and/or bank financing.



There are no assurances that SE Asia will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placement, public offerings and/or bank financing necessary to support SE Asia's working capital requirements.  To the extent that funds generated from any private placements, public offerings and/or bank financing are insufficient, SE Asia will have to raise additional working capital.  No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to SE Asia.  If adequate working capital is not available SE Asia may not continue its operations.



SE Asia faces many factors in its ability to continue as a going concern, including but not limited to, the low cost of foreign imports, competition from larger and better capitalized stores, and its ability to create traffic to its retail store. To date, much of SE Asias activities have been focused on advertising and promotion to create its identity in the community, and its continued existence is dependent upon the public purchasing more goods, particularly in the higher priced items.



If SE Asia was unable to continue to purchase low cost foreign imported goods it could cause their margins to decrease or even for them to lose sales. Competition from larger and better capitalized stores could cause sales to be diverted from SE Asia to the competition because of their greater resources for advertising promotion and price cutting.



Should the above concerns materialize, it is conceivable that SE Asia would have to suspend or discontinue operations.



Management believes that the low cost of foreign imports will continue for the foreseeable future even under domestic economic and political pressure.



These conditions raise substantial doubt about SE Asia's ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might be necessary should SE Asia be unable to continue as a going concern.





ITEM 7.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA



Our financial statements, together with the independent auditors' report thereon of Lopez, Blevins, Bork & Associates, LLP appear on pages F-1 through F-7 of this report.





ITEM 8.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANICAL DISCLOSURES



None.





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ITEM 8A.

CONTROLS AND PROCEDURES



|(a) | Evaluation of disclosure controls and procedures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | We maintain controls and procedures designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.  Based up on their evaluation of those controls and procedures performed within 90 days of the filings date of this report, our chief executive officer and the principal financial officer concluded that our disclosure controls and procedures were adequate.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|(b) | Changes in internal controls                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation of those controls by the chief executive officer and principal financial officer.                                                                                                                                                                                                                                                                                                                                             









































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PART III.



ITEM 9.

DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT



As of December 31, 2005, the following persons serve as our directors and officers.



Thomas G. Miller

Chief Executive Officer, President, Chief Financial Officer and Director



Thomas G. Miller is our Chief Executive Officer, Chief Financial Officer and sole Director. Mr. Miller graduated from Lees Summit High School in 1967 and attended Kansas City School of Preaching from 1972 to 1974. He worked in commercial construction until 1998 when he became the Associate Pastor of Lakeshore Church where he served until 2002. In 2003, he was the managing director of Equally Yoked Christian Singles, a dating service in Dallas, Texas. In January 2004, he became president of S. E. Asia Trading Company, Inc. where he works full time.



Compliance with Section 16(a) of the Exchange Act



Section 16(a) of the Exchange Act requires our officers, directors and persons who own more than 10% of any class of our securities registered under Section 12(g) of the Exchange Act to file reports of ownership and changes in ownership with the SEC. Officers, directors and greater than 10% stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.



Based on our review of copies of such reports, we believe that there was compliance with all

filing requirements of Section 16(a) applicable to our officers, directors and 10% stockholders during fiscal 2005.



Code of Ethics



We have always encouraged our employees, including officers and directors to conduct business in an honest and ethical manner.  Additionally, it has always been our policy to comply with all applicable laws and provide accurate and timely disclosure.  Although we do not have a formal written code of ethics, due to our lack of operations and the fact that we only have one employee, we intend to adopt a formal written code of ethics for our executive officers, directors and employees once our staff increases.



Our codes of ethics will be designed to deter wrongdoing and promote honest and ethical conduct and compliance with applicable laws and regulations.  The codes will also incorporate our expectations of our executives that will enable us to provide accurate and timely disclosure in our filings with the Securities and Exchange Commission and other public communications.  Once we our codes of ethics are complete, we will file them with the Commission.





ITEM 10.

EXECUTIVE COMPENSATION



Our executive officer received $23,290 in 2004 and $25,410 in 2005.

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ITEM 11.

SECURITY OWNERSHIP OF MANAGEMENT AND BENEFICIAL OWNERS





As of December 31, 2005, the following persons are known to us to own 5% or more of our voting stock:

:



AMOUNT

PERCENT

Name and Address                    BENEFICIALLY OWNED*            
OF CLASS





Thomas G. Miller                                5,000,000

77.62%

1545 E. Interstate 30

Rockwall, Texas 75087

___________________________________________________________________________

All directors and officers                      5,000,000

77.62%

as a group (1 persons)



Thomas G. Miller                                5,000,000

77.62%

1545 E. Interstate 30

Rockwall, Texas 75087



Gary V. Pilant

500,000

7.94%

1806 Cottonwood Valley Circle S

Irving, Texas 75039



Lynn Management, LLC**

400,000

6.35%

709-B West Rusk #580

Rockwall, Texas 75087

___________________________________________________________________________

All 5% or more shareholders               5,900,000

91.91%

as a group (3 persons)





*    Unless otherwise indicated such person is the sole beneficial owner of

the shares set forth opposite his name.



**

Beneficially owned by Charles Smith







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ITEM 12.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTION



We entered into an Amended and Restated Revolving Credit Arrangement on January 28, 2004 with Southeast Asia Trading Company, LLC, and Lynn Management, LLC, the Lender.  As of January 28, 2004, we, along with Southeast Asia Trading Company, LLC had already received $96,820.85 and owed accrued interest of $2,384.52 for a total of $99,105.37. However, we sought to increase the revolving credit arrangement to $120,000 for additional working capital.  Collateral for the loan includes all of our assets and business interests, as well as all of our common stock that Thomas G. Miller, our Chief Executive and Financial Officer owns, which is approximately 5,000,000 shares.  The loan has an interest rate of 5% per annum, compounded monthly and is due on April 1, 2006.   Upon the occurrence of an event of default, Lender may attach and apply any profits accrued by us, to cure the default or to apply on account of any indebtedness under the Revolving Credit Arrangement due and owing.  At December 31, 2005, the balance owing on the Revolving Credit Arrangement was $60,826 and owed accrued interest of $4,963.





ITEM 13.

EXHIBITS, FINANICAL STATEMENTS AND REPORTS ON FORM 8-K



(a) The following documents are filed as part of this report:  Included in Part II, Item 7 of this report:



Report of Independent Public Accountant



Balance Sheet as of December 31, 2005



Statement of Operations - Year ended December 31, 2005 and Period from Inception to December 31, 2004



Statement of Stockholders Equity - Period from Inception to December 31, 2005



Statement of Cash Flows - Year ended December 31, 2005 and Period from Inception to December 31, 2004



Notes to Financial Statements





(b) The company filed the following Form 8-Ks in 2005.



None.





(c)

Exhibits



31

Certification



32

Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002  CEO and CFO





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ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES



(1) AUDIT FEES

The aggregate fees billed for professional services rendered by our auditors, for the audit of the registrant's annual financial statements and review of the financial statements included in the registrant's Form 10-KSB or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for fiscal year 2005 was $16,500.





(2) AUDIT-RELATED FEES



NONE



(3) TAX FEES



NONE



(4) ALL OTHER FEES



NONE



(5) AUDIT COMMITTEE POLICIES AND PROCEDURES



The Company does not have an audit committee.



(6) If greater than 50 percent, disclose the percentage of hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees.



Not applicable.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Board of Directors

S.E. Asia Trading Company, Inc.

Rockwall, Texas



We have audited the accompanying balance sheet of S.E. Asia Trading Company, Inc. as of December 31, 2005 and the related statements of operations, stockholders equity, and cash flows for the year ended December 31, 2005 and the period from January 28, 2004 (Inception) through December 31, 2004. These financial statements are the responsibility of S.E. Asia Trading Companys management. Our responsibility is to express an opinion on these financial statements based on our audits.



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



In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of S.E. Asia Trading Company, Inc. as of December 31, 2005 and the results of its operations and its cash flows for the year ended December 31, 2005 and the period from January 28, 2004 (Inception) through December 31, 2004, in conformity with accounting principles generally accepted in the United States of America.



The accompanying financial statements have been prepared assuming that S.E. Asia Trading Company, Inc. will continue as a going concern.  As discussed in Note 2 to the financial statements, S.E. Asia Trading Company, Inc has an accumulated deficit through December 31, 2005 totaling $304,779 and has a working capital of deficit of $12,668 as of December 31, 2005.  S.E. Asia Trading Company, Inc. will require additional working capital to develop its business until it either (1) achieves a level of revenues adequate to generate sufficient cash flows from operations; or (2) obtains additional financing necessary to support its working capital requirements.  These conditions raise substantial doubt about S.E. Asia Trading Company, Inc.s ability to continue as a going concern.  Management's plans in regard to this matter are also described in Note 2.  The accompanying financial statements do not include any adjustments that might result from the outcome of these uncertainties.



/s/  Lopez, Blevins, Bork & Associates, LLP

Lopez, Blevins, Bork & Associates, LLP

Houston, Texas



March 1, 2006







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S.E. ASIA TRADING COMPANY, INC.

BALANCE SHEET

December 31, 2005



|ASSETS                                                                                               |          
|---------------------------------------------------------------------------------------------------- | ---------
|Current assets:                                                                                      |          
|Cash                                                                                                 | $
677    
|Accounts receivable, net of allowance for doubtful accounts of $0                                    | 1,522    
|Inventory, net of $3,500 reserve for obsolescence                                                    | 66,070   
|Total current assets                                                                                 | 68,269   
|                                                                                                     |          
|Property and equipment, net                                                                          | 14,772   
|                                                                                                     |          
|Deposits                                                                                             | 2,255    
|                                                                                                     |          
|                                                                                                     | $
85,296 
|                                                                                                     |          
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                 |          
|                                                                                                     |          
|Current liabilities:                                                                                 |          
|Accounts payable  third parties                                                                     | $
5,906  
|Accounts payable  related party                                                                     | 362      
|Accrued expenses                                                                                     | 8,880    
|Line of credit  related party                                                                       | 65,789   
|Total current liabilities                                                                            | 80,937   
|                                                                                                     |          
|COMMITMENTS                                                                                          |          
|                                                                                                     |          
|STOCKHOLDERS EQUITY:                                                                                |          
|Common stock, $.001 par value, 50,000,000 shares authorized,
6,441,400 shares issued and outstanding | 6,441    
|Additional paid in capital                                                                           | 302,697  
|Accumulated deficit                                                                                  | (304,779)
|Total stockholders equity                                                                           | 4,359    
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                                                           | $
85,296 



























See Accompanying Notes to Financial Statements

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S.E. ASIA TRADING COMPANY, INC.

STATEMENTS OF OPERATIONS

Year ended December 31, 2005 and

Period from Inception (January 28, 2004) to December 31, 2004



|                                      |  | 2005                   |  | Period from Inception to Dec 31, 2004
|------------------------------------- |  | ---------------------- |  | -------------------------------------
|                                      |  |                        |  |                                      
|Revenue                               |  | $
134,348              |  | $
33,382                             
|Cost of sales                         |  | 61,473                 |  | 14,703                               
|Gross profit                          |  | 72,875                 |  | 18,679                               
|                                      |  |                        |  |                                      
|Operating expenses                    |  | 224,139                |  | 150,481                              
|                                      |  |                        |  |                                      
|                                      |  |                        |  |                                      
|Loss from operations                  |  | (151,264)              |  | (131,802)                            
|                                      |  |                        |  |                                      
|Other expense                         |  |                        |  |                                      
|Interest expense                      |  | (3,060)                |  | (5,402)                              
|Loss on sale of marketable securities |  | -                      |  | (15,251)                             
|Total other expense                   |  | (3,060)                |  | (18,653)                             
|                                      |  |                        |  |                                      
|Net loss                              |  | $
(154,324)            |  | $
(150,455)                          
|                                      |  |                        |  |                                      
|Net loss per share:                   |  |                        |  |                                      
|Basic and diluted                     |  | $               (0.02) |  | $               (0.03)               
|                                      |  |                        |  |                                      
|Weighted average shares outstanding:  |  |                        |  |                                      
|Basic and diluted                     |  | 6,248,213              |  | 5,993,077                            



































See Accompanying Notes to Financial Statements

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S.E. ASIA TRADING COMPANY, INC.

STATEMENT OF STOCKHOLDERS EQUITY

Period from Inception (January 28, 2004) to December 31, 2005



|                                                    | Common stock |  | Additional
paid in capital |  | Accumulated deficit |  | Total      
|--------------------------------------------------- | ------------ |  | -------------------------- |  | ------------------- |  | -----------
|                                                    | Shares       |  | Amount                     | 
|Sold stock for cash and services         to founder | 5,000,000    |  | $
5,000                    |  | $
0                 |  | $
0        
|                                                    |              |  |                            |  |                     |  |            
|Common stock issued for:                            |              |  |                            |  |                     |  |            
|Cash                                                | 400,000      |  | 400                        |  | 19,600              |  |            
|Marketable securities                               | 620,000      |  | 620                        |  | 81,380              |  |            
|Net loss                                            | -            |  | -                          |  | -                   |  | (150,455)  
|Balance,
December 31, 2004                          | 6,020,000    |  | 6,020                      |  | 100,980             |  | (150,455)  
|                                                    |              |  |                            |  |                     |  |            
|Common stock issued for:                            |              |  |                            |  |                     |  |            
|Cash                                                | 277,400      |  | 277                        |  | 138,423             |  |            
|Less offering costs                                 |              |  |                            |  | (8,562)             |  |            
|Services                                            | 144,000      |  | 144                        |  | 71,856              |  |            
|Net loss                                            | -            |  | -                          |  | -                   |  | (154,324)  
|Balance,
December 31, 2005                          | 6,441,400    |  | $
6,441                    |  | $
302,697           |  | $
(304,779)





































See Accompanying Notes to Financial Statements

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S.E. ASIA TRADING COMPANY, INC.

STATEMENTS OF CASH FLOWS

Year ended December 31, 2005 and

Period from Inception (January 28, 2004) to December 31, 2004



|                                                                        | 2005                   |  | Period from Inception to Dec 31, 2004
|----------------------------------------------------------------------- | ---------------------- |  | -------------------------------------
|Cash flows from operating activities:                                   |                        |  |                                      
|Net loss                                                                | $
(154,324)            |  | $
(150,455)                          
|Adjustments to reconcile net loss to cash
used in operating activities: |                        |  |                                      
|Depreciation                                                            | 3,866                  |  | 3,078                                
|Inventory obsolescence expense                                          | 3,500                  |  | -                                    
|Common stock issued for services                                        | 72,000                 |  | 4,500                                
|Loss on sale of marketable securities                                   | -                      |  | 15,251                               
|Changes in assets and liabilities:                                      |                        |  |                                      
|Accounts receivable                                                     | (1,522)                |  | -                                    
|Inventory                                                               | (13,018)               |  | (64,552)                             
|Deposits                                                                | 1,762                  |  | (4,017)                              
|Accounts payable                                                        | 4,768                  |  | 1,500                                
|Accrued expenses                                                        | (3,964)                |  | 12,844                               
|Net cash used in operating activities                                   | (86,932)               |  | (181,851)                            
|                                                                        |                        |  |                                      
|Cash flows from investing activities:                                   |                        |  |                                      
|Capital expenditures                                                    | -                      |  | (21,716)                             
|Proceeds from sale of marketable securities                             | -                      |  | 66,749                               
|Net cash provided by investing activities                               | -                      |  | 45,033                               
|                                                                        |                        |  |                                      
|Cash flows from financing activities:                                   |                        |  |                                      
|Stock issued for cash, net of offering expenses                         | 130,138                |  | 20,500                               
|Line of credit, related party, net proceeds (repayments)                | (44,142)               |  | 117,931                              
|Net cash provided by financing activities                               | 85,996                 |  | 138,431                              
|                                                                        |                        |  |                                      
|Net increase (decrease) in cash                                         | $
(936)                |  | $
1,613                              
|Cash, beginning of period                                               | 1,613                  |  | -                                    
|Cash, end of period                                                     | $
677                  |  | $
1,613                              
|                                                                        |                        |  |                                      
|Supplemental disclosures:                                               |                        |  |                                      
|Income taxes paid                                                       | $
-                    |  | $
-                                  
|Interest paid                                                           | $
-                    |  | $
1,000                              
|                                                                        |                        |  |                                      
|Non-cash disclosures:                                                   |                        |  |                                      
|Common stock issued for marketable securities                           | $
-                    |  | $
82,000                             
|Inventory exchanged for reduction in line of credit                     | $                    - |  | $
8,000                              



See Accompanying Notes to Financial Statements

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S.E. ASIA TRADING COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS

December 31, 2005



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



BUSINESS AND BASIS OF PRESENTATION



The Company



S.E. Asia Trading Company, Inc. (SE Asia) was incorporated on January 28, 2004 under the laws of the State of Nevada.  SE Asia operates as a retailer of jewelry, framed art and home accessories.  The company is located in Rockwall, Texas.





Basis of Accounting



SE Asia maintains its accounts on the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America.



Net loss per share



Basic net loss per share excludes dilution and is computed by dividing net loss by the weighted average number of common shares outstanding for the period presented. Diluted net loss per common share was the same as basic net loss per common share for the period presented since the Company has no potentially dilutive securities and because of the Companys net loss.



Expense/ Revenue classification



The Company accounts for its shipping and handling costs in accordance with EITF 00-10, Accounting for Shipping and Handling Fees and Cost,  resulting in all payments for amounts paid to the company by customers for shipping and handling will be included under the heading: Revenue. Items classified as cost of goods sold include duty and import fees and inbound freight. These amounts are not significant. All other costs, including advertising and promotion, are categorized as general and administrative costs.



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 at the date of the balance sheet.  Actual results could differ from those estimates.



Revenue Recognition



SE Asia recognizes revenue on point of sale or upon shipment. Our return policy on jewelry is to replace only defective merchandise and give in store credit only. On all other items, there is a policy of no returns, all sales are final; therefore we have not recorded a reserve for returns.

---



Allowance for Doubtful Accounts



Earnings are charged with a provision for doubtful accounts based on a current review of collectibility of accounts receivable.  Accounts deemed uncollectible are applied against the allowance for doubtful accounts.  The majority of SE Asias sales are cash on point of sale.



Cash



SE Asia considers all highly liquid investments with a maturity of three months or less to be cash equivalents.



Inventory



Inventory consists of finished goods and is stated at the lower of cost or market, with cost being determined on a specific identification basis.



Marketable Securities



Investments in the stock of public companies are classified as available-for-sale and are adjusted to their fair market value with unrealized gains and losses, net of tax, recorded as a component of accumulated other comprehensive income.  Upon disposition of these investments, the specific identification method is used to determine the cost basis in computing realized gains or losses, which are reported in other income and expense.  Declines in value that are judged to be other than temporary are reported in other income and expense.



Property and Equipment



Property and equipment are stated at cost less accumulated depreciation.  Major renewals and improvements are capitalized; minor replacements, maintenance and repairs are charged to current operations.  Depreciation is computed by applying the straight-line method over the estimated useful lives which are generally five to seven years.



Income Taxes



Income taxes are computed using the asset and liability method.  Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws.  A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.



Advertising



Advertising and promotion costs are expensed as incurred.  These expenses were $48,217 and $38,034 for the year ending December 31, 2005 and period ending December 31, 2004, respectively.





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Concentrations of Credit Risk



The Companys financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents. The Company places its cash and cash equivalents with highly-rated financial institutions, limits the amount of credit exposure with any one financial institution and conducts ongoing evaluation of the credit worthiness of the financial institutions with which it does business.





NOTE 2 - FINANCIAL CONDITION AND GOING CONCERN



SE Asia has an accumulated deficit through December 31, 2005 totaling $304,779, and at December 31, 2005 had negative capital of $12,668. Because of these recurring losses, SE Asia will require additional working capital to develop its business operations.



SE Asia intends to raise additional working capital either through private placements, public offerings and/or bank financing.



There are no assurances that SE Asia will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placement, public offerings and/or bank financing necessary to support SE Asia's working capital requirements.  To the extent that funds generated from any private placements, public offerings and/or bank financing are insufficient, SE Asia will have to raise additional working capital.  No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to SE Asia.  If adequate working capital is not available SE Asia may not continue its operations.



SE Asia faces many factors in its ability to continue as a going concern, including but not limited to, the low cost of foreign imports, competition from larger and better capitalized stores, and its ability to create traffic to its retail store. To date, much of SE Asias activities have been focused on advertising and promotion to create its identity in the community, and its continued existence is dependent upon the public purchasing more goods, particularly in the higher priced items.



If SE Asia was unable to continue to purchase low cost foreign imported goods it could cause their margins to decrease or even for them to lose sales. Competition from larger and better capitalized stores could cause sales to be diverted from SE Asia to the competition because of their greater resources for advertising promotion and price cutting.



Should the above concerns materialize, it is conceivable that SE Asia would have to suspend or discontinue operations.



Management believes that the low cost of foreign imports will continue for the foreseeable future even under domestic economic and political pressure.



These conditions raise substantial doubt about SE Asia's ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might be necessary should SE Asia be unable to continue as a going concern.



---

NOTE 3 - PROPERTY AND EQUIPMENT:



Components of property, plant, and equipment, at December 31, 2005 are as follows:



| | Vehicles - trailer             | $ | 4,314  
| | ------------------------------ | - | -------
| | Furniture and fixtures         |   | 4,040  
| | Leasehold improvements         |   | 13,362 
| |                                |   | 21,716 
| | Less: accumulated depreciation |   | (6,944)
| |                                | $ | 14,772 





Depreciation expense totaled $3,866 and $3,078 for the year ended December 31, 2005 and period ended December 31, 2004, respectively.





NOTE 4 - LINE OF CREDIT - RELATED PARTY



SE Asia entered into an agreement for a line of credit with a financing company owned by a shareholder with a maximum borrowing base, as defined, of up to $120,000.  Advances under this line bear interest at the rate of 5.00% which is due monthly. The line of credit matures on April 1, 2006.  The line of credit is secured by all assets owned by SE Asia and the stock owned by the majority shareholder.  The balance outstanding on the note at December 31, 2005 was $65,789. The amount of accrued interest included in the note balance at December 31, 2005 is $4,963. Interest on the note for the year ended December 31, 2005 and the period ended December 31, 2004 was $3,060 and $3,401, respectively.





NOTE 5 - COMMON STOCK



The Company is authorized to issue 50,000,000 common shares of stock at a par value of $0.001 per share. These shares have full voting rights. At December 31, 2005, there were 6,441,400 shares outstanding. The Company has not paid a dividend to its shareholders.



At inception, S.E. Asia issued 5,000,000 shares of stock to its founding shareholder for $500 cash and services valued at $4,500. The services were valued at market value of the services provided by the founder in setting up the company and organizing the business and its plan.



During the period ended December 31, 2004, SE Asia issued 400,000 shares of stock for cash at $20,000, in conjunction with SE Asia obtaining a line of credit.



During the period ended December 31, 2004, SE Asia issued 620,000 shares of stock for marketable securities valued at $82,000.











---

During the period ended December 31, 2005, SE Asia sold 277,400 shares of common stock for $0.50 per share under its Form SB-1 filing with the U.S. Securities & Exchange Commission which became effective December 30, 2004.  The net proceeds received by the Company after offering costs of $8,562 were $130,138.



During the period ended December 31, 2005, SE Asia issued 144,000 shares for services valued at $72,000.





NOTE 6 - INCOME TAXES



For the year ended December 31, 2005 and the period ended December 31, 2004, S.E Asia has incurred net losses and, therefore, has no tax liability.  The net deferred tax asset generated by the loss carry-forward has been fully reserved.  The cumulative net operating loss carry-forward is approximately $305,000 at December 31, 2005, and will expire in the years 2024 through 2025.



The provision for refundable Federal income tax for consists of the following:



|                                               |              |               
|---------------------------------------------- | ------------ | --------------
|                                               |              | January 28,   
|                                               |              | 2004          
|                                               | Year ended   | (inception) to
|                                               | December 31, | December 31,  
|                                               | 2005         | 2004          
|Refundable Federal income tax attributable to: |              |               
|Current operations                             | $(52,300)    | $(51,200)     
|Less, Change in valuation allowance            | 52,300       | 51,200        
|Net refundable amount                          | -            | -             
|                                               |              |               



The cumulative tax effect at the expected rate of 34% of significant items comprising the Companys net deferred tax amounts are as follows:



|                                    |              |               
|----------------------------------- | ------------ | --------------
|                                    |              | January 28,   
|                                    |              | 2004          
|                                    | Year ended   | (inception) to
|                                    | December 31, | December 31,  
|                                    | 2005         | 2004          
|Deferred tax asset attributable to: |              |               
|Net operating loss carryover        | $(103,500)   | $(51,200)     
|Less, Valuation allowance           | 103,500      | 51,200        
|Net deferred tax asset              | -            | -             
|                                    |              |               















NOTE 7 - COMMITMENTS



SE Asia is renting retail space on a three year lease expiring in July 2007 from a company controlled by a shareholder.  The payments are $1,500 per month.  Total rent expense for the periods ending December 31, 2005 and 2004 is $18,000. The future minimum rental payments are:



| | 2006  | $18,000
| | ----- | -------
| | 2007  | 10,500 
| | Total | $28,500























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SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Annual Report on Form 10-KSB to be signed on its behalf by the undersigned hereunto duly authorized.





S.E. ASIA TRADING COMPANY, INC.











|By: | /s/  Thomas G. Miller                                             
|--- | ------------------------------------------------------------------
|    | Thomas G. Miller
Chief Executive Officer & Chief Financial Officer







---



Exhibit 31

CERTIFICATION



I, Thomas G. Miller, certify that:



1. I have reviewed this annual report on Form 10-KSB of S.E. Asia Trading Company, Inc.



2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;



3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;



4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:



a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;



b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and



c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;



5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):



a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and



b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and



6. The registrant's other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.



Date: March 25, 2006







/s/  Thomas G. Miller



Thomas G. Miller

Chief Executive Officer and Chief Financial Officer









Exhibit 32



CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002





In connection with the Annual Report of S.E. Asia Trading Company, Inc. (the Company) on Form 10-KSB for the period ending December 31, 2005, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Thomas G. Miller, Chief Executive Officer and Chief Financial Officers of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:



(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and



(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.







/s/  Thomas G. Miller



Thomas G. Miller

Chief Executive Officer and Chief Financial Officer

March 25, 2006