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

                                   FORM 10-KSB
(MARK ONE)
 [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934 For the fiscal year ended December 31, 2005     OR

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

                        Commission File Number 000-31291

                                 RPM TECHNOLOGIES, INC.
                      (Name of small business issuer in its charter)

                     Delaware                             36-4391958
               (state or other jurisdiction           (I.R.S. Employer
              Incorporation or Organization)          Identification No.)

         24001 S. Western Avenue, Park Forest, Illinois        60466
          (Address of principal of Executive Offices)        (Zip Code)

                       Issuer's telephone number: (708) 668-7400

         Securities registered under Section 12(b) of the Exchange Act:
          Title of each class      Name of each exchange on which registered
                None                                   None

            Securities registered under Section 12(g) of the Exchange Act:
                           Common Stock, no par value
                                (Title of Class)
                              _____________________

Check whether the issuer is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act. Yes [   ]  No [ X ]

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

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B 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 a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [   ]  No [ X ]

The issuer's revenue for the twelve months ended December 31, 2005 was
$2,862,253.

The aggregate market value of the voting common equity held by non-affiliates
of the registrant computed by reference to the closing sale price of the common
equity on April 10, 2006 was approximately $4.0 million. The registrant has no
outstanding non-voting common equity.

As of April 10, 2006, the number of shares outstanding of the registrant's only
class of common stock was 28,596,070.

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

DOCUMENTS INCORPORATED BY REFERENCE: None.
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                             PART I
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

    This report contains forward-looking statements, including among others:

    o   our product development activities;
    o   our business strategy for establishing a presence in the pallet market;
    o   anticipated trends in our financial condition and results of
        operations; and
    o   our ability to distinguish ourselves from our current and future
        competitors.

    You can identify forward-looking statements generally by the use of
forward-looking terminology such as "believes," "expects,"  "may," "will,"
"intends," "plans," "should," "could," "seeks," "pro forma," "anticipates,"
"estimates," "continues," or other variations thereof, including their use in
the negative, or by discussions of strategies, opportunities, plans or
intentions. You may find these forward-looking statements under the captions
"Risk Factors," "Management's Discussion and Analysis or Plan of Operation,"
and "Description of Business," as well as captions elsewhere in this report. A
number of factors could cause results to differ materially from those
anticipated by forward-looking statements, including those discussed under
"Risk Factors" and "Description of Business."

    These forward-looking statements necessarily depend upon assumptions  and
estimates that may prove to be incorrect.  Although we believe that the
assumptions and estimates reflected in the forward-looking statements are
reasonable, we cannot guarantee that we will achieve our plans, intentions or
expectations. The forward-looking statements involve known and  unknown risks,
uncertainties and other factors that may cause actual results to differ in
significant ways from any future results expressed or implied by the forward-
looking statements.

ITEM 1.  DESCRIPTION OF BUSINESS.

Overview

    We were incorporated in Delaware on April 10, 1996 under the name Mann
Enterprise, Inc. On March 17, 2000, Mann Enterprise acquired RPM Technologies,
Inc., a Colorado corporation ("RPM Colorado"), in a stock- for-stock exchange
transaction. RPM Colorado had been engaged in the business of developing,
producing and marketing plastic pallets since its inception in December 1997.
On April 17, 2000, RPM Colorado was merged with and into Mann Enterprise.
Immediately following the merger, Mann Enterprise changed its name to RPM
Technologies, Inc.

    We are engaged in the business of developing, producing through subcontract
manufacturers, marketing and selling plastic pallets and other material-
handling products throughout the United States, Canada and South America. We
subcontract the manufacture of our plastic pallets to large injection,
extrusion and compression molders on a competitive bid basis. These
manufacturers are selected on the basis of their equipment and manufacturing
capabilities. We supply them with the molds and resins that we have developed
for specific product applications.

    At our direction, these manufacturers utilize a proprietary processing
system to produce strong, durable and cost-effective plastic pallets. Our
pallets are made from recycled plastic and overcome many of the drawbacks
associated with wood pallets, such as limited durability, heaviness, the
causing of injuries by splintered wood and nails, and environmental issues.

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    The demand for and sales of our plastic pallet products is increasing. As
of the date of this report, we have received orders from and delivered product
to customers that include Toyota, Goodyear, Dow Chemical, Exxon- Mobil, the
United States Department of Defense, the National Guard, the United States
Department of Forestry, Wm. Wrigley Jr. Company, Kraft, Sara Lee, Armstrong
World, Smurfit-Stone, General Dynamics, Black & Decker, Fuji Film, Baxter
Laboratories, Romer, Pollack Paper, Lee Carpet, Bechtel Power, Organic Valley,
Transgeonomic, Numatech Industries, Unisea, Leader Manufacturing, Cyber Power
Systems, Rockwell International, North American, Biokyowa, Georgia Pacific and
others. We have also received product sales inquiries from potential customers
located in Canada, Europe and the Middle East.

    We continue to promote our line of material-handling products through
internet marketing and promotion with numerous different optimized websites,
each directed to a specific market segment. These websites include:
www.rpmplasticpallets.com, www.rpmtechnologiesinc.com, www.pallet- container-
quotes.com, www.shelving-quotes.com, www.locker-quotes.com, www.pallet-rack-
stack-racks.com, www.plastic-pallets-usa.biz, www.plastic- pallets.com,
www.plastic-pallets.org, www.plastic-pallets-use.info and www.plastic-pallets-
usa.ws. In the future we may add new variations of the suffixes, "usa," "us,"
"com," "biz," "org," "net," "info," "us" and "ws."

    We continue to add sales volume in the custom plastic pallet market. As
funds are available, we plan to introduce new mold designs, purchase new molds,
install new grinding equipment and add other molds. These enhancements are
expected to reduce costs and increase operating efficiency. Custom-size plastic
pallet sales have increased principally among exporters that previously used
wood pallets but are now switching to alternative materials due to wood
treatment requirements, which are specified in International Standard for
Phytosanitary Measures, or ISPM, number 15.

    ISPMs are prepared by the Secretariat of the International Plant Protection
Convention, or IPPC, as part of the United Nations Food and Agriculture
Organization, or FAO, global program of policy and technical assistance in
plant quarantine.  The IPPC is an international treaty relating to plant health
to which approximately 124 governments currently adhere.  ISPM 15, which was
adopted in March 2002, describes measures to reduce the risk of introduction
and/or spread of pests associated with wood packaging material. ISPM 15
requires wood packaging, including wood pallets, made from raw wood to be heat
treated or fumigated in a specified manner.  Many nations, including the United
States, Canada, Mexico, New Zealand, Korea, China, and European Union
countries, have already imposed requirements adopting the ISPM 15 standard.

    We believe we have developed a breakthrough in the technology and
production of a non-slip custom plastic pallet and we further believe that we
are the first to bring such a product to the market. This pallet features a
unique surface technology designed to virtually eliminate sliding or shifting
during transport of goods placed on the pallet. These pallets are offered in
two popular sizes: 48" x 48" and 40" x 48".

Industry Overview

    Pallets are used in virtually all industries in which products are broadly
distributed, including, but not limited to, the automotive, chemical, consumer
products, grocery, produce and food production, paper and forest products,
retail, and steel and metals industries. Forklifts, pallet trucks and pallet
jacks are used to move loaded pallets, reducing the need for costly hand
loading and unloading at distribution centers and warehouses.

    The size of the pallet industry is difficult to gauge due to the large
number of small companies in the industry and the lack of standard information.
The Wood Pallet Association estimates that the United States wood pallet
industry is served by approximately 3,600 companies, most of which are small,
privately held firms that

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operate in only one location. The Newia Polytechnic and State University Pallet
and Container Research Laboratory has estimated, that approximately 500 million
new pallets are now manufactured in the U.S. each year, of which wood pallets
comprise over 90%.


    The pallet industry has experienced significant change and growth during
the past several years as businesses continue to attempt to improve the
logistical efficiency of their manufacturing and distribution systems. With the
progression of these systems, expedited product movement has become
increasingly important. We believe that the plastic pallet industry will grow
along with the overall pallet industry.

Our Solution

    We develop, produce, market and sell plastic pallets and other material-
handling products throughout the United States, Canada and South America. We
believe that we are strongly positioned in the marketplace because of the
following:

        o   our processing and manufacturing advantages over other plastic
            pallet producers;
        o   our products' advantages over wood pallets; and
        o   the long-term cost advantages of our pallets compared to both wood
            pallets and other plastic pallets.

Processing and Manufacturing Advantages

    We believe that we are capable of providing a lower-priced plastic pallet
than our competitors because:

        o   we subcontract our manufacturing in rural areas where utility costs
            are lower;
        o   we subcontract pallets at a fixed cost;
        o   we specify that our molder use only recycled plastic resins, which
            are considerably less expensive than new resin;
        o   our designs feature lightweight construction, which translates into
            less cost per pallet  because of lower resin content;
        o   our blend of recycled resins and additives contributes to
            predictable and consistent quality of our pallets; and
        o   our state-of-the-art molding equipment improves cycle-time
            efficiency.

    We believe that our manufacturing process provides us with a competitive
advantage because it allows us to accept raw materials in a variety of forms.
Our ability to use raw materials from a variety of sources increases the
likelihood that an abundant supply of low-cost raw materials will continue to
exist. We believe that this makes our manufacturing process more cost-effective
because it enables our subcontract manufacturers to accept raw materials in a
variety of forms, including regrind, post-industrial scrap, post-consumer
plastic, post-institutional recyclable plastic, and off-grade new resin.
Quality control is also assured by an ongoing measurement of resin content,
confirming that each batch conforms to our resin specifications.

    We believe the conversion feature of our nestable pallet also reduces our
costs.  The conversion feature enables our nestable pallet to be easily
transformed into a rackable pallet by the addition of one component. The tops
and bottoms are approximately the same size and are locked into position with a
simple snap-lock appendage creating a rackable pallet. This convertibility
reduces mold costs and facilitates improved production time, thereby increasing
profit margins.

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    Our pallets are based upon proprietary designs that enable molders to
accept and process most high-density plastic materials. A thermoplastic
additive, developed by independent scientists, enables the amalgamation of
chemically incompatible polymers. The additive acts as a catalyst to make
commingled dissimilar polymers compatible, which would normally have little or
no affinity for each other. The additive also reduces melt viscosity and acts
as a wetting agent for inorganic substances. The additive is purchased by our
contract manufacturers, which use the additive in molding the pallets. We have
no legal rights to the additive. Because additives with similar attributes to
the one used by our contract manufacturers are readily available, we believe
that we are not heavily dependent on this particular additive.

    Tests on the thermoplastic additive that we have performed under laboratory
conditions have indicated a marked improvement in bonding. The additives we use
enable polymers to be molded at lower processing temperatures and also serve as
a filler or extender to thermoplastics, thereby lowering the cost of the end
product. We also believe that the additive permits a significant reduction in
raw material and processing costs, while producing an end product that we
believe has superior strength and durability.

    We and our subcontract manufacturers keep abreast of developments in the
additive field and evaluate new additives to determine their effectiveness and
applicability to our manufacturing processes.

    We own six extrusion molds, which are used to manufacture components for
our custom-size plastic pallets. These extrusion molds include plastic runners,
deck-boards and rounds. Management, in conjunction with our consulting
engineers, has identified other markets and applications for these plastic
runners, deck-boards and rounds. While still in the development stage, numerous
non-pallet applications for plastic components appear to be a promising adjunct
to our plastic-parts business.

    We operate a 12,000 square foot resin processing center in Park Forest,
Illinois. This facility is fully equipped with heavy-duty grinding and
processing machinery and equipment. The facility recycles post-industrial and
post-consumer plastic scrap. The majority of reground plastic produced in the
form of high-density polyethylene (HDPE) and polypropylene (PP) flake is
supplied to our contract manufacturers who produce our plastic pallets and
custom plastic lumber. The facility has a capacity of processing approximately
10 million pounds of plastic scrap annually. Resin not used in the manufacture
of our products is sold to other plastic product manufacturers, which defrays
some of our costs to operate the facility and has the potential to generate
additional profits or reduce our losses.

Product Advantages

    We believe that our plastic pallets offer the following advantages over
wood pallets:

        o   lighter weight;
        o   more can fit in a shipping container;
        o   more user friendly and less likely to cause injuries;
        o   more environmentally friendly; and
        o   more sanitary.

    Our nestable pallet is considerably lighter than a wood pallet of
comparable size. For example, our nestable 40" x 48" pallet weighs
approximately 22 pounds, while a wood pallet of similar dimensions weighs
approximately 45 pounds. Because shipping costs are often calculated based on
weight, shippers that use our plastic pallets immediately realize significant
freight and shipping savings.

    Because of the interlocking, nesting feature, more of our nestable pallets
can be shipped in a container or trailer. Wood pallets are typically stacked
one atop the other with no accommodations for nesting.

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    Our plastic pallets are user friendly. In addition to being lightweight,
our plastic pallets are designed and molded to eliminate sharp edges, burrs and
other protuberances that make wood pallets difficult to handle and may result
in worker injuries. Some shippers require that two workmen handle a wood
pallet.  Splintering, gouging, or puncture wounds from nails or sharp edges are
eliminated by utilization of our plastic pallets.

    Additionally, our plastic pallets are environmentally friendly and we
contribute to the nation's recycling efforts. The use of plastic allows us to
recycle older pallets and save on disposal costs. Wood pallets deplete our
forests and present a serious disposal problem for many communities.

    Finally, our plastic pallets are more sanitary than wood pallets.  Wood
pallets have been identified as harboring vermin, bacteria and insects. For
this reason, many countries have passed regulations requiring the costly
treatment of certain wood pallets before they can be exported to these
countries.  Our pallets do not harbor pests and can be used for export to these
countries without extra treatment.  In addition, our pallets resist
contamination and can be easily cleaned. Our pallets are also scuff- resistant
and do not leech, absorb odors or lose color.

Long-Term Cost Advantages

    Sales of plastic pallets have not significantly penetrated the overall
pallet market, due in large part to their cost. Heavy-duty plastic pallets
typically cost between $45.00 and $100.00, whereas new heavy-duty wood pallets
typically cost approximately $20.00 and less sturdy wood pallets typically cost
between $5.00 and $11.00. Based upon results of our surveys of plastic pallet
manufacturers' websites conducted in 2005, we believe that the prices of our
pallets, which range between $15.00 and $39.00, are significantly below the
industry average.

    With an average selling price of $15.00 or less per pallet, depending on
the quantity ordered, our nestable pallet competes directly with grade one wood
pallets and is considerably less expensive than most plastic pallets currently
being produced. This is also true for our rackable pallet. When evaluating
total pallet cost, our plastic pallet initially costs more than wood pallets
but can be used for many more trips. We believe that our pallet is ideal for
closed-loop shipping where a pallet is used for multiple trips before being
discarded. For example, we believe that a grade one wood pallet, which
typically costs about $10.00, is used in approximately seven trips before
disposal, repair or recycling is required. Heavy-duty plastic pallets, as
currently manufactured, have a useful life of approximately 75 trips.  Because
our plastic pallets have a useful life approximately ten times longer than
grade one wood pallets, our plastic pallets offer significantly lower cost per
use.

Our Strategy

    We have strived to develop expertise relating to plastic pallets and
material handling services. Our goal is to become one of the nation's leading
providers of plastic pallets.  Our business strategy to achieve this goal
includes the following elements:

        o   Develop Strategic Relationships. As our business grows, we intend
            to enter into additional arrangements with agents and distributors
            across the country to increase the market awareness of our
            products, while maintaining and building upon solid relationships
            with current and future suppliers, subcontract manufacturers and
            customers.

        o   Continue to outsource manufacturing while gradually establishing an
            internal manufacturing facility.  Our strategic decision to
            outsource the manufacturing of our pallets has assisted us in
            keeping start-up costs to a minimum while we developed our
            products. We plan to continue to outsource the production of our
            pallets until we are prepared to establish our own production
            facility.  As a first step to the establishment of our own
            production facility, we have leased an office building with
            sufficient space to serve as a production facility as well as our
            corporate headquarters. This facility includes grinding equipment
            with which we can grind post-industrial and post-consumer plastic
            products for use in connection with the manufacturing of our
            pallets.  Over time we intend to add presses to our production
            facility that will enable internal production of our pallets.

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        o   Continue to promote our products. In addition to establishing
            further relationships with agents and distributors, we intend to
            extend our marketing activities through direct mail programs, trade
            organizations, trade journals and website promotions, among other
            activities. See "Business - Sales and Marketing."

        o   Emphasize marketing to closed-loop shippers. Due to the durability
            of our pallets, we are ideally situated to target the closed-loop
            shipping market. See "Business-Competition."

        o   Continue to develop new products to meet our customers' needs. We
            are currently working to introduce three new pallets to the market,
            as well as a non-slip pallet that we expect to largely reduce the
            drawback of slippage which can be associated with plastic pallets.
            In addition, we continue to look for ways to reduce costs
            sufficiently to produce a low-cost one way plastic pallet capable
            of competing with low-cost wood pallets in the one-way shipping
            market.

        o   Continue to target environmentally-conscious customers.  Because
            our plastic pallets are more environmentally-friendly than wood
            pallets, we intend to continue to target entities that are
            particularly conscious about protecting the environment, including
            many governmental agencies.

Competition

   We compete directly with domestic and, to some extent, foreign manufacturers
of wood and plastic pallets. We compete mainly on the basis of price per use
and, to a lesser degree, on the basis of the superior environmental and safety
advantages of our pallets. Despite the competitive advantages that we believe
we possess, the market for plastic and wood pallets and the market for
materials handling products and related services are both extremely
competitive.  There are also no substantial barriers to entry to these markets.

    We have identified approximately 25 United States-based companies that
currently produce some type of plastic pallet, and we expect that competition
will intensify in the future. The majority of these manufacturers are believed
to be selling to a limited market in direct response to special orders, which
we believe results in higher costs and prices. Two direct competitors producing
large-scale plastic pallets are Orbis, Inc. in Oconomowoc, Wisconsin, and
Buckhorn, Inc. in Milford, Ohio.

    We believe that there is only one major competitor producing plastic lumber
in our marketplace and management believes that our product line is better and
less expensive than that of this competitor.

    We believe that our ability to compete successfully depends on a number of
factors, including the availability of capital, the quality of our supplier
services, governmental regulations, our ability to eventually acquire other
plastic and/or pallet-producing companies, the pricing policies of our
competitors and suppliers, our ability to establish co-marketing relationships,
and general economic trends.

    One of the major competitive obstacles we face is the predominance of wood
pallet use. Most shippers that use low-cost pallets for one-way shipping are
primarily concerned with initial pallet cost. The initial cost of a low-cost
wood pallet is typically far less than the initial cost for a plastic pallet.
Thus, we cannot currently compete effectively in the one- way market segment.
However, we believe that we compete successfully in the market for closed-loop
shippers who use higher-quality grade one wood pallets. A "closed-loop" is a
shipping and warehousing environment where pallets are shipped from a central
warehouse or distribution center to outlets and returned to the same central
warehouse for re-use rather than disposal. Because closed-loop shippers can use
pallets many times, their primary concern is the cost per use for pallets.
Because plastic pallets have a useful life of approximately 10 times that of
grade one wood pallets, the cost per use of plastic pallets is often lower than
the cost per use of wood pallets.  The cost per use

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for plastic pallets is further reduced by recycling.  Damaged pallets that are
to be returned to us are stockpiled in a central warehouse and eventually
picked up by us to be recycled. The closed-loop distributor receives recycle
credits on future orders for damaged pallets returned to us. Because of the
competitive advantage of plastic pallets when a shipper's primary concern is
cost per use, we intend to continue to focus our marketing efforts on closed-
loop distributors that benefit most from long pallet life.

    We believe that we can capture a significant market share of the low-cost
wood pallet market if and when we are able to produce a pallet directly
competitive with inexpensive wood pallets.  We believe this can be achieved as
we develop and process less expensive recycled resins and composites. We are
currently engaged in a study that utilizes otherwise unusable waste material
and we are testing this material to determine if it will be a viable substitute
for high density polyethylene or polypropylene. If this is the case, we believe
that we may be able to reduce raw material costs, which typically account for
60% to 70% of a pallet's cost, and offer a plastic pallet competitive with low-
cost new and used wood pallets. We are continuing our research and development
in this area and hope to have developed solutions by the end of 2006.

    Another obstacle that we must overcome is the long-term relationships that
existing wood pallet manufacturers have developed with their customers. These
relationships will require us to focus on marketing RPM Technologies as a long-
term supplier of materials handling products and a reliable source for pallet
requirements.

Our Products and Services

    Pallets come in a wide range of shapes and sizes, depending on their
purpose and use. However, the grocery industry, which we believe accounts for
approximately one-third of the demand for new pallets, uses a standard 40" x
48" pallet. This has essentially become the standard pallet size in most
industries in the United States.

    Block edge, rackable pallets are heavy-duty pallets with nine blocks
between the pallet decks that allow true four-way entry by forklifts, pallet
trucks, and pallet jacks. These types of pallets are often used to transport
goods from manufacturers to distribution centers where they are racked.
Nestable pallets are easily converted into rackable pallets through the
addition of an easily added single component. So-called "feet" are added to
nestable pallets to create rackable pallets that can be easily stacked.
Nestable pallets are often used to transport goods between distribution centers
and retail stores.

    We currently offer the following types of pallets for sale to markets
throughout North America:

        o   HEAVY DUTY NESTABLE PALLET.  This pallet measures 40" x 48," has a
            static load capacity of 10,000 pounds and a dynamic load capacity
            of 2,400 pounds. One-piece construction maximizes durability and
            ease of use with true four-way forklift and pallet jack entry. This
            plastic pallet is nestable at a 2:1 ratio.

        o   PLASTIC UTILITY PALLET.  This all-purpose pallet measures 40" x
            48," has a static load capacity of 15,000 pounds and a dynamic load
            capacity of 2,500 pounds.

        o   RACKABLE PALLET.  This pallet measures 40" x 48," has a static load
            capacity of 15,000 pounds and a dynamic load capacity of 3,000
            pounds.

    We have the capability of producing, through our subcontract manufacturers,
other high-grade, low-cost plastic pallets in most common pallet sizes and
configurations, including both rackable and nestable pallets. Our recycled
plastic pallets can be made to specification, including color variations and
logo inscription. These modifications typically result in approximately a 10%
surcharge. Special standard features can include a non-slip surface and bottom
texture to reduce pallet sliding and shifting loads.  An interlocking, nesting
feature saves space and facilitates easier shipping and storage. Strategically
placed drainage holes enable easy cleaning. Our pallets do not have certain
undesirable characteristics such as susceptibility to leeching, color-transfer
and odor retention.

<page>7

    In 2005, we introduced a new rackable pallet designed specifically for the
pharmaceutical industry and we are still in the design and engineering stages
of additional new pallet designs.

    We also manufacture custom-size pallets made of plastic stringers and deck
boards. These pallets can be made in sizes of up to 90" in length and width.
Components for our custom-size plastic pallets are produced from extrusion and
compression molds. We acquired ten extrusion molds to produce this custom line.

    We believe that we will continue to benefit from the adoption by many
countries of ISPM 15, an international standard imposed upon exporters to such
countries using soft-wood packaging materials. ISPM 15 requires wood packaging,
including wood pallets, made from raw wood to be heat treated or fumigated to
reduce the risk of introduction and/or spread of pests. These requirements
increase the cost and reduce the desirability of using wood pallets for export
to countries that have adopted ISPM 15 or similar regulations.  Since March
2002, when ISPM 15 was finalized, approximately 120 countries have adopted it
or similar regulations, including the United States, Canada, Mexico, New
Zealand, Korea, China, and all of the European Union nations.

    Management continues to research and explore the possibilities of producing
very inexpensive plastic pallets that would compete directly with low-cost wood
pallets. One-way wood pallets, which typically sell for $5.00 to $7.00,
constitute a market estimated by management at $6 billion in annual sales in
the United States alone. Management believes that a 40" x 48" plastic pallet,
which could be sold for a near equal amount would capitalize on the ongoing
movement from wood to plastic.

Operations

    We do not currently own or operate any manufacturing facilities. However,
we plan to lease a manufacturing facility prior to the end of 2006.
Manufacturing and assembly of our pallets is currently being handled by Polytec
Manufacturing, Inc., or Polytec, located in Wheaton, Minnesota, and ERP Inc.,
or ERP, located in Liberty City, Iowa. Both companies have large- scale
production facilities, with the appropriate presses and equipment to produce
our pallets. We own the pallet molds and specify the resin used in production.

    Our contractual relationships with Polytec and ERP are, we believe,
customary in the plastic molding industry and enable us to utilize other
subcontract manufacturers at any time. Contacts with manufacturers throughout
the United States also allow us greater flexibility in providing delivery and
shipping savings to potential clients located in diverse areas. Polytec, ERP
and others from whom we have received quotes have agreed to manufacture our
pallets at a fixed price per pallet. Polytec and ERP have provided firm quotes
to manufacture our pallets, but we do not have a formal binding contracts with
either of these companies, which we believe is normal and customary in the
molding industry.

    Subcontract manufacturing has significantly reduced our start-up costs.
However, a disadvantage of subcontract manufacturing is that we do not have
complete control over

<page>8


the manufacturing process or the manufacturing facility. Our inability to
oversee unique client demands could compromise our manufacturing. In the event
that we face these problems, we intend to resolve them by providing our
existing molds to other subcontract manufacturers to serve our manufacturing
needs. We believe there are other subcontract manufacturers that are ready,
willing and able to replace our existing subcontract manufacturers should the
need arise.

    We currently lease a building that serves as our corporate headquarters as
well as an operational, plastic grinding and plastic wood pallet assembly
facility. We are using the facility primarily to grind post-consumer and post-
industrial plastics, which are used in the production of our pallets.

    Polytec and ERP order raw materials that we specify as appropriate for
molding our products. There is no shortage of recyclable material and no
shortage is anticipated. Major recyclers, large hospital companies, local
governments, major manufacturers and other public and private organizations
have expressed interest in providing raw materials to us. The volume of
plastics these organizations generate far exceeds our current requirements.
These materials are purchased at rates ranging from $0.05 to $0.32 per pound.
In some cases, these materials are obtained at no charge, with costs limited to
cartage and processing.

Proprietary Technology

    Our manufacturing and plastic pallet processing systems and our development
efforts involve confidential operating systems and procedures, which we
consider proprietary information owned by us.  This proprietary information is
not considered by us to be capable of patent protection.

    We believe that we have intellectual property rights in our pallet
processing system, although we have no verification of these rights, and we
cannot give any assurances that we can withstand or defend against any
infringement of these rights. These rights are protected by non-disclosure and
non- competition agreements, which have been executed by our sales agents,
distributors and employees. The material terms of these agreements prohibit
divulging marketing strategies, names of prospects and customers or
manufacturing or operational techniques or procedures to any third-party
without our written consent.

    Our pallets are based upon proprietary designs that enable molders to
accept and process most high-density plastic materials. A thermoplastic
additive, developed by independent scientists, enables the amalgamation of
chemically incompatible polymers. The additive acts as a catalyst to make
commingled dissimilar polymers compatible, which would normally have little or
no affinity for each other. The additive also reduces melt viscosity and acts
as a wetting agent for inorganic substances. The additive is purchased by our
contract manufacturers, which use the additive in molding the pallets. We have
no legal rights to the additive. Because additives with similar attributes to
the one used by our contract manufacturer are readily available, we believe
that we are not heavily dependent on this particular additive.

    Tests on the thermoplastic additive that we have performed under laboratory
conditions have indicated a marked improvement in bonding. The additives we use
enable polymers to be molded at lower processing temperatures and also serve as
a filler or extender to thermoplastics, thereby lowering the cost of the end
product. We also believe that the additive permits a significant reduction in
raw material and processing costs, while producing an end product that we
believe has superior strength and durability.

    We and our subcontract manufacturers keep abreast of developments in the
additive field and evaluate new additives to determine their effectiveness and
applicability to our manufacturing processes.

<page>9

Sales and Marketing

    Our sales and marketing activities primarily involve promoting our products
and services through our multiple websites. We promote our websites through a
variety of techniques, including the purchase of preferred positions on
searched pages from providers such as Google, MSN, Overture and others.  We
manage and optimize our key words on our websites to promote an optimal level
of contact activity and lead volume, which is directly proportional to the
preferred position placements that we are either able to buy or acquire through
manipulation. We believe that having multiple websites, all linking directly or
indirectly to one another, creates an internet marketing environment conducive
to volume inquiries.  We plan to promote our websites in vertical print media
to be directed to shippers and warehouse management in a variety of industries.

    In addition, we have appointed a number of sales agents and distributors
that present our products to a wide variety of shippers throughout most of the
United States. All of our sales agents are independent contractors that sell
our products on a commission basis, which reduces overhead. We also have
agreements with distributors in the Chicago area, Florida and Michigan. Our
distributors are intermediaries that resell our products to their customers,
also on a commission basis.

    All of our sales agents and distributors are independent contractors who
have signed our standard independent contractor's agreement. They bear all
expenses, unless otherwise agreed and are paid commissions that range from 5%
to 10% of gross sales. The term of our agreements with our independent
contractors is normally five years. We can cancel the agreement at any time for
non-performance with no obligation of any kind other than paying commissions on
sales made prior to the cancellation of the agreement.

    All sales agents and distributors are expected to adhere to our selling and
pricing strategies, including maintaining the confidentiality of our price
list, which provides pricing for various classes of buyers. In the future, we
may provide each distributor with a protected territory and refer all queries
from prospects within a territory to the appropriate distributor.

    In 2005, we implemented the following marketing activities:

    o    produced a video presentation of our pallets, featuring their
         characteristics and benefits, summarizing test results, and showing
         our pallets subjected to a variety of in-use tests; computer-generated
         graphics, in tape and CD-ROM formats, show our pallets in actual
         application situations; this video presentation will be part of the
         sales kit used by sales agents and our management in making sales
         presentations;

    o    joined certain trade organizations that serve the material handling
         industry, and participated in national and international trade shows;

    o    conducted an in-house telemarketing program to contact prospective
         pallet buyers; leads generated from this medium were referred to the
         appropriate sales agents and distributors;

    o    prepared a number of technical bulletins and manuals that present and
         illustrate the key features of our pallets;

    o    implemented a customer service department that provides technical
         information; and continued extensive promotion of our websites.

    Our growth in custom plastic pallet sales may necessitate the enlargement
of or obtaining a new facility with additional capabilities. This may require
us to install new molds and extrusion lines in our Park Forest facility which
would automate the production and assembly of plastic components under our
direct control. These enhancements, if they occur, are expected to reduce
costs, increase operating efficiency and improve our quality control.  Custom-
size plastic pallet sales have increased principally among exporters that had
previously used wood but are now required to switch to alternative materials
due to requirements imposed by approximately 90 foreign countries.

Recycle Program

    We have established a recycle program in an effort to increase sales.
Under this program, we grant credit to customers who return unusable or damaged
pallets. When we deliver new pallets to a client in truckload quantities, we
agree to accept and dispose of the customer's unusable plastic pallets,
irrespective of the condition of such pallets.  Because an unusable plastic
pallet possesses valuable resin content, plastic pallets can be recycled by
regrinding and remolding. To determine the amount of credit provided to a
customer, we estimate the current market price for un- ground plastic parts and
deduct the freight charges to ship it to a grinder.  We then credit the
customer with a portion of the balance, which is valid on the customer's next
order.

Trial Order Program

    To generate new sales, we permit potential new customers to participate in
our trial order program. This program is offered to large pallet users who want
to try our pallets in actual warehouse conditions before committing to a larger
purchase. Under the program, we conditionally sell the prospective customer a
small number of pallets at the truckload price. The prospective customer pays
for the trial order only if the customer orders additional pallets. If the
prospective customer decides against ordering additional pallets, there is no
charge for the initial order and we retrieve the sample pallets.

<page>11

Expansion Plans - Plastic Roofing Products

    We plan to expanded our operations to produce plastic roofing tiles and
subcontract manufacture these tiles from a major compression molding company.
We believe that our plastic roofing products will be a viable alternative to
more expensive traditional roofing products. We expect our plastic roofing
products to be priced lower than wood shake, slate and clay tiles and we expect
to price our plastic roofing products competitively with other alternative
roofing materials. We believe that our plastic roofing tiles are considerably
more durable than wood, slate or barrel tiles made from traditional materials.
Our plastic roofing tiles have a life expectancy of approximately 50 years,
whereas natural tiles have a life expectancy of approximately 20 years.

    We also intend to offer a variety of roofing profiles and colors, including
customization options, to satisfy diverse requests. We plan to initially offer
simulated slate in six colors, simulated cedar slate in four colors, simulated
Spanish tile in three colors, and simulated flat cement thatch in five colors.

    We believe that traditional roofing products are generally either
attractive or safe, but not both. We believe that our roofing products combine
these two desirable characteristics and we aim to position our products with
distributors and suppliers, contractors and builders, architects, and end-
consumers as high-quality, durable, environmentally- friendly products that add
beauty and safety to virtually any structure at a competitive price.

    Industry Demand

    We believe that the demand for plastic roofing materials is increasing
faster than the demand for traditional roofing materials. A greater than 50%
increase in demand for plastic roofing products is expected by 2010, whereas
the entire roofing industry is expected to increase by 20% during the same
period. We believe that the demand for plastic roofing products is currently,
and will continue to be, bolstered in part by the continued emphasis on the use
of recycled materials. The EPA has raised recycling goals and has focused on
the construction industry. The EPA's target states with the largest recycling
rates include California, New York, Minnesota, Florida and Texas.

<page>12

    Our Plastic Roofing Products

    We intend to employ a proprietary substrate that can be molded into four
primary roofing products: simulated slate, simulated cedar shake, barrel tile
and flat tile. We expect that all of our plastic roofing tile products will be
manufactured from recycled plastic material in a process that creates products
that we believe are superior to all presently-employed roofing products. We
believe that these products are superior for the following reasons:

    o    extreme fire and flame resistance;

    o    superior impact resistance;

    o    high durability;

    o    absolute water resistance;

    o    aesthetic beauty based upon castings of hand selected virgin products;

    o    ease of installation;

    o    light-weight, negating extra structural engineering costs;

    o    qualify for discounts from major insurance companies; and

    o    heat reduction through reflection of up to 75% of the sun's heat,
         which in turn reduces the need for expensive extra insulation in
         certain climates and reduces other costs.

    No additional structural engineering is necessary for the installation of
our plastic roofing tiles and we believe that our roofing materials will not
only reduce costs for homeowners but also for contractors as a result of the
reduced cost of labor and materials.

    We plan to offer a variety of roofing profiles and colors, including the
following:

    SIMULATED SLATE. Our simulated slate tiles are cast from natural slate and
are expected to be available in black, charcoal, gray, brown, red and green
colors.  Our simulated slate tiles are 12 x 18 inches and weigh approximately
2.0 lbs. per tile. We believe that our simulated slate tiles are beautiful and
cannot be differentiated from genuine slate tiles except upon close
examination.

    SIMULATED CEDAR SHAKE. Our simulated cedar shake tiles are cast from
multiple patterns of genuine cedar shake and are expected to be available in
pewter, charcoal, brown and weathered gray colors. We believe that we have
obtained the natural beauty of real wood with these tiles. The length of this
tile is 24 inches and our simulated cedar shake tiles are expected to be
available in 5-, 7- and 12-inch widths weighing approximately 1.5, 2.0 and 3.0
lbs. per tile, respectively.

    SIMULATED SPANISH TILE.  Our simulated Spanish tiles provide Mediterranean
styling with all the beauty and durability of genuine clay tiles, but with
greater ease of installation, and are expected to be available in terra cotta,
brown and black colors. Our simulated Spanish tiles are 16.5 x 13 inches and
weigh approximately 3.0 lbs. per tile.

    SIMULATED FLAT CEMENT THATCH.  Our simulated flat cement thatch tiles are
designed to offer the beautiful, aged look of old-world split tile roofs and
are expected to be available in black, gray, red, brown and green colors.

    We plan to have each of our simulated tile products tested to produce a
Class A fire rating. In addition, we plan to have each of our simulated tile
products tested to produce a Class 4 impact rating, except for our simulated
Spanish tile product, which we plan to have tested to produce a Class 3 impact
rating. We expect that the durability and fire-resistance ratings of our
simulated tile products may reduce insurance premiums for the owners of homes
and buildings that utilize these products.

<page>13

    Environmental Considerations

    We believe that environmental considerations will favorably influence our
ability to succeed. We estimate that the recycling business is a $240 billion
industry. The EPA has raised recycling goals for 2005 and we expect that even
higher goals will be set in the future.  In order to achieve its goals, the EPA
is emphasizing the use of recycled materials employed in the construction of
private and public structures.

    Many states, such as California, are restricting or limiting the use of
wood roofing tiles due to susceptibility to fire and their contribution to the
depletion of natural resources. Recycled plastic roofing tiles can be used in
lieu of wood products and are less susceptible to fire.

    Sales and Marketing

    We intend to market our plastic roofing products to the following four
distinct groups:

    DISTRIBUTORS AND SUPPLIERS. We believe that distributors and suppliers are
an excellent resource to display and feature our plastic roofing products. We
believe that distributors and suppliers have key connections within the
construction industry and that they can provide numerous sales opportunities
for our products. We have already contacted two major distributors in Florida
and both have indicated an interest in buying our products when and if they are
readied for large-scale production and use.

    CONTRACTORS AND BUILDERS. Contractors and builders have the power to exert
influence over their clients regarding the type of roof to be chosen. We expect
to focus on contractors and builders in the geographic areas where we expect to
initially market our products: the South, the West and in Florida. By exposing
our products to contractors and builders and increasing demand for our products
within this group, we expect to also increase demand for our products with
distributors and suppliers.

    ARCHITECTS. We believe that architects represent an excellent potential
sales resource. Architects are often able to designate materials used in their
structures and, in addition to the core benefits of our plastic roofing
products, we hope to interest architects in unusual and modern roofs for
commercial and professional buildings. We believe that architects can be
marketed to through advertisements in trade-related publications. In marketing
to architects, we would expect to direct advertisements and information to the
various geographical areas where our sales activity is heaviest or where we are
focusing our marketing efforts.

    END CONSUMERS. Establishing long-term relationships with homeowners is an
important goal. Most modern residential roofs need replacement within a 20-
year period. Targeting homeowners and building owners is important for our
future as many homeowners and building owners will be in a position to utilize
our products in the future.

<page>14

    We expect to initiate direct mail campaigns, print advertising, website
communications and memberships in appropriate industry and other related
associations such as the Western States Roofing Contractor's Association, the
Florida Roofing and Sheet Metal Contractors Association, the National Roofing
Contractors Association and others. We anticipate that our print advertising
programs will include a product sample affixed to a printed advertisement. We
also anticipate that our direct mail campaigns will target select groups, such
as distributors and suppliers, contractors and builders, architects and end
consumers in an area-by-area launch program. We plan to have the mailing
program contain an informational packet, product samples, price lists and
advertising reprints of magazines or other advertising that we have circulated.
We estimate that we will commence these campaigns within several months
following insurance approvals and certification of our plastic roofing products
from the International Council of Building Officials.

    We intend to advertise in select industry magazines such as Builder
Magazine, Roofing Contractor Magazine, Roofing/Siding/Insulation Magazine,
Environmental Design + Construction Magazine and Architectural West. We expect
that the focus of our advertisements will be the advantages our products offer
over traditional roofing products and our competitors' alternative roofing
products.

    We plan to develop a website that is distinct from our existing plastic
pallet websites. We expect to include detailed descriptions and features of our
line of alternative roofing products, the methods for ordering them and pricing
information. We also expect to include methods for obtaining samples of these
products and actual photos of roofs of homes and buildings that employ our
products.

Competition

    There are a number of companies selling alternative roofing products. For
example, we believe that CoStar Group, Inc. offers only slate and cedar slate
alternative roofing products while Royal Building Products, Crowe Building
Products, Amcraft Building Products and US Century offer only slate alternative
roofing products. As noted above, we plan to initially offer simulated slate in
six colors, simulated cedar slate in four colors, simulated Spanish tile in
three colors, and simulated flat cement thatch in five colors. We believe that
our planned initial offering of our plastic roofing products will provide much-
needed variety to the alternative roofing products market.

    We expect to be able use only recycled materials to manufacture our roofing
products. We believe that, although our direct competitors in this segment use
some recycled materials, they frequently use virgin plastic which we believe
results in higher prices without any discernable benefit.

<page>15

Employees

    We currently have nine full-time employees and two part-time employees.
These employees are experienced in materials handling and plastic pallet
operations, and they are involved in executive, corporate administration,
operations and sales and marketing functions. We also utilize the services of
outside consultants and experts on many of our projects to help reduce costs.
Additional staffing will occur on an as-needed basis, dictated by the sales
volume we achieve.

<page>16

ITEM 2. DESCRIPTION OF PROPERTY.

    Our corporate office space under lease is located at 24001 S.  Western
Avenue, Park Forest, Illinois 60466. At this 12,000 square foot location, we
also process and grind plastic scrap, which is used in the manufacture of our
products. This facility also serves as a warehouse to store our custom plastic
pallet components. We lease this facility under a five-year lease that requires
monthly base rental payments of $4,200 per month for the first three years,
$4,700 per month for the next year and $5,200 per month for the final year of
the lease term. In addition, we conduct many executive office functions from
the separate personal offices of Randy Zych, our Chairman and Chief Executive
Officer, and Charles Foerg, our President. No formal lease agreement exists for
the use of these offices. During 2005 and 2004, we paid these officers an
aggregate approximately $103,900 and $70,800, respectively, for the use of
these offices and for the reimbursement of expenses paid personally by these
officers on our behalf. We believe that our facilities are adequate for our
needs for the near future.

ITEM 3. LEGAL PROCEEDINGS.

    We are subject to legal proceedings, claims and litigation arising in the
ordinary course of business. While the amounts claimed may be substantial, the
ultimate liability cannot presently be determined because of considerable
uncertainties that exist. Therefore, it is possible that the outcome of those
legal proceedings, claims and litigation could adversely affect our quarterly
or annual operating results or cash flows when resolved in a future period.
However, based on facts currently available, management believes such matters
will not adversely affect our financial position, results of operations or cash
flows.

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

    During the quarter ended December 31, 2005, no matters were submitted to a
vote of our security holders.

<page>17

                                   PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

    Our common stock trades on the OTC Bulletin Board under the symbol "RPMM."
The table below shows, for each fiscal quarter indicated, the high and low
closing bid prices of our common stock. This information has been obtained from
Pink Sheets LLC, a research service company that compiles quote information
reported on the National Association of Securities Dealers composite feed or
other qualified interdealer quotation medium. The prices shown reflect inter-
dealer prices, without retail mark-up, mark-down or commissions, and may not
represent actual transactions.

                                                              High       Low
                                                             --------  --------
Year Ended December 31, 2004:
  First Quarter..........................................      $0.55      $0.28
  Second Quarter.........................................       0.60       0.16
  Third Quarter..........................................       0.43       0.16
  Fourth Quarter.........................................       0.33       0.13

Year Ended December 31, 2005:
  First Quarter..........................................      $0.28      $0.14
  Second Quarter.........................................       0.15       0.05
  Third Quarter .........................................       0.09       0.04
  Fourth Quarter.........................................       0.19       0.04

    As of April 10, 2006, we had 28,596,070 shares of common stock
outstanding and held of record by approximately 600 shareholders. Within the
holders of record of our common stock are depositories such as Cede & Co. that
hold shares of stock for brokerage firms which, in turn, hold shares of stock
for beneficial owners. On April 10, 2006, the last reported sale price of
our common stock on the OTC Bulletin Board was $0.15 per share.

    We have never paid cash dividends on our common stock and do not currently
intend to pay cash dividends on our common stock in the foreseeable future. We
are restricted from paying dividends on our common stock under state law and
under the terms of our outstanding convertible term note. We currently
anticipate that we will retain any earnings for use in the continued
development of our business.

Recent Sales of Unregistered Securities

    In May 2005, we issued 750,000 shares of common stock valued at $82,875 to
a consultant as compensation for services rendered.

    In June 2005, we issued 615,550 shares of common stock to Laurus Master
Fund, Ltd., an accredited investor, in exchange for a reduction of $67,710 in
principal plus related interest on our convertible debenture.

   In July 2005, we issued 1,000,000 shares of common stock valued at $68,000
to a consultant as compensation for services rendered.

    In August 2005, we issued 200,000 shares of common stock valued at $13,600
to a consultant as compensation for services rendered.

    In September 2005, we issued 850,000 shares of common stock to an
accredited investor in exchange for $34,000 in cash.

    In November 2005, we issued 500,000 shares of common stock valued at
$42,450 to a consultant as compensation for services rendered.

<page>18

    In November 2005, the Company issued 750,000 shares of common stock to an
accredited investor upon the exercise of an option for an aggregate exercise
price of $15,000, which was paid in cash.

    In December 2005, the Company issued 950,000 shares of common stock to an
accredited investor upon the exercise of an option for an aggregate exercise
price of $20,000, which was paid in cash.

    Exemption from the registration provisions of the Securities Act of 1933
for the transactions described above is claimed under Section 4(2) of the
Securities Act of 1933, among others, on the basis that such transactions did
not involve any public offering.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

    The following discussion and analysis should be read in conjunction with
our financial statements and notes to financial statements and the information
included under the caption "Risk Factors" included elsewhere in this report.
Except for historical information, the following discussion contains forward-
looking statements that involve risks and uncertainties, such as statements of
our plans, objectives, expectations and intentions and our current beliefs
regarding revenues we might earn if we are successful in implementing our
business strategies. See "Special Note Regarding Forward-Looking Statements"
for further information regarding forward-looking statements. Our actual
results may differ materially from the results discussed in the forward-looking
statements as a result of a number of factors, many of which are beyond our
control, including those factors discussed under "Risk Factors" and other
headings in this report, which could, among other things, cause the price of
our common stock to fluctuate substantially.

Overview

    We are engaged in the business of developing, producing through subcontract
manufacturers, marketing and selling plastic pallets and other material-
handling products throughout the United States, Canada and South America. We
subcontract the manufacture of our plastic pallets to large injection,
extrusion and compression molders on a competitive bid basis. These
manufacturers are also selected on the basis of their equipment and
manufacturing capabilities. We supply them with the molds and resins that we
have developed for specific product applications.

    We have established a formal corporate headquarters and a production
facility where we assemble some of our plastic pallets. We purchased equipment
that enables us to grind post-industrial and post-consumer plastic products
used in the production of our plastic pallets. We do not presently have the
proceeds sufficient for us to purchase enough molding equipment and presses to
fully enable us to produce our plastic pallets internally. Therefore we will to
continue to outsource the manufacturing of our plastic pallets until we raise
additional capital enabling us to purchase extra molds and presses.

<page>19


    Our main method of selling our plastic pallets and other material handling
products is currently through our websites. Our websites include:
www.rpmplasticpallets.com, www.rpmtechnologiesinc.com, www.pallet- container-
quotes.com, www.shelving-quotes.com, www.locker-quotes.com, www.pallet-rack-
stack-racks.com, www.plastic-pallets-usa.biz, www.plastic- pallets.com,
www.plastic-pallets.org, www.plastic-pallets-usa.info and www.plastic-pallets-
usa.ws. In the future, we may add new variations of the suffixes, "usa," "us,"
"com," "biz," "org," "net," "info," "us" and "ws."

    We promote our websites through a variety of techniques, including the
purchase of preferred positions on searched pages from providers such as
Google, MSN, Overture and others.  We manage and optimize our key words on our
websites to promote an optimal level of contact activity and lead volume, which
is directly proportional to the preferred position placements that we are
either able to buy or acquire through manipulation. We believe that having
multiple websites, all linking directly or indirectly to one another, creates
an internet marketing environment conducive to volume inquiries.  We plan to
promote our websites in vertical print media, which will be directed to
shippers and warehouse management in a variety of industries.

    We also sell our plastic pallets and other material handling products
through sales agents and distributors. We currently have contractual
relationships with five agents and/or distributors based primarily in the
Midwest and Southeast regions of the United States and we intend to develop
further relationships with agents and distributors in other locations as our
business grows.

Operating Performance and Financial Condition

    We focus on numerous factors in evaluating our operating performance and
our financial condition. In particular, in evaluating our operating
performance, we focus primarily on revenues, net product margins, as well as
operating expenses and net income.

    REVENUE.  Revenue is a key indicator of our operating performance. We
closely monitor overall revenues, as well as revenues from specific customers,
and seek to increase revenues by expanding sales to additional customers and
expanding sales to existing customers both by increasing sales of existing
products and introducing new products. As revenues increase or decrease from
period to period, it is critical for management to understand and react to the
various causes of these fluctuations, such as successes or failures of
particular products, product pricing, customer decisions, seasonality and other
causes. Where possible, management attempts to anticipate potential changes in
sales revenues and seeks to prevent adverse changes and stimulate positive
changes by addressing the expected causes of adverse and positive changes.

    PROFIT MARGINS.  Profit margins, from pallet-to-pallet and across all of
our pallets as a whole, is an important measurement of our operating
performance. We monitor margins on a pallet-by-pallet basis to ascertain
whether particular pallets are profitable or should be phased out as
unprofitable pallets. In evaluating particular levels of pallet margins on a
pallet-by-pallet basis, we seek to attain a level of gross profit margin
sufficient to contribute to normal operating expenses and to provide a net
profit.

    OPERATING EXPENSES.  We focus on operating expenses to keep these expenses
within budgeted amounts in order to achieve or exceed our targeted
profitability. We budget certain of our operating expenses in proportion to our
projected sales revenues, including operating expenses relating to production
and shipping of our plastic pallets. However, most of our expenses relating to
general and administrative costs and product design are essentially fixed.
Deviations that result in operating expenses in greater proportion than
budgeted signal to management that it must ascertain the reasons for the
unexpected increase and take appropriate action to bring operating expenses
back into the budgeted proportion.

    NET INCOME.  Net income is the ultimate goal of our business. By managing
the above factors, among others, and monitoring our actual results of
operations, our goal is to generate net income at levels that meet or exceed
our targets.

<page>20

    In evaluating our financial condition, we focus primarily on cash on hand,
available financing, anticipated near-term cash receipts, and accounts
receivable as compared to accounts payable. Cash on hand, together with our
other sources of liquidity, is critical to funding our day-to-day operations.

    Anticipated near-term cash receipts are also regarded as a short-term
source of liquidity, but are not regarded as immediately available for use
until receipt of funds actually occurs.

    The proportion of our accounts receivable to our accounts payable and the
expected maturity of these balance sheet items is an important measure of our
financial condition. We attempt to manage our accounts receivable and accounts
payable to focus on cash flows in order to generate cash sufficient to fund our
day-to-day operations and satisfy our liabilities. Typically, we prefer that
accounts receivable are matched in duration to, or collected earlier than,
accounts payable. If accounts payable are either out of proportion to, or due
far in advance of, the expected collection of accounts receivable, we will
likely use our cash on hand.

Seasonality

    We have not identified any seasonality in the sales of our plastic pallets
    or material handling products to date. We continue to monitor for seasonal
    trends in the sales of our products.

Critical Accounting Policies and Estimates

    The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires us to
make certain estimates, judgments and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements, and the reported amounts
of revenues and expenses during the reporting period. Some of our accounting
policies require us to make difficult and subjective judgments, often as a
result of the need to make estimates of matters that are inherently uncertain.
The following accounting policies involve a critical accounting estimate
because they are particularly dependent on estimates and assumptions made by
management about matters that are highly uncertain at the time the accounting
estimates are made. In addition, while we have used our best estimates based on
facts and circumstances available to us at the time, different estimates
reasonably could have been used in the current period and changes in the
accounting estimates we used are reasonably likely to occur from period to
period, which may have a material impact on the presentation of our financial
condition and results of operations.

    Our most critical accounting estimates include revenue recognition, the
 valuation of inventory, which impacts gross margin; assessment of
 recoverability of long-lived assets, which primarily impacts operating expense
 when we impair assets or accelerate depreciation; deferred income tax assets
 and liabilities, which impacts our tax provision; reserve for warranty costs,
 which impacts gross margin; and stock-based compensation. We also have other
 policies that we consider to be key accounting policies, such as our policies
 for the valuation of accounts receivable, reserves for sales returns and
 allowances, and reserves for commitments and contingencies; however, these
 policies either do not meet the definition of critical accounting estimates
 described above or are not currently material items in our financial
 statements. We review our estimates, judgments, and assumptions periodically
 and reflect the effects of revisions in the period that they are deemed to be
 necessary. We believe that these estimates are reasonable; however, actual
 results could differ from these estimates.

<page>21


Revenue Recognition

    We derive revenues primarily from the sale of standard and custom plastic
pallets. Our revenues occasionally include nonrecurring engineering revenues
related to the development of customer-specific products. Sales of our products
are generally made through either our internet site or independent
manufacturers' representatives or through our stocking distributor. The
majority of our shipments are made directly to our customers, with shipments to
our manufacturing representatives and our stocking distributor, accounting for
less than 10% of total revenues during 2005.

    Revenues from the sale of standard and customer-specific products are
recognized when title to the products passes to the buyer. Revenues from our
distributor are recognized when the product is sold to the distributor. Our
distribution agreements provide for selling prices that are fixed at the date
of sale, although we occasionally offer price concessions, which are specific,
of a fixed duration and are reserved for in our financial statements. Further,
the distributor is obligated to pay the amount and it is not contingent on
reselling the product; the distributor takes title to the product and bears
substantially all of the risks of ownership; the distributor has economic
substance; we have no significant obligations for future performance to bring
about resale; and the amount of future returns can be reasonably estimated. We
allow our distributor to return products for warranty reasons as well as for
exchange products, within certain limitations. Customers can only return
product for warranty reasons. If we are unable to repair or replace products
returned under warranty, we will issue a credit for a warranty return.

Inventories

    We state our inventories at the lower of cost or market. We use a
combination of standard cost and moving average cost methodologies to determine
our cost basis for our inventories. This methodology approximates actual cost
on a first-in, first-out basis. In addition to stating our inventory at a lower
of cost or market valuation, we also evaluate it each period for excess
quantities and obsolescence. This evaluation includes identifying those parts
specifically identified as obsolete and reserving for them, analyzing
forecasted demand versus quantities on hand and reserving for the excess,
identifying and recording other specific reserves, and estimating and recording
a general reserve based on historical experience and our judgment of economic
conditions. If future demand or market conditions are less favorable than our
projections and we fail to reduce manufacturing output accordingly, additional
inventory reserves may be required and would have a negative impact on our
gross margin in the period the adjustment is made.

Long-Lived Assets

    We evaluate long-lived assets for impairment of their carrying value when
events or circumstances indicate that the carrying value may not be
recoverable. Factors we may consider in deciding when to perform an impairment
review include significant negative industry or economic trends, significant
changes or planned changes in our use of the assets, plant closure or
production line discontinuance, technological obsolescence, or other changes in
circumstances which indicate the carrying value of the assets may not be
recoverable. If impairment appears probable, we evaluate whether the sum of the
estimated undiscounted cash flows attributable to the assets in question is
less than their carrying value. If this is the case, we recognize an impairment
loss to the extent that carrying value exceeds fair value. Fair value is
determined based on market prices or discounted cash flow analysis, depending
on the nature of the asset. Any estimate of future cash flows is inherently
uncertain. The factors we take into consideration in making estimates of future
cash flows include product life cycles, pricing trends, future capital needs,
cost trends, product development costs, competitive factors and technology
trends as they each affect cash inflows and outflows. Our markets are not
highly cyclical and are not characterized by rapid shifts in demand that are
difficult

<page>22

to predict in terms of direction and severity. If an asset is written down to
fair value that becomes the asset's new carrying value, which is depreciated
over the remaining useful life of the asset.

Warranty Costs

    We sell our products with warranties that they will be free of faulty
workmanship or defective materials and that they will conform to our published
specifications or other specifications mutually agreed to with a customer. An
accrual for expected warranty costs results in a charge to the financial
results in the period recorded. This liability can be difficult to estimate
and, if we experience warranty claims in excess of our projections, we may need
to record additional accruals, which would adversely affect our financial
results.

    We allow only our distributor to exchange product for other than warranty
reasons. If we are unable to repair or replace a product returned under
warranty, we will issue a credit for a warranty return.

Stock-Based Compensation

    We account for compensation cost related to employee stock options and
other forms of employee stock-based compensation plans in accordance with the
provisions of Accounting Principles Board Opinion ("APB") No. 25, Accounting
for Stock Issued to Employees, and related interpretations. As such,
compensation expense would be recorded on the date of grant only if the current
market prices of the underlying stock exceeded the exercise price. We apply
Financial Accounting Standards Board ("FASB") SFAS No. 123, Accounting for
Stock-Based Compensation, which allows entities to continue to apply the
provisions of APB No. 25 and provide pro forma net income (loss) and pro forma
earnings (loss) per share disclosures for employee stock option grants as if
the fair value based method defined in SFAS No. 123 had been applied.

    The accounting for stock-based compensation involves a number of estimates
about the expected lives of stock options, interest rates, stock volatility,
and assumptions as well as the selection of a valuation model. We have elected
to use the Black-Scholes option valuation model. A change in any of these
estimates or a selection of a different option-pricing model could have a
material impact on our pro forma net income (loss)disclosures. Beginning in the
first quarter of 2006, we will be required to account for stock-based
compensation under SFAS No. 123(R), Share-Based Payment, which will require us
to recognize the estimate on our financial statements.

<page>23

Results of Operations

      Comparison of Results of Operations for the Years Ended December 31, 2005
      and 2004

    Our revenues increased by $671,000, or 31%, from $2,191,000 in 2004 to
$2,862,000 in 2005. Our growth in revenues in 2005 as compared to 2004
primarily resulted from the expansion of our product line, our acquisition of
new customers and our continued marketing and e-commerce promotions.

    Our cost of sales increased by $642,000, or 34%, from $1,863,000 in 2004 to
$2,505,000 in 2005 and our gross profit increased by $28,000, or 9% from
$329,000 in 2004 to $357,000 in 2005.

    Total operating expenses decreased by $2,247,000, or 62%, from $3,650,000
in 2004 to $1,403,000 in 2005. The decrease in operating expenses was primarily
due to a decrease in non-cash compensation expenses related to the grant of
stock options that occurred in 2004. The decrease in operating expenses was
also due to a $508,000 decrease in fees associated with professional and
consulting services.

    Our net loss decreased by $2,262,000, or 68%, from $3,308,000 in 2004 to
$1,046,000 in 2005. The substantial decrease in our net loss resulted primarily
from a decrease of approximately $1,500,000 in non-cash compensation expenses
related to the grant of stock options and compensation expense related to
common stock issuances at less than fair market value.

    Our total current liabilities increased by $392,000, or 29%, from
$1,359,000 as of December 31, 2004 to $1,751,000 as of December 31, 2005. This
increase was largely due to a $223,000 increase in accrued officer compensation
from $892,000 as of December 31, 2004 to $1,115,000 as of December 31, 2005 and
a $142,000 increase in trade payables associated with increased revenues. We
are currently experiencing no pressure to pay the accrued compensation from the
individuals to whom we owe this compensation as it consists primarily of unpaid
salaries of Randy Zych and Charles Foerg. However, we plan to pay amounts owed
to Messrs. Zych and Foerg as funds become available.

      Our total current assets remained consistent as of December 31, 2005 and
2004 at $902,000 and $878,000 respectively.

Liquidity and Capital Resources

    At December 31, 2005 and 2004, we had cash of approximately $412,000 and
$593,000, respectively.  As of those dates, we had a working capital deficit of
approximately $850,000 and $481,000, respectively.  Cumulative accrued
compensation owed to our executive officers reduced our working capital by
approximately $1,115,000 and $892,000, respectively, at December 31, 2005 and
2004. We are currently experiencing no pressure to pay the accrued compensation
from the individuals to whom we owe this compensation as it consists primarily
of unpaid salaries of Randy Zych and Charles Foerg.  However, we plan to pay
amounts owed to Messrs. Zych and Foerg as funds become available. In addition,
we may reduce all or part of this accrued officer compensation liability
through issuances of our common stock.

    Cash used in our operating activities totaled $280,000 for the year ended
December 31, 2005 as compared to $285,000 for the year ended December 31, 2004.

<page>24

    Cash provided by our investing activities totaled $1,474,000 for the year
ended December 31, 2005 as compared to cash used in our investing activities of
$2,079,000 for the year ended December 31, 2004. The substantial decrease in
cash used in our investing activities in 2005 as compared to 2004 resulted
primarily from a decrease of $1,700,000 in restricted cash associated with our
convertible term note with Laurus Master Fund, Ltd., and a decrease in the
purchases in the amount of $113,000 of equipment held for sale.

    Cash provided by our financing activities totaled $2,641,000 for the year
ended December 31, 2005 as compared to cash used in our financing activities of
$1,375,000 for the year ended December 31, 2004.

    During the year ended 2005 and the year ended 2004, we financed our
operations through cash generated through sales of our products and through
private placements of our equity securities.

    On July 9, 2004, we completed a financing transaction with Laurus, whereby
Laurus purchased from us a secured convertible term note and warrants to
purchase up to 1,125,000 shares of our common stock in exchange for up to $2.5
million in cash. Of the $2.5 million, $1.2 million was released to us and $1.3
million was deposited into a restricted cash account. In November 2005 Laurus
Master Fund removed all the cash from the restricted cash account consisting of
$1.3 million. None of these funds will be released to the Company. The Company
is discussing additional financing with Laurus Master Fund.

    We believe current and future available capital resources, revenues
generated from operations, and other existing sources of liquidity, will be
sufficient to fund our anticipated working capital and capital expenditure
requirements for at least the next twelve months.

    Our continued operations are dependent on maintaining adequate sources of
liquidity through accounts receivable collections and/or the future
availability of new debt and/or equity financing.

<page>25

Risk Factors

    AN INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. IN
    ADDITION TO THE OTHER INFORMATION IN THIS REPORT, YOU SHOULD CAREFULLY
    CONSIDER THE FOLLOWING RISK FACTORS BEFORE DECIDING TO INVEST IN SHARES OF
    OUR COMMON STOCK. IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCURS, IT IS
    LIKELY THAT OUR BUSINESS, FINANCIAL CONDITION AND OPERATING RESULTS WOULD
    BE HARMED. AS A RESULT, THE TRADING PRICE OF OUR COMMON STOCK COULD
    DECLINE, AND YOU COULD LOSE ALL OR PART OF THE MONEY YOU PAID TO BUY OUR
    COMMON STOCK.

    We have no history of significant revenues, have incurred losses, could
    have continued losses and may never achieve or sustain profitably. If we
    continue to incur losses, we may have to curtail our operations, which may
    prevent us from selling our plastic pallets.

    We have no history of significant revenues, have not been profitable and may
experience continued losses. Historically, we have relied upon cash from
financing activities to fund all of the cash requirements of our business and
have incurred significant losses and experienced negative cash flow. As of
December 31, 2005, we had an accumulated deficit of $13.3 million. For the year
2005, we incurred a net loss of $1,046,000 and for the year 2004, we incurred
a net loss of $3,650,000. We cannot predict when we will become profitable or
if we ever will become profitable, and we may continue to incur losses for an
indeterminate period of time and may never achieve or sustain profitability. An
extended period of losses and negative cash flow may prevent us from
successfully selling our plastic pallets.

    Our losses have resulted principally from costs incurred in connection with
the development of our pallets and from costs associated with our marketing and
administrative activities. Even if we are able to achieve profitability, we may
be unable to sustain or increase our profitability on a quarterly or annual
basis.

    Without profits from our operations or additional financing, we may be
    unable to achieve the objectives of our current business strategy, which
    could force us to delay, curtail or eliminate our product development
    programs.

    We require additional funds to produce molds for our cost-reduced plastic
pallets for large-scale manufacturing. If we are unable to obtain these funds,
either by achieving profitability or by obtaining additional financing, we
could be forced to delay, curtail or eliminate certain product development
programs. In addition, our inability to obtain additional funds could have such
a material adverse effect on our business, prospects, results of operations or
financial condition, that we may be forced to restructure, file for bankruptcy,
sell assets or cease operations entirely, any of which could jeopardize an
investment in our common stock.

    If we do not achieve profitability, we will need and may be unable to
    obtain additional financing on satisfactory terms, which may require us to
    accept financing on burdensome terms that may cause substantial dilution to
    our shareholders and impose onerous financial restrictions on our business.

    We require additional funds to meet our business objectives. If we do not
achieve profitability, we will require additional financing. Future financing
may not be available on a timely basis, in sufficient amounts or on terms
acceptable to us. This financing may also dilute existing shareholders' equity.
Any debt financing or other financing of securities senior to our common stock
will likely include financial and other covenants that will restrict our
flexibility. Our current financing restricts our

<page>26

ability to pay dividends on our common stock, and we expect that any future
financing will similarly prohibit us from paying dividends on our common stock.
Any failure to comply with these covenants would have a material adverse effect
on our business, prospects, financial condition and results of operations
because we could lose any then- existing sources of  financing and our ability
to secure new sources of financing may be impaired.

    Many companies with greater resources and operating experience are
    developing and selling plastic pallets similar to ours. These companies
    could use their greater resources to gain market share at our expense.

    We have significant competition and although we believe that our pallets
are competitive in the marketplace, we cannot assure you that these or other
companies with greater experience and greater resources than us will use their
greater resources to gain market share at our expense. We have identified
approximately 25 United States-based companies producing some type of plastic
pallet. Two direct competitors producing large-scale plastic pallets are Orbis,
Inc. in Oconomowoc, Wisconsin, and Buckhorn, Inc. in Milford, Ohio.

    We rely heavily on our Chief Executive Officer, Randy Zych, and our
    President, Charles Foerg. The loss of their services could adversely affect
    important relationships with our suppliers and subcontract manufacturers
    and therefore adversely affect our business.

    Our success depends, to a significant extent, upon the continued services
of Randy Zych, who is our Chief Executive Officer and Chairman of the Board,
and Charles Foerg, who is our President, Secretary and Treasurer. For example,
Messrs. Zych and Foerg have developed key personal relationships with our
suppliers and subcontract manufacturers. We greatly rely on these relationships
in the conduct of our operations and the execution of our business strategies.
The loss of either or both of Messrs. Zych and Foerg could, therefore, result
in the loss of our favorable relationships with one or more of our suppliers or
subcontract manufacturers. Although we have entered into employment agreements
with these executive officers, those agreements are of limited duration and are
subject to early termination at the executive officer's option under certain
circumstances. In addition, we do not maintain "key person" life insurance
covering the lives of Mr. Zych or Mr. Foerg. The loss of Mr. Zych or Mr. Foerg
could significantly delay or prevent the achievement of our business objectives
and therefore have a material adverse affect on our business.

    Because we believe that proprietary rights are material to our success,
    misappropriation of those rights or claims of infringement or legal actions
    related to intellectual property could adversely impact our financial
    condition.

    We believe we have proprietary rights in our molds, designs and the
specific mix of inputs we utilize in connection with our plastic pallets.
However, we have not obtained patents in connection with these proprietary
rights, and we believe such rights may not be patentable. If our competitors
infringe upon our proprietary rights we may be unable to enforce our rights.
Also, although we do not believe we are infringing upon any third party's
intellectual property rights, we may receive infringement claims from third
parties relating to our products. In those cases, we intend to investigate the
validity of the claims and, if we believe the claims have merit, to respond
through licensing or other appropriate actions. If we are unable to license or
otherwise resolve the issue on a cost-effective basis, we could be prohibited
from marketing products containing that intellectual property, incur
substantial costs in redesigning products incorporating that intellectual
property, or incur substantial costs defending any legal action taken against
us.

<page>27

    Our common stock price is subject to significant volatility, which could
    result in substantial losses for investors and in litigation against us.

    The stock market as a whole and individual stocks, including our common
stock, historically have experienced wide price and volume fluctuations. During
the year ended December 31, 2005, the high and low closing bid prices of our
common stock were $0.28 and $0.04, respectively. The market price of our common
stock may exhibit significant fluctuations in the future in response to various
factors, many of which are beyond our control, and which include:

    o variations in our quarterly operating results, which variations could
      result from, among other things, changes in the needs of one or more of
      our customers;
    o changes in market valuations of similar companies and stock market price
      and volume fluctuations generally;
    o economic conditions specific to the plastic pallet industry;
    o announcements by us or our competitors of new or enhanced products, or
      services or significant contracts, acquisitions, strategic relationships,
      joint ventures or capital commitments;
    o regulatory developments; and
    o future sales of our common stock or other debt or equity securities.

    If our operating results in future quarters fall below the expectations of
market makers, securities analysts and other investors, our stock price will
likely decline. Consequently, the  price at which you purchase shares of our
common stock may not be indicative of the price that will prevail in the
trading market and you may be unable to sell your shares of common stock at or
above your purchase price. In the past, securities class action litigation
often has been brought against a company following periods of volatility in the
market price of its securities. We may in the future be the target of similar
litigation. Securities litigation could result in substantial costs and
liabilities and could divert management's attention and resources.

    Because we are subject to the "Penny Stock" rules, the level of trading
    activity in our stock may be reduced. If the level of trading activity is
    reduced, you may not be able to sell your shares of our common stock.

    Broker-dealer practices in connection with transactions in "penny stocks"
are regulated by penny stock rules adopted by the Securities and Exchange
Commission. Penny stocks are generally, equity securities with a price of less
than $5.00 that trade on the OTC Bulletin Board or the Pink Sheets. The penny
stock rules require a broker-dealer, prior to a transaction in a penny stock
not otherwise exempt from the rules, to deliver a standardized risk disclosure
document that provides information about penny stocks and the nature and level
of risks in the penny stock market. The broker-dealer also must provide the
customer with current bid and offer quotations for the penny stock, the
compensation of the broker-dealer and its salesperson in the transaction, and,
if the broker-dealer is the sole market maker, the broker-dealer must disclose
this fact and the broker-dealer's presumed control over the market, and monthly
account statements showing the market value of each penny stock held in the
customer's account. In addition, broker-dealers who sell these securities to
persons other than established customers and "accredited investors" must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written agreement to the transaction.
These requirements may have the effect of reducing the level of trading
activity in a penny stock, such as our common stock, and investors in our
common stock may find it difficult to sell their shares.

<page>28

    Because our common stock is not listed on a national securities exchange,
    you may find it difficult to dispose of or obtain quotations for our common
    stock.

    Our common stock trades under the symbol "RPMM" on the OTC Bulletin Board.
Because our stock trades on the OTC Bulletin Board rather than on a national
securities exchange, you may find it difficult to either dispose of, or to
obtain quotations as to the price of, our common stock.

    Shares of our common stock eligible or to become eligible for public sale
    could adversely affect our stock price and make it difficult for us to
    raise additional capital through sales of equity securities.

    As of April 10, 2006, we had outstanding 28,596,070 shares of common stock.
We also have outstanding options to purchase up to 8,300,000 shares of our
common stock, outstanding warrants to purchase up to 2,125,000 shares of our
common stock, and an outstanding convertible term note, the principal portion
of which is currently convertible into approximately 4,100,000 shares of our
common stock (plus applicable interest, penalties and any anti-dilution
adjustments). The shares underlying the convertible term note and the warrants
have been registered for resale pursuant to a registration statement and may be
sold under the Securities Act. We cannot predict the effect, if any, that
future sales of shares of our common stock into the market will have on the
market price of our common stock. However, sales of a substantial number of
shares of our common stock in the public market, or the perception that sales
could occur, could adversely affect the market price of our common stock. Any
adverse effect on the market price of our common stock could make it difficult
for us to raise additional capital through sales of equity securities at a time
and at a price that we deem appropriate.

    Conversion or exercise of our outstanding convertible securities could
    substantially dilute your investment and the existence of our convertible
    securities could negatively effect the price of our common stock.

    We have issued a convertible term note that is convertible at prices that
are subject to adjustment due to a variety of factors, including the issuance
of securities at, or at an exercise or conversion price, less than the current
fixed conversion price of $0.24. As of April 10, 2006 the principal portion of
the convertible term note was convertible into approximately 4,100,000 shares
of our common stock (plus applicable interest, penalties and any anti-dilution
adjustments). You could, therefore, experience substantial dilution of your
investment as a result of the conversion of our outstanding convertible term
note. We also have outstanding options to purchase up to 8,300,000 shares of
our common stock and warrants to purchase up to 2,125,000 shares of our common
stock that could have a dilutive effect on your shares. The existence of these
securities could also mean that an increase in the trading price of a share of
our common stock will result in a limited benefit to existing security holders.
This possibility could negatively affect the price of our common stock.

    If our security holders engage in short sales of our common stock,
    including sales of shares to be issued upon conversion or exercise of
    derivative securities, the price of our common stock may decline.

    Selling short is a technique used by a shareholder to take advantage of an
anticipated decline in the price of a security. A significant number of short
sales or a large volume of other sales within a relatively short period of time
can create downward pressure on the market price of a security. Further sales
of common stock issued upon conversion or exercise of our derivative securities
could cause even greater declines in the price of our common stock due to the
number of additional shares available in the market, which could encourage
short sales that could further undermine the value of our common stock. You
could, therefore, experience a decline in the value of your investment as a
result of short sales of our common stock.

<page>29

    Our current financing arrangements could prevent our common stock from
    being listed on Nasdaq or other principal markets.

    Nasdaq and other principal markets require that, to be eligible for
inclusion in the stock market, a company's common stock have a specified
minimum bid price per share. Convertible note financings characteristically
exert downward pressure on the market for a company's common stock. This
pressure, which may be applied against the market for our common stock while
our convertible term note is outstanding, may prevent our common stock from
being listed on Nasdaq or other principal markets

    If the ownership of our common stock continues to be highly concentrated,
    it may prevent you and other stockholders from influencing significant
    corporate decisions and may result in conflicts of interest that could
    cause our stock price to decline.

    As a group, our executive officers and directors beneficially own or control
approximately 20.2% of our outstanding shares of common stock (after giving
effect to the exercise of all outstanding vested options exercisable within 60
days from April 10, 2006). As a result, our executive officers and directors,
acting as a group, have substantial control over the outcome of corporate
actions requiring stockholder approval, including the election of directors,
any merger, consolidation or sale of all or substantially all of our assets, or
any other significant corporate transaction. Our executive officers and
directors may have interests different than yours. For example, the executive
officers and directors may delay or prevent a change in control of our company,
even one that would benefit our stockholders, or pursue strategies that are
different from the wishes of other investors. The significant concentration of
stock ownership may adversely affect the trading price of our common stock due
to investors' perception that conflicts of interest may exist or arise.

    We cannot assure you that an active market for our shares of common stock
    will develop or, if it does develop, will be maintained in the future. If
    an active market does not develop, you may not be able to readily sell your
    shares of our common stock.

    Our common stock began trading on the OTC Bulletin Board in February of
2002. Since that time, there has been limited trading in our shares, at widely
varying prices, and the trading to date has not created an active market for
our shares. We cannot assure you that an active market for our shares will be
established or maintained in the future. If an active market is not established
or maintained, you may not be able to readily sell your shares of our common
stock.

ITEM 7. FINANCIAL STATEMENTS.

    Our consolidated financial statements are filed with and begin on page F-1
of this report.

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

    None.

ITEM 8A. CONTROLS AND PROCEDURES

    Our Chief Executive Officer and Chief Financial Officer (our principal
executive officer and principal financial officer, respectively) have
concluded, based on their evaluation as of December 31, 2005 (the "Evaluation
Date"), that the design and operation of our "disclosure controls and
procedures" (as defined in Rules 13a-15(e) under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) are effective to ensure that information
required to be disclosed by us in the reports filed or submitted by us under
the Exchange Act is accumulated, recorded, processed, summarized and reported
to our management, including our principal executive officer and principal
financial officer, as appropriate to allow timely decisions regarding whether
or not disclosure is required.

    During the quarter ended December 31, 2005, there were no changes in our
"internal controls over financial reporting" (as defined in Rule 13a-15(f)
under the Exchange Act) that have materially affected, or are reasonably likely
to materially affect, our internal controls over financial reporting.

ITEM 8B. OTHER INFORMATION.

        None.

<page>31

        PART III

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

Directors and Executive Officers

    The directors and executive officers of RPM Technologies, Inc. and their
 ages, positions, business experience and education as of April 10, 2006 are as
 follows:

Name                  Age                  Position Held
------------------  -------  ----------------------------------------------
Randy Zych             61    Chairman, Chief Executive Officer and Director
Charles Foerg          73    President, Secretary, Treasurer and Director
David Lade             50    Chief Financial Officer, Controller and Director
Business Experience

    Randy Zych has served as our Chairman and Chief Executive Officer and as a
Director since our inception in 1997. Mr. Zych has spent most of the past
twenty-five years working as an entrepreneur, developing and promoting various
new businesses, including several manufacturing companies. For example, Mr.
Zych developed and promoted an organic fertilizer for Earthlife Products, Inc.
He also developed and promoted financial services for Cambridge Capital Group,
Ltd. Between 1990 and our inception in 1997, Mr. Zych worked as an independent
consultant in the areas of marketing and distribution strategies for the two
preceding companies. Mr. Zych attended the University of Illinois, Chicago,
concentrating his studies in finance and business management.

    Charles W. Foerg has served as our President, Secretary and Treasurer and
as a Director since 1997. Immediately prior to his association with us, he was
self-employed as a management consultant from 1991 to 1996. He has accumulated
more than 25 years of experience in financing, building and managing several
companies across many industries, with jobs and duties covering executive
management, marketing, technology acquisitions, quality control and
manufacturing operations. Mr. Foerg's experience in advertising includes
working as Account Supervisor and Vice President for Young & Rubicam
Advertising and BBD&O Advertising. Mr. Foerg received a BS degree in Economics
from Shurtleff College, Alton, Illinois and completed graduate studies in
Business Administration at the University of Detroit. Mr. Foerg served in the
U.S. Army in Europe and Korea.

    David A. Lade has served as our Chief Financial Officer and as a Director
since 1999.  Mr. Lade also serves as our Controller. From 1995 until 1999, Mr.
Lade was an independent financial consultant, and served as part-time
controller for several closely held corporations. As a consultant, Mr. Lade
contributed in all areas of accounting, budgeting, cash management, bank
relations and acquisition analysis.  From 1987 until 1995, Mr. Lade worked as
Controller for AGA Gas Central, where he was responsible for financial
reporting and analysis, strategic planning, customer service and branch
administration. From 1983 until 1987, Mr. Lade was Experienced Audit Senior for
Arthur Anderson & Co., where he served as a member of the commercial audit
division.  Mr. Lade became a Certified Public Accountant in 1984, and a
Registered Securities Representative (Series 6 Exam) in 1992.

<page>32

Section 16(a) Beneficial Ownership Reporting Compliance

    Section 16(a) of the Securities Exchange Act of 1934, as amended ("Exchange
Act"), requires our executive officers and directors, and persons who
beneficially own more than 10% of a registered class of our common stock, to
file initial reports of ownership and reports of changes in ownership with the
Securities and Exchange Commission ("Commission").  These officers, directors
and stockholders are required by the Commission regulations to furnish us with
copies of all reports that they file.

    Based solely upon a review of copies of the reports furnished to us during
the year ended December 31, 2005 and thereafter, or any written representations
received by us from directors, officers and beneficial owners of more than 10%
of our common stock ("reporting persons") that no other reports were required,
we believe that, during 2005 all Section 16(a) filing requirements applicable
to our reporting persons were met.

Board and Board Committees

    All directors hold office until the next annual meeting of shareholders or
until their respective successors are elected or until their earlier death,
resignation or removal.

    Our board of directors has an audit committee, a compensation committee and
a nominating committee.  The audit committee consists of Randy Zych, Charles
Foerg and David Lade. Our compensation and nominating committees consist of
Messrs. Zych and Foerg. The duties and responsibilities of our audit committee
and our nominating committee have been set forth in a written charter governing
such committees.

Codes of Ethics

    Our board of directors has adopted a written code of ethics applicable to
our Chief Executive Officer, our Chief Financial Officer and any other current
or future senior financial officers.

    We intend to satisfy the disclosure requirement under Item 10 of Form 8-K
relating to amendments to or waivers from provision of these codes that relate
to one or more of the items set forth in Item 406(b) of Regulation S-K, by
describing on our main Internet website at www.rpmtechnologiesinc.com, within
five business days following the date of a waiver or a substantive amendment,
the date of the waiver or amendment, the nature of the amendment or waiver, and
the name of the person to whom the waiver was granted.

    Information on our Internet website is not, and shall not be deemed to be,
a part of this report or incorporated into any other filings we make with the
Securities and Exchange Commission.

Compensation Committee Interlocks and Insider Participation

    No member of our board of directors has a relationship that would
constitute an interlocking relationship with executive officers and directors
of another entity.

<page>33

ITEM 10.  EXECUTIVE COMPENSATION.

    The Summary Compensation Table below provides information concerning the
annual and long-term compensation for services in all capacities of Randy Zych,
our Chief Executive Officer and Charles Foerg, our President, Secretary and
Treasurer, or the named executives, during the years 2005, 2004 and 2003 that
they were entitled to pursuant to employment agreements. No other employee of
RPM was compensated in amounts exceeding $100,000 during the year ended
December 31, 2005.

                            Summary Compensation Table
                            ---------------------------
                                                    Long-Term
                                                  Compensation
                                                  ------------
                                                    Awards
                                                  ------------
                              Annual Compensation  Securities
     Name and                                      Underlying
     Principal Position       Year     Salary($)   Options(#)
     -------------------      -------  ---------  ------------
     Randy Zych               2005     $125,000(1)        --
     Chief Executive Officer  2004     $125,000     2,500,000
                              2003     $125,000           --

     Charles Foerg,           2005     $ 85,000(1)        --
     President, Secretary     2004     $ 85,000     2,500,000
     and Treasurer            2003     $ 85,000           --
     -------------------
    (1) In 2005, cash salaries of $28,886 and $1,614 were paid to Mr. Zych and
        Mr. Foerg, respectively, and the remainder of their salaries were added
        to accrued compensation.

Stock Option Grants

    In fiscal 2005, no options or stock appreciation rights were granted to the
named executives.

<page>34

Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values

     The following table provides information regarding the number of shares
of our common stock underlying exercisable and unexercisable in-the-money
stock options held by the named executives and the values of those options at
fiscal year-end. An option is "in-the-money" if the fair market value for the
underlying securities exceeds the exercise price of the option. The named
executives did not hold any stock appreciation rights.

<table>
                                          NUMBER OF
                                    SECURITIES UNDERLYING            VALUE ($) OF UNEXERCISED
                                   UNEXERCISED OPTIONS AT             IN-THE-MONEY OPTIONS AT
                                      DECEMBER 31, 2005                DECEMBER 31, 2005 (1)
                               ------------------------------      ------------------------------
            NAME               EXERCISABLE      UNEXERCISABLE      EXERCISABLE      UNEXERCISABLE
---------------------------    -----------      -------------      -----------      -------------
<S>                              <C>                <C>              <C>                <C>
Randy Zych.................     2,500,000            --             $    --           $    --
Charles Foerg..............     2,500,000            --             $    --           $    --
</TABLE>

----------
(1)  Based on the last reported sale price of our common stock of $0.19 on
     December 31, 2005, as reported on the OTC Bulletin Board, less the exercise
     price of the options.

Long-Term Incentive Plan Awards


     During the year ended December 31, 2005, no awards were given to named
executives under long-term incentive plans.

Compensation of Directors

    Our directors do not receive any compensation in their capacity as members
of our board of directors, but may be reimbursed for reasonable expenses
incurred in connection with attendance of meetings of the board of directors.
No amounts were reimbursed to directors in 2005 for expenses that may have been
incurred by such directors in connection with attendance of meetings of the
board of directors.

<page>35

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

    We entered into an employment agreement with Randy Zych, our Chairman and
Chief Executive Officer, on September 1, 2002.  The employment agreement has a
term of three years and automatically renews for additional five year terms
unless either party terminates it by giving at least 180 days notice to the
other party.  Mr. Zych's annual salary under the employment agreement is
$125,000.  During subsequent terms, we are to negotiate in good faith increases
in Mr. Zych's salary.  Mr. Zych received 500,000 shares of our common stock
upon signing his employment agreement.  Mr. Zych also received an option to
purchase up to 2,500,000 shares of common stock at an option price of $0.50 per
share.  This option was exercisable during the initial three year term of the
employment agreement, with an option to renew said option for an additional
three years.  This option expired on September 1, 2005. All stock options are
vested and irrevocable unless Mr. Zych is terminated for cause for any of the
following reasons, in which case all stock options are automatically revoked:
refusing to carry out the reasonable and lawful directions of the corporation,
defrauding the corporation, embezzling funds of the corporation, engaging in
willful misconduct, or engaging in fraud or dishonesty in performance of
duties. If we terminate Mr. Zych without cause, we are obligated to pay Mr.
Zych an amount equal to his salary and benefits for a period of 180 days.

    We entered into an employment agreement with Charles Foerg, our President,
on September 1, 2002.  The employment agreement has a term of three years and
automatically renews for additional five year terms unless either party
terminates it by giving at least 180 days notice to the other party.  Mr.
Foerg's annual salary under the employment agreement is $85,000.  During
subsequent terms, we are to negotiate in good faith increases in Mr. Foerg's
salary.  Mr. Foerg received 500,000 shares of our common stock upon signing his
employment agreement.  Mr. Foerg also received an option to purchase up to
1,000,000 shares of common stock at an option price of $0.50 per share.  This
option was exercisable during the initial three year term of the employment
agreement, with an option to renew said option for an additional three years.
This option expired on September 1, 2005. All stock options are vested and
irrevocable unless Mr. Foerg is terminated for cause for any of the following
reasons, in which case all stock options are automatically revoked:  refusing
to carry out the reasonable and lawful directions of the corporation,
defrauding the corporation, embezzling funds of the corporation, engaging in
willful misconduct, or engaging in fraud or dishonesty in performance of
duties.  If we terminate Mr. Foerg without cause, we are obligated to pay Mr.
Foerg an amount equal to his salary and benefits for a period of 180 days.

<page>36

Report on Repricing of Options and SARs

    No repricing of stock options or stock appreciation rights
previously awarded to the named executives occurred during the year ended
December 31, 2005.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
          RELATED STOCKHOLDER MATTERS.

    The following table sets forth, as of April 10, 2006, certain information
with respect to (i) each director of our company, (ii) the named executives,
and (iii) all directors and executive officers of our company as a group, and
(iv) each person known to our company to be the beneficial owner of more than
5% of our common stock. The information with respect to each person specified
is as supplied or confirmed by such person or based upon statements filed with
the Commission.
<table>
Name and Address of             Title of        Amount and Nature of
of Beneficial Owner (1)        Class           Beneficial Ownership(2)     Percent of Class
--------------------------     ---------       ------------------------   ------------------
                               <C>             <C>                        <C>
Randy Zych                      Common              3,600,000(3)                11.6%

Charles Foerg                   Common              3,102,000(4)                10.0%

David Lade                      Common                 72,000                     *

All directors and executive
officers as a group
(3 persons)                     Common             10,274,000(5)                20.2%
--------------------------
*       Less than 1.0%

(1)     The address of each director and executive officer named in this
        table is c/o RPM Technologies, Inc., 24001 S. Western Avenue, Park
        Forest, Illinois 60466.

<page>37

(2)     Beneficial ownership is determined in accordance with the rules  of
        the  Securities  and  Exchange  Commission   and generally includes
        voting or investment power with  respect to securities. Except as
        indicated by footnote, and subject to community  property laws
        where applicable,  the persons named in the  table above have  sole
        voting and  investment power with respect to all  shares of common
        stock shown  as beneficially owned by them. Shares of common stock
        subject to options currently exercisable, or exercisable within  60
        days after April 10, 2006, are deemed to be outstanding in
        calculating the percentage ownership  of a person or  group but are
        not deemed to be outstanding as to any other person or group.

(3)     Includes 2,500,000 shares of common stock underlying options.

(4)     Includes 2,500,000 shares of common stock underlying options.

(5)     Includes 5,000,000 shares of common stock underlying options.
</table>

Equity Compensation Plan Information

    The following table and the accompanying footnotes give information about
our common stock that may be issued upon the exercise of options, warrants and
rights under our stock option plans, as well as warrants and rights issued
outside of any formal plan as of December 31, 2005.
<table>

                                                                          Weighted Average       Number of
                                            Number of Securities to        Exercise Price        Securities
                                            be Issued Upon Exercise       of Outstanding          Remaining
                                               of Outstanding Options,    Options, Warrants      Available for
              Plan Category                    Warrants and Rights            and Rights         Future Issuance
----------------------------------------    ----------------------------  ------------------   ------------------
                                            <C>                           <C>                  <C>
Equity compensation plans approved by
  security holders.....................              -                            -                    -
Equity compensation plans not approved
  by security holders(1)................       8,300,000                       $0.31                 N/A
                                            ----------------------------  ------------------   ------------------
Total                                          8,300,000                       $0.31                 N/A
----------------------------
(1) As of December 31, 2005, we had outstanding options issued outside of any formal
    plan to purchase up to 8,300,000 shares of our common stock.

</table>
<page>38


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

    We conduct many executive office functions from the separate personal
offices of Randy Zych, our Chairman and Charles Foerg, our President. No formal
lease agreement exists for the use of these offices. During 2005 and 2004, we
paid these officers an aggregate approximately $103,900 and $70,800,
respectively, for the use of these offices and for the reimbursement of
expenses paid personally by these officers on our behalf. We believe that our
facilities are adequate for our needs for the near future.

    As of December 31, 2005 and 2004, respectively, we had accrued
approximately $1,115,000 and $892,000 in earned but unpaid officer
compensation.

    On September 3, 2002, we issued an option to purchase 250,000 shares of
Class A Preferred Stock at an exercise price of $5.00 to Randy Zych exercisable
until September 1, 2005. In June of 2004, our current securities counsel
advised us that the Class A Preferred Stock and the issuance thereof was not
properly authorized.  In lieu thereof, on July 1, 2004, we granted Randy Zych
options to purchase 2,500,000 shares of our common stock, exercisable until
September 1, 2007 at $0.50 per share.

    On September 3, 2002, Charles Foerg was granted a fully-vested three-year
option to purchase up to 250,000 shares of Class A Preferred Stock at an
exercise price of $5.00 per share, which is $.50 per share of common stock on
an as-converted basis, which was the closing price of a share of our common
stock on that date. In June of 2004, our current securities counsel advised us
that the Class A Preferred Stock and the issuance thereof was not properly
authorized.  In lieu thereof, on July 1, 2004, we granted Charles Foerg options
to purchase 2,500,000 shares of our common stock, exercisable until September
1, 2007 at $0.50 per share.

    We are or have been a party to employment and compensation arrangements
with related parties, as more particularly described above under the headings
"Compensation of Executive Officers," "Employment Contracts and Termination of
Employment and Change-in-Control Arrangements" and "Compensation of Directors."

<page>39

ITEM 13. EXHIBITS.

    Reference is made to the Index to Exhibits that follows the consolidated
financial statements contained in this report.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

   The following table presents fees for professional audit services rendered
by Frank L. Sassetti & Co. for the audit of our consolidated financial
statements for the year ended December 31, 2005 and S. W. Hatfield, CPA for the
audit of our consolidated financial statements for the year ended December  31,
2004.

                              2005             2004
                            --------        --------
    Audit Fees              $ 14,000        $ 27,100
    Audit-Related Fees          --              --
    Tax Fees                                   1,000
    All Other Fees              --              --
                            --------        --------
    Total                   $ 14,000        $ 28,100

    AUDIT FEES. Consist of amounts billed for professional services rendered
for the audit of our annual consolidated financial statements included in our
Annual Reports on Forms 10-KSB and the reviews of our interim consolidated
financial statements included in our Quarterly Reports on Forms 10 QSB.

    TAX FEES. Consists of amounts billed for professional services rendered in
connection with the preparation and filing of our federal and state tax
returns.

    Our audit committee is responsible for approving all audit, audit-related,
tax and other services.  The audit committee pre-approves all auditing services
and permitted non-audit services, including all fees and terms to be performed
for us by our independent auditor at the beginning of the fiscal year.  Non-
audit services are reviewed and pre-approved by project at the beginning of the
fiscal year.  Any additional non-audit services contemplated by us after the
beginning of the fiscal year are submitted to the audit committee for pre-
approval prior to engaging the independent auditor for such services.

<page>40

                                RPM TECHNOLOGIES, INC.
                            Index to Financial Statements

                                                                       Page(s)
                                                                     ---------
Reports of Independent Registered Public Accounting Firms            F-2 - F-3

Financial Statements

  Balance Sheets
    as of December 31, 2005 and December 31, 2004                          F-4

  Statements of Operations and Comprehensive Loss
    for the years ended December 31, 2005 and December 31, 2004            F-5

  Statement of Changes in Stockholders' Equity
    for the years ended December 31, 2005 and December 31, 2004            F-6

  Statements of Cash Flows
    for the years ended December 31, 2005 and December 31, 2004            F-7

  Notes to Financial Statements                                            F-8


<page>F-1




To The Board of Directors
RPM Technologies, Inc.
Park Forest, Illinois

                   REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have audited the accompanying balance sheet of RPM TECHNOLOGIES, INC. as of
December 31, 2005 and the related statements of operations and comprehensive
loss, changes in stockholders' equity and cash flows for the year ended
December 31, 2005.  These financial statements are the responsibility of the
company's management.  Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  The company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of RPM TECHNOLOGIES, INC. as of
December 31, 2005, and the results of its operations and its cash flows for the
year ended December 31, 2005, in conformity with accounting principles
generally accepted in the United States.

/s/ Frank L. Sassetti & Co.
----------------------------
March 27, 2006
Oak Park, Illinois



6611 W. North Avenue * Oak Park, Illinois 60302 * Phone (708) 386-1433
* Fax (708) 386-0139

<page>F-2

                          LETTERHEAD OF S. W. HATFIELD, CPA
              REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


Board of Directors and Stockholders
RPM Technologies, Inc.

We have audited the accompanying balance sheet of RPM Technologies, Inc. (a
Delaware corporation) as of December 31, 2004 and the related statement of
operations and comprehensive loss, statement of changes in stockholders' equity
(deficit) and statement of cash flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting.  Our audit included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Company's internal control
over financial reporting.  Accordingly, we express no such opinion.  An audit
also includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of RPM Technologies, Inc. as of
December 31, 2004 and the results of its operations and its cash flows for the
year ended December 31, 2004 in conformity with generally accepted accounting
principles generally accepted in the United States of America.

                                            /s/ S. W. Hatfield, CPA
                                            ---------------------------
                                            S. W. HATFIELD, CPA
Dallas, Texas
April 9, 2005

<page>F-3

                            RPM TECHNOLOGIES, INC.
                                BALANCE SHEETS
                          December 31, 2005 and 2004

                                  December 31,      December 31,
                                      2005              2004
                                  ------------      ------------
                        ASSETS
                        ------
Current Assets
  Cash and cash equivalents       $      411,904   $   592,936
  Accounts receivable - Trade,
   net of allowance for doubtful
   accounts of $-0- and $-0-,
   respectively                          475,622        284,963
  Pallet Inventory                        14,360              0
                                  --------------    -----------
    Total Current Assets                 901,886        877,899
                                  --------------    -----------
    Net Property and Equipment           730,870        557,861
                                  --------------    -----------
Other assets
  Restricted cash                              0      1,737,280
  Equipment held for sale                112,800        112,800
  Refundable deposits and other           17,353         19,853
                                  --------------    -----------
     Total Other Assets                  130,153      1,869,933
                                  --------------    -----------
Total Assets                      $    1,762,909    $ 3,305,693
                                  ==============    ===========

           LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
           ----------------------------------------------
Current Liabilities
  Note payable                    $      50,000  $     50,000
  Accounts payable - trade              476,826      334,562
  Accrued interest payable               49,707        82,201
  Accrued officer compensation        1,114,876       892,148
  Other Accrued Liabilities              60,475             0
                                  --------------    -----------
    Total Current Liabilities         1,751,884     1,358,911
                                  --------------    -----------
Convertible Term Note                   986,358     2,500,000
                                 --------------    -----------
    Total Liabilities                 2,738,242     3,858,911

Commitments and Contingencies
Stockholders' Equity (Deficit)
  Common stock - $0.001 par value.
    250,000,000 shares authorized.
    25,096,070 and 18,980,520 shares
    issued and outstanding,
    respectively                         25,096        18,981
  Additional paid-in capital          9,891,799     9,526,200
  Deferred compensation -
   fair value of vested stock
   options                            2,455,000     2,225,000
  Accumulated deficit               (13,347,228)  (12,301,428)
                                  --------------    -----------
                                       (975,333)     (531,247)
  Stock subscription receivable               0      ( 21,971)
                                  --------------    -----------
    Total Stockholders' Equity         (975,333)     (553,218)
                                  --------------    -----------
Total Liabilities and
     Stockholders' Equity          $   1,762,909   $3,305,693
                                  ==============   ============

<page>F-4

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


                              RPM TECHNOLOGIES, INC.
                  STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
                      Years ended December 31, 2005 and 2004



                                             Year ended     Year ended
                                            December 31,    December 31,
                                                2005            2004
                                           --------------   -------------
Revenues                                     $2,862,253     $2,191,373

Cost of Sales                                 2,504,875      1,862,681
                                           --------------   -------------
Gross Profit                                    357,378        328,692

Expenses
  Sales and marketing expenses                  209,596        218,082
  Payroll and related expenses                  274,328        309,568
  Professional and consulting fees              186,407        694,130
  General and administrative expenses           220,562        262,634
  Interest expense                              105,192         91,614
  Depreciation                                   90,618         65,790
  Compensation expense related to fair
    value of granted stock options              230,000      1,700,000
  Compensation expense related to common stock
    issuances at less than "fair value"          86,475        308,586
                                           --------------   -------------
    Total operating expenses                  1,403,178      3,650,404
                                           --------------   -------------
Loss from operations                         (1,045,800)    (3,321,712)
Other Income
  Interest income                                     0         13,445
                                           --------------   -------------
Loss before Income Taxes                     (1,045,800)    (3,308,267)
Provision for Income Taxes                         -               -
                                           --------------   -------------
Net Loss                                     (1,045,800)    (3,308,267)
Other comprehensive income                         -               -
                                           -------------  --------------
Comprehensive Loss                          $(1,045,800)   $(3,308,267)
                                           =============  ==============
Loss per weighted-average share of
  common stock outstanding,
  computed on Net Loss - basic and
  fully diluted                                 $(0.05)        $(0.20)
                                           ==============   =============
Weighted-average number of shares of common
  stock outstanding                           20,910,690     16,772,811
                                           ==============   =============

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

<page>F-5

<table>

                              RPM TECHNOLOGIES, INC.
                    STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                       Years ended December 31, 2005 and 2004

                                              Additional     Deferred        Stock
                       Common Stock            paid-in    compensation-  subscription Accumulated
                       Shares    Amount        capital    stock options  receivable     deficit       Total
                      -----------------       ---------- -------------- -----------  ------------  ----------
                      <C>                     <C>        <C>            <C>          <C>           <C>
Balances at
  January 1, 2004
                     13,497,156 $13,497      $8,671,279     $525,000    $(104,180)   $(8,993,161)   $112,435

  Cash                1,527,000   1,527         370,059         -          82,209           -        453,795
    Less costs to
      acquire capital     -         -          (124,500)        -            -              -       (124,500)
  Professional fees   3,951,364   3,952         606,867         -            -              -        610,819
  Acquisition of pallet
    handling technology
    licensing rights      5,000       5           2,495         -            -              -          2,500
  Deferred compensation-
    fair value of granted
    stock options           -          -             -     1,700,000         -              -      1,700,000

Net loss for the year       -          -             -            -          -        (3,308,267) (3,308,267)
                     ----------  --------    -----------  -----------    ---------  ------------- ------------
Balances at
  December 31, 2004  18,980,520  $18,981     $9,526,200   $2,225,000     $(21,971)  $(12,301,428) $ (553,218)

  Cash                2,550,000   2,550          94,479         -          21,971           -        119,000
  Debt Reduction        615,550     615          67,095         -            -              -         67,710
  Professional fees   2,950,000   2,950         204,025         -            -              -        206,975
  Deferred compensation-
    fair value of granted
    stock options           -          -             -       230,000         -              -        230,000

Net loss for the year       -          -             -            -          -        (1,045,800) (1,045,800)
                     ----------  --------    -----------  -----------    ---------  ------------- ------------
Balances at
  December 31, 2005  25,096,070  $25,096     $9,891,799   $2,455,000     $    -     $(13,347,228)  $(975,333)
                     ========== =========    ===========  ===========    ========== ============== ===========

The accompanying notes are an integral part of these financial statements.
</table>
<page>F-6


                               RPM TECHNOLOGIES, INC.
                             STATEMENTS OF CASH FLOWS
                       Years ended December 31, 2005 and 2004

                                           Year ended    Year ended
                                          December 31,   December 31,
                                              2005          2004
                                          ------------   ------------
Cash Flows from Operating Activities
  Net Loss                                 $(1,045,800)   $(3,308,267)
  Adjustments to reconcile net
    income to net cash used in
    operating activities
      Depreciation                              90,618       65,790
      Compensation expense related to fair
        value of granted stock options         230,000    1,700,000
      Compensation expense related to
       common stock issuances                  206,975      799,404
      (Increase) Decrease in
        Accounts receivable - trade and other (190,659)      57.949
        Inventory                              (14,360)        -
        Refundable deposits and other            2,500      (12,531)
      Increase (Decrease) in
        Accounts payable                       142,264      104,608
        Other accrued liabilities               75,691       72,311
        Accrued officers compensation          222,728      235,987
                                          -------------  ----------
    Net cash used in operating activities     (280,043)    (284,749)
                                          -------------  -----------
Cash Flows from Investing Activities

  Change in restricted cash from
       convertible term note                 1,737,280    (1,737,280)
  Purchase of equipment held for sale                0      (112,800)
  Purchase of property and equipment          (263,627)     (229,178)
                                          -------------  ------------
    Net cash provided by (used in)
     investing activities                    1,473,653    (2,079,258)
                                          -------------  ------------

Cash Flows from Financing Activities
  Cash received on convertible term note             0    2,500,000
  Principal payments on notes payable      (1,493,642)           -
  Cash paid to acquire capital                       0    (124,500)
  Proceeds from sales of common stock          119,000      265,210
                                          -------------  ----------
    Net cash provided by (used in)
     financing activities                   (1,374,642)   2,640,710
                                          -------------  ----------

Increase (Decrease) in Cash and
   Cash Equivalents                           (181,032)     276,703
Cash and cash equivalents at beginning
   of period                                   592,936      316,233
                                          -------------  ----------
Cash and cash equivalents at end of period   $ 411,904     $592,936
                                          =============  ==========

Supplemental Disclosures of Interest
    and Income Taxes Paid
  Interest paid during the period            $ 89,976      $19,303
                                             =========     ========
  Income taxes paid (refunded)               $     -       $   -
                                             =========     ========
Supplemental Disclosure of Non-Cash
  Investing and Financing Activities
  Acquisition of pallet handling technology
  rights with common stock                   $       0     $  2,500
                                             =========     ========
  Issuances of stock for satisfaction
    of debt and accrued interest             $  67,710     $      0
                                             =========     ========


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

<page>F-7

  RPM TECHNOLOGIES, INC.
  NOTES TO FINANCIAL STATEMENTS


Note A - Organization and Description of Business

RPM Technologies, Inc. (the "Company") was incorporated on April 10, 1996 in
accordance with the laws of the State of Delaware as Mann Enterprise, Inc.

The Company is in the business to develop, produce, market and sell plastic
pallets to various unrelated entities located throughout the United States,
Canada, Central and South America.  The Company has developed what it believes
is a proprietary process for the manufacture of plastic pallets at costs
comparable to those currently in use constructed of wood pallets which will meet
current and future anticipated environmental standards, encourage the
preservation of trees and promote plastic recycling.

Note B - Preparation of Financial Statements

The Company follows the accrual basis of accounting in accordance with
accounting principles generally accepted in the United States of America and
has a year-end of December 31.

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

Management acknowledges that it is solely responsible for adopting sound
accounting practices, establishing and maintaining a system of internal
accounting control and preventing and detecting fraud.  The Company's system of
internal accounting control is designed to assure, among other items, that 1)
recorded transactions are valid; 2) valid transactions are recorded; and 3)
transactions are recorded in the proper period in a timely manner to produce
financial statements which present fairly the financial condition, results of
operations and cash flows of the Company for the respective periods being
presented

For segment reporting purposes, the Company operated in only one industry
segment during the periods represented in the accompanying financial statements
and makes all operating decisions and allocates resources based on the best
benefit to the Company as a whole.

<page>F-8

  RPM TECHNOLOGIES, INC.
  NOTES TO FINANCIAL STATEMENTS - CONTINUED

Note C - Summary of Significant Accounting Policies

1.  Cash and cash equivalents

The Company considers all cash on hand and in banks, certificates of deposit
and other highly-liquid investments with maturities of three months or less,
when purchased, to be cash and cash equivalents.

2.  Property and equipment

Property and equipment is recorded at cost and is depreciated on a straight-
line basis, over the estimated useful lives (generally 3 to 10 years) of the
respective asset.  Major additions and betterments are capitalized and
depreciated over the estimated useful lives of the related assets.
Maintenance, repairs, and minor improvements are charged to expense as
incurred.

3.  Organization and reorganization costs

The Company has adopted the provisions of AICPA Statement of Position 98-5,
"Reporting on the Costs of Start-Up Activities" whereby all organizational and
initial costs incurred with the incorporation and initial capitalization of the
Company were charged to operations as incurred.

4.  Research and development expenses

Research and development expenses are charged to operations as incurred.

5.  Advertising expenses

The Company does not utilize direct solicitation advertising.  All other
advertising and marketing expenses are charged to operations as incurred.

6.  Income Taxes

The Company utilizes the asset and liability method of accounting for income
taxes.  At December 31, 2005 and 2004, the deferred tax asset and deferred tax
liability accounts, as recorded when material, are entirely the  result of
temporary differences.  Temporary differences represent differences in the
recognition of assets and liabilities for tax and financial reporting purposes,
primarily accumulated depreciation and amortization.

7.  Share-Based Payments

The Company utilizes the fair-value method of accounting for the payment for
goods and/or services with the issuance of equity shares in lieu of cash.

8.  Earnings (loss) per share

Basic earnings (loss) per share is computed by dividing the net income (loss)
available to common shareholders by the weighted-average number of common
shares outstanding during the respective period presented in the Company's
accompanying financial statements.

Fully diluted earnings per share is computed similar to basic income
per share except that the denominator is increased to include the number
of common stock equivalents (primarily outstanding options and warrants).

<page>F-9

  RPM TECHNOLOGIES, INC.
  NOTES TO FINANCIAL STATEMENTS - CONTINUED

Note C - Summary of Significant Accounting Policies - Continued

8.  Earnings (loss) per share - continued

Common stock equivalents represent the dilutive effect of the assumed exercise
of the outstanding stock options and warrants, using the treasury stock method,
at either the beginning of the respective period presented or the date of
issuance, whichever is later, and only if the common stock equivalents are
considered dilutive based upon the Company's net income position at the
calculation date.

As of December 31, 2005 and 2004, the Company had outstanding stock options to
acquire up to 8,300,000 and 9,100,000 and outstanding stock warrants to acquire
up to 2,125,000 and 2,125,000 shares of common stock of the Company,
respectively, and the Company's outstanding stock options and warrants are
anti-dilutive due to the Company's net operating loss position.

9. Accounts Receivable

The Company makes judgments as to the collectibility of accounts receivable
based on historic trends and future expectations. Management estimates an
allowance for doubtful accounts, which represents the collectibility of the
receivables. Management does not believe an allowance is required as of
December 31, 2005 and 2004, respectively.

10. Inventories

Inventories, which consist of finished goods, are valued at the lower of cost
or market using the first-in, first-out method of valuation.


11. Recently Issued Pronouncements

In November 2004, the Financial Accounting Standards Board (the "FASB") issued
SFAS No. 151, "Inventory Costs, an amendment of ARB No. 43, Chapter 4." SFAS
No. 151 clarifies the accounting for abnormal amounts of idle facility expense,
freight, handling costs and wasted materials.  SFAS No. 151 is effective for
inventory costs incurred during fiscal years beginning after June 15, 2005. The
initial application of SFAS No. 151 did not have a significant impact on the
Company's financial position or results of operations.

In December 2004, the FASB issued SFAS 123(R), "Share-Based Payment," which
addresses the accounting for employee stock options.  SFAS 123(R) revises the
disclosure provisions of SFAS 123 and supersedes APB 25.  SFAS 123(R) requires
that the cost of all employee stock options, as well as other equity-based
compensation arrangements, be reflected in financial statements based on the
estimated fair value of the awards. In March 2005, the Securities & Exchange
Commission (the "SEC") issued Staff Accounting Bulletin No. 107, "Share-Based
Payment," which summarizes the views of the SEC staff regarding the interaction
between SFAS 123(R) and certain SEC rules and regulations, and is intended to
assist in the initial implementation.  SFAS(R) is effective for all companies
that file as small business issuers as of the beginning of the first interim or
annual reporting period that begins after December 15, 2005.  The Company is
currently evaluating the provisions of SFAS 123(R) and its effect on its
financial statements.  The Company does not expect the adoption of this
statements to have a material impact on its financial statements.

In December 2004, the FASB issued SFAS 153, "Exchanges of Nonmonetary Assets,
an amendment of APB 29, Accounting for Nonmonetary Transactions."  This
statement's amendments are based on the principle that exchanges of nonmonetary
assets should be measured based on the fair value of the assets exchanged.
Further, SFAS 153 eliminates the narrow exception for nonmonetary exchanges of
similar productive assets and replaces it with a broader exception for
exchanges of nonmonetary assets that do not have commercial substance.
Provisions of this statement are effective for fiscal periods beginning after
June 15, 2005.  The Company does not expect the adoption of this statement to
have a material impact on its financial statements.

In March 2005, the FASB issued FASB Interpretation No. 47, "Accounting for
Conditional Asset Retirement Obligations"("FIN 47"), which is an interpretation
of SFAS 143, "Accounting for Asset Retirement Obligations."  FIN 47 clarifies
terminology within SFAS 143 and requires an entry to recognize a liability for
the fair value of a conditional asset retirement obligation when incurred if
the liability's fair value can be reasonably estimated.  FIN 47 is effective
for fiscal years ending after December 15, 2005.  The Company does not expect
the adoption of this statement to have a material impact on its financial
statements.

In June 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error
Corrections," which will require entities that voluntarily make a change in
accounting principle to apply that change retroactively to prior periods'
financial statements unless this would be impracticable. SFAS No. 154
supersedes Accounting Principles Board Opinion No. 20, "Accounting Changes"
("APB No. 20"), which previously required that most voluntary changes in
accounting principle be recognized by including in the current period's net
income the cumulative effect of changing to the new accounting principle.  SFAS
No. 154 also makes a distinction between "retrospective application" of an
accounting principle and the "restatement" of financial statements to reflect
the correction of an error.  Another significant change in practice under SFAS
No. 154 will be that if an entity changes its method of depreciation,
amortization, or depletion for long-lived, non-financial assets, the change
must be accounted for as a change in accounting principle.  SFAS No. 154
applies to accounting changes and error corrections that are made in fiscal
years beginning after December 15, 2005.  The provisions of SFAS No. 154 are
not expected to affect the Company's consolidated financial statements.

Note D - Fair Value of Financial Instruments

The carrying amount of cash, accounts receivable, accounts payable and notes
payable, as applicable, approximates fair value due to the short term nature of
these items and/or the current interest rates payable in relation to current
market conditions.

Interest rate risk is the risk that the Company's earnings are subject to
fluctuations in interest rates on either investments or on debt and is fully
dependent upon the volatility of these rates.  The Company does not use
derivative instruments to moderate its exposure to interest rate risk, if any.

Financial risk is the risk that the Company's earnings are subject to
fluctuations in interest rates or foreign exchange rates and are fully
dependent upon the volatility of these rates.  The company does not use
derivative instruments to moderate its exposure to financial risk, if any.

Note E- Stock Options

In December 2002, FASB issued SFAS No. 148 "Accounting for Stock-Based
Compensation - Transition and Disclosure".  This statement amends SFAS No. 123
"Accounting for Stock-Based Compensation" and provides alternative methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based employee compensation.  This statement also amends the
disclosure requirements of SFAS No. 123 to require more prominent and frequent
disclosures in financial statements about the effects of stock-based
compensation.  The transition guidance and annual disclosure provisions of SFAS
No. 148 are effective for financial statements issued for fiscal years ending
after December 15, 2002.  Effective December 31, 2002, the Company's Board of
Directors, in conjunction with public opinion and SFAS 148, elected to expense
the imputed compensation cost related to stock options granted during fiscal
2002.

Note F - Concentrations of Credit Risk

The Company maintains its cash accounts in a financial institution subject to
insurance coverage issued by the Federal Deposit Insurance Corporation (FDIC).
Under FDIC rules, the Company is entitled to aggregate coverage of $100,000 per
account type per separate legal entity per financial institution.  During the
years ended December 31, 2005 and 2004, the Company maintained deposits in
various financial institutions with credit risk exposures in excess of
statutory FDIC coverage.  The Company incurred no losses during 2005 or 2004,
or subsequent thereto, as a result of any unsecured bank balance.

<page>F-10

  RPM TECHNOLOGIES, INC.
  NOTES TO FINANCIAL STATEMENTS - CONTINUED

Note G - Property and Equipment

Property and equipment consist of the following components at December 31, 2005
and 2004, respectively:

                                 2005          2004         Estimated life
                            ------------ -------------    --------------
Molds, tools and dies        $875,801     $659,889           10 years
Production equipment          261,086      213,371        15-20 years
Computer equipment             18,157       18,157            3 years
                           -----------   -------------
                            1,155,044      891,417
Accumulated depreciation     (424,174)    (333,556)
                           -----------   -------------
Net property and equipment $  730,870    $ 557,861
                           ===========   =============

Depreciation expense for the years ended December 31, 2005 and 2004,
respectively, was $90,618 and $65,790.

Note H - Note Payable

Note Payable consists of the following:
                                            December 31,  December 31,
                                                2005          2004
                                            ------------  ------------
$50,000 note payable to an individual.
Interest at 10.0% per annum. Principal
and all accrued, but unpaid, interest is
due at maturity in November 2002.
Unsecured.  During 2005, the Company and
the Lender renegotiated the due date and
conversion terms of this debt whereby the
final settlement is deferred until January 3,
2007 and has a fixed conversion rate of $0.25
per share                                     $50,000       $50,000
                                             ==========    ===========

Note I - Convertible Term Note
        Restricted Cash

On July 9, 2004, the Company entered into a financing transaction whereby the
Company issued $2.5 million in principal amount of a secured convertible term
note due July 9, 2007 to Laurus Master Fund, Ltd. (Note Purchaser) in exchange
for gross proceeds of $2.5 million in cash.  The Company also issued warrants
to purchase up to an aggregate of 1,125,000 shares of the Company's common
stock to the Note Purchaser.  The Company's obligations under the financing are
secured by a first priority lien over all of its assets in favor of the Note
Purchaser.  The convertible term note bears interest at an annual rate equal to
the prime rate published from time to time in The Wall Street Journal plus 3%.
However, amounts held in the restricted account were to bear interest at 1% per
annum until released to the Company.  The initial conversion price of the
debentures is equal to $0.24 per share, and is subject to adjustment under
certain circumstances, including if the Company makes certain issuances of
stock in the future at a price below the conversion price.

<page>F-11

  RPM TECHNOLOGIES, INC.
  NOTES TO FINANCIAL STATEMENTS - CONTINUED

Note I - Convertible Term Note
        Restricted Cash - Continued

Approximately $2,200,000 of the proceeds of the convertible term note were
placed in a restricted cash account subject to the terms of a Restricted
Account Agreement and the Letter Agreement the Company entered into with the
Note Purchaser in connection with the financing.  These funds were under the
control of the Note Purchaser until released to the Company pursuant to the
Letter Agreement, including under the following circumstances: (a) $100,000 was
to be released to the Company when (1) either the Company has provided evidence
to the Note Purchaser that the Company has obtained general liability insurance
with a coverage limit of at least $1,200,000, or (2) the Note Purchaser has
determined that such insurance is not customary with respect to the Company's
business operations; (b) $100,000 was to be released to the Company when the
Company has entered into a lease on commercially reasonable terms for a
corporate headquarters and operational and manufacturing facility; (c) $100,000
was to be released to the Company when the Company filed with the Securities
and Exchange Commission a Registration Statement registering for resale the
shares of the Company's common stock underlying the convertible term note and
the warrants issued to the Note Purchaser in connection with the financing; and
(d) up to $1,000,000 was to be released to the Company when the Company has
provided written evidence to the Note Purchaser that the Company has entered
into an agreement or agreements to consummate one or more purchases of certain
manufacturing equipment (the amount released to the Company was to be equal to
the corresponding dollar amount necessary to purchase the equipment).

The funds to be released to the Company for the equipment purchases were not to
be released to the Company if the Company had not first (1) provided the Note
Purchaser with evidence of satisfactory insurance for such equipment and, (2)
entered into the lease as described in clause (b) above.  None of the funds
described above were to be released to the Company if the Company was in
default of its obligations under the financing agreements.

Of the $2.5 million, $1.1 million was released to the Company. Of the $2.5
million, $1.4 million of the proceeds of the convertible term note remained in
a restricted cash account subject to the terms of a Restricted Account
Agreement and a Letter Agreement the Company entered into with Laurus in
connection with the financing. These funds were under the control of Laurus
until they were released to the Company pursuant to the Letter Agreement. The
Letter Agreement provided for the release of funds not yet released of up to an
additional $100,000 when the Company provided written evidence to Laurus that
it had entered into an agreement or agreements to consummate one or more
purchases of certain manufacturing equipment (the amount released to the
Company was to be equal to the corresponding dollar amount necessary to
purchase the equipment). The funds to be released for the equipment purchases
were released to the Company after it provided Laurus with evidence of
satisfactory insurance for such equipment. The remaining $1.4 million was not
to be released to the Company unless it had reduced the outstanding principal
amount of the secured convertible note (other than amounts that remained in the
restricted cash account) to zero. In that event, amounts equal to outstanding
principal subsequently converted into common stock were to be released to the
Company until all funds had been released. None of the unreleased funds
described above were to be released if the Company was in default of its
obligations under the financing.

In November 2005 Laurus removed all the cash from the restricted cash account
consisting of $1.3 million. None of these funds will be released to the
Company. The Company is discussing additional financing with Laurus.

The above description is not a complete description of the material terms of
the financing, and is qualified in its entirety by reference to the agreements
entered into in connection with the financing which were included in the
Current Report on Form 8-K, filed with the U. S. Securities and Exchange
Commission, on August 12, 2004.

<page>F-12

  RPM TECHNOLOGIES, INC.
  NOTES TO FINANCIAL STATEMENTS - CONTINUED

Note J - Income Taxes

As of December 31, 2005 and 2004 the Company had estimated  net operating loss
carryforwards of approximately $5,178,000 and $4,524,000 to offset future
taxable income. Subject to current regulations, this carryforward will begin to
expire in 2018. The amount and availability of the net operating loss
carryforwards may be subject to limitations set forth by the Internal Revenue
Code. Factors such as the number of shares ultimately issued within a three
year look-back period; whether there is a deemed more than 50% change in
control; the applicable long-term tax exempt bond rate; continuity of
historical business; and subsequent income of the Company all enter into the
annual computation of allowable annual utilization of the carryforwards.

The Company's income tax expense (benefit) for the years ended December 31,
2005 and 2004 differed from the statutory federal rate of 34% as follows:

                                    2005          2004
                                ------------  -------------
Statutory rate applied to
 income before income taxes     $ (356,000)   $(1,125,000)
Increase (decrease) in income
  taxes resulting from:
  Nondeductible compensation
    Expense                        108,000        578,000
    State income taxes                   -              -
    Other, including reserve
     for deferred tax asset
     and application of net
      operating loss
      carryforward                 248,000        547,000
                                ------------  -------------
      Income tax expense        $    -        $    -
                                ============  =============

Temporary differences, consisting primarily of statutory deferrals of expenses
for pre-operations interest expense, research and development expenses and
start-up costs and statutory differences in the depreciable lives for property
and equipment, between the financial statement carrying amounts and tax bases
of assets and liabilities give rise to deferred tax assets and liabilities as
of December 31, 2005 and 2004, respectively:

                                              2005          2004
                                          ------------  ------------
      Deferred tax assets
        Net operating loss carryforwards  $1,968,000    $1,719,000
        Less valuation allowance          (1,968,000)   (1,719,000)
                                          ------------- -------------
      Net Deferred Tax Asset              $        -    $        -
                                          ============  =============

For the years ended December 31, 2005 and 2004 the valuation allowance
increased by approximately $249,000 and $393,000, respectively.

Note K - Common Stock Transactions

During 2004, the Company issued an aggregate of 3,951,364
shares of common stock to various consultants for services valued
at approximately $610,818, which includes a non-cash charge to operations of
approximately $120,000 for the difference between the agreed-upon value of the
services provided and the estimated "fair value" of the Company's common stock
based on the quoted closing price of the Company's common stock on the date of
each respective transaction.

During 2004, the Company sold approximately 1,527,000 shares of
common stock for aggregate proceeds of approximately $148,350.
The Company incurred a non-cash charge to operations
of approximately $188,586 for the difference between the selling price of the
shares and the estimated "fair value" of the Company's common stock based on the
quoted closing price of the Company's common stock on the date of each
respective transaction.

<page>F-13

  RPM TECHNOLOGIES, INC.
  NOTES TO FINANCIAL STATEMENTS - CONTINUED

Note K - Common Stock Transactions - Continued

On June 30, 2004, the Company issued an additional 5,000 shares of
common stock to an individual as additional compensation related
to the previously acquired licensing rights of certain pallet handling
technology.  This new transaction was valued at approximately $2,500, which
approximates the estimated "fair value" of the Company's common stock based on
the quoted closing price of the Company's common stock on the date of the
transaction.

During 2005, the Company issued an aggregate of 2,450,000
shares of common stock to various consultants for services valued
at approximately $206,925, which includes a non-cash charge to operations of
approximately $86,475 for the difference between the agreed upon value of the
services provided and the estimated "fair value" of the Company's common stock
based on the quoted closing price of the Company's common stock on the date of
each respective transaction.

In May 2005, the Company issued 750,000 shares of common stock valued at
$82,875 to a consultant as compensation for services rendered.

In June 2005, the Company issued 615,550 shares of common stock to Laurus
Master Fund, an accredited investor, in exchange for a reduction of $67,710 in
principal plus related interest on our convertible term note.

In July 2005, the Company issued 1,000,000 shares of common stock valued at
$68,000 to a consultant as compensation for services rendered.

In August 2005, the Company issued 200,000 shares of common stock valued at
$13,600 to a consultant as compensation for services rendered.

In September 2005, the Company issued 850,000 shares of common stock to an
accredited investor in exchange for $34,000 in cash.

In November 2005, the Company issued 1,000,000 shares of common stock valued at
$42,500 to a consultant as compensation for services rendered.

In November 2005, the Company issued 750,000 shares of common stock to an
accredited investor upon the exercise of an option with an aggregate exercise
price of $15,000, which was paid in cash.

In December 2005, the Company issued 950,000 shares of common stock to an
accredited investor upon the exercise of an option with an aggregate exercise
price of $20,000, which was paid in cash.

Note L - Stock Options

2002 Stock Option Plan

On February 28, 2002, the Company filed a Registration Statement on Form S-8 to
register 300,000 shares of common stock to support the 2002 Stock Option Plan
(the "2002 Plan").  Under the 2002 Plan, the Company may grant options, from
time to time, to acquire shares of common stock to employees of the Company or
its subsidiaries.  In addition, at the discretion of the Board of Directors,
options to acquire common stock of the Company may from time to time be granted
under the 2002 Plan to other individuals, including consultants or advisors,
who contribute to the success of the Company or its subsidiaries and are not
employees of the Company or its subsidiaries, provided that bona fide services
shall be rendered by consultants and advisors and such services shall not be in
connection with the offer or sale of securities in a capital-raising
transaction and do not directly or indirectly promote or maintain a market in
the Company's securities.

The purpose of the 2002 Plan is intended to aid the Company in maintaining and
developing a management team, and in attracting new personnel as needed and to
provide such personnel with an incentive to remain employees of the Company, to
use their best efforts to promote the success of the Company's business, and to
provide them with an opportunity to obtain or increase a proprietary interest
in the Company.  It is also designed to permit the Company to reward those
individuals who are not employees of the Company but who management perceives
to have contributed to the success of the Company, or who are important to the
continued business and operations of the Company.

The 2002 Plan is administered by the Company's Board of Directors.   The
Board of Directors may further delegate administration of the 2002 Plan or
specific administrative duties with respect to the 2002 Plan on such terms and
to such committees of the Board as it deems proper.  The issuance of any
options will be approved as specified by the Company's Board of Directors.

The Board of Directors has initially allocated a total of 300,000 shares of
common stock to the 2002 Plan.  The number of shares of common stock subject
to, or issued pursuant to, options granted under the 2002 Plan may be increased
or decreased as the Board of Directors deem advisable.  At the time any option
is granted under the terms of the 2002 Plan, the Company will reserve for
issuance the number of shares of supporting common stock subject to such option
until it is exercised or expires.  The Company may reserve either authorized
but unissued shares or issued shares reacquired by the Company.

Each granted option shall have its term established by the Board of Directors,
or their designee, at the time the option is granted but in no event may such
term exceed five (5) years.   Once an option is granted, its term may be
modified only as provided for in the 2002 Plan and under the express written
provisions of the option.

On March 1, 2002, the Company granted options to purchase up to an aggregate of
280,000 shares under the 2002 Plan, to three consultants, providing various
management and financial consulting services.  These options were exercised
upon grant by the receiving parties as compensation for their respective
services.

As of December 31, 2005, no options to acquire common stock under the 2002 Plan
were outstanding.

<page>F-14

  RPM TECHNOLOGIES, INC.
  NOTES TO FINANCIAL STATEMENTS - CONTINUED

Note L - Stock Options - Continued

2003 Stock Option Plan

On January 29, 2003, the Company filed a Registration Statement on Form S-8 to
register 700,000 shares of common stock to support the 2003 Stock Option Plan
(the "2003 Plan").  Under the 2003 Plan, the Company may grant options, from
time to time, to acquire shares of common stock to employees of the Company or
its subsidiaries.  In addition, at the discretion of the Board of Directors,
options to acquire common stock of the Company may from time to time be granted
under this Plan to other individuals, including consultants or advisors, who
contribute to the success of the Company or its subsidiaries and are not
employees of the Company or its subsidiaries, provided that bona fide services
shall be rendered by consultants and advisors and such services shall not be in
connection with the offer or sale of securities in a capital-raising
transaction and do not directly or indirectly promote or maintain a market in
the Company's securities.

The purpose of the 2003 Plan is intended to aid the Company in maintaining and
developing a management team, and in attracting new personnel as needed and to
provide such personnel with an incentive to remain employees of the Company, to
use their best efforts to promote the success of the Company's business, and to
provide them with an opportunity to obtain or increase a proprietary interest
in the Company.  It is also designed to permit the Company to reward those
individuals who are not employees of the Company but who management perceives
to have contributed to the success of the Company, or who are important to the
continued business and operations of the Company.

The 2003 Plan is administered by the Company's Board of Directors.   The
Board of Directors may further delegate administration of the 2003 Plan or
specific administrative duties with respect to this Plan on such terms and to
such committees of the Board as it deems proper.  The issuance of any options
will be approved as specified by the Company's Board of Directors.

Initially, the Board of Directors has allocated a total of 1,000,000 shares of
common stock to the 2003 Plan.  The number of shares of common stock subject
to, or issued pursuant to, options granted under the 2003 Plan may be increased
or decreased as the Board of Directors deem advisable.  At the time any option
is granted under the terms of the 2003 Plan, the Company will reserve for
issuance the number of shares of supporting common stock subject to such option
until it is exercised or expires.  The Company may reserve either authorized
but unissued shares or issued shares reacquired by the Company.

Each granted option shall have its term established by the Board of Directors,
or their designee, at the time the option is granted but in no event may such
term exceed five (5) years.   Once an option is granted, its term may be
modified only as provided for in the 2003 Plan and under the express written
provisions of the option.

As of December 31, 2005, no options to acquire common stock under the 2003 Plan
were outstanding.

<page>F-15

  RPM TECHNOLOGIES, INC.
  NOTES TO FINANCIAL STATEMENTS - CONTINUED

Note L - Stock Options - Continued

Other options - continued

On July 1, 2004, the Company issued Randy Zych, the Company's Chairman and
Chief Executive Officer, a fully vested three-year option to purchase up to
2,500,000 shares of restricted common stock at an exercise price of $0.50 per
share, exercisable until September 1, 2007.

On July 1, 2004, the Company issued Charles Foerg, the Company's President, a
fully vested three-year option to purchase up to 2,500,000 shares of restricted
common stock at an exercise price of $0.50 per share, exercisable until
September 1, 2007.

On October 15, 2005, the Company issued an option to purchase 5,000,000 shares
of restricted common stock to an accredited investor at an exercise price of
$0.02 per share, exercisable until November 1, 2006.

The following tables summarize all common stock options granted through the two
years ended December 31, 2005.

                                                            Weighted average
                                                            price per share
                                                            ----------------
    Options outstanding at December 31, 2003  4,100,000           $0.94
      Issued                                  5,000,000           $0.50
      Exercised                                 -                   -
      Expired/Terminated                        -                   -
                                              ---------
    Options outstanding at December 31, 2004  9,100,000           $0.70
                                              =========

    Options outstanding at January 1, 2005     9,100,000          $0.70
      Issued                                   5,000,000          $0.02
      Exercised                               (1,700,000)         $0.02
      Expired/Terminated                      (4,100,000)         $0.94
                                              ----------
    Options outstanding at December 31, 2005   8,300,000          $0.31
                                              ==========

                  Options     Options     Options     Options
                  granted    exercised  terminated  outstanding Exercise price
2002 investors    3,100,000   2,500,000    600,000           0   $3.00 - $4.00
2002 officers     3,500,000         -    3,500,000           0   $0.50
2004 officers     5,000,000         -        -       5,000,000   $0.50
2005 investors    5,000,000   1,700,000      -       3,300,000   $0.02
                 ----------   ---------  ---------   ---------
  Totals         16,600,000   4,200,000  4,100,000   8,300,000

The weighted average exercise price of all issued and outstanding options at
December 31, 2005  is approximately $0.31 and all issued and outstanding
options are vested and eligible for exercise.

The weighted-average remaining contractual life of the options outstanding at
December 31, 2005 was 1.48 years.  The exercise prices of the options
outstanding at December 31, 2005 ranged from $0.02 to $0.50 per share.  The
following table summarizes the outstanding options at December 31, 2005:

                                                Weighted-     Weighted-
                                     Weighted-   average       average
                                      average    exercise     exercise
  Range of     Stock     Stock       remaining   price of     price of
  exercise    options   options     contractual   options      options
   prices  outstanding exercisable     life      outstanding outstanding
---------- ----------- -----------   ----------- ----------- -----------
  $0.50      5,000,000  5,000,000       1.75 yrs     $0.50      $0.50
  $0.02      3,300,000  3,300,000       0.79 yrs     $0.02      $0.02
           ----------- ------------
            8,300,000 8,300,000

<page>F-16


  RPM TECHNOLOGIES, INC.
  NOTES TO FINANCIAL STATEMENTS - CONTINUED

Note L - Stock Options - Continued

Year ended December 31, 2004
----------------------------
Expected life of the option:  The initial life of the corresponding option, 3
                              years, 2 months.
Expected volatility in
  the Company's stock price:  466.0%, which was based on fluctuations of the
                              Company's stock price over the past fiscal year.

Expected dividends:           Zero (0.00) based on past performance
Anticipated risk free
   interest rate:             Estimated to be 3.0%.

This calculation resulted in approximately $1,700,000 being charged to
operations for the year ended December 31, 2004 for stock options issued during
the year.

The weighted-average fair value of options covering approximately 4,100,000
shares of common stock granted during the year ended December 31, 2002 for
which the exercise price was greater than the market price on the grant date
was $0.40 and the weighted-average exercise price was $0.94.

The weighted-average fair value of options covering approximately 5,000,000
shares of common stock granted during the year ended December 31, 2004 for
which the exercise price was grater than the market price on the grant date was
$0.34 and the weighted-average exercise price was $0.50.

No stock options have been granted at any time where the exercise price was
equal to the market price on the grant date.

Year ended December 31, 2005
----------------------------
Expected life of the option:  The initial life of the corresponding option,
                              12 months.
Expected volatility in
  the Company's stock price:  300.0%, which was based on fluctuations of the
                              Company's stock price over the past fiscal year.

Expected dividends:           Zero (0.00) based on past performance
Anticipated risk free
   interest rate:             Estimated to be 6.0%.

This calculation resulted in approximately $230,000 being charged to
operations for the year ended December 31, 2005 for stock options issued during
the year.

The weighted-average fair value of options covering approximately 5,000,000
shares of common stock granted during the year ended December 31, 2005 for
which the exercise price was less than the market price on the grant date was
$0.05 and the weighted-average exercise price was $0.02.

<page>F-17


  RPM TECHNOLOGIES, INC.
  NOTES TO FINANCIAL STATEMENTS - CONTINUED

Note L - Stock Options - Continued

The Black-Scholes option valuation model was developed for use in estimating
the fair value of traded options, which do not have vesting restrictions and
are fully transferable.  In addition, option valuation models require the input
of highly subjective assumptions, including the expected stock price
volatility.  Because the Company's employee stock options have characteristics
significantly different from those of traded options, and because changes in
the subjective input assumptions can materially affect the fair value estimate,
in management's opinion, the existing models do not necessarily provide a
reliable single measure of the fair value of its employee stock options.

Note M - Stock Warrants

On July 25, 2004, the Company issued 1,000,000 Class D Warrants to purchase an
equivalent number of shares of the Company's common stock at an exercise price
of $3.00 per share, exercisable until August 20, 2006 to Huntleigh Securities
acting as trustee for a group of accredited investors.

On July 9, 2004, the Company issued warrants to purchase an aggregate of up to
1,125,000 shares of the Company's common stock to Laurus Master Fund, Ltd. in
conjunction with a $2,500,000 secured convertible term note due July 9, 2004.
The warrants expire on July 8, 2011. Warrants to purchase 375,000, 375,000 and
375,000 shares of the Company's common stock are each exercisable at $0.30,
$0.36 and $0.42, respectively.

No warrants were exercised or terminated during the years ended December 31,
2005 and 2004.

<page>F-18

  RPM TECHNOLOGIES, INC.
  NOTES TO FINANCIAL STATEMENTS - CONTINUED

Note N - Commitments

Executive Compensation

For periods prior to January 1, 2002, the Company's two controlling
shareholders/officers had an informal, unwritten agreement with the Company
whereby they will provided their services to the Company at an annual salary of
$60,000 each, with one-half, or $30,000, to be contributed to the Company as
"additional paid-in capital" and one-half, or $30,000, to be accrued and paid
at a future date when the Company's cash flows will support the repayment.

Effective January 1, 2002, these officers/shareholders amended their
informal, unwritten agreement whereby the Company was to pay each of them an
annual salary of $85,000, to be accrued and paid at a future time when the
Company has the available cash flow to retire the debt.

On September 1, 2002, the Company's Board of Directors ratified an Employment
Agreement with Randy Zych to serve as the Company's Chairman of the
Board and Chief Executive Officer.  The Agreement term was effective as of
September 1, 2002 and expires on the third anniversary date of the Agreement
with an automatic five (5) year extension unless either the Company or Mr. Zych
provides a 180-day written notice not to continue the Agreement. This Agreement
provides Mr. Zych with an initial annual base salary of $125,000 per year,
payable in cash.  Each subsequent year's base salary shall be negotiated
between the Company and Mr. Zych in good faith; however, each subsequent year
shall not be at an amount less than the initial base amount of $125,000.
Further, the Company paid a signing bonus of 500,000 shares of
common stock upon execution of this Agreement.

On September 1, 2002, the Company's Board of Directors ratified an Employment
Agreement with Charles Foerg to serve as the Company's President.
The Agreement term was effective as of September 1, 2002 and expires on the
third anniversary date of the Agreement with an automatic five (5) year
extension unless either the Company or the President provides a 180-day written
notice not to continue the Agreement.  This Agreement provides the President
with an initial annual base salary of $125,000 per year, payable in cash.  Each
subsequent year's base salary shall be negotiated between the Company and Mr.
Foerg in good faith; however, each subsequent year shall not be at an amount
less than the initial base amount of $125,000.  Further, the Company paid a
signing bonus of 500,000 shares of common stock upon execution of this
Agreement.

As of December 31, 2005 and 2004, respectively, the Company had accrued
approximately $1,115,000 and $892,000 in earned but unpaid officer
compensation.

Building Lease

The Company leases its administrative offices and plant facilities on a long-
term operating lease.  The lease is for a 61 month term from December 1, 2004
through December 31, 2009.  The lease may be extended for two separate three
(3) year periods on terms to be negotiated at the future extension and the
lease requires a 10 month written notice by the Company to the Lessor of its
intent to exercise the renewal option.  The lease requires monthly base rental
payments of approximately $4,200 for the first 37 months, approximately $4,700
for the next 12 months and approximately $5,200 for the final 12 months.
Additionally, the Company is responsible for 100% of all real estate taxes and
assessments on the property, pro rata during the lease term.  Further, the
Company is responsible for the payment of all utility, communication,
maintenance/upkeep and other ancillary services which may be separately metered
or billed at the facility.

<page>F-19

  RPM TECHNOLOGIES, INC.
  NOTES TO FINANCIAL STATEMENTS - CONTINUED

Note N - Commitments

Building Lease - continued

Future maturities of the base rent are as follows:

            Year ended
            December 31,    Amount
            ------------    -------
                2006        $50,000
                2007         50,000
                2008         56,000
                2009         62,000
                           ---------
              Totals       $218,000

The total rent expense for the years ended December 31, 2005 and 2004 were
$53,020 and $22,220, respectively.

Note O - Significant 4th Quarter Adjustments

During the 4th quarter of 2005, the Company recognized compensation expense of
$230,000 related to options granted in October 2005 to purchase an aggregate of
5,000,000 shares of common stock.

Note P - Related Party Transactions

The Company conducts many executive office functions from the separate personal
offices of Randy Zych, its Chairman and Chief Executive Officer, and Charles
Foerg, its President.  No formal lease agreement exists for the use of these
offices.  During 2005 and 2004, the Company paid the officers an aggregate
approximately $103,900 and $70,800, respectively, for the use of these offices
and reimbursement of Company expenses paid personally on behalf of the Company.

Note Q - Selected Financial Data (Unaudited)

The following is a summary of the quarterly results of operations for the years
ended December 31, 2005 and 2004.
<table>
               Quarter ended    Quarter ended   Quarter ended   Quarter ended
                  March 31,         June 30,      September 30,  December 31,
               -------------    -------------   --------------- --------------
               <C>              <C>             <C>             <C>
 2005

  Revenues        $830,567         $827,509        $543,972      660,205
  Gross profit     188,068           70.115         142,308      (43,113)
  Net loss        (119,564)        (198,426)       (148,198)    (579,612)
  Basic and fully
  diluted loss
  per share         $(0.01)          $(0.01)         $(0.01)    $ (0.02)
  Weighted average
    number of shares
    issued and
    outstanding  18,980,520       19,539,322       21,459,113    23,606,940

2004

  Revenues        $477,994         $438,831        $687,763      $  586,785
  Gross profit      67,326           50,842          91,977         118,547
  Net loss        (167,789)        (489,523)       (334,906)     (2,316,049)
  Basic and fully
  diluted loss
  per share         $(0.01)          $(0.03)         $(0.02)         $(0.12)
  Weighted average
    number of shares
    issued and
    outstanding  13,497,156       14,905,387       19,304,008    19,094,947
</table>
<page>F-20

                           INDEX TO EXHIBITS
Exhibit
Number      Description
--------    -----------
3.1         Certificate of Incorporation of the Registrant, as amended (1)

3.2         Bylaws of the Registrant, as amended (1)

10.1        Employment Agreement dated as of September 1, 2002 between the
            Registrant and Randy Zych (#)(2)

10.2        Employment Agreement dated as of September 1, 2002 between the
            Registrant and Charles Foerg (  #)(2)

10.3        Securities Purchase Agreement dated as of July 9, 2004 between the
            Registrant and Laurus Master Fund, Ltd. (3)

10.4        Secured Convertible Term Note dated as of July 9, 2004 issued by
            the Registrant in favor of Laurus Master Fund, Ltd. (3)

10.5        Common Stock Purchase Warrant dated as of July 9, 2004 granted by
            the Registrant to Laurus Master Fund, Ltd. (3)

10.6        Registration Rights Agreement dated as of July 9, 2004 between the
            Registrant and Laurus Master Fund, Ltd. (3)

10.7        Master Security Agreement dated as of July 9, 2004 between the
            Registrant and Laurus Master Fund, Ltd. (3)

10.9        Subordination Agreement dated as of July 8, 2004 by and among Randy
            Zych, Charles Foerg and Laurus Master Fund, Ltd. (3)

31.1        Certification pursuant to Section 302 of Sarbanes- Oxley Act of
            2002 - Chief  Executive Officer and  Chief Financial Officer.

32.1        Certification pursuant to Section 906 of Sarbanes-Oxley Act of
            2002.
____________
(#) Management contract or compensatory plan, contract or arrangement required
to be filed as an exhibit.
(1) Filed as an exhibit to the Registrant's Form 10 filed with the Securities
and Exchange Commission on August 24, 2001 (Registration No. 000-31291) and
incorporated herein by reference.
(2) Filed as an exhibit to the Registrant's Annual Report on Form 10-KSB filed
with the Securities and Exchange Commission on March 31, 2003 (File No.   000-
31291) and incorporated herein by reference.
(3) Filed as an exhibit to the Registrant's Current Report on Form 8-K filed
with the Securities and Exchange Commission on August 12, 2004 (File No.  000-
31291) and incorporated herein by reference.

<page>41



                             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 thereunto duly authorized as of the 12th day of April, 2006.



                                          RPM TECHNOLOGIES, INC.

                                          By:     /S/ RANDY ZYCH
                                                  ----------------------------
                                                  Randy Zych
                                                  Chief Executive Officer
                                                  (Principal Executive Officer)
                                                  and Chairman of the Board

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

Name                         Title                          Date


/S/ RANDY ZYCH          Chairman of the Board and       April 12, 2006
------------------      Chief Executive Officer
Randy Zych              (principal executive officer)


/S/ CHARLES FOERG       President, Secretary,
------------------      Treasurer and Director          April 12, 2006
Charles Foerg


/S/ DAVID LADE          Chief Financial Officer         April 12, 2006
------------------      (principal financial and
David Lade              accounting officer), Controller
                        and Director


<page>42



                                EXHIBITS

Exhibit
Number           Description
-------          -----------

31.1             Certification pursuant to Section 302 of Sarbanes-
                 Oxley Act of 2002 - Chief Executive Officer and
                 Chief Financial Officer.

32.1             Certification pursuant to Section 906 of Sarbanes-
                 Oxley Act of 2002.





<page>43