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, 2001

[ ] Transition Report Under Section 13 or 15(d) of the Securities Exchange Act
    of 1934

    Commission file number: 333-46643


Industrial Rubber Products, Inc.
(Exact name of registrant as specified in its charter)

Minnesota
(State or other jurisdiction of incorporation or organization)

41-1550505
(I.R.S. Employer Identification No.)

3516 East 13th Avenue, Hibbing, MN 55746
(Address of principal executive offices including zip code)

(218) 263-8831
(Issuer's telephone number, including area code)

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

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 Par Value


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days.

Yes x   No _

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

The Company's revenues for its fiscal year ended December 31, 2001: $14,128,815.

     Aggregate Market Value of Stock held by Non-Affiliates of the Company as of
February 15, 2002:  $936,992 based on a closing average bid and asked price on
that date of $.36 per share.

The number of shares of the Company's  Common Stock  outstanding  as of February
15, 2002 is 4,187,205.

Transitional Small Business Disclosure Form: Yes _ No x

Documents Incorporated by Reference

Portions of the Proxy Statement for the 2002 Annual Meeting of Shareholders  are
incorporated by references in Part III.

PART I
                Special Note Regarding Forward-Looking Statements

     Certain  matters  discussed  in  this  Annual  Report  on  Form  10KSB  are
"forward-looking  statements"  intended  to qualify  for the safe  harbors  from
liability  established by the Private Securities  Litigation Reform Act of 1995.
These forward-looking statements can generally be identified as such because the
context of the  statement  will  include  words such as the Company  "believes",
"anticipates", "expects", or words of similar import. Similarly, statements that
describe   the   Company's   future   plans,   objectives   or  goals  are  also
forward-looking  statements.  Such  forward-looking  statements  are  subject to
certain risks and  uncertainties  which are described in close proximity to such
statements and which would cause actual results to differ  materially from those
anticipated as of the date of this report. Shareholders, potential investors and
other  readers  are  urged  to  consider   these   factors  in  evaluating   the
forward-looking statements and are cautioned not to place undue reliance on such
forward-looking  statements.  The forward-looking statements included herein are
only made as of the date of this report and the Company undertakes no obligation
to publicly update such forward-looking  statements to reflect subsequent events
or circumstances.

ITEM 1. Business

(a) General development of business

     Industrial Rubber Products,  Inc. (the "Company" or Industrial Rubber") was
founded in 1986 to acquire and operate a rubber  lining  facility  then owned by
Irathane Systems Incorporated, a wholly owned subsidiary of Illinois Tool Works,
Inc.

     The Company was  incorporated as a Minnesota  corporation on March 5, 1986,
as Industrial  Rubber  Applicators,  Inc., and on January 30, 1998,  changed its
name to Industrial  Rubber Products,  Inc.

     The  Company's  corporate  offices  are  located at 3516 East 13th  Avenue,
Hibbing, MN 55746, and its telephone number is (218) 263-8831.

     The Company  began  operations  in April of 1986.  The  Company's  Business
originally  consisted of applying and then vulcanizing rubber (for corrosion and
abrasion resistance  purposes) to wearable parts that were used primarily in the
mining industry.

     In 1996  The  Company  entered  into a  major  contract  for  approximately
$10,000,000,  to provide  rubber-lining  services for a pipelining  project near
Salt Lake City,  Utah. To effectively  provide these services the Company leased
and opened a manufacturing  facility in Clearfield Utah in 1996. During 1997 and
1998 the Company  used the  facility to provide  products and services to copper
and gold producing customers in the Western United States and Canada.

     On January 20, 1999 the  Company  acquired  Sonwil  Products,  Inc.  dba TJ
Products in West  Jordan,  Utah.  TJ Products  provides  products  and  services
similar to  Industrial  Rubber in the  Inter-mountain  West region of the United
States.  In addition,  it produces cast urethane and rubber molded  products for
the military,  aerospace,  paper, utility and mineral processing industries.  TJ
Products had sales volume of approximately $2.5 million in 2000 and 2001.

     On January 31, 1999, the lease on the Clearfield  facility  expired and the
Company consolidated those operations at the facilities of the newly acquired TJ
Products.

     On March 31,  1999,  the Company  acquired  the assets of Irathane  Systems
Inc.,  ("Irathane")  which was a wholly owned subsidiary of Illinois Tool Works.
Irathane had three manufacturing  plants located in Colorado Springs,  Colorado;
Hibbing,   Minnesota;  and  Sudbury,  Ontario,  Canada.  These  plants  produced
primarily  cast  urethane  products for the mineral  processing,  aggregate  and
utility  industries.  The Colorado  Springs plant also produced the  pre-polymer
liquids used to produce the cast products in all three Irathane  plants and sold
the liquids to licensees  in Chile and India.  Irathane  Systems had  historical
annual sales of approximately $10 million.

     During the first  quarter of 2000 the  Company  sold the  Colorado  Springs
facility and relocated all of the manufacturing  equipment to the Hibbing plant.
The proceeds from the sale of approximately $1.6 million were used to reduce the
Company's bank term loan.

     In October of 1999, the Company became the  distributor  for Nordberg Sales
Corp.  ("Nordberg")  to the taconite  industry in Minnesota  and  Michigan.  The
Company distributed new equipment (crushers), wear materials and spare parts for
Nordberg.  The Company also distributed new equipment  (magnetic  separators and
filter systems) for Scanmec (a wholly owned division of Nordberg).  During 2001,
Metso Minerals,  Inc.,  formerly  Nordberg , ("Metso  Minerals") was merged with
Svedela Industries AB and the Company's relationship with Metso Minerals will be
terminated completely by the end of June 2002.

     Metso Minerals  divested of some of its business units in 2001. The Company
is now selling  products  for two of these former  business  units and is in the
process of obtaining formal  distribution  agreements with them.  Agreements are
expected to be in place by mid 2002.

     Initially,  the Company  was taxed as a C  corporation  under the  Internal
Revenue Code. Effective January 1, 1989, the Company elected to be taxed as an S
corporation.  The Company  continued to be taxed as an S corporation until March
31, 1998, when the Company elected C Corporation status.

(b) Narrative description of Industrial Rubber's business

Principal  Products,   Services  and  Markets

     Industrial  Rubber  and  its  subsidiaries   design,   produce  and  supply
protective    materials,    abrasion    resistant    products   and   equipment,
erosion/corrosion  protective  linings and  proprietary  rubber  products to the
mineral processing, power, wood processing and other heavy industries.
<PAGE>

Product Lines

     Industrial  Rubber has four product  lines.  Its  urethane  cast parts line
consists of urethane  molded  products for the mineral  processing and aggregate
industries.  Its pipe and pipe  lining  products  line  consists  of rubber  and
urethane  lined  pipe  and  pipe  parts  fabricated  primarily  for the  mineral
processing  industry.  Its  proprietary  products  line  consists of  engineered
replacement  parts  primarily for mineral  processing  facilities.  Its standard
rubber products line consists of products sold along with related  services,  to
the Company's customers in the various industry segments served by the Company.

     Urethane Cast Parts.  Industrial  Rubber  Products  produces  urethane cast
parts at its Irathane facilities and at TJ Products. These parts include screens
for the mineral processing and aggregate industries,  pump linings and parts for
the utility and mineral processing  industries,  rollers for the paper industry,
tie  pads for the  railroad  industry  and  many  other  parts  for the  mineral
processing  industry including cyclones,  classifier shoes,  discharge cones and
launder liners.  Irathane also produces the liquid  pre-polymer  used to produce
the cast parts and distributes the liquid pre-polymer through licensees in Chile
and India.  The Company also applies urethane coating to pipe and other parts to
prevent wear.

     Pipe and Pipe Lining  Products.  Industrial  rubber  produces  and supplies
rubber and urethane  lined  slurry pipe and  components  for  tailings  pipeline
systems.  Proprietary  formulated  rubber  and  urethane  compounds  are used to
protect these pipelines from abrasion and corrosion.

     In 1996,  the Company  designed and  developed  new processes and equipment
that  decreased  the cost and improved the overall  product  quality of overland
slurry pipelines.  Mechanical  couplings,  historically used in connecting lined
pipe for long distance overland slurry systems, are typically high cost items to
the  customer.  This  is  particularly  true in high  pressure,  large  diameter
pipelines.  The Company  believes  that prior to 1996,  industry  standards  and
equipment limitations only allowed for the production of 40' long pipe sections.
Industrial  Rubber has  designed its own  production  equipment,  and  presently
supplies to its customers 60' lined pipe sections,  eliminating one third of the
required mechanical  couplings,  and resulting in cost savings to the customers.
The Company believes that the development of 60' lined pipe has set the standard
for the industry.  Between 1982 and 1998 the Industrial  Rubber  Applicators and
the Irathane Systems  divisions lined  $43,000,000 worth of slurry pipelines for
worldwide installations.

     Proprietary and Engineered  Products.  Industrial Rubber's  proprietary and
engineered  product line includes air bags, lifter bars, shell liners,  pressure
seals, fuel igniters,  auto suspension parts, screens, bridge pads, construction
liners,  cyclone liners,  pump liners,  sheet stock,  classifier  shoes and mill
parts, all manufactured with either rubber or urethane raw materials.

<PAGE>


     Standard  Rubber  Products.  Historically,  the Company's  standard  rubber
products  are  vulcanized  rubber  to  steel.  Examples  of  such  products  are
manifolds,  screens,  pulleys,  and rolls.  The  acquisition  of TJ Products and
Irathane Systems greatly expanded this line of products to include molded rubber
products  for the military and  aerospace  industries;  as well as parts for the
paper and  mineral  processing  industries.  All  products  are made to customer
engineered  specifications.  The Company's  Quality  Assurance  Program seeks to
insure product  conformity while limiting defects and reducing  associated value
added  costs.  The  Company's  Irathane/Elliott  division in  Sudbury,  Ontario,
Canada, is ISO 9000 certified.

Markets

     The  markets  for  the  Company's   products  are  the  hard  rock  mineral
processing,  coal mining and power generation,  aggregate,  railroad,  paper and
pulp production, and other similar heavy industries.

     In 1999,  the world wide mining market began to sink into a recession.  The
industries that they serve and that serve them also began to realize a reduction
in business.  Out of the 9 major  industries  mining,  aggregate,  power,  paper
aerospace,  transportation,  military,  agriculture,  and construction  that the
Company  manufactures  products  for,  all  of  them  have  seen a  downturn  in
production  in the last 18 months.  This reduced the Company's sales by 24% in
2001.

                                     MINING

     The mining industry, including aggregate related materials is served by the
Company's products.  The hard rock that hosts important minerals (iron,  copper,
gold,  molybdenum),  is generally  blasted from the earth and then crushed,  and
ground (processed),  to allow the extraction  (beneficiation) of these minerals.
The equipment needed to process and beneficiate this rock is subject to constant
abrasion,  corrosion and erosion.  Industrial  Rubber has  developed,  designed,
tested and  produced  rubber and  urethane  products  that  protect  the mineral
processing and  beneficiation  equipment,  extending their serviceable life, and
saving its  customers  money  through  decreased  replacement  costs and reduced
downtime.  The  Company's  rubber and urethane  products  also  provide  further
benefits to its customers through noise abatement and dust and dirt reductions.

     Although  Industrial  Rubber's products protect the mineral  processing and
beneficiation  equipment, the products do become worn and must be replaced. Many
of the Company's  products are used to replace its own and other  manufacturers'
protective products that have become worn.

     In 2002,  the Company has begun to see recovery in worldwide  copper mining
and worldwide & domestic gold mining. The market for domestic taconite,  nickel,
and molybdenum, mining has been significantly hurt by imported foreign steel. It
is  anticipated  that action in the first  quarter of 2002 by the United  States
government in imposing tariffs on certain steel imports will help this industry.

     With 28 steel companies in bankruptcy, this relief will allow consolidation
and  restructuring of the United States steel industry.  When new stronger steel
companies  emerge they again will need these important raw materials  (taconite,
nickel,  &  molybdenum).  Over the next three  years the  Company  expects  that
taconite  mined in the United  States  will  recover  from the 30  million  tons
produced  in 2001 to over 40  million  tons.  This  market  alone will allow the
Company to recover 15% of lost 2001 revenues.

     The Company  expects 2002 to begin a cycle of recovery in worldwide  mining
that should continue for at least 5 years.

     In the first quarter of 2002, the Company contracted with a new distributor
for the Florida phosphate mining area. This Florida  distributor expects to sell
$1,000,000 annually as polyurethane is the accepted wear material in this mining
region and they are the largest supplier of products to these phosphate mines.

<PAGE>

                                    AGGREGATE

     In 2001,  for the  first  time in 7 years  aggregate  products  used in the
United States declined.  The polyurethane screen market in the United States for
aggregate is  $35,000,000.  With the Company only  capturing  $1,400,000 of this
market,  it was recognized that the Company's  product needed to be retooled and
redesigned. Recognizing that a decline in the market would give the Company time
to remake its products,  tooling,  and change its  distribution method, it began
these changes in 2001.

     The Company hired a screen  designer whose  objective in 2001 was to remake
and fix tooling and design new nonblinding  products for this market.  These two
objectives were met in the year 2001 and the new products were introduced at the
Con-Agg show in Las Vegas on March 17 - 23, 2002.  Previously,  the distribution
of products for the aggregate  industry depended on many small distributors that
could not be supported by direct sales  personnel on a regular  basis.  In March
2002, a new master  distributor  has been  contracted to  distribute  all of the
Company's aggregate products East of the Mississippi. Two direct sales engineers
will be responsible  for training and supporting  this marketing  effort.  A new
sales engineer with 10 years  experience in the aggregate  industry was hired to
identify and support the Company's  Western  distribution  network.  The goal of
this  marketing  and sales effort is to increase the  Company's  market share of
polyurethane screens to $10,000,000 in three years.

                                      POWER

     The polyurethane  products  supplied by the Company have been in testing in
coal-fired power plants with Flue Gas Desulfurization  (FGD) circuits for three
years.  The tests are now complete and these products have proven to be the best
value for this process.  In February 2002, the Company hired a marketing  person
to develop an Internet catalogue to bring these products to market.  This person
will use the FGD  market  study  commissioned  by  Irathane  Systems  in 1999 to
identify potential customers. The goal for the Company is to add 10 power plants
to its customer base in 2002.

                                      PAPER

     The paper  industry  is a small  market  for the  Company's  products.  The
opportunities  for  growth  in this  industry  will be to expand  the  Company's
products from a single  customer with multiple  plants to other paper  companies
throughout  the US and  Canada.  The  Company's  Utah  division  will begin this
marketing  effort in 2002 by identifying and entering the Company's  products in
an Internet business-to-business catalogue for paper manufacturers.

                             MILITARY AND AEROSPACE

     This market has been in a recession for the Company's  products since 1993.
With the US  government  funding the largest  military  spending  increase in 20
years,  the Company expects its specialty  precision molded products to increase

<PAGE>

sales  in the  4th  quarter  of  2002.  The  Company  is  already  the  approved
manufacturer  for  these  products  and  with  plant  availability  of 80% it is
expected  that the  military  and  aerospace  business  will grow to  $1,500,000
annually from its present $170,000.

                                  CONSTRUCTION

     The  construction  industry  segment  that uses the  Company's  products is
concrete.  In 2001,  the  Original  Equipment  Manufacturer's  (OEM's) for batch
plants,  aggregate  mixers,  and concrete mixers saw a significant  reduction in
capital  orders.  With one of the four major  OEMs'  using the  Company's  liner
products  exclusively  in 2002,  an increase is  expected  from 2001 sales.  The
Company  continues  to improve the  industry  standard  for these  products  and
unveiled  this  improvement  at the Con-Agg show in Las Vegas in March.  At this
trade  show there  were an  estimated  150,000  attendees.  To  prepare  for the
announcement of the new construction liner products,  the Company sent 10 people
to the Con-Agg show and printed new literature  specific to this  industry.  The
Company  will also  unveil a new web page with a catalogue  and direct  ordering
information. The construction industry is forecast to grow by 10% a year for the
next 10 years and the Company's goal is to increase its market share.

                                 TRANSPORTATION

     Industrial Rubber Products manufactures products for rail, highway, and air
travel.  With an ever-growing  need for  infrastructure  improvements  for these
industries the Company expects its market to grow at 10% per year for the next 5
years.

     The  Company's  rail  products  are  American   Railway   Engineering   and
Maintenance of Way Association  (AREMA) specified and approved.  In 2002, cities
like Kansas City, Missouri are requiring a complete rebuild of railroad bridges,
which could triple the Company's sales for these rail products from 2001 levels.
As other cities and  government  require  30-year-old  bridges to be reworked or
replaced the Company will continue to increase its sales.

     The  Company  serves the  trucking  and airline  industry  with custom made
products. These products,  although specific in nature, are used as springboards
for  the  development  of new  products.  As an  example  the  Company's  airbag
manufactured  for truck air ride systems gave the Company  technicians  the idea
for  the  P.U.R.L  system.  P.U.R.L.  is  an  advanced  suspension  systems  for
automobiles  and light  trucks that reduces the weight of a vehicle by 16 pounds
and is expected to be  introduced  in 2005  vehicles.  This product has a market
potential of  $20,000,000  per year,  is patented,  and its production  is under
contract by the Company for 10 years from the time it is developed and ready for
manufacture.

     As its markets grow and expand the Company will use operating  revenues and
new capital infusions to continue to grow and expand with them.

<PAGE>

Marketing and Distribution of Products

     The Company markets its products through a direct sales force,  independent
sales representatives, distributors, licensees, and OEM alliances.

     The  Company's present sales force consists of a sales and  marketing  vice
president,  nine direct sales people, two inside sales people,  approximately 40
independent sales representatives and distributors, two licensee representatives
(India and Chile), four OEM alliances, and sales and marketing clerks.

     Industrial  Rubber  seeks  to grow  through  increased  penetration  of all
current  markets with its present  products,  the  development  and sales of new
products,  sales to new markets  outside the United  States and sales of present
and new products to new markets.

     The Company  estimates  that the Minnesota and Michigan  taconite  industry
will produce about 20% less  taconite than an average year, or at  approximately
the same level as 2001. Although the majority of the anticipated  reduction will
be at mines that are not the Company's largest  customers,  it seeks to continue
to reduce its dependence on the taconite industry.

     Industrial  Rubber's marketing  strategy is to maximize  penetration of new
markets, including the auto industry, the aggregate industry, and coal and power
generating  facilities,  with its  present  products.  The  Company is acting to
expand its product lines and new products will be cross-sold to existing and new
customers.

     The marketing plan includes prospective customer  identification,  customer
needs  analysis, and increased and  strategic  placement of the sales force,  to
facilitate  geographic  market and product  expansion.  The  Company  intends to
develop business  partnerships  with existing  customers.  The marketing plan is
being implemented in the U.S., Canadian,  Mexican, and Chilean markets and, when
appropriate,  will be implemented  elsewhere.  At the present time, Chile, Peru,
Brazil, Argentina, Mexico, and Australia are major mineral processing countries,
as are certain Southeast Asian countries.

     Industrial Rubber utilizes general and product specific brochures and sales
literature.  Video is used as an additional marketing resource.  Advertising and
articles in industry trade magazines, journals, newsletters and papers have been
increased.  Trade show  attendance and  participation  has increased to become a
larger part of the marketing effort.

     The Company has identified other protective  material  products,  including
steel and iron products that are not presently produced by Industrial Rubber but
are used by its customers.  Through its distribution agreements with a number of
companies,  the Company seeks to be able to supply cast iron and steel  products
to its customers and is seeking strategic  relationships  with the manufacturers
of related products.

     The goal is to allow the Company to supply its  customers  with a full line
of  protective  products  eliminating  the  disadvantage  to the  customers  and
acquiring  components from multiple suppliers.  Customers should further benefit
by having a single  source  for the design and  testing  of  protective  product
improvements.
<PAGE>

     In connection with the sale of its products, the Company from time to time,
provides  its  customers  with  written   limited   warranties,   including  the
establishment of performance  related standards.  The Company's products subject
to such  performance  related  standards  are under  continuing  review  and the
failure to meet performance  related standards can result in credits back to the
customers.  As of year end, no significant  warranty claims or other performance
related claims have had to be accrued.

Competitive Conditions

     The  protective   material   products  business  that  serves  the  mineral
processing and other heavy industries is competitive.  These protective material
products  are made of steel,  iron,  rubber,  urethane,  ceramics,  plastics and
hybrids of these materials.  The Company's  competitors  fabricate,  cast, mold,
shape,  machine,  and form the material into finished  products.  Both large and
small  companies  throughout  the world  compete on price and by adding value to
their  products  through fit and function,  using physical  design,  chemical or
physical make up or proprietary data (patents).  The competition  falls into two
categories.

     The first category is the regional  manufacturer/supplier that services the
mineral  processing  and  power  generation  properties  that  are  close to its
production  facility.   Standard  rubber  liners,  urethane  castors  and  metal
fabricators  typically fall within this category.  They use personalized service
and quick delivery as an advantage to their regional customers.

     The second category is national  manufacturers of products that are used by
a large  number of  mineral  processing  and  power  generating  plants.  Rubber
molders,  cast  iron  and  metal  makers,  ceramic  manufacturers  and  original
equipment  manufacturers typically fall into this category. They use proprietary
design,  large  distribution  networks  and high volume to reduce  manufacturing
costs.  Sophisticated  quality  programs,  managed  inventories and just-in-time
deliveries are  advantages to their  customers and their size provides them with
access to greater financial and other resources.

     The Company  believes that it can  successfully  compete with  companies in
both  categories,   through  focused  service  to  customers  located  near  its
Minnesota,  Ontario,  and Utah  facilities  and  through  its ability to provide
quality  products in  increasingly  large  quantities  to  customers  located in
geographically distant areas.

Raw Materials and Supplies

     The Company  obtains  rubber used to manufacture  its rubber  products from
numerous  rubber   suppliers  using  Industrial   Rubber  Products   proprietary
compounds.  The Company  produces its own pre-polymer  liquids for cast urethane
production  through a supply of raw material  from large  nationally  recognized
chemical  companies.  The Company obtains numerous metal fabrications from metal

<PAGE>

fabricators  in  Minnesota,  Colorado,  other  states and  Canada.  The  Company
anticipates  that it will continue to obtain this material from these suppliers,
but other sources are available for all such materials.

Dependence on Major Customers

     The Company had no major customers (10% of sales) in the year 2001. This is
part of the  Company's  strategy of  diversifying  both its products and markets
served.  A major  project  could  change  this in the future  but the  Company's
continued plan is for further  diversification away from mining and its cyclical
nature.

Proprietary Rights and Labor Contracts

     The Company holds numerous patents and trademarks.  Industrial Rubber holds
a patent for a Discharge  Millhead,  which will  terminate on April 7, 2013. The
Irathane  division  holds various  patents for  elastomeric  railroad pads and a
railroad tie repair  system.  The Company is developing  additional  potentially
patentable products including rubber compounds, grinding mill parts, screens and
cyclone products,  pipe coupling products and parts for the automobile industry.
The Company also has several proprietary rubber and urethane compounds.

     Since  many  of the  Company's  developments  are  extensions  of  existing
knowledge,  and given the cost of obtaining patent protection,  no assurance can
be given that patents for either the products or processes  being developed will
be issued, that the scope of any patent protection,  will exclude competitors or
provide competitive advantages to the Company, that any of the Company's patents
will be held valid if  subsequently  challenged  or that  others  will not claim
rights in or ownership to the patents and other  proprietary  rights held by the
Company.  Further,  there can be no assurance  competitors have not developed or
will not develop  similar  products,  duplicate  the  Company's  products or, if
patents are issued to the  Company,  design  around such  patents.  In addition,
whether or not  patents are issued,  others may hold or receive  patents,  which
contain claims having a scope that covers products developed by the Company.

     Industrial Rubber's proprietary rubber formula is not patentable. While the
Company  obtains  confidentiality  agreements  from  its  suppliers  and its key
employees,   competitors  could  independently  develop  the  formula.  Further,
litigation to protect either patents or trade secrets, to enforce patents issued
to the Company,  to protect trade secrets or know how owned by the Company,  and
to defend the Company against claimed infringement may be necessary.

     The Minnesota  production employees at the Industrial Rubber Products plant
are covered by a collective bargaining agreement with the United SteelWorkers of
America,  Local  #6860-1,  which  terminates  on April 15, 2004.  The  Minnesota
production  employees  at  the  Irathane  plant  are  covered  by  a  collective

<PAGE>

bargaining  agreement with Midwestern  Industrial  Council,  which terminates on
June 30, 2002. The Sudbury,  Ontario production  employees at the Irathane plant
are  covered  by  a  collective  bargaining  agreement  with  the  International
Brotherhood of Painters and Allied Trades,  Local 1904,  which terminates on May
31, 2004. There is no union affiliation at the TJ Products facility.

Research and Development

     The Company has not incurred  significant  research and development  costs,
although it has incurred certain of such costs on a job-by-job basis,  which are
expensed as incurred.  During 2002, the Company moved its research facility from
Colorado Springs to Hibbing, Minnesota. The move was made to further consolidate
both costs and  operational  efficiency  within the  Company.  This new facility
performs  research and development  functions for all Industrial Rubber Products
divisions.

Governmental Regulation

     While Industrial  Rubber's  products are not subject to, and do not require
any governmental approvals before sale, the Company is subject to a wide variety
of governmental  regulations.  As a manufacturing company,  Industrial Rubber is
subject to safety  regulations  established  by the United States  Department of
labor and the Minnesota  Department of Labor and industry under the Occupational
Safety and Health Act  ("OSHA").  Because  its  products  are sold to the mining
industry,  workplace  safety at the Company is also subject to regulation by the
Mine Safety and Health Administration.  The Company's operations are continually
being  monitored and inspected.  During 2001, the Company  received OSHA reports
addressing a number of deficiencies  against the Company totaling  approximately
$1,100.  In 2001 all deficiencies  were addressed,  none of which had a material
effect on the  Company's  operations.  The Company  participates  with OSHA in a
program to limit or correct deficiencies before fines are assessed.

Environmental Regulation

     The  Company  uses  hazardous  solvents  in its  production  processes  and
disposes of waste products such as used solvents.  These and other activities of
the Company are subject to various federal, state and local laws and regulations
governing  the  generation,  handling,  storage,  transportation,  treatment and
disposal  of  hazardous  wastes.  Under such  laws,  and owner or lessee of real
estate  may be liable  for,  among  other  things,  (i) the costs of  removal or
remediation of certain hazardous or toxic substances located on, in or emanating
from,  such  property,  as well as related costs of  investigation  and property
damage  and  substantial  penalties  for  violations  of  such  laws,  and  (ii)
environmental  contamination  at  facilities  where  its  waste  is or has  been
disposed.  Such laws often impose such  liability  without regard to whether the
owner or lessee knows of, or was responsible for, the presence of such hazardous
or toxic substances.

     While  the  Company's  operations,  to its  best  knowledge,  are  in  full
compliance with all existing laws and regulations, environmental legislation and
regulations  have changed rapidly in recent years and the Company cannot predict
what,  if any,  impact  future  changes  in  such  legislation  may  have on the
Company's business. Further, environmental legislation has been enacted, and may
in the future be enacted,  that  creates  liability  for past  actions that were
lawful  at the  time  taken.  As in the case  with  manufacturing  companies  in
general,  if damage to persons or the environment has been caused,  or is in the

<PAGE>

future  caused,  by the  Company'  facilities,  the Company may be fined or held
liable for the cost of remediating such damage.

     Imposition of such fines or the incurrence of such  liability  could have a
material  adverse  effect on the  Company's  business,  financial  condition and
results of  operations.  Further,  changes in  environmental  regulations in the
future may require  the  Company to make  significant  capital  expenditures  to
change methods of disposal of hazardous  solvents or otherwise  alter aspects of
its operations.

Employees

     As of March 14, 2002,  Industrial Rubber had 99 employees,  94 of whom were
full-time;  61 were production  workers (49 union); the other 33 full time and 5
part time were in sales, engineering,  accounting,  administrative and clerical,
and production supervision.

     The Company  believes that its relations  with its employees are excellent,
demonstrated   by  a  low  turnover   rate.   The  Company   believes  that  the
representation  of employees by unions acts to remove a potential barrier to the
sale of certain of the  Company's  products  to the  taconite  mining  plants by
responding to union contract language that limits outsourcing of work.

ITEM 2. Properties

     The Company currently has four manufacturing  facilities.  Two of these are
owned and two are leased. Two are in Hibbing,  Minnesota  (Industrial Rubber and
Irathane);  and one each is in West Jordan, Utah and Sudbury,  Ontario. On March
31, 2000, the Company sold the Colorado Springs plant and moved the equipment to
the Hibbing plant.

     The Hibbing, Minnesota (Industrial Rubber) facility is a 30,000 square foot
manufacturing  facility and office facility that the Company owns,  subject to a
mortgage  with a balance of $266,665 as of December 31, 2001.  This  facility is
used to produce  proprietary  rubber and rubber lined  products that are used in
the  taconite  industry  and also shipped  throughout  North  America for use in
copper, gold, molybdenum and other mineral processing operations.

     The  Hibbing,  Minnesota  (Irathane)  facility  is  a  42,000  square  foot
manufacturing and office facility that the Company leases. This facility is used
to produce  urethane cast  products used in the taconite  industry in Minnesota,
other mineral  processing  operations  throughout the world, and screens for the
aggregate  industry.  All  manufacturing  equipment  previously  located  in the
Colorado  plant was moved to the  Hibbing  facility  during the first and second
quarters of 2000. This facility also houses sales and technical  support staffs.
This facility also houses the Company's corporate headquarters.

     The West  Jordan,  Utah  facility  is a 25,000  square  foot  manufacturing
facility  that is leased from the previous  owner of TJ  Products.  The facility
produces  urethane  cast  products,  rubber  molded  products  and rubber  lined
products for the mineral  processing,  military and  aerospace,  paper and power

<PAGE>

industries in the  Inter-mountain  West. The Company has options to purchase all
or  portions  of the land  and  buildings  during  the  term of the  lease.  The
production  equipment  from the Arizona  facility was moved to and was stored at
this facility early in 2000.

     The  Sudbury,  Ontario  facility  is a  15,000  square  foot  manufacturing
facility used to produce  urethane  cast products and rubber lined  products for
the mineral processing industry in Canada. The Company owns the facility.

     The Company also owns a 16,000 square feet facility in Hibbing,  Minnesota,
that is currently being used for storage

     The Company  believes that all  facilities are in  satisfactory  conditions
given their age and use, and expects only normal maintenance in the near future.

ITEM 3. Legal Proceedings

     The Company is not involved in any legal proceedings and there are no known
pending or threatened legal proceedings at this time.

ITEM 4. Submission of Matters to a Vote of Security Holders

     No matters have been  submitted  to a vote of the  security  holders of the
Company since the date of its previous annual meeting, May 22, 2001, through the
solicitation of proxies or otherwise.

                                     PART II

ITEM 5. Market for Registrant's Common Equity and Related Stockholder Matters

     The  Company's  Common  Stock  trades on the OTC BB Market under the symbol
INRB.  The  following  table sets forth the high and low bid  quotation  for the
quarters shown.  The prices quoted  represent prices between trades in the stock
without adjustments for markups, markdowns or commissions and do not necessarily
reflect actual  transactions.  The Company's  initial  public  offering date was
April 24, 1998.

                  2001     Quarter           High              Low
                  ------------------------------------------------
                             1st             1.06             .38
                             2nd             1.23             .43
                             3rd              .90             .20
                             4th              .55             .20

                  2000     Quarter           High              Low
                  ------------------------------------------------
                             1st            3 15/16          17/32
                             2nd            2 1/2             1/2
                             3rd            2                 9/16
                             4th            2                 3/32


     The   approximate   number  of   shareholders   of  record  and  beneficial
shareholders  of the  Company's  $.001 par value common stock as of December 31,
2000 and December 31, 2001, was 1,000.


<PAGE>

     The Company has not paid any dividends on its Common Stock,  and intends to
follow a policy of retaining  all of its earning to finance its business and any
future acquisitions.  The terms of the Company's covenants with its bank further
limits its ability to pay dividends.

Item 6: Management's  Discussion and Analysis of Financial Condition and Results
of Operations

     This commentary should be read in conjunction with the Financial Statements
and Notes,  presented  immediately  following the signature  page of this 10-KSB
Report, for a full  understanding of Industrial  Rubber's financial position and
results of operations.

Fiscal 2001 Compared With 2000

     Net sales in the year ended  December 31, 2001,  of  $14,128,875  decreased
23.6%, or $4,363,672 when compared with 2000 sales of $18,492,547.  The decrease
is attributable  to the general  decline in business  activity and production in
the industries served by the Company.

     The  Company's  order  backlog on  December  31,  2001,  was  approximately
$1,500,000.

     Cost of sales as a percentage  of net sales was 76.4% in 2001 compared with
77.2% in 2000.  This decrease was the result of the Company's  ability to reduce
variable manufacturing expenses at nearly all subsidiaries.

     Selling,  general and administrative  expenses decreased from $3,610,906 in
2000 to  $2,654,616  in 2001.  The decrease is the result of cost  consolidation
efforts. These consolidations and cost reductions came from all of the Company's
operating  units  in  2001.  The  Company  believes  that  it has  strategically
reorganized it operations to reduce these  expenses and will be well  positioned
to capitalize on the return of many of its historical  markets.  As a percentage
of sales, selling,  general and administrative  expenses decreased from 19.5% in
2000 to 18.8% in 2001.

     Net  non-operating  expenses for 2001 of $546,251 compared with $475,747 in
2000.  Included in the 2001  expenses  were  $546,499 of interest  expense,  all
except $67,423 of which was on bank debt. The $67,423 represents interest on the
capital lease of the Hibbing Irathane facility.  During 2000, the Company signed
a seven-year  extension to the original  three-year  lease.  This  extension was

<PAGE>

signed after the Company  moved the Colorado  equipment to the Hibbing  facility
and  invested  nearly  $400,000  in  leasehold  improvements.  Interest  expense
decreased in 2001 compared with 2000  primarily  because of two factors.  First,
the  Company's   aggressive  plan  of  reducing  bank  debt  by  $1,000,000  was
accomplished.  Second,  the majority of the  Company's  loans are variable  rate
loans and there were significant interest rate reductions in the market in 2001.
Excluding  the  $248,207  gain  from  the  sale  of  assets  in  2000,  the  net
non-operating expenses improved by $177,703.

     The  Company  recorded  an income tax  provision  of $89,740 in 2001.  This
compares with a provision of $52,731 in 2000. Additional information is provided
in Note 8, Income Tax Matters, of the Financial  Statements,  presented in Item
13 of this 10-KSB Report.

     The 2001 net  income  of  $38,656,  or $.01 per basic  and  diluted  share,
compared to the 2000 net income of $84,465, or $.02 per basic and diluted share.
This reduction of income was based on sales and expenses previously discussed.

Fiscal 2000 Compared With 1999

     Net sales in the year ended  December 31, 2000,  of  $18,492,547  increased
42.4%, or $5,507,246 when compared with 1999 sales of $12,985,301.  The increase
is  attributable  to the 1999  acquisitions  of Irathane  Systems on March 31st,
which  accounted for  approximately  $2.5 million of the increase.  The Nordberg
distributorship,  which  started in October  of 1999,  accounted  for about $2.7
million of the  increase.  Sales levels of the other  subsidiaries  reflected no
major changes.

     The  Company's  order  backlog on  December  31,  2000,  was  approximately
$2,200,000.

     Cost of sales as a percentage  of net sales was 77.2% in 2000 compared with
81.4%  in  1999.   The  decrease  was  the  result  of  reductions  in  variable
manufacturing   expenses  at  nearly  all  subsidiaries  and  included  Nordberg
distributorship  cost of sales of 87.8%,  which did not impact the 1999 results.
The 2000 cost of sales as a percentage of net sales was 75.9% without Nordberg.

     Selling,  general and administrative  expenses decreased from $3,984,698 in
1999 to $3,610,906 in 2000. The decrease is the result of restructuring and cost
consolidation  efforts,  primarily  at TJ Products  and  Irathane  Systems,  and
reduced legal and audit expenses,  which related to the 1999  acquisitions.  The
2000 expenses of $3,610,906 included  approximately $367,000 of expenses related
specifically  to the closure and move of the Colorado  Irathane  facility.  As a
percentage of sales, selling, general and administrative expenses decreased from
30.7% in 1999 to 19.5% in 2000, 17.6% excluding the Colorado expenses.

     In 1999 the Company recorded a $505,991  provision for restructuring  costs
associated with the closing of the Arizona and the Colorado facilities. In 2000,
$93,705 of the provision  was reversed,  as the Company was able to sublease the
Arizona facility and experienced  lower than anticipated  costs to dismantle and
relocate the Arizona equipment.


<PAGE>

     Net  non-operating  expenses for 2000 of $475,747 compared with $429,988 in
1999.  Included in the 2000  expenses  were  $730,517 of interest  expense,  all
except $71,743 of which was on bank debt. The $71,743 represents interest on the
capital lease of the Hibbing Irathane facility.  During 2000, the Company signed
a seven-year  extension to the original  three-year  lease.  This  extension was
signed after the Company  moved the Colorado  equipment to the Hibbing  facility
and  invested  nearly  $400,000  in  leasehold  improvements.  Interest  expense
increased in 2000  compared with 1999  primarily  because the bank debt began on
March 31,  1999.  Partially  offsetting  the  increased  interest  expense was a
$248,207 gain from the sale of assets. Most of this, $202,000, resulted from the
sale of the Colorado real estate.

     The  Company  recorded  an income tax  provision  of $52,731 in 2000.  This
compares with an $889,000 tax credit in 1999. Additional information is provided
in Note 10, Income Tax Matters, of the Financial  Statements,  presented in Item
13 of this 10-KSB Report.

     The 2000 net  income  of  $84,465,  or $.02 per basic  and  diluted  share,
represents a significant  improvement  from the 1999 net loss of $1,618,635,  or
$.39 per basic and diluted share. This change was due to the increased sales and
reduced expenses previously discussed.


Liquidity and Capital Resources

     The Company's cash flows provided by operating  activities  were $1,095,805
for 2001, which is a significant improvement over the $518,460 used by operating
activities in 2000. There were several  significant  differences between the two
periods.  The  Company's  concentrated  efforts in  collecting  receivables  and
reducing   inventories   in  2001   accounts  for  some  of  these   significant
improvements.  In 2001, non-cash adjustments provided $882,254,  while favorable
working capital changes provided $139,895.

     Cash flows used by investing activities were $86,400 in 2001, compared with
$1,201,245  provided by investing  activities in 2000. The major  difference was
the $1,764,186  from the sale of assets  (primarily the Colorado real estate) in
2000.

     The Company's cash flows used for financing  activities  were $1,048,202 in
2001 compared with  $875,422  used by financing  activities in 2000.  The dollar
figures for 2000 and 2001 represent  payments of bank debt.  These reductions of
debt had been a primary  goal of the Company and the  Company has  exceeded  any
payback required by its lenders.

     In total,  the Company had a decrease  in cash of $63,744,  resulting  in a
cash balance of $324,607 as of December 31, 2001.  This compares with a decrease
of $175,494 in 2000.

<PAGE>
<TABLE>
<CAPTION>
                           Industrial Rubber Products
                        Table for Management's Discussion
                      and Analysis Contractual Obligations
                                    31-Dec-01

<S>                                         <C>          <C>          <C>           <C>          <C>    <C>                 <C>
                                            2002         2003         2004          2005         2006   Thereafter          Total
                                    ----------------------------------------------------------------------------------------------
Contractual Obligations

Long-Term Debt
Bank                                      18,912      133,000                                                             151,912
Bank                                      13,728      122,000                                                             135,728
Other                                      9,500                                                                            9,500



Capital Lease Obligation                 109,080      109,080      109,080       109,080      109,080      327,240        872,640

Operating Leases                         182,577       24,532        7,393                                                214,502
                                    ----------------------------------------------------------------------------------------------


Total Contractual Obligations            333,797      388,612      116,473       109,080      109,080      327,240      1,384,282
                                    ==============================================================================================
</TABLE>

Other commercial commitments are as follows:

<TABLE>
<CAPTION>
                                                        2002
                                                    ------------
<S>                                                 <C>
Revolving Line of Credit                            $    476,889
Bank Term Loan                                         4,223,107
                                                    ------------
                                                    $  4,699,996
                                                    ============
</TABLE>


     The  Company  has  recently  signed  an  eighth  amendment  to the US  Bank
revolving line of credit and term loan,  which now extends until April 30, 2002.
The agreement  provides for a $50,000  monthly  principal  payment.  The Company
continues to pursue  financing  alternatives  other than US Bank, which informed
the Company in November of 2000 of their  desire to exit the  relationship.  The
major issue  encountered  in  obtaining  new  financing  has been the  currently
available collateral rates on the Company's manufacturing equipment. On December
19, 2000,  the State of  Minnesota's  Commissioner  of Iron Range  Resources and
Rehabilitation  approved a one million-dollar loan, contingent on the completion
of  a  new  financing  package.  On  July  31,  2001  the  SBA  approved  a  one
million-dollar  financing  package for the Company.  The Company also has a term
sheet from Wells Fargo Business  Credit for the Company's  revolving line needs.
The last piece of the financing  package currently has pre-approval from USDA in
the amount of $1.6 million  dollars.  The Company is awaiting final approval for
this loan.  The  Company  is  confident  that with this loan and the  successful
completion  of  other  financing  initiatives  currently  being  pursued,  a new
financing package will be completed during 2002.

     The Company also believes that it can fund  proposed  capital  expenditures
and  operational  requirements  from  operations,  currently  available cash and
renewed  lines of credit.  Proposed  capital  expenditures  for the year  ending
December 31, 2002 are  estimated at $50,000 and compare with $71,869 in 2001 and
$529,361 in 2000

Critical Accounting Policies

     The  Company's  significant  accounting  policies  are  summarized  in  the
footnotes to its financial  statements.  Some of the most critical  policies are
also discussed below.

     Goodwill:  The  carrying  amount  of  goodwill  is  reviewed  if facts  and
circumstances  suggest that it may be impaired.  If this review  indicates  that
goodwill  will  not  be  recoverable,  as  determined  based  on  the  estimated
undiscounted  cash flows of the entity acquired over the remaining  amortization
period,  the  carrying  amount  of the  goodwill  is  reduced  by the  estimated
shortfall  of the cash  flows.  The net  goodwill  as of  December  31, 2001 was
$869,260.

     In 2002, Statement of Financial Accounting Standards No. 142, "Goodwill and
Other  Intangible  Assets"  became  effective and as a result,  the Company will
cease to amortize its remaining goodwill. The Company had recorded approximately
$72,000 of amortization on these amounts during 2001 and estimates that it would
have  recorded  the same amount  during 2002.  During 2002,  the Company will be
required to perform an initial  impairment  review of its goodwill and an annual
impairment review thereafter. The Company expects to complete its initial review
during the first half of 2002.

     Income taxes:  Deferred taxes are provided on an asset and liability method
whereby deferred tax assets are recognized for deductible temporary  differences
and operating loss and tax credit carryforwards and deferred tax liabilities are
recognized for taxable  temporary  differences.  Temporary  differences  are the
differences between the reported amounts of assets and liabilities and their tax
bases.  Deferred tax assets are reduced by a valuation  allowance  when,  in the
opinion of  management,  it is more likely than not that some  portion or all of
the  deferred  tax  assets  will  not  be  realized.  Deferred  tax  assets  and
liabilities  are adjusted for the effects of change in tax laws and rates on the
date of enactment.

     Significant  management  judgment is required in determining  the Company's
provision  for  income  taxes and its  deferred  tax  assets.  The  Company  has
estimated  that its deferred tax assets will be  recovered  from future  taxable
income. The deferred tax asset as of December 31, 2001 was $1,241,000.

Related  Party  Transactions

     The Company had a receivable of $35,427 as of December 31, 2000 from Nelson
Roofing,  Inc., a company owned by its president and largest stockholder.  Under
the terms of an  agreement  with Nelson  Roofing,  Inc.,  the  Company  provides
management  and  administrative  services  based upon actual  employee cost plus
overhead  and  receives a  management  fee for such  services.  Management  fees
received from Nelson Roofing,  Inc.  amounted to approximately  $117,000 in 2000
and  $83,000 in 2001.  The Company  paid  $174,784 in 2000 and $7,158 in 2001 to
Nelson Roofing, Inc. for construction services.

     During part of 2000, the Company rented a house in Utah on a month-to-month
basis from its largest  stockholder.  Total rent paid to the largest stockholder
amounted to $22,560.

     The Company rented warehouse space on a month-to-month basis from a company
owned by its largest stockholder for $6,000 annually in 2000 and 2001.

     The Company rents a portion of an office and  production  facility from its
largest  stockholder  under the terms of a ten-year  capital  lease  expiring on
December 31, 2009. The lease  provides that the Company pay all property  taxes,
insurance,  and maintenance  plus a monthly rental of $9,090.  The Company has a
purchase  option at any time of $650,000 to December  31, 2002 at which time the
purchase  price  changes by an  inflation  adjustment.  Rent also changes by the
inflation adjustment on January 1, 2003.

     On  January  30,  2000  the  Company  entered  into a  two-year  employment
agreement with its president, who is also its largest stockholder,  in which the
president  will  receive a base salary of  $175,000  in  addition  to  quarterly
bonuses,  as  defined  in the  agreement,  and  annual  bonuses  based  upon the
performance  of the  Company,  as  determined  by the  Board of  Directors.  The
agreement contains certain noncompetition provisions.

     The  Company  accrued  unpaid  salary and other  expenses  to the  majority
stockholder   of  $21,000  and  $90,242  as  of  December  31,  2000  and  2001,
respectively.  The Company had advances to its president and largest stockholder
of $28,000 and $112,000 as of December 31, 2000 and 2001, respectively.

     The Company acquired 10 percent of the stock of Acotec S.A. (Acotec) during
2001.  The  remaining  90  percent  of Acotec is owned by one of the  members of
Industrial  Rubber  Products'  Board of Directors.  Sales to Acotec  amounted to
$419,994 in 2001.  Accounts receivable from Acotec were $236,805 at December 31,
2001.

Item 7.  Financial Statements

     The Company's  financial  statements  are filed as a part of this report on
Form 10-KSB immediately following the signature page.

Item  8.  Changes  in  and  Disagreements  with  Accountants  on Accounting  and
Financial Disclosure

     The Company has not, during the past two years and through the date of this
report,  had a change in its independent  certified public  accountants or had a
disagreement  with such  accountants  as any  matter of  accounting  principles,
practices or financial statement disclosure.

Part III

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

The response to this item  incorporates by reference the  information  under the
caption  "Election of Directors" of Industrial  Rubber's Proxy Statement for the
annual meeting of the stockholders held in 2002.



Item 10. Executive Compensation

The response to this item  incorporates by reference the  information  under the
caption "Executive  Compensation" of Industrial Rubber's Proxy Statement for the
annual meeting of the stockholders held in 2002.



Item 11. Security Ownership of Certain Beneficial Owners and Management

The response to this item  incorporates by reference the  information  under the
caption "Voting Securities and Principal  Holders" of Industrial  Rubber's Proxy
Statement for the annual meeting of the stockholders held in 2002.



Item 12. Certain Relationships and Related Transactions

The response to this item  incorporates by reference the  information  under the
caption "Certain  Transactions"  of Industrial  Rubber's Proxy Statement for the
annual meeting of the stockholders held in 2002.



Item 13. Exhibits and Reports on Form 8-K.

Exhibits  designated  by the symbol * are filed with this Annual  Report on Form
10-KSB.  All exhibits not so designated are incorporated by reference to a prior
filing as indicated.

(a) Required Exhibits

     Industrial Rubber Products,  Inc.  undertakes to furnish to any shareholder
so  requesting  a copy of any of the  following  exhibits  upon  payment  to the
Company of the  reasonable  costs incurred by the Company in furnishing any such
exhibit.

Exhibits Number

3(a)(1) Restated  Articles of  Incorporation  of Company dated as of January 30,
        1998 (Filed as Exhibit 3.1 to Form SB-2 dated  February 20,  1998,  File
        No. 333-46643).

3(a)(2) Restated Bylaws of Company as of January 30, 1998  (Filed as Exhibit 3.1
        to Form SB-2 dated February 20, 1998 File No. 333-46643).

10(1)   Employment Agreement between the Company and Daniel O. Burkes dated
        January 30, 2000. (Filed as Exhibit 10(1) to Form 10-KSB dated April 3,
        2000, File No. 000-24039).

10(2)   Management Contract between the Company and Nelson Roofing, Inc., dated
        January 30, 1999 (Filed as Exhibit 10.2 to Form SB-2 dated February 20,
        1998 File No. 333-46643)which contract has been extended to December 31,
        2002.

10(3)   Labor Agreement  between the Company and United  Steelworkers of America
        dated June 26, 2000.

10(4)   Labor Agreement between Irathane Systems and Midwestern Industrial
        Council dated June 30, 1999. (Filed as Exhibit 10(4) to Form 10-KSB
        dated April 3, 2000, File No. 000-24039).

10(5)   Labor Agreement between Industrial Rubber Products-Canada Inc. and
        International Brotherhood of Painters and Allied Trades Local 1904 dated
        April 1, 1999. (Filed as Exhibit 10(5) to Form 10-KSB dated April 3,
        2000, File No. 000-24039).

10(6)   Stock Option Plan, Including Specimen Stock Option Agreement as of
        January 30, 1999 (Filed as Exhibit 10.5 to Form SB-2 dated February 20,
        1998 File No. 333-46643).

10(7)   Stock Bonus Plan adopted on October 12, 1999. (Filed as Exhibit 10(7) to
        Form 10-KSB dated April 3, 2000, File No. 000-24039).

10(8)   Credit Agreement between Company and U.S. Bank National Association
        dated March 31, 1999 (Filed as Exhibit 10.11 to Form 8-K dated April 12,
        1999 File No. 000-24039).

10(9)   First Amendment to Credit Agreement between Company and US Bank National
        Association dated September 30, 1999. (Filed as Exhibit 10(9) to Form
        10-KSB dated April 3, 2000, File No. 000-24039).

10(10)  Second Amendment to Credit  Agreement  between Company and US Bank dated
        March 31, 2000. (Filed as Exhibit 10(10) to Form 10-KSB dated March 12,
        2001, File No. 000-24039).

10(11)  Third  Amendment to Credit  Agreement  between Company and US Bank dated
        June 9, 2000. (Filed as Exhibit 10(11) to Form 10-KSB dated March 12,
        2001, File No. 000-24039).

10(12)  Fourth  Amendment to Credit  Agreement between Company and US Bank dated
        December 31, 2000. (Filed as Exhibit 10(12) to Form 10-KSB dated March
        12, 2001, File No. 000-24039).

10(13)  Lease Agreement between DGW Enterprises, L.C. and Industrial Rubber
        Products - Utah, Inc. dated January 20, 1999 (Filed as Exhibit 10(7) to
        Form 10-KSB dated March 29, 1999, File No. 000-24039).

10(14)  First Amendment to Lease Agreement between DGW Enterprises, L.C. and
        Company dated October 5, 1999. (Filed as Exhibit 10(11) to Form 10-KSB
        dated April 3, 2000, File No. 000-24039).

10(15)  Lease Agreement between Daniel O. Burkes and Irathane Systems, Inc.
        dated January 1, 2000. (Filed as Exhibit 10(12) to Form 10-KSB dated
        April 3, 2000, File No. 000-24039).

10(16)  Lease  Agreement  between  Daniel O. Burkes  and Irathane Systems,  Inc.
        dated  June 30,  2000.  (Filed as Exhibit  10(3) to Form  10-KSB  dated
        March 12, 2001, File No. 000-24039).

10(17)  Purchase Agreement between Industrial Rubber Products - Utah, Inc. and
        Company and Sonwil Products, Inc., dba T.J. Products and Dean G. Wilson
        dated January 20, 1999 (Filed as Exhibit 2.1 to Form 8-K dated February
        4, 1999, File No. 000-24039).

10(18)  Purchase Agreement between Illinois Tool Works Inc. and Industrial
        Rubber Products, Inc. dated March 25, 1999 (Filed as Exhibit 10.8 to
        Form 10-KSB dated March 29, 1999, File No. 000-24039).

10(19)  Secrecy and Supply Agreement between Illinois Tool Works, Inc. and
        Company dated March 31, 1999 (Filed as Exhibit 10.9 to Form 8-K dated
        April 12, 1999 File No. 000-24039).

10(20)  Non-Competition Agreement between Illinois Tool Works, Inc. and Company
        dated March 31, 1999 (Filed as Exhibit 10.10 to Form 8-K dated April 12,
        1999, File No. 000-24039).

10(21)  Fifth Amendment to Credit  Agreement  between Company and US Bank dated
        March 7,2001.  (Filed as Exhibht 10(13) to Form 10-QSB dated May 4, 2001
        File No. 000-24039).

10(22)  Sixth Amendment to Credit  Agreement  between Company and US Bank dated
        July 12, 2001. (Filed as Exhibit 10(13) to Form 10-QSB dated July 27,
        2001, File No. 000-24039).

10(23)* Seventh  Amendment to Credit Agreement  between Company and US Bank
        dated November 20, 2001


21. List of Subsidiaries

Industrial Rubber Products-Utah, Inc., a Utah corporation which does business as
"TJ Products".

Irathane Systems Inc., a Minnesota Corporation.

Industrial Rubber Products-Canada, Inc., an Ontario Canada corporation which
does business as "Irathane/Elliott Systems".

Industrial Rubber Products, Arizona, Inc., an Arizona Corporation.

Industrial Rubber Applicators, Inc., a Minnesota Corporation.

Industrial Rubber Products-Montana, Inc., a Montana Corporation.
Currently inactive.

27. Financial Data Schedule
<TABLE>
<S>                                     <C>
PERIOD-TYPE                             Year
FISCAL-YEAR-END                          DEC-31-2001
PERIOD-START                             JAN-01-2001
PERIOD-END                               DEC-31-2001
CASH                                         324,607
SECURITIES                                         0
RECEIVABLES                                2,723,743
ALLOWANCES                                   380,500
INVENTORY                                  1,166,081
CURRENT-ASSETS                             4,382,363
PP&E                                       8,953,038
DEPRECIATION                               3,413,095
TOTAL-ASSETS                              12,145,260
CURRENT-LIABILITIES                        6,221,412
BONDS                                        775,298
PREFERRED-MANDATORY                                0
PREFERRED                                          0
COMMON                                         4,187
OTHER-SE                                   5,144,363
TOTAL-LIABILITY-AND-EQUITY                12,145,260
SALES                                     14,128,875
TOTAL-REVENUES                            14,128,875
CGS                                       10,799,612
TOTAL-COSTS                               13,454,228
OTHER-EXPENSES                                     0
LOSS-PROVISION                               (21,500)
INTEREST-EXPENSE                             546,499
INCOME-PRETAX                                128,396
INCOME-TAX                                    89,740
INCOME-CONTINUING                             38,656
DISCONTINUED                                       0
EXTRAORDINARY                                      0
CHANGES                                            0
NET-INCOME                                    38,656
EPS-BASIC                                        .01
EPS-DILUTED                                      .01
 </TABLE>

<PAGE>
(b)  Reports on Form 8K
     None




SIGNATURES

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



Industrial Rubber Products, Inc.

Dated: April 1, 2002         /s/ James A. Skalski
                              Comptroller

Pursuant  to the  requirement  of the  Securities  Exchange  Act of  1934,  this
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


SIGNATURE                          TITLE                          DATE
                                   President
/s/ Daniel O. Burkes               Chief Executive Officer
Daniel O. Burkes                   and Director                   April 1, 2002

                                   Vice President
/s/ Christopher M. Liesmaki        Chief Operating Officer
Christopher M. Liesmaki            and Director                   April 1, 2002

/s/ Paul A. Friesen
Paul A. Friesen                    Director                       April 1, 2002


/s/ James D. Mackay
James D. Mackay                    Director                       April 1, 2002

/s/ John R. Ryan, Jr.
John R. Ryan, Jr.                  Director                       April 1, 2002

/s/ Gabriel Berczely
Gabriel Berczely                   Director                       April 1, 2002
<PAGE>
                          INDEPENDENT AUDITOR'S REPORT

To the Board of Directors
Industrial Rubber Products, Inc.
Hibbing, Minnesota


     We have audited the accompanying  consolidated balance sheets of Industrial
Rubber Products, Inc. and Subsidiaries as of December 31, 2000 and 2001, and the
related consolidated  statements of operations,  stockholders'  equity, and cash
flows for each of the years  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 audits.

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

     In our opinion,  the consolidated  financial  statements  referred to above
present fairly, in all material  respects,  the financial position of Industrial
Rubber Products, Inc. and Subsidiaries as of December 31, 2000 and 2001, and the
results  of their  operations  and their  cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.


Duluth, Minnesota
February 14, 2002


<PAGE>

INDUSTRIAL RUBBER PRODUCTS, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
December 31, 2000 and 2001

<S>          <C>                                                                  <C>                  <C>
ASSETS (Note 4)                                                                   2000                 2001
--------------------------------------------------------------------------------------------------------------------
Current Assets
Cash and cash equivalents                                                       $  388,351            $ 324,607
Trade receivables, less allowance for doubtful
accounts 2000 $402,000; 2001 $380,500                                            2,643,729            2,343,243
Inventories (Note 3)                                                             1,725,134            1,166,081
Prepaid expenses                                                                    85,627              287,432
Deferred taxes (Note 8)                                                            289,000              261,000
                                                                                -------------------------------
Total current assets                                                             5,131,841            4,382,363
                                                                                -------------------------------

Other Assets
Cash value of life insurance                                                       214,104              238,720
Investment in common stock of Acotec S.A.                                                0              120,000
Goodwill, at cost, less accumulated amortization
2000 $140,561; 2001 $212,691                                                       941,390              869,260
Prepaid pension costs (Note 9)                                                      13,309               14,974
                                                                                -------------------------------
                                                                                 1,168,803            1,242,954
                                                                                --------------------------------

Deferred Taxes (Note 8)                                                            987,000              980,000
                                                                                --------------------------------

Property and Equipment (Note 5)
Land                                                                               509,186              511,576
Buildings and leasehold improvements                                             1,610,551            1,610,551
Automotive equipment                                                               529,560              527,560
Machinery and equipment                                                          6,257,871            6,303,351
                                                                                --------------------------------
                                                                                 8,907,168            8,953,038
Less accumulated depreciation                                                    2,592,220            3,413,095
                                                                                --------------------------------
                                                                                 6,314,948            5,539,943
                                                                                --------------------------------
                                                                                $13,602,592          $12,145,260
                                                                                ================================
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
<S>                                                                               <C>                  <C>
LIABILITIES AND STOCKHOLDERS' EQUITY                                              2000                 2001
--------------------------------------------------------------------------------------------------------------------
Current Liabilities
Bank notes payable (Note 4)                                                    $ 5,684,996          $ 4,699,996
Current maturities of long-term debt (Note 5)                                       62,734               67,088
Accounts payable                                                                 1,115,985              794,369
Accrued expenses                                                                   760,182              608,663
Income taxes payable                                                                 1,000               51,296
                                                                                -------------------------------
Total current liabilities                                                        7,624,897            6,221,412
                                                                                -------------------------------

Long-Term Debt, less current maturities (Note 5)                                   842,854              775,298
                                                                                -------------------------------

Commitments and Contingencies (Notes 4, 11, and 12)


Stockholders' Equity (Note 6)
Common stock, $.001 par value; authorized 25,000,000
 shares; issued 4,187,205 shares                                                     4,187                4,187
Additional paid-in capital                                                       5,638,862            5,638,862
Accumulated deficit                                                               (533,137)            (494,481)
Accumulated other comprehensive income (loss)                                       24,929                  (18)
                                                                                --------------------------------
                                                                                 5,134,841            5,148,550
                                                                                --------------------------------
                                                                              $ 13,602,592         $ 12,145,260
                                                                              =================================
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended December 31, 2000 and 2001

<S>                                                                               <C>                  <C>
                                                                                  2000                 2001
-------------------------------------------------------------------------------------------------------------------

Net Sales (Note 3)                                                            $ 18,492,547         $ 14,128,875

Cost of Sales                                                                   14,268,698           10,799,612
                                                                                -------------------------------
Gross profit                                                                     4,223,849            3,329,263

Operating Expenses                                                               3,610,906            2,654,616
                                                                                -------------------------------
Operating income                                                                   612,943              674,647
                                                                                -------------------------------

Nonoperating Income (Expense)
Interest and other income                                                            6,563                6,442
Interest expense                                                                  (730,517)            (546,499)
Gain (loss) on sale of equipment                                                   248,207               (6,194)
                                                                                --------------------------------
                                                                                  (475,747)            (546,251)
                                                                                --------------------------------

Income before income taxes                                                         137,196              128,396

Federal and State Income Taxes (Note 8)                                             52,731               89,740
                                                                                -------------------------------
Net income                                                                        $ 84,465             $ 38,656
                                                                                ===============================

Net income per share
Basic                                                                               $ 0.02               $ 0.01
                                                                                ===============================
Diluted                                                                             $ 0.02               $ 0.01
                                                                                ===============================

Weighted average number of shares and share equivalents:
Basic                                                                            4,181,539            4,187,205
                                                                                ===============================

Diluted                                                                          4,478,790            4,468,555
                                                                                ===============================
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
INDUSTRIAL RUBBER PRODUCTS, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years Ended December 31, 2000 and 2001


                                                                             Accumulated
                                                    Additional                   Other         Total        Total
                               Common Stock          Paid-in    Accumulated Comprehensive  Stockholders'Comprehensive
                              Shares      Amount      Capital      Deficit   Income (Loss)     Equity       Income
----------------------------------------------------------------------------------------------------------------------
<S>                           <C>          <C>       <C>           <C>           <C>        <C>             <C>
Balance, December 31, 1999    4,144,000    $ 4,144   $ 5,605,832   $(617,602)    $ 7,786    $5,000,160

Issuance of common
  stock                          43,205         43       33,030            0           0        33,073
Foreign currency
  translation adjustment              0          0            0            0      17,143        17,143      $ 17,143
Net income                            0          0            0       84,465           0        84,465        84,465
----------------------------------------------------------------------------------------------------------------------
Total comprehensive
 income                                                                                                     $101,608
                                                                                                           =========

Balance, December 31, 2000    4,187,205      4,187    5,638,862     (533,137)     24,929     5,134,841

Foreign currency
 translation adjustment               0          0            0            0     (24,947)      (24,947)     $(24,947)
Net income                            0          0            0       38,656           0        38,656        38,656
--------------------------------------------------------------------------------------------------------------------
Total comprehensive
 income                                                                                                     $ 13,709
                                                                                                            ========

Balance, December 31, 2001    4,187,205    $ 4,187   $5,638,862    $(494,481)      $ (18)   $5,148,550
                           ==============================================================================
</TABLE>
See Notes to Consolidated Financial Statements.

<PAGE>

INDUSTRIAL RUBBER PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 2000 and 2001

<TABLE>
<CAPTION>
<S>                                                                               <C>                  <C>
                                                                                  2000                 2001
---------------------------------------------------------------------------------------------------------------
Cash Flows from Operating Activities
  Net income                                                                    $ 84,465             $ 38,656
  Adjustments to reconcile net income to net cash
   provided by (used in) operating activities:
   Depreciation                                                                  823,987              828,930
   Amortization                                                                   72,130               72,130
   Provision for (recovery of) bad debts                                          39,116              (25,000)
   (Gain) loss on sale of equipment                                             (248,207)               6,194
   Deferred taxes                                                                 40,000               35,000
   Changes in working capital components
    (Increase) decrease in trade receivables                                    (523,263)             205,486
    (Increase) decrease in inventories                                           (96,675)             559,053
    (Increase) decrease in prepaid expenses                                       27,801             (201,805)
    Decrease in accounts payable and accrued expenses                           (647,814)            (473,135)
    Increase (decrease) in income taxes payable                                  (90,000)              50,296
                                                                               -------------------------------
     Net cash provided by (used in) operating activities                        (518,460)           1,095,805
                                                                               -------------------------------
Cash Flows from Investing Activities
  Purchase of property and equipment                                            (529,361)             (71,869)
  Proceeds from sale of equipment                                              1,764,186               11,750
  Increase in cash value of life insurance and prepaid pension                   (33,580)             (26,281)
                                                                               -------------------------------
     Net cash provided by (used in) investing activities                       1,201,245              (86,400)
                                                                               -------------------------------
Cash Flows from Financing Activities
  Net payments on short-term borrowings                                         (815,004)            (985,000)
  Principal payments on long-term borrowings                                     (60,418)             (63,202)
                                                                               -------------------------------
     Net cash used in financing activities                                      (875,422)          (1,048,202)
                                                                               -------------------------------
Effect of Foreign Currency Exchange Rate Changes
  on Cash and Cash Equivalents                                                    17,143              (24,947)
                                                                               -------------------------------
     Net decrease in cash and cash equivalents                                  (175,494)             (63,744)

Cash and Cash Equivalents
  Beginning                                                                      563,845              388,351
                                                                               -------------------------------
  Ending                                                                       $ 388,351            $ 324,607
                                                                               ===============================
</TABLE>
                               (Continued)
<PAGE>
INDUSTRIAL RUBBER PRODUCTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 2000 and 2001

<TABLE>
<CAPTION>
<S>                                                                               <C>                  <C>
                                                                                  2000                 2001
---------------------------------------------------------------------------------------------------------------
Supplemental Disclosures of Cash Flow Information
Cash payments for:
Interest                                                                        $ 727,077            $ 582,395
                                                                                ===============================

Income taxes                                                                    $  99,903            $   3,050
                                                                                ===============================

Supplemental Schedule of Noncash Investing
and Financing Activities
Capital lease obligation incurred for use of property                           $ 650,000             $      0
                                                                                ===============================

Accrued bonus paid with common stock                                            $  33,073             $      0
                                                                                ===============================

Accounts receivable exchanged for investment
in common stock of Acotec S.A.                                                  $       0            $ 120,000
                                                                                ===============================
</TABLE>

See Notes to Consolidated Financial Statements.
<PAGE>


INDUSTRIAL RUBBER PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1.  Nature of Business and Significant Accounting Policies

     Nature of  business:  The  Company's  operations  consist of  applying  and
vulcanizing  rubber and applying urethane (for corrosion and abrasion  resistant
purposes) to pipes,  pumps and other wear  material  surfaces.  The Company also
produces cast urethane parts and rubber molded parts. The Company's products are
primarily  for  the  mineral  processing  industry,  but  are  also  used in the
aggregate,  paper,  utility and military and aerospace  industries.  The Company
extends credit to its  customers,  all on an unsecured  basis,  on terms that it
establishes for individual customers.

     A summary of the Company's significant accounting policies follows:

     Basis of consolidation:  The consolidated  financial statements include the
accounts  of the  Company  and  its  wholly  owned  subsidiaries.  All  material
intercompany accounts and transactions are eliminated in consolidation.

     Cash and cash  equivalents:  For  purposes of  reporting  cash  flows,  the
Company  considers all highly liquid debt instruments  purchased with a maturity
of three  months or less to be cash  equivalents.  Cash  equivalents  consist of
money market funds.

     The Company  maintains its cash in accounts,  which,  at times,  may exceed
insured limits. The Company has not experienced any losses in such accounts.

     Inventories: Inventories are stated at the lower of cost or market. Cost is
determined by the first-in, first-out method.

     Investment  in common stock:  The Company is accounting  for its 10 percent
investment in Acotec S.A., a Chilean company, at cost.

     Property  and  equipment:   Property  and  equipment  is  stated  at  cost.
Depreciation  is  computed  using the  straight-line  method for  buildings  and
leasehold  improvements  and a combination of the accelerated and  straight-line
methods  for  equipment  over  the  following   estimated   useful  lives.   The
depreciation  expense on assets  acquired  under capital leases is included with
depreciation expense on owned assets.


                                                                     Years
--------------------------------------------------------------------------------
Buildings including building under capital lease                     10 - 39
Leasehold improvements                                            Term of lease
Automotive equipment                                                  3 - 5
Machinery and equipment                                               5 - 10



     Buildings  under  capital  lease  had a cost of  $650,000  and  accumulated
depreciation   of  $65,000  and   $130,000  at  December   31,  2000  and  2001,
respectively.

     Long-lived assets are reviewed for impairment whenever events or changes in
circumstances  indicate that the carrying amount may not be recoverable.  If the
fair value is less than the carrying  amount of the asset,  a loss is recognized
for the  difference.  Long-lived  assets to be disposed  of are  reported at the
lower of carrying amount of or fair value less cost to sell.

<PAGE>


     Goodwill:  Goodwill is the excess of the purchase price over the fair value
of identifiable net assets acquired in business combinations  accounted for as a
purchase.  Goodwill is  amortized  on a  straight-line  basis over the  expected
periods  benefited of 15 years.  The carrying  amount of goodwill is reviewed if
facts  and  circumstances  suggest  that  it may be  impaired.  If  this  review
indicates  that goodwill  will not be  recoverable,  as determined  based on the
estimated  undiscounted  cash flows of the entity  acquired  over the  remaining
amortization  period,  the  carrying  amount of the  goodwill  is reduced by the
estimated shortfall of cash flows.

     Income taxes:  Deferred taxes are provided on an asset and liability method
whereby deferred tax assets are recognized for deductible temporary  differences
and operating loss and tax credit carryforwards and deferred tax liabilities are
recognized for taxable  temporary  differences.  Temporary  differences  are the
differences between the reported amounts of assets and liabilities and their tax
bases.  Deferred tax assets are reduced by a valuation  allowance  when,  in the
opinion of  management,  it is more likely than not that some  portion or all of
the  deferred  tax  assets  will  not  be  realized.  Deferred  tax  assets  and
liabilities are adjusted for the effects of changes in tax laws and rates on the
date of enactment.

     Employee health benefits  self-insurance:  The Company is self-insured  for
employee health benefits.  The Company has purchased  reinsurance to limit claim
exposure.  The estimated expense from uninsured claims,  including  incurred but
not reported claims, is accrued as losses occur.

     Advertising  costs: The Company follows the policy of charging the costs of
advertising  to expense as incurred.  For the years ended  December 31, 2000 and
2001, advertising expense totaled $81,630 and $28,161, respectively.

     Revenue  recognition:  The  Company  recognizes  revenue  upon  shipment of
product (FOB shipping point).  Returns and allowances are recorded in the period
the need for such is identified.

     Shipping fees and costs: The Company classifies amounts billed to customers
for shipping fees as revenue. Shipping costs are included in cost of sales.

     Foreign currency  translation:  For the Company's Canadian  operation,  the
results of operations  and cash flows are  translated at average  exchange rates
during the year, and assets and liabilities are translated at end of year rates,
except for property and  equipment,  which is translated  at  historical  rates.
Translation  adjustments  are included as a separate  component  of  accumulated
other comprehensive income in stockholders' equity.

     Disclosures about fair value of financial instruments:  The carrying amount
of current assets and liabilities  approximates  fair value because of the short
maturity  of  those   instruments.   The  carrying   amount  of  long-term  debt
approximates  fair value since the fair value of the long-term debt is estimated
based on  interest  rates for the same or similar  debt  offered to the  Company
having the same or similar remaining maturities and collateral requirements.

     Use  of  estimates  in  the  preparation  of  financial   statements:   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.


<PAGE>

     Earnings per common share:  Earnings per common share have been computed on
the basis of the  weighted-average  number of common shares  outstanding  during
each period  presented.  Common  shares  issuable  upon exercise of the employee
stock options (see Note 7) and common shares  issuable upon exercise of warrants
issued  to the  underwriters  (see  Note 6) have been  included  in the  diluted
earnings per share calculation.

Note 2.  Revenue by Products and Services

     The  Company's  revenue is attributed  to a single  reportable  segment and
results from the sale of products or services which consist of liquid urethanes,
urethane  moldings and rubber and urethane  linings for the mineral  processing,
aggregate, transportation, and power industries.

     The following table presents net sales from external  customers for each of
the Company's  groups of products and services for the years ended  December 31,
2000 and 2001:

<TABLE>
<CAPTION>
<S>                                                 <C>                  <C>
                                                    2000                 2001
--------------------------------------------------------------------------------------------------------------------
Urethane cast parts                             $ 7,621,923          $ 6,532,774
Pipe and pipe lining products                     1,621,948            1,201,129
Coatings                                          1,192,133              663,083
Spray                                               342,636              488,767
Proprietary engineered products                     649,551              977,877
Standard rubber products                          3,390,326            2,488,281
Steel cast parts                                  2,055,496              970,831
New equipment                                     1,077,100              470,633
Other                                               541,434              335,500
                                              ----------------------------------
                                               $ 18,492,547         $ 14,128,875
                                              ==================================
</TABLE>
The Company's revenue (based on location of the customer) for the years ended
December 31, 2000 and 2001 is as follows:

<TABLE>
<CAPTION>
<S>                                                 <C>                  <C>
                                                    2000                 2001
--------------------------------------------------------------------------------------------------------------------
United States                                  $ 15,735,225         $ 11,355,875
Canada                                            1,668,989            2,088,000
Other countries                                   1,088,333              685,000
                                               ---------------------------------
                                               $ 18,492,547         $ 14,128,875
                                               =================================
</TABLE>

     Net sales for the year ended  December 31, 2000  included  sales to a major
customer which accounted for $2,070,953 or 11.2 percent of net sales.

     The  Company's  property and equipment as of December 31, 2000 and 2001 are
located as follows:

<TABLE>
<S>                                                 <C>                  <C>
                                                    2000                 2001
--------------------------------------------------------------------------------------------------------------------
United States                                   $ 5,688,125          $ 4,913,120
Canada                                              626,823              626,823
                                                --------------------------------
                                                $ 6,314,948          $ 5,539,943
                                                ================================
</TABLE>

<PAGE>

Note 3.  Inventories

     Inventories consist of the following as of December 31, 2000 and 2001:

<TABLE>
<S>                                                        <C>                  <C>
                                                           2000                 2001
--------------------------------------------------------------------------------------------------------------------
Raw materials                                          $ 1,417,107            $ 977,065
Work in process                                             17,090                8,856
Finished goods                                             457,781              354,603
                                                       --------------------------------
                                                         1,891,978            1,340,524
Raw materials purchased on behalf of customers              25,606               26,531
                                                       --------------------------------
                                                         1,917,584            1,367,055
Less allowance for obsolescence                            192,450              200,974
                                                       --------------------------------
                                                       $ 1,725,134          $ 1,166,081
                                                       ================================
</TABLE>


     The Company  incurs  costs on behalf of its  customers  for the purchase of
pipes,  pumps and launders and is reimbursed  for these costs by the  customers.
The Company does not receive a commission or recognize gross profit upon sale of
these  components;  therefore,  net sales and cost of sales in the statements of
operations do not include amounts for sales and purchases of components.

Note 4.       Notes Payable and Liquidity

     During 2001, the Company entered into a $1,200,000 revolving line of credit
for working capital financing and a $4,323,107 term loan with a bank, which were
due on January  31,  2002.  Advances  under the line of credit are  subject to a
borrowing base of eligible trade receivables and inventories,  as defined in the
agreement.   Advances   under  the  line  of  credit   and  the  term  loan  are
collateralized   by   trade   receivables,   inventories,   equipment,   general
intangibles,   assignment  of  a  life  insurance  policy,  and  are  personally
guaranteed by the majority stockholder. Interest on the revolving line of credit
is payable monthly at the bank's reference rate, plus 1 percent (5.75 percent at
December 31, 2001).  Interest on the term loan is payable  monthly at the bank's
reference rate, plus 1.5 percent (6.25 percent at December 31, 2001).  Principal
payments of $50,000 per month are due on the term loan.  At December  31,  2001,
$476,889 was  outstanding  on the revolving  line of credit and  $4,223,107  was
outstanding on the term loan.

Among other things, the agreement requires the Company to:

    a. Maintain a tangible net worth of at least $4,000,000.
    b. Maintain a current ratio of at least 1.5 to 1. (Excluding bank term loan)
    c. Maintain a leverage ratio of less than 2.0 to 1.
    d. Maintain all of its deposits with the bank.
    e. Refrain from declaring or paying dividends or redeeming any of its common
       stock.
    f. Refrain from incurring additional interest-bearing indebtedness.

<PAGE>

     On January 31, 2002, the Company obtained a 90-day extension on the line of
credit and term loan through April 30, 2002. In connection  with the  extension,
the  Company is  required  to make  monthly  payment of $50,000  plus  interest.
Although it is not committed to do so, the Bank may extend the maturities of the
line of credit and term notes for additional  periods.  It is the Company's plan
to work with the lender to obtain the needed extensions, and to seek alternative
sources of financing.

Note 5.  Long-Term Debt

A summary of long-term debt as of December 31, 2000 and 2001 is as follows:

<TABLE>
<S>                                                                   <C>              <C>
                                                                      2000             2001
--------------------------------------------------------------------------------------------------------------------
Capital lease obligation to Company president for use of
  building, payable in monthly installments of $9,090 to
  December 31, 2009, discounted at a rate of 11.3%                 $ 613,843       $ 572,187
Note payable, bank, due in monthly installments of $1,576
  including interest at 8.5% to April 2003, at which time
  the remaining balance is due                                       144,784         138,094
Note payable, bank, in participation with the Iron Range
  Resources Rehabilitation Board, due in monthly
  installments of  $1,144 including interest at 3.5% to
  April 2003, at which time the remaining balance is due             137,550         128,561
Other notes payable due through November 2002                          9,411           3,544
                                                                  --------------------------
                                                                     905,588         842,386
Less current maturities                                               62,734          67,088
                                                                  --------------------------
                                                                   $ 842,854       $ 775,298
                                                                  ==========================
</TABLE>

     The  8.5  percent  and  3.5   percent   notes   payable  to  the  bank  are
collateralized by real estate and guaranteed by the majority stockholder.  Among
other things, these notes require the Company to:

     a. Maintain a current ratio of at least 1.2 to 1.
     b. Maintain a ratio of total liabilities to tangible net worth of less than
        3 to 1.
     c. Maintain  a ratio of  traditional  cash flow to current  maturities  of
        long-term debt of at least 1.5 to 1.
     d. Refrain from  declaring or paying  dividends in excess of 50 percent of
        after tax net income.
     e. Limit capital expenditures to $500,000.
     f. Obtain bank approval for the issuance of additional debt.
     g. Refrain  from  consolidating,  combining  or  merging  with  any  other
        corporation or purchase or acquire the assets of another business.

     The Company was in violation  of certain  covenants of the above bank notes
payable agreement as of December 31, 2001;  however,  these violations have been
waived by the Bank.

<PAGE>

     Aggregate maturities required on long-term debt as of December 31, 2001 are
as follows:
<TABLE>
<CAPTION>
Years Ending December 31,
--------------------------------------------------------------------------------
<C>                                                                     <C>
2002                                                                    $ 67,088
2003                                                                     301,935
2004                                                                      58,425
2005                                                                      65,398
2006                                                                      73,204
Thereafter                                                               276,336
                                                                    ------------
                                                                       $ 842,386
                                                                    ============

</TABLE>
     Gross  lease  payments  under the  building  lease are  $109,080  each year
through December 31, 2009.  Total lease payments  remaining at December 31, 2001
amount to $872,640, including imputed interest of $300,453.

Note 6.  Stockholders' Equity

     In connection  with the initial public  offering in April 1998, the Company
issued warrants to the  underwriters to purchase 126,000 shares of the Company's
common stock.  The warrants are  exercisable at a price equal of $6.00 per share
through April 2003.

Note 7.       Stock Option and Bonus Plan

     At December 31, 2001, the Company has a stock-based compensation plan which
is described below. As permitted under accounting  principles generally accepted
in the  United  States  of  America,  grants  under the plan are  accounted  for
following  APB  Opinion  No. 25 and  related  interpretations.  Accordingly,  no
compensation  cost has been  recognized  for grants under the stock option plan.
Had compensation  costs for the Company's stock options been determined based on
the fair value method  prescribed  in FASB  Statement  No. 123, net earnings and
earnings per share would have been reduced to the pro forma amounts shown below:

<TABLE>
<CAPTION>
                                                     2000                 2001
--------------------------------------------------------------------------------
Net earnings:
<S>                                                <C>                  <C>
As reported                                        $ 84,465             $ 38,656
Pro forma                                            71,956               26,147

Basic earnings per share:
As reported                                          $ 0.02               $ 0.01
Pro forma                                              0.02                 0.01

Diluted earnings per share:
As reported                                          $ 0.02               $ 0.01
Pro forma                                              0.02                 0.01
</TABLE>

<PAGE>

     In  determining  the pro forma  amounts  above,  the value of each grant is
estimated at the grant date using the fair value method  prescribed in Statement
No. 123, with the  following  weighted-average  assumptions  for grants in 2000:
risk  free  interest  rate of 5.32  percent;  expected  life of four  years  and
expected  price  volatility of 68.25 percent.  There were no options  granted in
2001.

     Stock option plan:  The Company has a Stock Option Plan which  provides for
the  granting  of stock  options to  employees,  directors  and  officers of the
Company.  The number of shares issued  pursuant to the options granted shall not
exceed 400,000 shares.  Options are exercisable at $1.125,  $1.875 and $2.00 per
share, which approximates fair market value at the date of grant and expire five
years after date of grant.  Options vest  immediately.  During 2000, the Company
canceled  all the $4.50  stock  options  and  reissued  new options at $2.00 per
share.

A summary of the stock option plan is as follows:

<TABLE>
<CAPTION>
                                                        2000                             2001
                                                -----------------------         ------------------------
                                                              Weighted-                       Weighted-
                                                               Average                         Average
                                                              Exercise                        Exercise
                                                 Shares         Price           Shares          Price
--------------------------------------------------------------------------------------------------------
<S>                                             <C>             <C>             <C>             <C>
Under option, beginning of year                 170,950         $ 4.44          177,650         $ 1.96
  Granted                                       174,300           1.96                0              0
  Exercised                                           0              0                0              0
  Forfeited/canceled                           (167,600)          4.49          (44,000)          2.00
Under option, end of year                       177,650                         133,650
                                              ==========                       =========

Options exercisable, end of year                177,650                         133,650
                                              ==========                       =========

Weighted-average fair value per option
  of options granted during the year             $ 0.51                            N/A
                                              ==========                       =========
</TABLE>
<PAGE>


A further summary of options outstanding as of December 31, 2001 is as follows:

<TABLE>
<CAPTION>
                                                      Options Outstanding and Exercisable
---------------------------------------------------------------------------------------------------------
                                                                         Weighted-
                                                                          Average               Weighted-
                                                    Number               Remaining               Average
                                                  Outstanding           Contractual             Exercise
Exercise Price                                  and Exercisable         Life (Years)              Price
---------------------------------------------------------------------------------------------------------
<C>                                                        <C>            <C>                    <C>
$1.125                                                     7,500          3.08                   $ 1.125
$1.875                                                     3,750          2.80                     1.875
$2.000                                                   122,400          3.08                     2.000
                                                 ---------------                                ---------
                                                         133,650                                 $ 1.947
                                                ================
</TABLE>

     Stock bonus plan: The Company has a stock bonus plan which provides for the
granting of stock to  employees,  directors  and  officers of the  Company.  The
number of  shares  which may be issued  pursuant  to the plan  shall not  exceed
50,000 shares. The Company has issued 43,205 shares under the plan, all in 2000.

Note 8.  Income Tax Matters

     The components of the income tax provision for the years ended December 31,
2000 and 2001 are as follows:

<TABLE>
<CAPTION>
                                                      2000                 2001
--------------------------------------------------------------------------------
Current:
<S>                                                  <C>                  <C>
  Federal                                            $    0               $    0
  State                                               1,000                3,050
  Foreign                                            11,731               51,690
                                                   -----------------------------
                                                     12,731               54,740
                                                   -----------------------------
Deferred:
Federal                                              34,000               25,000
State                                                 6,000               10,000
                                                   -----------------------------
                                                     40,000               35,000
                                                   -----------------------------
                                                   $ 52,731             $ 89,740
                                                   =============================
</TABLE>

     The income tax provision  differs from the amount of income tax  determined
by  applying  the US  federal  income  tax  rate  to  pretax  income  due to the
following:

<TABLE>
<CAPTION>
Year Ended December 31,                                       2000                 2001
-----------------------------------------------------------------------------------------
<S>                                                        <C>                  <C>
Computed "expected" tax expense                            $ 48,000             $ 45,000
Increase (decrease) in income taxes resulting from:
  State income taxes, net of federal tax benefit              5,000                4,500
  Benefit of income taxed at lower rates                      1,000                3,050
  Nondeductible expenses and other                           (1,269)              37,190
                                                     ------------------------------------
                                                           $ 52,731             $ 89,740
                                                     ====================================
</TABLE>
<PAGE>

     Net deferred tax assets consist of the following  components as of December
31, 2000 and 2001:

<TABLE>
<CAPTION>
                                                                                  2000                 2001
---------------------------------------------------------------------------------------------------------------
<S>                                                                           <C>                  <C>
Property and equipment                                                        $ (497,000)          $ (606,000)
                                                                           -------------------------------------

Additional costs capitalized to inventory for income tax purposes                 25,000               12,000
Accrued expenses not currently deductible for tax purposes                        39,000               28,000
Allowance for doubtful accounts                                                  153,000              145,000
Net operating loss carryforwards                                               1,449,000            1,551,000
Allowance for obsolete inventory                                                  72,000               76,000
Foreign tax credit carryforward                                                   35,000               35,000
                                                                           -------------------------------------
        Total deferred tax assets                                              1,773,000            1,847,000
                                                                           -------------------------------------
        Net deferred tax assets                                              $ 1,276,000          $ 1,241,000
                                                                           =====================================
</TABLE>
The deferred tax amounts have been classified on the balance sheet as follows:

<TABLE>
<CAPTION>
                                                                                  2000                 2001
-------------------------------------------------------------------------------------------------------------------
<S>                                                                          <C>                  <C>
Current deferred tax assets                                                  $   289,000          $   261,000
Noncurrent deferred tax assets                                                   987,000              980,000
                                                                              -------------------------------------
        Net deferred tax assets                                              $ 1,276,000          $ 1,241,000
                                                                           ========================================
</TABLE>

     The  Company  has  determined  that it is more  likely  than  not  that the
deferred tax assets will be realized and a valuation  allowance  for such assets
is not required.

     At  December  31,  2001,   the  Company  has  federal  net  operating  loss
carryforwards of approximately $4,100,000 and state operating loss carryforwards
for Minnesota and Utah of approximately  $2,036,000 and $813,000,  respectively,
which are  available to reduce future  taxable  income.  The net operating  loss
carryforwards expire as follows:


<TABLE>
<CAPTION>
Expiration Date                                  Federal              State
--------------------------------------------------------------------------------
<S>      <C> <C>                                <C>                 <C>
December 31, 2013                               $      0            $ 414,743
December 31, 2014                                      0            1,445,930
December 31, 2015                                      0              807,376
December 31, 2016                                      0              180,988
December 31, 2018                                590,639                    0
December 31, 2019                              2,093,412                    0
December 31, 2020                              1,170,958                    0
December 31, 2021                                241,164                    0
                                            ------------------------------------
                                             $ 4,096,173          $ 2,849,037
                                            ====================================
</TABLE>

<PAGE>


Note 9.  Retirement Plan

     The Company  has a Salary  Savings  Plan and Trust  (401(k))  which  covers
substantially all employees of the Company.  The plan provides for contributions
in such  amounts  as the Board of  Directors  may  annually  determine.  Company
contributions for 2000 and 2001 were $33,649 and $26,556, respectively.

     The Company has a defined  benefit  pension plan that covers  certain union
employees and retirees.  Information  relative to the Company's  defined benefit
pension plan is presented below:

<TABLE>
<CAPTION>
                                                     2000                 2001
--------------------------------------------------------------------------------
Changes in benefit obligations:
<S>                                               <C>                  <C>
  Obligations at beginning of year                $ 155,252            $ 186,493
   Service cost                                      11,354               14,562
   Interest cost                                     12,247               13,989
   Participant contributions                              0                    0
   Benefits paid                                       (900)                (876)
   Actuarial gains                                    8,540               10,060
                                               ----------------------------------
  Obligations at end of year                      $ 186,493            $ 224,228
                                               ==================================

Changes in plan assets:
  Fair value of assets at beginning of year       $ 150,897            $ 171,949
   Actual return on assets                            3,162                9,342
   Company contributions                             18,790               22,426
   Participant contributions                              0                    0
   Benefits paid                                       (900)                (876)
                                               ----------------------------------
  Fair value of assets at end of year             $ 171,949            $ 202,841
                                               ==================================

Funded status at end of year:
  Plan assets less than obligations               $ (15,054)           $ (21,387)
   Unrecognized gains                               (18,348)              (7,122)
   Unrecognized prior service cost                        0                    0
   Unrecognized transition obligation                46,711               43,483
                                               ----------------------------------
        Prepaid pension costs                      $ 13,309             $ 14,974
                                               ==================================

Costs recognized during the year:
  Service cost                                     $ 11,354             $ 14,562
  Interest cost                                      12,247               13,989
  Expected return on plan assets                    (10,142)             (11,018)
  Amortization of prior losses (gains)                    0                    0
  Amortization of prior service cost                      0                    0
  Amortization of transition obligation               3,228                3,228
                                               ----------------------------------
        Total costs recognized in expense          $ 16,687             $ 20,761
                                               ==================================
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
                                                            2000                 2001
----------------------------------------------------------------------------------------
Assumptions used in computing ending obligations:
<S>                                                          <C>                 <C>
Discount rate                                                7.5%                7.25%
Expected return on plan assets                                6%                   6%
</TABLE>

Note 10. Related Party Transactions

     The Company had a receivable of $35,427 as of December 31, 2000 from Nelson
Roofing,  Inc.  Under the terms of an agreement with Nelson  Roofing,  Inc., the
Company  provides  management  and  administrative  services  based upon  actual
employee cost plus overhead and receives a management fee for such services.

     Management   fees  received   from  Nelson   Roofing,   Inc.   amounted  to
approximately $117,000 in 2000 and $83,000 in 2001. The Company paid $174,784 in
2000 and $7,158 in 2001 to Nelson Roofing, Inc. for construction services.

     The  Company  rented a house  in Utah on a  month-to-month  basis  from the
majority  stockholder.  Total rent paid to the majority  stockholder amounted to
$22,560 in 2000.

     The Company rented warehouse space on a month-to-month basis from a company
owned by the majority stockholder for $6,000 in 2000 and 2001.

     The Company rents a portion of an office and  production  facility from the
majority  stockholder  under the terms of a ten-year  capital lease  expiring on
December 31, 2009. The lease  provides that the Company pay all property  taxes,
insurance,  and maintenance  plus a monthly rental of $9,090.  The Company has a
purchase  option at any time of $650,000 to December  31, 2002 at which time the
purchase  price  changes by an  inflation  adjustment.  Rent also changes by the
inflation adjustment on January 1, 2003.

     On  January  30,  2000  the  Company  entered  into a  two-year  employment
agreement with its president, who is also the majority stockholder, in which the
president  will  receive a base salary of  $175,000  in  addition  to  quarterly
bonuses,  as  defined  in the  agreement,  and  annual  bonuses  based  upon the
performance  of the  Company,  as  determined  by the  Board of  Directors.  The
agreement contains certain noncompetition provisions.

     The  Company  accrued  unpaid  salary and other  expenses  to the  majority
stockholder   of  $21,000  and  $90,242  as  of  December  31,  2000  and  2001,
respectively.  The Company had advances to the majority  stockholder  of $28,000
and $112,000 as of December 31, 2000 and 2001, respectively.

     The Company acquired 10 percent of the stock of Acotec S.A. (Acotec) during
2001.  The  remaining  90 percent of Acotec is  benefically  owned by one of the
members of  Industrial  Rubber  Products'  Board of  Directors.  Sales to Acotec
amounted to $419,994 in 2001.  Accounts  receivable from Acotec were $236,805 at
December 31, 2001.
<PAGE>

Note 11. Lease Commitments and Total Rental Expense

     The Company leases two office and production facilities under noncancelable
operating  lease  agreements  which  expire in  January  2003 and March 2005 and
require various  minimum annual rentals.  The leases also require the payment of
the property taxes, normal maintenance and insurance on the properties.

     The Company also leases automobiles and other equipment on annual leases.

     Total rent expense,  including  rent paid to related  parties,  amounted to
approximately $254,000 in 2000 and $215,000 in 2001.

     The total minimum rental commitment at December 31, 2001 is due as follows:

<TABLE>
<CAPTION>
Years Ending December 31,                                              Amount
--------------------------------------------------------------------------------
<C>                                                                   <C>
2002                                                                  $ 182,577
2003                                                                     24,532
2004                                                                      7,393
                                                                    ------------
                                                                      $ 214,502
                                                                   =============
</TABLE>

Note 12. Pronouncements Issued Not Yet Adopted

     In June 2001,  the  Financial  Accounting  Standards  Board  (FASB)  issued
Statement 142, Goodwill and Other Intangible Assets. This pronouncement provides
that goodwill be reviewed for  impairment  rather than  amortized,  beginning on
January 1, 2002.

     In  September  2001,  the  FASB  issued  Statement  143,  Asset  Retirement
Obligations.  This Statement  addresses  financial  accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and the
associated  asset  retirement  costs.  The  Statement  will be effective for the
Company's fiscal year ending December 2003.

     In August 2001, the FASB issued Statement 144, Accounting for Impairment or
Disposal of Long-Lived Assets. This Statement addresses financial accounting and
reporting for the  impairment or disposal of  long-lived  assets.  The Statement
will be effective for the Company's fiscal year ending December 2002.

     The Company does not believe that the adoption of these pronouncements will
have a material effect on its financial statements.

<PAGE>

                                 EXHIBIT 10(14)
                                SEVENTH AMENDMENT
                                       TO
                                CREDIT AGREEMENT

     This Seventh Amendment to Credit Agreement dated as of November 20, 2001 is
by and between  INDUSTRIAL RUBBER PRODUCTS,  INC., a Minnesota  corporation (the
"Borrower") and U.S. BANK NATIONAL  ASSOCIATION,  a national banking association
(the "Lender").

                                    RECITALS

     A. The Borrower and the Lender have entered into a Credit  Agreement  dated
as of March 30, 1999, as amended by a First Amendment to Credit  Agreement dated
as of  September  30,  1999,  as  amended  by that  Second  Amendment  to Credit
Agreement dated as of March 31, 2000, as further amended by that Third Amendment
to Credit  Agreement dated as of June 9, 2000, as further amended by that Fourth
Amendment to Credit  Agreement dated as of December 31, 2000, as further amended
by a Fifth  Amendment  to Credit  Agreement  dated as of March 7,  2001,  and as
further amended by that Sixth Amendment to Credit Agreement dated as of July 12,
2001, (as amended, the Credit Agreement").

     B. The  Borrower  and the Lender  wish to make  certain  amendments  to the
Credit Agreement.

     NOW,  THEREFORE,  in  consideration of the mutual promises herein set forth
and for other good and valuable consideration, the Borrower and the Lender agree
as follows:

     Section  1.  Capitalized  Terms.  Capitalized  terms  used  herein  and not
otherwise  defined herein shall have the meanings assigned to them in the Credit
Agreement, unless the context shall otherwise require.

     Section 2.  Amendments.  The Credit Agreement is hereby amended as follows:

     2.1 The Commitments.  Section 2.1 of the Credit Agreement is amended in its
entirety to provide as follows:

     2.1(a)  Revolving  Credit.  A revolving loan (the "Revolving  Loan") to the
Borrower  available as Advances at any time and from time to time from  November
1, 2001 to January 31, 2002 (the "Revolving Maturity Date"), during which period
the Borrower may borrow,  repay and reborrow in accordance  with the  provisions
hereof,  provided,  that the unpaid principal amount of revolving Advances shall
not at any time exceed  $1,200,000  (the  "Revolving  Commitment  Amount");  and
provided,  further,  that no  revolving  Advance  will be made if,  after giving
effect thereto,  the unpaid  principal amount of the Revolving Note would exceed
the Borrowing Base.

     2.1(b) A term loan (the "Term Loan") from the Lender to the Borrower in the

<PAGE>

 amount of $4,323,106.77 (the "Term Loan Commitment Amount").

     2.2 The Notes.  The  Revolving  Note  attached to the Credit  Agreement  as
Exhibit  2.3(a) is amended in its entirety to read as set forth on the Revolving
Note attached hereto as Exhibit A, all references in the Credit Agreement to the
Revolving Note shall mean the Revolving Note dated as of the date hereof, in the
form attached hereto.  The Term Note attached to the Credit Agreement as Exhibit
2.3(b) is amended in its entirety to read as set forth on the Term Note attached
hereto as Exhibit B, all  references  in the Credit  Agreement  to the Term Note
shall  mean the Term  Note  dated as of the date  hereof,  in the form  attached
hereto.

     Section 3.  Conditions  and  Effectiveness.  This  Amendment  shall  become
effective  on  the  date  hereof,   only  upon  satisfaction  of  the  following
conditions:

     (a) The  Borrower  shall have  executed  and  delivered  to the Lender this
Seventh Amendment.

     (b) The Lender shall have received an amended and restated  Revolving  Note
executed by the Borrower in form and substance satisfactory to the Lender.

     (c) The  Lender  shall have  received  an amended  and  restated  Term Note
executed by the Borrower in form and substance acceptable to the Lender.

     (d) The Lender shall have received a copy of the  resolutions  of the Board
of Directors of the Borrower authorizing the execution, delivery and performance
of this  Amendment  certified as true and accurate by its Secretary or Assistant
Secretary,  along with a certification by such Secretary or Assistant  Secretary
certifying as to (i) no change in the Articles of Incorporation or Bylaws of the
Borrower since true and accurate copies of the same were delivered to the Lender
with a certificate  of the Secretary of the Borrower and (ii)  identifying  each
officer of the Borrower  authorized  to executed  this  Amendment  and any other
instrument  or  agreement  executed  by the  Borrower  in  connection  with this
Amendment  (collectively,  the  "Amendment  Documents"),  and  certifying  as to
specimens of such  officer's  signature  and  incumbency in such offices as such
officer holds.

     (e) The Lender shall have  received an executed  consent and  reaffirmation
from each guarantor in form and substance acceptable to the Lender.

     (f) The Lender shall have  received an executed  reaffirmation  of security
agreement  from  each  of the  Borrower's  subsidiaries  in form  and  substance
acceptable to the Lender.

     (g) The Lender shall have received  such other  documents as the Lender may
reasonably request.


<PAGE>

     (h) The  Lender  shall  have  received  an  extension  fee in the amount of
$5000.00.

     (i) The Borrower shall have satisfied such other conditions as specified by
the Lender,  including payment of all unpaid legal fees and expenses incurred by
the Lender  through the date of this  Amendment  in  connection  with the Credit
Agreement and the Amendment Documents.

     Section 4.  Acknowledgment.  The  Borrower and the Lender  acknowledge  and
agree  that as hereby  amended  the Credit  Agreement  remains in full force and
effect. All references in the Credit Agreement to "this Agreement",  "herein" or
similar  references  shall mean the Credit  Agreement  as  amended  herein.  The
Borrower represents and warrants that the Borrower has the power and legal right
and  authority  to  enter  into  this  Amendment  and  has  duly  authorized  as
appropriate  the execution and delivery of this  Amendment and other  agreements
and documents  executed and delivered by the Borrower in connection  herewith or
therewith by proper corporate action. The Borrower  acknowledges and agrees that
the security  interests granted to the Lender pursuant to the Security Agreement
secure all  liabilities  and  obligations of the Borrower to the Lender and this
Agreement, as hereby amended.

     Section 5.  Counterparts.  This  Amendment  may be  executed in one or more
counterparts  and by  separate  parties on separate  counterparts  with the same
effect as if the signatures thereto were on the same instrument and shall become
effective  when  counterparts  executed by all parties have been received by the
Lender.

     IN WITNESS WHEREOF,  the parties hereto have caused this Seventh  Amendment
to Credit  Agreement to be executed by their officers  thereunto duly authorized
as of the date first above written.

                                              INDUSTRIAL RUBBER PRODUCTS, INC.


                                              By:
                                                 ------------------------------
                                              Title:
                                                 ------------------------------

                                              U.S. BANK NATIONAL ASSOCIATION


                                              By:
                                                -------------------------------
                                              Title:
                                                -------------------------------

<PAGE>
                                                                   EXHIBIT A TO
                                                           SEVENTH AMENDMENT TO
                                                               CREDIT AGREEMENT
                                                              EXHIBIT 2.3(A) TO
                                                               CREDIT AGREEMENT

                                 REVOLVING NOTE

$1,200,000                                                    November 20, 2001
                                                                Minneapolis, MN

     FOR  VALUE  RECEIVED,  INDUSTRIAL  RUBBER  PRODUCTS,  INC.,  a  corporation
organized  under the laws of the State of Minnesota,  hereby  promises to pay to
the order of U.S. BANK NATIONAL ASSOCIATION (the "Lender") at its main office in
Hibbing,  Minnesota,  in  lawful  money  of the  United  States  of  America  in
immediately  available  funds on the  Revolving  Maturity Date (as such term and
each other  capitalized  term used  herein are  defined in the Credit  Agreement
hereinafter  referred  to) the  principal  amount  of ONE  MILLION  TWO  HUNDRED
THOUSAND  DOLLARS AND NO CENTS  ($1,200,000)  or, if less, the aggregate  unpaid
principal  amount of all Revolving  Advances made by the Lender under the Credit
Agreement, and to pay interest (computed on the basis of actual days elapsed and
a year of 360 days) in like funds on the unpaid  principal  amount  hereof  from
time to time  outstanding  at the  rates  and  times  set  forth  in the  Credit
Agreement.

     This note is the Revolving Note referred to in the Credit  Agreement  dated
as of March 30, 1999 as amended by the First Amendment to Credit Agreement dated
as of September 30, 1999, by that Second  Amendment to Credit Agreement dated as
of March 31, 2000, by that Third Amendment to Credit  Agreement dated as of June
9, 2000, by that Fourth  Amendment  dated as of December 31, 2000, by that Fifth
Amendment to Credit Agreement dated as of March 7, 2001, by that Sixth Amendment
to Credit Agreement dated as of July 12, 2001, and by that Seventh  Amendment to
Credit  Agreement  dated as of even date (as the same may hereafter be from time
to time  amended,  restated or  modified,  the "Credit  Agreement")  between the
undersigned  and the  Lender.  This note is  secured,  it is  subject to certain
permissive   and   mandatory   prepayments   and  its  maturity  is  subject  to
acceleration,  in each case upon the terms  provided in said  Credit  Agreement.
This note is issued in  substitution,  extension and  replacement of, but not in
payment of, a Revolving  Note in the  original  principal  amount of  $1,500,000
dated as of July 12, 2001 from the Borrower to the Lender.

     In the event of default hereunder,  the undersigned agrees to pay all costs
and  expenses  of  collection,   including   reasonable   attorney's  fees.  The
undersigned waives demand, presentment, notice of nonpayment, protest, notice of
protest and notice of dishonor.

     THE  VALIDITY,  CONSTRUCTION  AND  ENFORCEABILITY  OF THIS  NOTE  SHALL  BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA WITHOUT GIVING EFFECT TO
THE CONFLICT OF LAWS  PRINCIPLES  THEREOF,  BUT GIVING EFFECT TO FEDERAL LAWS OF
THE UNITED STATES APPLICABLE TO NATIONAL BANKS

                                               INDUSTRIAL RUBBER PRODUCTS, INC.

                                               By:
                                               Title:

<PAGE>
                                                                    EXHIBIT B TO
                                                            SEVENTH AMENDMENT TO
                                                                CREDIT AGREEMENT
                                                               EXHIBIT 2.3(b) TO
                                                                CREDIT AGREEMENT

                                    TERM NOTE

$4,323,106.77                                                  November 20, 2001
                                                          Minneapolis, Minnesota

     FOR  VALUE  RECEIVED,  INDUSTRIAL  RUBBER  PRODUCTS,  INC.,  a  corporation
organized  under the laws of the State of Minnesota,  hereby  promises to pay to
the order of US BANK NATIONAL  ASSOCIATION  (the "Lender") at its main office in
Hibbing,  Minnesota,  in  lawful  money  of the  United  States  of  America  in
immediately  available funds the principal  amount of FOUR MILLION THREE HUNDRED
TWENTY-THREE THOUSAND ONE HUNDRED SIX AND 77/100 DOLLARS ($4,323,106.77), and to
pay  interest  (computed  on the basis of actual days  elapsed and a year of 360
days) in like  funds on the unpaid  principal  amount  hereof  from time to time
outstanding at the rate and times set forth in the Credit Agreement.

     The principal  amount of this note shall be due and payable by a payment in
the amount of $50,000 on November  15,  2001, a payment in the amount of $50,000
on December  15,  2001,  a payment in the amount of $50,000 on January 15, 2002,
and one final payment on January 31, 2002 in the amount of the entire  remaining
principal balance.

     This Note is the Term Note referred to in the Credit  Agreement dated as of
March 30, 1999 as amended by that First  Amendment to Credit  Agreement dated as
of September 30, 1999, by that Second  Amendment to Credit Agreement dated March
31, 2000, by that Third Amendment to Credit  Agreement dated as of June 9, 2000,
by that Fourth  Amendment to Credit  Agreement dated as of December 31, 2000, by
that Fifth  Amendment  to Credit  Agreement  dated as of March 7, 2001,  by that
Sixth  Amendment  to Credit  Agreement  dated as of July 12,  2001,  and by that
Seventh  Amendment  to Credit  Agreement  dated as of even date (as the same may
hereafter  be from time to time  amended,  restated or otherwise  modified,  the
"Credit Agreement") between the undersigned and the Lender. This Note is secured
and its  maturity  is  subject  to  acceleration,  in each  case  upon the terms
provided  in said  Credit  Agreement.  This  note  is  issued  in  substitution,
extension and replacement of, but not in payment of, a Term Note in the original
principal amount of $4,523,106.77 dated as of July 12, 2001 from the Borrower to
the Lender.

     In the event of default hereunder,  the undersigned agrees to pay all costs
and  expenses  of  collection,   including   reasonable   attorneys'  fees.  The
undersigned waives demand, presentment, notice of nonpayment, protest, notice of
protest and notice of dishonor.

     THE  VALIDITY,  CONSTRUCTION  AND  ENFORCEABILITY  OF THIS  NOTE  SHALL  BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OFMINNESOTA  WITHOUT GIVING EFFECT TO
THE CONFLICT OF LAWS  PRINCIPLES  THEREOF,  BUT GIVING EFFECT TO FEDERAL LAWS OF
THE UNITED STATES APPLICABLE TO NATIONAL BANKS.


                                                INDUSTRIAL RUBBER PRODUCTS, INC.


                                                By:
                                                Title:

<PAGE>