United
      States


Securities
      And Exchange Commission


Washington,
      D.C. 20549





FORM
      10-QSB





x Quarterly
      Report
      Under Section 13 Or 15(d) Of The Securities Exchange
      Act Of 1934





For
      The
      Quarterly Period Ended September 30, 2007.





o Transition
      Report
      Under Section 13 Or 15(d) Of The Securities Exchange Act
      Of
      1934





For
      The
      Transition Period From ______________To_________________





Commission
      File Number 333-125868








Execute
      Sports, Inc.


(Exact
      Name Of The Small Business Issuer As Specified In Its Charter)








Nevada
              
              30-0038070(State
                  or Other Jurisdiction of
              
              (I.R.S.
                  EmployerIncorporation
                  or Organization)
              
              Identification
                  No.)


21143
      Hawthorne BL #425


Torrance,
      CA 90503


(310)
      515-8902


(Address,
      Including Zip Code, And Telephone Number, Including


Area
      Code, Of Registrant's mailing address in California)





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 o





The
      number of outstanding shares of the issuer's common stock, $0.001 par value,
      as
      of November 12, 2007 was 79,389,973.








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


Yes o
      No x





Transitional
      Small Business Disclosure Format (Check one): Yes o No x








TABLE
      OF
      CONTENTS















PagePart
                  IItem
                  1.
              Financial
                  StatementsConsolidated
                  Balance Sheet as of September 30, 2007 (Unaudited).......
              1Consolidated
                  Statements of Operations for the three and nineMonths
                  Ended September 30, 2007 and 2006(unaudited)
              2Consolidated
                  Statements of Stockholders Equity for the nine months Ended September
                  30,
                  2007 (unaudited
              3Consolidated
                  Statements of Cash Flows for the three and nine months ended September
                  30,
                  2007 and 2006 (unaudited
              4Notes
                  To Financial Statements (Unaudited)
              5Item
                  2.
              Management's
                  Discussion and Analysis or Plan of Operations
              24Item
                  3.
              Controls
                  and Procedures
              29Part
                  II - Other InformationItem
                  1.
              Legal
                  Proceedings
              30Item
                  2.
              Unregistered
                  Sales of Equity Securities and use of Proceeds
              30Item
                  3.
              Defaults
                  Upon Senior Notes
              30Item
                  4.
              Submission
                  of Matters to a Vote of Security Holders
              30Item
                  5.
              Other
                  Information
              30Item
                  6.
              Exhibits
              31Signatures.
              31







**EXECUTE
                  SPORTS, INC.**Consolidated
                  Balance Sheet (Unaudited)As
                  of September 30, 2007
  ASSETSCURRENT
                  ASSETSCash
              
              $
              632,729Accounts
                  receivable, net (Note A)
              
              
              44,371Inventory
              
              
              30,811Deferred
                  financing costs (Note G)
              
              
              302,512Other
                  current assets
              
              
              5,441TOTAL
                  CURRENT ASSETS
              
              
              1,015,864Fixed
                  assets, net (Note B)
              
              
              91,043Trademarks
                  (Note C)
              
              
              5,000,000Loans
                  receivable, net (Note D)
              
              
              146,128TOTAL
                  ASSETS
              
              $
              6,253,035LIABILITIES
                  AND STOCKHOLDERS' EQUITYCURRENT
                  LIABILITIESAccounts
                  payable and accrued expenses
              
              $
              120,933Convertible
                  debentures (Note G)
              
              
              6,202,395Notes
                  Payable (Note H)
              
              
              170,159Promissory
                  Notes Payable (Note H)
              
              
              372,928Related
                  party notes payable (Note H)
              
              
              32,065TOTAL
                  CURRENT LIABILITIES
              
              
              6,898,480STOCKHOLDERS'
                  EQUITY (Note J)Common
                  stock, par value $.001, 100,000,000 shares authorizedauthorized;
                  issued and outstanding 73,150,497 at September 30, 2007
              
              
              73,145Additional
                  paid-in capital
              
              
              11,490,673Retained earnings <deficit>
              
              
              (12,209,263
              )TOTAL
                  STOCKHOLDERS' EQUITY
              
              
              (645,445
              )TOTAL
                  LIABILITIES ANDSTOCKHOLDERS'
                  EQUITY
              
              $
              6,253,035SEE
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






1






**EXECUTE
                  SPORTS, INC.**Consolidated
                  Statements of Operations (Unaudited)Three
                  and Nine Months Ended September 30, 2007 and
                  2006
   Three
                  Months Ended
              
              Nine
                  Months EndedSeptember
                  30,
              
              September
                  30,REVENUES
              
              2007
              
              2006
              
              2007
              
              2006Net
                  sales
              
              $
              86,910
              
              $
              531,932
              
              $
              1,438,429
              
              $
              1,634,456Cost
                  of sales
              
              
              69,201
              
              
              268,375
              
              
              787,188
              
              
              1,100,409Gross
                  profit
              
              
              17,709
              
              
              263,557
              
              
              651,241
              
              
              534,047EXPENSESGeneral
                  and administrative expenses
              
              
              351,952
              
              
              518,452
              
              
              1,032,556
              
              
              2,218,952Selling
                  and advertising
              
              
              44,375
              
              
              163,595
              
              
              91,868
              
              
              429,187Depreciation
                  expense
              
              
              2,530
              
              
              1,138
              
              
              7,590
              
              
              3,414Total
                  expense
              
              
              398,857
              
              
              683,185
              
              
              1,132,014
              
              
              2,651,553Income
                  (loss) from operations
              
              
              (381,148
              )
              
              (419,628
              )
              
              (480,773
              )
              
              (2,117,506
              )OTHER
                  INCOME AND EXPENSESInterest
                  income
              
              
              -
              
              
              -
              
              
              -
              
              
              6,739Other
                  income
              
              
              53,224
              
              
              48
              
              
              100,807
              
              
              2,851Interest
                  expense
              
              
              (224,142
              )
              
              (87,078
              )
              
              (437,682
              )
              
              (138,171
              )Loss
                  due to loan reserve
              
              
              -
              
              
              (250,000
              )
              
              
              
              
              (250,000
              )Loss
                  due to discount on conversion to stock
              
              
              -
              
              
              (32,356
              )
              
              (54,250
              )
              
              (32,356
              )Amortization
                    of beneficial conversion featureof convertible
                    debenture
              
              
              (389,165
              )
              
              (160,719
              )
              
              (1,009,990
              )
              
              (227,151
              )Amortization
                    of warrant discount related toconvertible debenture
              
              
              (84,333
              )
              
              (81,138
              )
              
              (270,104
              )
              
              (120,153
              )Amortization
                  of deferred financing costs
              
              
              (36,172
              )
              
              (34,631
              )
              
              (108,963
              )
              
              (51,699
              )Total
                  other income and expenses
              
              
              (680,588
              )
              
              (645,874
              )
              
              (1,780,182
              )
              
              (809,940
              )Net
                  loss before discontinued operations
              
              
              (1,061,736
              )
              
              (1,065,502
              )
              
              (2,260,955
              )
              
              (2,927,446
              )Income
                  (loss) from discontinued operations
              
              
              -
              
              
              -
              
              
              (1,421
              )
              
              -Gain
                  (loss) on disposal of discontinued operations
              
              
              -
              
              
              -
              
              
              208,112
              
              
              -Total
                  discontinued operations
              
              
              -
              
              
              -
              
              
              206,691
              
              
              -NET
                  INCOME (LOSS)
              
              
              (1,061,736
              )
              
              (1,065,502
              )
              
              (2,054,264
              )
              
              (2,927,446
              )Net
                    (loss) per common share Basic and diluted fromcontinuing
                    operations
              
              $
              (0.017
              )
              $
              (0.046
              )
              $
              (0.039
              )
              $
              (0.137
              )Net
                    (loss) per common share basic and diluted afterdiscontinued
                    operations
              
              $
              (0.017
              )
              $
              (0.046
              )
              $
              (0.036
              )
              $
              (0.137
              )Weighted
                    average common shares outstandingbasic and diluted
              
              
              62,335,980
              
              
              23,321,088
              
              
              57,289,247
              
              
              21,376,749The
                    average shares listed below were not included in the computationper share because to do so would have been antidilutive
                    for the
                    periods presented:Stock
                  options
              
              
              450,000
              
              
              900,000
              
              
              450,000
              
              
              900,000Warrants
              
              
              12,868,016
              
              
              3,486,627
              
              
              7,619,868
              
              
              1,769,632Debt
                  collateralized with common stock
              
              
              110,022,520
              
              
              13,442,627
              
              
              44,875,726
              
              
              6,339,565
  SEE
                  NOTES TO FINANCIAL STATEMENTS





2




**EXECUTE
                  SPORTS, INC.**Consolidated
                  Statement of Stockholder's Equity (Unaudited)As
                  of September 30, 2007
  Common
                  Stock
              
              Additional
              
              Retained
              
              TotalNumber
                  of
              
              
              
              Payable/
              
              Paid-in
              
              Earnings
              
              StockholdersShares
              
              Amount
              
              Subscribed
              
              Capital
              
              <Deficit>
              
              EquityDecember
                  31, 2005
              
              
              18,706,501
              
              $
              18,702
              
              $
              788,900
              
              $
              4,958,951
              
              $
              (4,546,089
              )
              $
              1,220,464Shares
                  subscriptions received
              
              
              
              
              
              
              
              
              
              
              
              5,130
              
              
              
              
              
              5,130Shares
                  issued for acquisition
              
              
              1,932,569
              
              
              1,933
              
              
              (676,400
              )
              
              674,467
              
              
              
              
              
              -Shares
                  issued for director compensation
              
              
              1,073,808
              
              
              1,073
              
              
              (7,500
              )
              
              36,533
              
              
              
              
              
              30,106Shares
                    issued for cash in connection withthe SB-2 filed
                    6/16/05
              
              
              300,000
              
              
              300
              
              
              (105,000
              )
              
              104,700
              
              
              
              
              
              -Founders
                  shares voluntarily canceled
              
              
              (1,000,000
              )
              
              (1,000
              )
              
              
              
              
              1,000
              
              
              
              
              
              -Shares
                  issued pursuant to warrant exercises
              
              
              655,000
              
              
              655
              
              
              
              
              
              137,595
              
              
              
              
              
              138,250Shares
                  issued for cash
              
              
              200,000
              
              
              200
              
              
              
              
              
              69,800
              
              
              
              
              
              70,000Shares
                  issued for services
              
              
              12,303,816
              
              
              12,304
              
              
              
              
              
              470,399
              
              
              
              
              
              482,703Shares
                  issued for notes payable
              
              
              1,862,127
              
              
              1,862
              
              
              
              
              
              368,480
              
              
              
              
              
              370,342Shares
                  issued pursuant to PUT agreement
              
              
              2,750,049
              
              
              2,750
              
              
              
              
              
              161,347
              
              
              
              
              
              164,097Stock
                  options granted
              
              
              
              
              
              
              
              
              
              
              
              85,313
              
              
              
              
              
              85,313Beneficial
                    conversion feature ofconvertible debenture
              
              
              
              
              
              
              
              
              
              
              
              1,425,000
              
              
              
              
              
              1,425,000Warrant
                  discount to convertible debenture
              
              
              
              
              
              
              
              
              
              
              
              475,000
              
              
              
              
              
              475,000Net
                  loss
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (5,608,910
              )
              
              (5,608,910
              )December
                  31, 2006
              
              
              38,783,870
              
              $
              38,779
              
              $
              -
              
              $
              8,973,715
              
              $
              (10,154,999
              )
              $
              (1,142,505
              )Shares
                  issued for director compensation
              
              
              2,516,968
              
              
              2,517
              
              
              
              
              
              93,015
              
              
              
              
              
              95,532Shares
                  issued for services
              
              
              2,690,271
              
              
              2,690
              
              
              
              
              
              89,088
              
              
              
              
              
              91,778Warrants
                  issued for services
              
              
              
              
              
              
              
              
              
              
              
              134,510
              
              
              
              
              
              134,510Shares
                    issued to induce creditor to makeloans to the
                    Company
              
              
              1,400,000
              
              
              1,400
              
              
              
              
              
              27,200
              
              
              
              
              
              28,600Shares
                  issued for notes payable
              
              
              8,190,040
              
              
              8,190
              
              
              
              
              
              163,054
              
              
              
              
              
              171,244Shares
                    issued pursuant to put agreementfor repayment of
                    debenture
              
              
              7,679,788
              
              
              7,680
              
              
              
              
              
              263,643
              
              
              
              
              
              271,323Shares
                    issued pursuant to put agreementfor repayment of
                    loans
              
              
              9,977,355
              
              
              9,977
              
              
              
              
              
              194,248
              
              
              
              
              
              204,225Shares
                  issued for cash pursuant to put agreement
              
              
              1,912,205
              
              
              1,912
              
              
              
              
              
              74,256
              
              
              
              
              
              76,168Beneficial
                    conversion feature ofconvertible debenture
              
              
              
              
              
              
              
              
              
              
              
              1,424,185
              
              
              
              
              
              1,424,185Warrant
                  discount to convertible debenture
              
              
              
              
              
              
              
              
              
              
              
              53,759
              
              
              
              
              
              53,759Net
                  loss
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (2,054,264
              )
              
              (2,054,264
              )September
                  30, 2007
              
              
              73,150,497
              
              $
              73,145
              
              $
              -
              
              $
              11,490,673
              
              $
              (12,209,263
              )
              $
              (645,445
              )SEE
                  NOTES TO CONSOLIDATED FINANCIAL
                  STATEMENTS





3




**EXECUTE
                  SPORTS, INC.**Consolidated
                  Statements of Cash Flows (Unaudited)Three
                  and Nine Months Ended September 30, 2007 and
                  2006
  Three
                  Months Ended
              
              Nine
                  Months EndedSeptember
                  30,
              
              September
                  30,2007
              
              2006
              
              2007
              
              2006CASH
                  FLOWS FROM OPERATING ACTIVITIES:Net
                  loss from continuing operations
              
              $
              (1,061,736
              )
              $
              (1,065,502
              )
              $
              (2,054,264
              )
              $
              (2,927,446
              )Adjustments
                    to reconcile net loss to net
                    cash used by operating activities:Depreciation
              
              
              2,530
              
              
              1,138
              
              
              7,590
              
              
              3,414Common
                  stock issued for services
              
              
              176,090
              
              
              6,250
              
              
              350,421
              
              
              220,753Compensation
                  expense on options granted
              
              
              -
              
              
              -
              
              
              -
              
              
              85,313Loss
                  on the conversion of convertible debt
              
              
              -
              
              
              43,906
              
              
              54,250
              
              
              43,906Gain
                  on cancellation of debt
              
              
              (47,224
              )
              
              -
              
              
              (47,224
              )
              
              -Amortization
                  of beneficial conversion feature
              
              
              389,165
              
              
              160,719
              
              
              1,009,990
              
              
              227,151Amortization
                  of warrant discount related to convertible debenture
              
              
              84,333
              
              
              81,138
              
              
              270,104
              
              
              120,153Issuance
                  of common stock for convertible debenture
              
              
              -
              
              
              -
              
              
              270,199
              
              
              -Issuance
                  of common stock for notes payable
              
              
              142,216
              
              
              -
              
              
              375,469
              
              
              -Increase
                  in loan receivable loss reserve
              
              
              -
              
              
              250,000
              
              
              -
              
              
              250,000CHANGES
                  IN CURRENT ASSETS AND CURRENTLIABILITIES:(Increase)
                  decrease in current assets:Accounts
                  receivable
              
              
              171,679
              
              
              (300,245
              )
              
              208,566
              
              
              (470,094
              )Inventory
              
              
              58,825
              
              
              29,895
              
              
              (2,456
              )
              
              (243,144
              )Prepaid
                  expenses
              
              
              -
              
              
              81,299
              
              
              49,494
              
              
              300,680Deferred
                  financing costs
              
              
              (271,328
              )
              
              3,448
              
              
              (198,537
              )
              
              (139,301
              )Employee
                  advance
              
              
              -
              
              
              14,258
              
              
              -
              
              
              (12,955
              )Other
                  current assets
              
              
              1,000
              
              
              31,183
              
              
              (4,441
              )
              
              -Increase
                  (decrease) in current liabilities:Accounts
                  payable and accrued expenses
              
              
              (24,304
              )
              
              (291,787
              )
              
              (619,350
              )
              
              100,935Customer
                  deposits
              
              
              -
              
              
              -
              
              
              -
              
              
              (25,262
              )NET
                  CASH USED FOR OPERATING ACTIVITIES
              
              
              (378,754
              )
              
              (954,300
              )
              
              (330,189
              )
              
              (2,465,897
              )CASH
                  FLOWS FROM INVESTING ACTIVITIES:Loan
                  proceeds to unaffiliated company
              
              
              -
              
              
              -
              
              
              -
              
              
              (155,019
              )Acquisition
                  of trademarks
              
              
              (5,000,000
              )
              
              -
              
              
              (5,000,000
              )
              
              -Acquisition
                  of furniture and equipment
              
              
              -
              
              
              (31,938
              )
              
              (1,058
              )
              
              (70,175
              )NET
                  CASH USED FOR INVESTING ACTIVITIES
              
              
              (5,000,000
              )
              
              (31,938
              )
              
              (5,001,058
              )
              
              (225,194
              )CASH
                  FLOWS FROM FINANCING ACTIVITIES:Increase
                  in deposits
              
              
              -
              
              
              -
              
              
              -
              
              
              (1,858
              )Issuance
                  of common stock for convertible debenture
              
              
              -
              
              
              -
              
              
              (217,073
              )
              
              -Issuance
                  of common stock for cash
              
              
              -
              
              
              109,182
              
              
              76,168
              
              
              341,551Proceeds
                  from convertible debenture
              
              
              5,877,907
              
              
              -
              
              
              5,930,120
              
              
              1,900,000Proceeds
                  from notes payable
              
              
              344,000
              
              
              -
              
              
              1,454,299
              
              
              515,000Repayment
                  of notes payable
              
              
              (141,471
              )
              
              (53,001
              )
              
              (1,263,107
              )
              
              (116,010
              )Proceeds
                  from related party notes payable
              
              
              -
              
              
              -
              
              
              18,207
              
              
              58,431Repayment
                  of related party notes payable
              
              
              (4,223
              )
              
              (31,306
              )
              
              (66,523
              )
              
              (182,179
              )Secured
                  borrowings
              
              
              (102,248
              )
              
              71,379
              
              
              (42,501
              )
              
              (127,673
              )NET
                  CASH PROVIDED BY FINANCING ACTIVITIES
              
              
              5,973,965
              
              
              96,254
              
              
              5,889,590
              
              
              2,387,262NET
                  INCREASE <DECREASE> IN CASH
              
              
              595,211
              
              
              (889,984
              )
              
              558,343
              
              
              (303,829
              )CASH,
                  beginning of period
              
              
              37,518
              
              
              957,290
              
              
              74,386
              
              
              371,135CASH,
                  end of period
              
              $
              632,729
              
              $
              67,306
              
              $
              632,729
              
              $
              67,306SUPPLEMENTAL
                  DISCLOSURES OF CASH FLOW INFORMATIONCASH
                  PAID DURING THE YEAR FOR:Taxes
                  paid
              
              $
              -
              
              $
              -
              
              $
              800
              
              $
              13,268Interest
                  paid
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              24,829Other
                  non-cash investing and financing activities:Shares
                  issued for services
              
              $
              176,090
              
              $
              6,250
              
              $
              350,421
              
              $
              201,582Shares
                  issued for debt retirement
              
              $
              142,216
              
              $
              -
              
              $
              645,668
              
              $
              426,952
  SEE
                  NOTES TO CONSOLIDATED FINANCIAL
                  STATEMENTS






4


**EXECUTE
        SPORTS, INC.**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006**




**NOTE
      A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
      POLICIES**




Basis
      of Presentation




The
      unaudited financial statements of Execute Sports, Inc. (“Execute Sports” or the
“Company”) as of September 30, 2007 and for the three and nine month periods
      ended September 30, 2007 and 2006 have been prepared in accordance with
      accounting principles generally accepted in the United States for interim
      financial reporting. Accordingly, they do not include all of the disclosures
      required by accounting principles generally accepted in the United States for
      complete financial statements and should be read in conjunction with the audited
      consolidated financial statements and notes thereto included in the Company’s
      Form 10-KSB for the fiscal year ended December 31, 2006 filed with the SEC
      on
      April 16, 2007. In the opinion of management, all adjustments (consisting only
      of normal recurring adjustments) considered necessary for a fair presentation
      of
      the interim financial information have been included. The results of operations
      for any interim period are not necessarily indicative of the results of
      operations for the entire year.





Organization





Execute
      Sports was founded in 2002 as Padova International USA, Inc. to produce graphics
      kits and ancillary soft goods for the motocross, enduro and ATV
      markets.





In
      2003,
      the Company launched its water sports division under the "Execute Sports" brand
      to provide wetsuits, vests, rash guards and ancillary products to the wake
      board
      and ski markets.





On
      March
      3, 2005 the Company changed its name from Padova International U.S.A., Inc.
      (DBA
      Execute Sports) to Execute Sports, Inc.





In
      January 2006, the Company expanded its product mix by consummating the
      acquisition of Pacific Sports Group, Inc. (“PSG”), which owned and operated
      Academy Snowboards, Kampus Wakesk8s, Kampus Wake Shoes and Collective
      Development Bags and Bindings. In January, 2007, the Company entered into a
      trademark transfer and assignment agreement whereby all right, title, interest
      and good will in the Academy brand were transferred to the two former owners
      of
      PSG. In connection with the transfer, all of the Company’s accounts payable and
      accounts receivable relating to the trademark were assigned as
      well.





In
      August
      2007, the Company further expanded its product mix by purchasing the right,
      title, interest and goodwill relating to the business of designing,
      manufacturing and marketing jet powered Sugar Sands boats, including the SUGAR
      SAND trade names, trademarks, service marks, and service names, including www.sugarsand.com .
      By
      acquiring the Sugar Sand brand, the Company expands our product offering without
      the added responsibilities and complexities of the manufacturing process, while
      positioning the company to capitalize on existing sales and marketing
      relationships.




5


**EXECUTE
        SPORTS, INC.**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006**


**NOTE
      A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
      POLICIES**





Summary
      of Significant Accounting Principles





Basis
      of Presentation





The
      financial statements include the accounts of Execute Sports and its wholly
      owned
      subsidiary PSG under the accrual basis of accounting.





Accounting
      estimates





The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities and 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.





Principles
      of consolidation





The
      consolidated financial statements include the accounts of Execute Sports and
      its
      subsidiary, which is 100% consolidated in the financial statements. All material
      inter-company accounts and transactions have been eliminated.





Cash
      and cash equivalents





For
      purposes of the statement of cash flows, the Company considers all highly liquid
      debt instruments purchased with an original maturity of three months or less
      to
      be cash equivalents.





Accounts
      receivable





Accounts
      receivable are reported at the customers' outstanding balances less any
      allowance for doubtful accounts. Interest is not accrued on overdue accounts
      receivable. The Company evaluates receivables on a regular basis for potential
      reserve. During the three months ended September 30, 2007, the allowance for
      doubtful accounts decreased $10,000 from $20,000 at June 30, 2007 to $10,000
      at
      September 30, 2007.





The
      Company has a factoring agreement with JD Factors. Pursuant to the agreement
      JD
      Factors’ will provide account receivable financing and factoring to the Company.
      JD Factors purchases the accounts receivable and may pay a portion of the
      purchase price, or lend money to the Company based upon accounts’ receivable of
      the Company.





6


**EXECUTE
        SPORTS, INC.**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006**
  **NOTE
        A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
        POLICIES**





Inventories





Inventories
      are valued at the lower of cost or market. Cost is determined using the average
      costing method. Management performs periodic assessments to determine the
      existence of obsolete, slow moving and non-salable inventories, and records
      necessary provisions to reduce such inventories to net realizable
      value.





Property
      and equipment





Property
      and equipment are stated at cost. Major renewals and improvements are charged
      to
      the asset accounts while replacements, maintenance and repairs, which do not
      improve or extend the lives of the respective assets, are expensed. At the
      time
      property and equipment are retired or otherwise disposed of, the asset and
      related accumulated depreciation accounts are relieved of the applicable
      amounts. Gains or losses from retirements or sales are credited or charged
      to
      income.





Depreciation
      is provided using the 200% declining balance method. It is calculated over
      recovery periods as prescribed by management that range from 5 years for
      equipment to 7 years for furniture.





Long-lived
      assets





The
      Company has adopted Statement of Financial Accounting Standards No. 144 (SFAS
      144). The Statement requires that long-lived assets be reviewed for impairment
      whenever events or changes in circumstances indicate that the historical
      cost-carrying value of an asset may no longer be appropriate. The Company
      assesses recoverability of the carrying value of an asset by estimating the
      future net cash flows expected to result from the asset, including eventual
      disposition. If the future net cash flows are less than the carrying value
      of
      the asset, an impairment loss is recorded equal to the difference between the
      asset's carrying value and fair value.





Revenue
      recognition policy





Revenue
      from the sale of water sports clothing and apparel, and motorcycle accessories
      are recognized when the earning process is complete and the risk and rewards
      of
      ownership have transferred to the customer, which is generally considered to
      have occurred upon shipment to the customer.





Shipping
      and handling costs





The
      Company's policy is to classify shipping and handling costs as selling, general
      and administrative expenses.




7


**EXECUTE
        SPORTS, INC.**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006**





**NOTE
      A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
      POLICIES**





Advertising





The
      Company expenses all advertising costs as incurred. For the three and nine
      months ended September 30, 2007, the Company incurred approximately $4,972
      and
      $13,090, respectively, in advertising expenses.





For
      the
      three and nine months ended September 30, 2006, the Company incurred
      approximately $28,270 and $80,449, respectively in advertising
      expenses.





Loss
      per common share





The
      Company adopted Statement of Financial Accounting Standards No. 128, which
      requires reporting of both basic and diluted earnings (loss) per share. Basic
      loss per share is calculated using the weighted average number of common shares
      outstanding in the period. Diluted loss per share includes potentially dilutive
      securities such as outstanding options and warrants, using the “treasury stock”
method and convertible securities using the "if-converted" method. There were
      no
      adjustments required to net loss for the period covered in this report in the
      computation of diluted earnings per share.





Issuance
      of common stock




The
      Company accounts for stock-based compensation using the fair value method of
      Financial Accounting Standard No. 123r. Common shares issued for services
      rendered by a third party (both employees and non-employees) are recorded at
      management’s estimate of the fair value of the shares issued or services
      rendered, whichever is more readily determinable.





Comprehensive
      loss





The
      Company adopted Financial Accounting Standards Board Statement of Financial
      Standards No. 130, “Reporting Comprehensive Income,” which establishes standards
      for the reporting and display of comprehensive income and its components in
      the
      financial statements. There were no items of comprehensive income (loss)
      applicable to the Company during the periods covered in the financial statements
      included in this report.





Income
      taxes





On
      November 1, 2004, the Company amended its Articles of Incorporation to make
      the
      transition from an S-Corporation to a C-Corporation. Prior to the transition,
      the S-Corporation was not a tax paying entity for federal or state income tax
      purposes and thus no provision for income taxes was recognized. Subsequent
      to
      the change, the Company began recognizing the full valuation for deferred tax
      assets (See Note M).





8


**EXECUTE
        SPORTS, INC.**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006**


**NOTE
      A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
      POLICIES**





Impact
      of accounting standards





In
      February 2006, the FASB issued SFAS Statement No. 155, “Accounting for Certain
      Hybrid Financial Instruments—an amendment of FASB Statements No. 133 and 140”
("SFAS 155"). This Statement amends FASB Statements No. 133, Accounting for
      Derivative Instruments and Hedging Activities, and No. 140, Accounting for
      Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.
      This Statement resolves issues addressed in Statement 133 Implementation Issue
      No. D1, “Application of Statement 133 to Beneficial Interests in Securitized
      Financial Assets.” This Statement permits fair value re-measurement for any
      hybrid financial instrument that contains an embedded derivative that otherwise
      would require bifurcation, clarifies which interest-only strips and
      principal-only strips are not subject to the requirements of Statement 133,
      establishes a requirement to evaluate interests in securitized financial assets
      to identify interests that are freestanding derivatives or that are hybrid
      financial instruments that contain an embedded derivative requiring bifurcation,
      clarifies that concentrations of credit risk in the form of subordination are
      not embedded derivatives and amends Statement 140 to eliminate the prohibition
      on a qualifying special-purpose entity from holding a derivative financial
      instrument that pertains to a beneficial interest other than another derivative
      financial instrument. SFAS 155 is effective for all financial instruments
      acquired or issued for the Company for fiscal year begins after September 15,
      2006. The adoption of this standard is not expected to have a material effect
      on
      the Company’s results of operations or financial position.





In
      March
      2006, the FASB issued SFAS No. 156 ("FAS 156"), "Accounting for Servicing of
      Financial Assets--An Amendment of FASB Statement No. 140." Among other
      requirements, FAS 156 requires a company to recognize a servicing asset or
      servicing liability when it undertakes an obligation to service a financial
      asset by entering into a servicing contract under certain situations. Under
      FAS
      156 an election can also be made for subsequent fair value measurement of
      servicing assets and servicing liabilities by class, thus simplifying the
      accounting and provide for income statement recognition of potential offsetting
      changes in the fair value of servicing assets, servicing liabilities and related
      derivative instruments. The Statement was effective beginning the first fiscal
      year that begins after September 15, 2006. The Company does not believe that
      this accounting pronouncement will have a material impact on its financial
      position or results of operations.





In
      June
      2006, the FASB issued FIN 48, “Accounting for Uncertainty in Income Taxes—an
      interpretation of FASB No. 109. This Interpretation clarifies the accounting
      for
      uncertainty in income taxes recognized in an enterprise’s financial statements
      in accordance with FASB No. 109, “Accounting for Income Taxes”. This
      interpretation prescribes recognition of threshold and measurement attribute
      for
      the financial statement recognition and measurement of a tax position taken
      or
      expected to be taken in a tax return. This interpretation also provides guidance
      on derecognition, classification, interest and penalties, accounting in interim
      periods, disclosure, and transition. This interpretation is effective for fiscal
      years beginning after December 15, 2006.




9


**EXECUTE
        SPORTS, INC.**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006**


**NOTE
      A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
      POLICIES**





Impact
      of accounting standards (Continued)





Earlier
      application is permitted if the entity has not yet issued interim or annual
      financial statements for that fiscal year. The adoption of this standard is
      not
      expected to have a material effect on the Company’s results of operations or
      financial position.





In
      September 2006, the FASB issued Statement of Financial Accounting Standards
      No.
      157, “Fair Value Measurements.” The standard provides guidance for using fair
      value to measure assets and liabilities. Under the standard, fair value refers
      to the price that would be received to sell an asset or paid to transfer a
      liability in an orderly transaction between market participants in the market
      in
      which the reporting entity transacts. The standard clarifies the principle
      that
      fair value should be based on the assumptions market participants would use
      when
      pricing the asset or liability. In support of this principle, the standard
      establishes a fair value hierarchy that prioritizes the information used to
      develop those assumptions. The Statement is effective for financial statements
      issued for fiscal years beginning after November 15, 2007, and interim periods
      within those fiscal years. The Company is currently evaluating the Statement
      to
      determine what impact, if any, it will have on the Company.





In
      September 2006, the FASB issued Statement of Financial Accounting Standards
      No.
      158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement
      Plans, an amendment of FASB Statements No. 87, 88, 106 and 132R” (“SFAS 158”).
      This statement requires balance sheet recognition of the funded status, which
      is
      the difference between the fair value of plan assets and the benefit obligation,
      of pension and postretirement benefit plans as a net asset or liability, with
      an
      offsetting adjustment to accumulated other comprehensive income in shareholders’
equity. In addition, the measurement date, the date at which plan assets and
      the
      benefit obligation are measured, is required to be the company’s fiscal year
      end. The Company does not believe that this accounting pronouncement will have
      a
      material impact on its financial position or results of operations.





In
      February 2007, the FASB issued Statement of Financial Accounting Standards
      No.
      159, “The Fair Value Option for Financial Assets and Financial Liabilities”.
      This statement permits entities to choose to measure many financial instruments
      and certain other items at fair value. The objective is to improve financial
      reporting by providing entities with the opportunity to mitigate volatility
      in
      reported earnings caused by measuring related assets and liabilities differently
      without having to apply complex hedge accounting provisions. This Statement
      is
      expected to expand the use of fair value measurement, which is consistent with
      the Company’s Board of Directors long-term measurement objectives for accounting
      for financial instruments. This Statement is effective as of the beginning
      of an
      entity’s first fiscal year that begins after November 15, 2007. The Company does
      not believe that this recent accounting pronouncement will have a material
      impact on its financial position or results of operations.





10


**EXECUTE
        SPORTS, INC.**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006**





**NOTE
      A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
      POLICIES**





Concentrations
      of credit risk





The
      Company performs ongoing credit evaluations of its customers. As of September
      30, 2007, the Company's five largest customers accounted for 88% (36%, 16%,
      12%,
      12% and 12%) of accounts receivable. As of September 30, 2006, the Company's
      two
      largest customers accounted for 47% (31% and 16%) of accounts receivable.





For
      the
      three and nine months ended September 30, 2007, three customers accounted for
      approximately 83% (42%, 23% and 18%) and 91% (53%, 24% and 14%) of sales,
      respectively. For the three and nine months ended September 30, 2006, one
      customers accounted for approximately 36% and three customers accounted for
      63%
      (39%, 13% and 11%) of sales, respectively.





For
      the
      three and nine months ended September 30, 2007, none of the Company’s net sales
      were made to customers outside the United States. For the three nine months
      ended September 30, 2006, approximately 43% and 17%, respectively, of the
      Company’s net sales were made to customers outside the United
      States.





The
      Company is dependent of third-party manufacturers and distributors for all
      of
      its supply of inventory. For the three and nine months ended September 30,
      2007,
      the Company's single and two largest supplier(s) individually accounted for
      approximately 100% and 98% (72%, and 26%) of product purchases, respectively.
      For the three and nine months ended September 30, 2006, the Company's two and
      three largest suppliers individually accounted for approximately 87% (55% and
      32%) and 76% (35%, 21% and 20%) of product purchases, respectively. The Company
      is dependent on the ability of its suppliers to provide products and services
      on
      a timely basis and on favorable pricing terms. The loss of certain principal
      suppliers or a significant reduction in product availability from principal
      suppliers could have a material adverse effect on the Company.




Disclosure
      about Fair Value of Financial Instruments





The
      Company estimates that the fair value of all financial instruments at September
      30, 2007, as defined in FASB 107, does not differ materially from the aggregate
      carrying values of its financial instruments recorded in the accompanying
      balance sheet. The estimated fair value amounts have been determined by the
      Company using available market information and appropriate valuation
      methodologies. Considerable judgment is required in interpreting market data
      to
      develop the estimates of fair value, and accordingly, the estimates are not
      necessarily indicative of the amounts that the Company could realize in a
      current market exchange.





11





**EXECUTE
        SPORTS, INC.**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006**





**NOTE
      B - PROPERTY AND EQUIPMENT**





Property
      and equipment at September 30, 2007 consists of the following:





2007Computer
                  and office equipment
              
              $
              127,745Furniture
                  and fixtures
              
              
              2,281Machinery
                  and equipment
              
              
              11,262$
              141,288Less:
                  Accumulated Depreciation
              
              
              (50,245
              )$
              91,043


Depreciation
      expense for the three and nine months ended September 30, 2007 was $2,530 and
      $7,590, respectively. Depreciation expense for the three and nine months ended
      September 30, 2006 was $1,138 and $3,414, respectively.





**NOTE
      C - TRADEMARKS**





On
      August
      29, 2007, Execute Sports, Inc. (the "Company" or "Execute Sports") entered
      into
      an Asset Purchase Agreement (the "Agreement") with Challenger Powerboats, Inc.
      ("Challenger") and its wholly owned subsidiary, IMAR Group, Inc. ("IMAR",
      together with Challenger, the "Sellers"), pursuant to which Execute Sports
      purchased from the Sellers, and Sellers sold and transferred to Execute Sports,
      all right, title, interest and goodwill in and to certain assets, properties
      and
      rights relating to, used in or held for use in IMAR's business of designing,
      manufacturing and marketing water jet powered Sugar Sands boats, including
      the
      SUGAR SAND trade names and associated trade names, trademarks, service marks
      and
      service names, and the associated logos and their goodwill, and all associated
      domain names, in particular the domain www.sugarsand.com, trades secrets and
      copyrights and their goodwill. The purchase price was approximately $5,000,000.
      Execute Sports did not assume any obligations of IMAR in connection with the
      acquisition, other than the obligation to procure or maintain permits in
      connection with the post-closing operation of the Business by the Company.
      No
      physical assets were purchased. The following trade names were included in
      the
      purchase: Sugar Sand, Sugar Sand Sting, Sugar Sand Tango, Sugar Sand Mirage,
      Sugar Sand Calais, Sugar Sand Oasis, and Sugar Sand Airwave.




In
      connection with the transaction, Execute Sports and IMAR entered into an
      Agreement for Exclusive Right of Supply, pursuant to which IMAR will manufacture
      and be the exclusive supplier of the Sugar Sand line of jet boats to Execute
      Sports, for an initial term of 10 years. In addition, Execute Sports entered
      into an Exclusive Sales and Marketing Agreement with Challenger, pursuant to
      which Challenger will provide sales and marketing services related to the Sugar
      Sand boats for an initial term of 10 years.





12


**EXECUTE
        SPORTS, INC.**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006**


**NOTE
      C - TRADEMARKS**





Pursuant
      to Statement of Financial Accounting Standards No. 144 (SFAS 144), the Company
      does not believe any impairment currently exists. However, the Company will
      evaluate this asset for impairment at December 31, 2007.





**NOTE
      D - LOANS RECEIVABLE**





During
      2005 and 2006, the Company made strategic loans totaling $396,127 for potential
      future association to an unaffiliated company that accrues interest at 2% per
      year and due 12 months from the date of draw.





As
      of
      September 30, 2007, the entire balance of the loans was in default. However,
      we
      are in the process of collections and believe a portion will be collected.
      Therefore, the Company has created a reserve of $250,000 against the
      loans.





**NOTE
      G - CONVERTIBLE DEBENTURES**





***May
      15, 2006 Debenture ($1,900,000)***





On
      May
      15, 2006, the Company completed a private placement of convertible debentures
      generating gross proceeds of $1.9 million, and the issuance of warrants to
      purchase $475,000 worth of the Company’s common stock. Third party fees totaled
      $191,000, which were paid in cash.





The
      terms
      of the warrants and debentures are substantially the same. The exercise price
      of
      the warrants is calculated the same as for the conversion price of the
      convertible debentures. The warrants and debentures are immediately exercisable.
      The debentures bear interest at 12% per annum, interest payable monthly at
      the
      option of the Holder in cash or common stock. The debenture agreement payment
      schedule provides for full repayment by September 30, 2011, the maturity date
      of
      this debenture, any remaining principle balance automatically converts to the
      Company’s common stock.





Prior
      to
      maturity, the debentures and warrants are convertible into the Company's common
      stock at a fixed conversion price equal to the lowest closing bid price of
      the
      common stock between the issuance date and the date of the filing the
      registration statement covering resale of the shares underlying the debenture,
      or at a conversion price of fifteen cents ($.15). Since the Company’s stock
      price did not decline below $0.15 prior to the filing of the registration
      statement, $0.15 is the fixed conversion price for this debenture and associated
      warrants.





The
      debentures provide that the Holders may only convert the debenture if the number
      of shares held by the lender or its affiliates after conversion would not exceed
      4.99% of the outstanding shares of the Company's common stock following such
      conversion.





13


**EXECUTE
        SPORTS, INC.**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006**





**NOTE
      G - CONVERTIBLE DEBENTURES (Continued)**





***May
      15, 2006 Debenture ($1,900,000) (Continued)***





In
      connection with the transaction, the Company entered into a Registration Rights
      Agreement. Pursuant to the terms of the Registration Rights Agreement, within
      twenty-one calendar days following the initial closing date, or June 5, 2006,
      the Company was required to file with the Securities and Exchange Commission
      a
      registration statement under the Securities Act of 1933, as amended, covering
      the resale of all of the common stock underlying the convertible debenture
      and
      issuable upon the exercise of the warrants based on a conversion price of $0.15
      per share.





The
      Registration Rights Agreement further provides that if a registration statement
      is not filed within 21 days from the initial closing date, then in addition
      to
      any other rights the Holder may have, and until the registration statement
      is
      filed, the Company would be required to pay the Holder an amount in cash, as
      liquidated damages, equal to an aggregate two percent (2%) of the purchase
      price
      of the debentures. In addition, the conversion price would decrease by 10%
      of
      the fixed conversion price for each fifteen (15) day calendar period that a
      registration statement is not filed. The Registration Rights Agreement further
      provides that if a registration statement is not declared effective within
      80
      days from the initial closing date, then the Company would be required to pay
      the Holder an amount in cash, as liquidated damages, equal to an aggregate
      two
      percent (2%) of the purchase price of the debentures until the registration
      statement becomes effective. The Company initially filed the registration
      statement on May 24, 2006 and it was declared effective on June 15, 2006, or
      30
      days from the initial close date both within the time frames set forth in the
      Registration Rights Agreement.





The
      issuance costs related to the convertible debentures of approximately $191,000
      in cash were capitalized to prepaid expenses on the balance sheet and are being
      amortized over the term of the repayment schedule which is calculated based
      upon
      the effective interest method. The Company recognized $36,172 and $108,963
      during the three and nine months ended September 30, 2007, and $34,631 and
      $51,699 during the three and nine months ended September 30, 2006, respectively,
      as other expense related to the amortization of the issuance costs. The deferred
      financing costs were fully amortized as of September 30, 2007.





Pursuant
      to Paragraph 9-32 of EITF 00-19, Accounting for Derivative Financial Instruments
      Indexed to, and Potentially Settled in, a Company's Own Stock, the warrants
      issued in connection with the convertible debentures meet the requirements
      of
      and are accounted for as permanent equity since the filing of an effective
      registration statement within the allotted time frames negated any liquidated
      damages, settlement is by delivery of shares only and the exercise price is
      fixed. The initial value of the warrants was treated as a discount to the
      debenture and recorded as additional paid in capital. The Company calculated
      the
      initial value of the warrants on the closing date of the transaction as being
      $633,333 as determined using a Black-Scholes option pricing model with the
      following assumptions: expected term 5 years, exercise price $0.15, volatility
      7.6%, risk free rate 5.15%, and zero dividend yield. The total value of the
      warrants and the debenture was $2.53 million of which the warrants represented
      25%. Thus, the relative value of the warrants to the total value, or 25% was
      applied to the debenture value of




14


**EXECUTE
        SPORTS, INC.**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006**


**NOTE
      G - CONVERTIBLE DEBENTURES (Continued)**





***May
      15, 2006 Debenture ($1,900,000) (Continued)***





$1.90
      million yielding a warrant discount of $475,000. The discount to the debenture
      is being amortized over the term of the repayment schedule, or sixteen (16)
      months, and is calculated based upon the effective interest method. The Company
      recognized $84,333 and $270,104 during the three and nine months ended September
      30, 2007, and $81,138 and $120,153 during the three and nine months ended
      September 30, 2006, respectively, in non-cash amortization expense related
      to
      the warrant discount. The warrant discount was fully amortized as of September
      30, 2007.





The
      Company determined that the $1.90 million debenture was issued with a beneficial
      conversion feature (“BCF”) due to the conversion price ($0.15) being less than
      the closing stock price ($.32) on the date of issuance, and the conversion
      feature being in-the-money. Thus, pursuant to EITF 00-27, 27, Application of
      Issue No. 98-5 to Certain Convertible Instruments, the BCF has been determined
      based on the gross debenture amount less the portion attributable to the
      warrants described above, and recorded as a discount to reduce the carry value
      of the debenture and increase additional-paid-in-capital. The Company calculated
      the initial BCF on the closing date of the transaction to be $1,615,000 using
      the intrinsic value method. Since this amount is greater than the $1,425,000
      remaining value of the debenture after deducting for the warrant discount
      described above, the Company reduced the initial carry value of the debenture
      to
      zero effectively recording a BCF of $1,425,000 as additional-paid-in-capital.
      The BCF discount is being amortized over the debenture repayment term of sixteen
      (16) months and calculated based upon the effective interest method. The Company
      recognized $389,165 and $1,009,990 during the three and nine months ended
      September 30, 2007, and $160,719 and $227,151 during the three and nine months
      ended September 30, 2006, respectively, in non-cash amortization expense
      attributable to the amortization of the beneficial conversion feature discount.
      The beneficial conversion feature was fully amortized as of September 30,
      2007.





The
      Company recognized $54,710 and $159,971 during the three and nine months ended
      September 30, 2007, and $66,930 and $85,759 during the three and nine months
      ended September 30, 2006, respectively, in interest expense related to the
      May
      2006 debenture.





The
      May
      2006 debenture balance, including interest and principle as of September 30,
      2007 is $1,836,605.





***August
      23, 2007 Debenture ($5,750,000)***





On
      August
      23, 2007, the Company completed a private placement of convertible debentures
      generating gross proceeds of $5.75 million, and the issuance of warrants to
      purchase 5,750,000 shares of the Company’s common stock for $.02 per share. Fees
      totaled $307,500, which were paid in cash.





15


**EXECUTE
        SPORTS, INC.**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006**





**NOTE
      G - CONVERTIBLE DEBENTURES (Continued)**





***August
      23, 2007 Debenture ($5,750,000) (Continued)***





The
      warrants and debentures are immediately exercisable. The debentures bear
      interest at 12% per annum, interest payable monthly at the option of the Holder
      in cash or common stock. The debenture has a term of five (5) years and matures
      August 23, 2012. Any remaining principle balance automatically converts to
      the
      Company’s common stock.





Prior
      to
      maturity, the debentures are convertible into the Company's common stock at the
      lesser of (i) seventy-five percent (75%) of the lowest closing bid price of
      the
      Common Stock during the twenty (20) trading days immediately prior to a
      Conversion Notice; or (ii) 2/100 U.S. dollars ($.02).





The
      debentures provide that the Holders may only convert the debenture if the number
      of shares held by the lender or its affiliates after conversion would not exceed
      4.99% of the outstanding shares of the Company's common stock following such
      conversion.





The
      issuance costs related to the convertible debentures of approximately $307,500
      in cash were capitalized to prepaid expenses on the balance sheet and are being
      amortized over the term of the debenture which is calculated based upon the
      effective interest method. The Company recognized $4,988 during the three and
      nine months ended September 30, 2007, respectively, as other expense related
      to
      the amortization of the issuance costs. The balance of deferred financing costs
      as of September 30, 2007 was $302,512.





Pursuant
      to Paragraph 9-32 of EITF 00-19, Accounting for Derivative Financial Instruments
      Indexed to, and Potentially Settled in, a Company's Own Stock, the warrants
      issued in connection with the convertible debentures meet the requirements
      of
      and are accounted for as permanent equity since settlement is by delivery of
      shares only and the exercise price is fixed. The initial value of the warrants
      was treated as a discount to the debenture and recorded as additional paid
      in
      capital. The Company calculated the initial value of the warrants on the closing
      date of the transaction as being $53,759 as determined using a Black-Scholes
      option pricing model with the following assumptions: expected term 5 years,
      exercise price $0.02, Strike price $.025, volatility 14.28%, risk free rate
      4.62%, and zero dividend yield. The discount to the debenture is being amortized
      over the term of the debenture and is calculated based upon the effective
      interest method. The Company recognized $892 and $892 during the three and
      nine
      months ended September 30, 2007, respectively, in non-cash amortization expense
      related to the warrant discount.





The
      Company determined that the debenture was issued with a beneficial conversion
      feature (“BCF”) due to the conversion price ($0.020) being less than the closing
      stock price ($.025) on the date of issuance, and the conversion feature being
      in-the-money. Thus, pursuant to EITF 00-27, 27, Application of Issue No. 98-5
      to
      Certain Convertible Instruments, the BCF has been determined based on the gross
      debenture amount less the portion attributable to the warrants, and recorded
      as
      a discount to reduce the carry value of the debenture and increase
      additional-paid-in-




16


**EXECUTE
        SPORTS, INC.**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006**
  **NOTE
        G - CONVERTIBLE DEBENTURES (Continued)**





***August
      23, 2007 Debenture ($5,750,000) (Continued)***





capital.
      The Company calculated the initial BCF on the closing date of the transaction
      to
      be $1,424,185 using the intrinsic value method. The BCF discount is being
      amortized over the term of the debenture. The Company recognized $20,567 and
      $20,567 during the three and nine months ended September 30, 2007, respectively,
      in non-cash amortization expense attributable to the amortization of the BCF
      discount.





The
      Company recognized $72,274 during the three and nine months ended September
      30,
      2007, respectively, in interest expense related to this debenture.





The
      debenture balance, including interest and principle as of September 30, 2007
      is
      $5,822,275.





As
      of
      September 30, 2007, the actual dollar amount due to the Holders of the Company’s
      May 15, 2006 ($1.9 million), and August 23, 2007 ($5.75 million) debentures
      was
      $7,658,880. The following table represents the actual balance due compared
      to
      the amount recorded on the balance sheet as of September 30, 2007:





September
                  30, 2007Amount
                  borrowed under the convertible debentures
              
              
              7,650,000Accrued
                  interest
              
              
              223,985Payments
                  applied to principle
              
              
              (214,183
              )Debenture
                  balance
              
              
              7,659,802Unamortized
                  beneficial conversion feature
              
              
              (1,404,540
              )Unamortized
                  Warrant discount
              
              
              (52,867
              )Recorded
                  debenture balance
              
              
              6,202,395




***Investment
      Agreement***





In
      connection with the debenture, the Company entered into a separate Investment
      Agreement on May 15, 2006 with Dutchess Private Equities Fund, L.P.
      ("Dutchess"), which provides for the sale and issuance from time to time of
      up
      to $10,000,000 in shares of Common Stock for a period of up to 36 months from
      the date the Registration Statement is declared effective. The maximum number
      of
      shares that the Company may put to Dutchess at any one time shall be equal
      to,
      at the Company's election, either (a) 200% of the average daily volume in the
      U.S. market of the Common Stock for the ten trading days prior to the date
      the
      Company notifies





Dutchess
      of its intent to sell shares to Dutchess, multiplied by the average of the
      three
      daily closing bid prices immediately preceding the date a Put Notice is
      delivered, or (b) a number of shares having a value of $100,000. The Company
      may
      not submit a Put Notice until after the completion of a previous sale under
      the
      Investment Agreement. The purchase price for the Common Stock to be sold shall
      be equal to 93% of the lowest closing best bid price of the





17


**EXECUTE
        SPORTS, INC.**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006**


**NOTE
      G - CONVERTIBLE DEBENTURES (Continued)**





***Investment
      Agreement (Continued)***





Common
      Stock during the five-day period following the date the Company delivers a
      Put
      Notice. Since the price of the shares put to Dutchess are expected to be below
      market price at 93% of the market price, there is no added benefit to the
      Company. Thus, the Company has not recorded an asset related to this agreement.
      Upon the delivery of shares and receipt of cash related to this Investment
      Agreement, the Company records the increase in cash or decrease in debenture
      interest and principle, and an increase in common stock and additional paid
      in
      capital. During the nine months ended September 30, 2007, the Company placed
      puts with Dutchess totaling $551,716 resulting in the issuance of 19,569,348
      shares of common stock. Of the $551,716, $76,168 was received as cash, $204,225
      was applied to promissory notes made to the Company (See Note H, *Promissory
      Notes Payable* ),
      $54,250 was recognized as a loss due to the conversion discount and $217,073 was
      applied to accrued interest and principle on the May 2006
      debenture.





During
      the three and nine months ended September 30, 2007 and 2006, the Company
      recognized $0 and $54,250 and $0 and $0, respectively as a non-cash loss due
      to
      the conversion discount applied upon the conversion of interest and principle
      into common stock of the Company pursuant to the Investment Agreement and
      Debenture Agreement.





**NOTE
      H - NOTES PAYABLE**





***Notes
      Payable***





Non
      related party notes payable at September 30, 2007 is as follows:




Unsecured
                  demand note payable bearing interest at 2% per year; currently
                  in
                  default.
              
              $
              9,538Unsecured
                  demand note payable bearing interest at 4% per year; matures
                  3/31/09.
              
              $
              89,221Unsecured
                  demand note payable to New Heart Ministries, bearing interest at
                  4% per
                  year; currently in default.
              
              $
              2,925Unsecured
                  demand note payable to Pacific Sports Investors LLC, bearing interest
                  at
                  10% per year; currently in default.
              
              $
              40,375Secured
                  demand note payable to Christian Beckas, bearing interest at 12%
                  per year
                  collateralized by 80,000 shares of common stock; currently in
                  default.
              
              $
              19,300Secured
                  demand note payable to Hector Peneda, bearing interest at 12% per
                  year
                  collateralized by 40,000 shares of common stock; currently in
                  default.
              
              $
              8,800Total
              
              $
              170,159




The
      interest rate offered on the 2% through 4% loans above is below market rate.
      The
      Company has determined the difference between the stated interest rate and
      the
      rate available at the date of the loan(s) would be immaterial to these financial
      statements.





18


**EXECUTE
        SPORTS, INC.**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006**


**NOTE
      H - NOTES PAYABLE (Continued)**





***Related
      Party Notes Payable (Continued)***





Related
      party Notes payable at September 30, 2007 is as follows:




Secured
                  demand note payable to Craig Hudson, bearing interest at 12% per
                  year
                  collateralized by 116,000 shares of common stock; currently in
                  default
              
              $
              32,065Total
              
              $
              32,065




***Notes
      Payable and Related Party Notes Payable***





During
      the three and nine months ended September 30, 2007, the Company recognized
      $1,083 and $6,934, respectively, of interest expense related to all the notes
      above. During the three and nine months ended September 30, 2006, the Company
      recognized $19,414 and $37,054, respectively, of interest expense related to
      the
      notes above. ****





During
      the three months ended September 30, 2007, the Company repaid $75,000 ($70,606
      of principle and $4,394 of interest) on non related party debt by converting
      into 3,000,000 shares of common stock. The common stock had a fair market value
      of $69,000 on the date of conversion resulting in a $6,000 gain on conversion
      of
      the debt.





During
      the nine months ended September 30, 2007, the Company repaid $204,751 ($190,606
      of principle and $14,145 of interest) on non related party debt by converting
      into 8,190,040 shares of common stock. The common stock had a fair market value
      of $171,244 on the date of conversion resulting in a $33,507 gain on conversion
      of the debt.





***Promissory
      Notes Payable***




Secured
                  promissory note to Dutchess Private Equities Fund, Ltd., bearing
                  interest
                  at 12% per year and collateralized by however many shares are needed
                  to
                  settle the debt; matures May 1, 2008.
              
              $
              60,928Secured
                  promissory note to Dutchess Private Equities Fund, Ltd., bearing
                  interest
                  at 12% per year and collateralized by however many shares are needed
                  to
                  settle the debt; matures September 13, 2008.
              
              $
              312,000Total
              
              $
              372,928




On
      April
      9, 2007, the Company issued to Dutchess a promissory note in the face amount
      of
      $132,000 for gross proceeds of $110,000. The Note bears interest at 12% per
      annum and matures on April 9, 2008. Pursuant to the Note, the Company is
      required to make payments to Dutchess in
      the
      amount of the greater of a) one hundred percent (100%) of each Put (as defined
      in the Investment Agreement (See Note G) between the Company and the Investor
      given to Dutchess from the Company; or b) eleven thousand seven hundred
      twenty-one dollars and 39/100 ($11,721.39) until the Face Amount is paid in
      full, minus any fees due. In connection with the issuance of the Note, the
      Company has agreed to provide Collateral to Dutchess in the form of






19


**EXECUTE
        SPORTS, INC.**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006**


**NOTE
      H - NOTES PAYABLE (Continued)**





***Promissory
      Notes Payable (Continued)***





thirty
      (30) Put Notices. In the event that the Company has not repaid the Face Amount
      by the maturity date, then as liquidated damages, the face amount shall be
      increased by ten percent (10.0%) as an initial penalty *and* an
      additional two and one-half percent (2.5%) per month (pro rata for partial
      periods), compounded daily, for each month until the face amount is paid in
      full.


As
      an
      incentive to enter into this note, the Company issued to Dutchess 600,000 shares
      of the Company’s restricted common stock.





During
      the nine months ended September 30, 2007, the Company issued 5,998,489 shares
      of
      common stock in repayment of the April 9, 2007 promissory note, which has been
      repaid in full as of September 30, 2007.





On
      May 1,
      2007, the Company issued to Dutchess a promissory note in the face amount of
      $132,000 for gross proceeds of $110,000. The Note bears interest at 12% per
      annum and matures on May 1, 2008. Pursuant to the Note, the Company is required
      to make payments to Dutchess in
      the
      amount of the greater of a) one hundred percent (100%) of each Put (as defined
      in the Investment Agreement (See Note G) between the Company and the Investor
      given to Dutchess from the Company; or b) eleven thousand seven hundred
      twenty-one dollars and 39/100 ($11,721.39) until the Face Amount is paid in
      full, minus any fees due. In connection with the issuance of the Note, the
      Company has agreed to provide Collateral to Dutchess in the form of thirty
      (30)
      Put Notices. In the event that the Company has not repaid the Face Amount by
      the
      maturity date, then as liquidated damages, the face amount shall be increased
      by
      ten percent (10.0%) as an initial penalty *and* an
      additional two and one-half percent (2.5%) per month (pro rata for partial
      periods), compounded daily, for each month until the face amount is paid in
      full.


As
      an
      incentive to enter into this note, the Company issued to Dutchess 800,000 shares
      of the Company’s restricted common stock.





During
      the nine months ended September 30, 2007, the Company issued 3,983,866 shares
      of
      common stock in repayment of $71,072 of the May 1, 2007 promissory note, which
      has a balance of $60,928 as of September 30, 2007.





On
      August
      13, 2007, the Company issued to Dutchess a promissory note in the face amount
      of
      $312,000 for gross proceeds of $260,000. The Note bears interest at 12% per
      annum and matures on September 13, 2008. Pursuant to the Note, the Company
      is
      required to make payments to Dutchess in
      the
      amount of one hundred percent (100%) of each Put (as defined in the Investment
      Agreement (See Note G) until the Face Amount is paid in full, minus any fees
      due. In connection with the issuance of the Note, the Company has agreed to
      provide Collateral to Dutchess in the form of thirty (30) Put Notices. In the
      event that the Company has not repaid the Face Amount by the maturity date,
      then
      as liquidated damages, the face amount shall be increased by ten percent (10.0%)
      as an initial penalty *and* an
      additional two and one-half percent (2.5%) per month (pro rata for partial
      periods), compounded daily, for each month until the face amount is paid in
      full.






20


**EXECUTE
        SPORTS, INC.**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006**


**NOTE
      H - NOTES PAYABLE (Continued)**





***Promissory
      Notes Payable (Continued)***





During
      the three and nine months ended September 30, 2007, the Company recognized
      $94,000 and $126,000 of interest expense related to the notes
      above.





***Purchase
      Order Financing***





During
      the nine months ended September 30, 2007, the Holders of our convertible
      debentures advanced to the Company $869,425 to be used specifically for
      production of watersports goods. The advances bear interest of three percent
      (3%) per month and mature within three months. The advances are secured by
      the
      Company’s assets and are convertible into shares of common stock of the Company
      at the lenders discretion pursuant to the Investment Agreement as described
      in
      Note G above. During the nine months ended September 30, 2007, the Company
      repaid $869,425 of principle and incurred $70,192 of interest expense related
      to
      the purchase order financing. No debt was converted into common stock.





**NOTE
      J - STOCKHOLDERS’ EQUITY**





On
      August
      18, 2004, the Company entered into a service contract valued at $100,000 in
      exchange for 400,000 shares of common stock, which represents the fair market
      value of the common stock as of that date. The contract term was 24 months.
      During the three and nine months ended September 30, 2006, the Company
      recognized $12,465 and $24,795, respectively, of expense in connection with
      this
      contract, which has been fully expensed as of December 31, 2006.





On
      March
      1, 2004, the Company entered into a service contract valued at $62,500 in
      exchange for 250,000 shares of common stock, which represents the fair market
      value of the stock as of that date. The contract term is 24 months. The Company
      recognized $0 and $5,137 during the three and nine months ended September 30,
      2007, and $7,877 and $23,373 during the three and nine months ended September
      30, 2006, respectively, of expense in connection with this contract, which
      has
      been fully expensed as of September 30, 2007.





During
      the nine months ended September 30, 2007, the Company issued 2,516,968 shares
      of
      common stock valued at the closing price of the stock on the date of issuance,
      or $95,532 to two of its directors as payment in lieu of cash.





During
      the nine months ended September 30, 2007, the Company issued 2,690,271 shares
      of
      common stock valued at the closing price of the stock on the date of issuance,
      or $91,778 as payment for services rendered in lieu of cash.








21


**EXECUTE
        SPORTS, INC.**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006**


**NOTE
      J - STOCKHOLDERS’ EQUITY (Continued)**





During
      the nine months ended September 30, 2007, the Company issued 1,400,000 shares
      of
      common stock valued at the closing price of the stock on the date of issuance,
      or $28,600 to the Holders of our convertible debentures as an inducement to
      make
      short term loans to the Company for the purpose of financing production and
      working capital.





During
      the nine months ended September 30, 2007, the Company issued 8,190,040 shares
      of
      common stock in exchange for the retirement of $190,606 of principle and $14,145
      of accrued interest. The stock was valued at the closing price of the stock
      on
      the date of issuance and resulted in an increase to shareholders equity of
      $171,244 and a gain of $33,507.





During
      the nine months ended September 30, 2007, the Company issued 19,569,348 shares
      to Dutchess pursuant to the Investment Agreement (See NOTE G). The total value
      of the shares on the dates of issuance was $551,716. Of this amount $76,168
      was
      received in cash, $204,225 was applied to promissory notes made to the Company
      (See Note H, *Promissory
      Notes Payable* ),
      $54,250 was recognized as a loss due to the conversion discount and $217,073
      was
      applied to accrued interest and principle on the May 2006
      debenture.





**NOTE
      K - WARRANTS**





At
      September 30, 2007, the Company had 3,440,238 Warrants outstanding entitling
      the
      holder thereof the right to purchase one share of common stock for each warrant
      held as follows:







ExerciseWarrant
              
              Number
                  of
              
              Price
                  Per
              
              ExpirationClass
              
              Warrants
              
              Warrant
              
              DateA
              
              
              500,000
              
              $
              0.350
              
              
              3/31/08A
              
              
              28,571
              
              $
              0.350
              
              
              9/30/07May
                  2006 Debenture
              
              
              2,911,667
              
              $
              0.150
              
              
              5/15/11August
                  2007 Debenture
              
              
              5,750,000
              
              $
              0.020
              
              
              8/23/12B
              
              
              5,000,000
              
              $
              0.001
              
              
              5/23/012B
              
              
              2,000,000
              
              $
              0.001
              
              
              5/23/012Total
              
              
              16,190,238


During
      the nine months ended September 30, 2007, the Company issued 12,750,000
      warrants, including the August 2007 warrants (See Note G) and “B” class
      warrants.





*Stock
      Warrants Issued to Third Parties*





The
      Company accounts for stock-based compensation issued to non-employees in
      accordance with the provisions of SFAS 123 and the Emerging Issues Task Force
      consensus in Issue No. 96-18 ("EITF 96-18"), "Accounting for Equity Instruments
      that are Issued to Other Than Employees for Acquiring or in Conjunction with
      Selling, Goods or Services."





22


**EXECUTE
          SPORTS, INC.**
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
          THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006**


**NOTE
      K - WARRANTS (Continued)**





In
      addition, the Company evaluates each derivative issued to determine whether
      treatment as either equity or a liability is warranted for that derivative
      pursuant to EITF 00-19, Accounting for Derivative Financial Instruments Indexed
      to, and Potentially Settled in a Company's Own Stock of that
      derivative.





The
      August 23, 2007 warrant for 5,750,000 shares of common stock was issued in
      conjunction with the debenture of the same date and is discussed in Note G.
      The
“B” class warrants were recorded to permanent equity and resulted in $134,510 of
      expense using the Black-Scholes Option Pricing Model with the following
      assumptions: expected term 5 years, exercise price $0.001, Strike price $.020,
      volatility 14.23%, risk free rate 4.86%, and zero dividend yield.





**NOTE
      L - STOCK INCENTIVE PLAN**





On
      December 13, 2005, pursuant to an Employment Agreement and in anticipation
      of
      approval of the Stock Incentive Plan, the Company awarded its then Product
      Manager, Duane Pacha a non-qualified stock option to purchase 300,000 shares
      of
      common stock of the Company at an exercise price of $.35 per share with an
      expiration date of December 12, 2015. The option vests and become exercisable
      at
      a rate of 12,500 per month over a twenty-four month period. On December 31,
      2006, the Company terminated Mr. Pacha’s position as Product Manager due to the
      disposition of the Academy business. At the time of departure from the Company,
      options to purchase 150,000 shares had vested. The remaining options to purchase
      150,000 shares were canceled. As of September 30, 2007, the vested options
      were
      canceled due to non exercise within 90 days of separation from the
      Company.





On
      December 13, 2005, pursuant to an Employment Agreement and in anticipation
      of
      approval of the Stock Incentive Plan, the Company awarded its then Marketing
      Director, Jeff Baughn a non-qualified stock option to purchase 300,000 shares
      of
      common stock of the Company at an exercise price of $.35 per share with an
      expiration date of December 12, 2015. The option vests and become exercisable
      at
      a rate of 12,500 per month over a twenty-four month period. On December 15,
      2006, the Company terminated Jeff Baughn’s position as Marketing Director due to
      the disposition of the Academy business. At the time of departure from the
      Company, options to purchase 150,000 shares had vested. The remaining options
      to
      purchase 150,000 shares were canceled. As of September 30, 2007, the vested
      options were canceled due to non exercise within 90 days of separation from
      the
      Company.





On
      December 15, 2005, pursuant to an Employment Agreement and in anticipation
      of
      approval of the Stock Incentive Plan, the Company awarded its President, Todd
      Pitcher a non-qualified stock option to purchase 300,000 shares of common stock
      of the Company at an exercise price of $.35 per share with an expiration date
      of
      December 14, 2015. The option vests and become exercisable at a rate of 12,500
      per month over a twenty-four month period. On December 22, 2006, the Company
      and
      Todd Pitcher mutually agreed to terminate Mr. Pitcher as President in order
      to
      improve operational cash flow. At the time of departure from the Company,
      options to purchase 150,000 shares had vested. The remaining options to purchase
      150,000 shares were




23


**EXECUTE
          SPORTS, INC.**
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
          THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006**


**NOTE
      L - STOCK INCENTIVE PLAN (Continued)**





canceled.
      As of September 30, 2007, the vested options were canceled due to non exercise
      within 90 days of separation from the Company.





The
      following table summarizes the Company's stock option activity for the nine
      months ended September 30, 2007:




2007Weighted
                  AverageShares
              
              Exercise
                  PriceOutstanding
                  at beginning of period
              
              
              450,000
              
              $
              0.35Granted
              
              
              -Forfeited
              
              
              (450,000
              )
              
              0.35Exercised
              
              
              -Outstanding
                  at end of period
              
              
              -
              
              $
              0.35Options
                  exerciseable at end of period
              
              
              -




The
      Company accounts for stock options pursuant to Financial Accounting Standards
      No. 123 (revised 2004), Share-Based Payment. The Company values each option
      grant utilizing the grant date fair value for fixed awards based on the
      Black-Scholes Option Pricing Model. Compensation cost is amortized over the
      vesting period.





During
      the nine months ended September 30, 2007, no compensation expense related to
      options was recognized. To date, the Company has recognized compensation expense
      of $85,313.





**NOTE
      M - NET OPERATING LOSS CARRY FORWARD**





In
      assessing the ability to realize deferred tax assets, management considers
      whether it is more likely than not that some portion or all of the deferred
      tax
      assets will not be realized. The ultimate realization of deferred tax assets
      is
      dependent upon the generation of future taxable income during the periods in
      which those temporary differences become deductible. Management considers the
      scheduled reversal of deferred tax liabilities, projected future taxable income
      and tax planning strategies in making this assessment.





At
      December 31, 2006, a valuation allowance for the full amount of the net deferred
      tax asset was recorded because of uncertainties as to the amount of taxable
      income that would be generated in future years.




United
      States Corporation Income Taxes


Period
                of Loss
            
            Amount
            
            Expiration
                DateDecember
                31, 2006
            
            $5,602,753
            
            December
                31, 2026December
                31, 2005
            
            $3,559,866
            
            December
                31, 2025December
                31, 2004
            
            $420,421
            
            December
                31, 2024





24


**EXECUTE
        SPORTS, INC.**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006**


**NOTE
      M - NET OPERATING LOSS CARRY FORWARD (Continued)**





Prior
      to
      November 2004 the Company was organized as an S-Corporation and all losses
      were
      distributed and recognized through the tax returns of the owners. The loss
      for
      the fiscal year ended December 31, 2006, was $5,608,910. As of December 31,
      2006, a valuation allowance for the full amount of the net deferred tax asset
      has been recognized over the period for $2,243,564, based on an anticipated
      tax
      rate of 40%.





**NOTE
      N - GOING CONCERN AND MANAGEMENT’S PLANS**





The
      Company has suffered recurring losses from operations since inception. In
      addition, the Company has yet to generate an internal cash flow from its
      business operations. These factors raise substantial doubt about its ability
      to
      continue as a going concern.





Management’s
      plans with regard to these matters encompass the following actions: 1) obtain
      funding from new investors to alleviate the Company’s working capital
      deficiency; and 2) implement a plan to generate additional sales. The Company’s
      continued existence is dependent upon its ability to resolve its liquidity
      problems and increase profitability in its current business operations. However,
      the outcome of management’s plans cannot be ascertained with any degree of
      certainty. The accompanying consolidated financial statements do not include
      any
      adjustments that might result from the outcome of these risks and
      uncertainty.





**NOTE
      O - RELATED PARTY TRANSACTIONS**





As
      of
      December 31, 2006, Mr. Apicella was owed $54,700 for advances made to the
      Company. During the three months ended March 31, 2007, the Company incurred
      $11,800 of expenses paid on its behalf by Geno Apicella, CEO. In addition,
      during the three months ended March 31, 2007, the Company repaid $62,300 to
      Mr.
      Apicella leaving a balance due to Mr. Apicella of $4,223 as of March 31, 2007.
      During the three months ended June 30, 2007, the Company repaid an additional
      $1,200 bringing the balance due Mr. Apicella’s to $3,023 which was repaid in
      full during the three months ended September 31, 2007..





**NOTE
      P - DISPOSITION OF ACADEMY LINE**





On
      February 5, 2007 the Company filed a current report on Form 8-k with the United
      States Securities and Exchange Commission relating to the January 31, 2007,
      Trademark Transfer and Assignment Agreement (the “Agreement”) with Duane Pacha
      (“Duane”) and Jeff Baughn (“Jeff”, with Duane, the “Buyers”) pursuant to which
      the Company transferred all right, title, interest and good will in the ACADEMY
      SNOWBOARD CO. and ACADEMY trademarks, and the associated ACADEMY logo and their
      goodwill, and all associated domain names, in particular the domain
      www.academysnowboards.com, trades secrets and copyrights and their goodwill
      (collectively, the “Brand”). Moreover, as per the Agreement, there was no cash
      component relating to the transfer and assignment of the Brand and the Company
      shall assign to Buyers certain of the Company’s accounts payable and accounts
      receivable relating to the Brand. Specifically, the accounts receivable in
      the
      amount of $107,761.52 were transferred to the




25


**EXECUTE
        SPORTS, INC.**
 **NOTES
        TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **FOR
        THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006**


**NOTE
      P - DISPOSITION OF ACADEMY LINE (Continued)**





Buyers
      resulting in a decrease to accounts receivable. Accounts payable in the amount
      of $345,321.50 were transferred to the Buyers resulting in a decrease to
      accounts payable.








**NOTE
      Q - SUBSEQUENT EVENTS**





From
      October 1, 2007 through November 1, 2007, the Company issued 4,258,964 shares
      of
      common stock to Dutchess in exchange for the reduction of $57,862 of short
      term
      loans.





From
      October 1, 2007 through November 12, 2007, the Company issued 475,000 and
      750,000 shares of common stock to two officers and two directors, respectively,
      with a combined value of $24,500 based on the closing stock price on the date
      of
      issuance.





From
      October 1, 2007 through November 12, 2007, the Company issued 12,000 shares
      in
      lieu of payment to an outside consultant for services valued at $240 based
      on
      the closing stock price on the date of issuance.





From
      October 1, 2007 through November 12, 2007, the Company issued 743,512 shares
      in
      exchange for debt valued at $14,870 based on the closing stock price on the
      date
      of issuance.





26




**Item
      2 - Management's Discussion and Analysis or Plan of
      Operations**







This
      management’s discussion and analysis of results of operations and financial
      condition contains forward-looking statements that involve risks and
      uncertainties. In some cases, you can identify these statements by
      forward-looking words such as "may," "might," "will," "should," "expect(s),"
      "plan(s)," "anticipate(s)," "believe(s)," "estimate(s)," "predict(s),"
      "intend(s)," "potential" and similar expressions. All of the forward-looking
      statements contained in this registration statement are based on estimates
      and
      assumptions made by our management. These estimates and assumptions reflect
      our
      best judgment based on currently known market and other factors. Although we
      believe such estimates and assumptions are reasonable, they are inherently
      uncertain and involve risks and uncertainties. In addition, management’s
      assumptions about future events may prove to be inaccurate. We caution you
      that
      the forward-looking statements contained in this registration statement are
      not
      guarantees of future performance and we cannot assure you that such statements
      will be realized. In all likelihood, actual results will differ from those
      contemplated by such forward-looking statements as a result of a variety of
      factors, including, but not limited to, those factors discussed in "Risk
      Factors" and included in our on Form 10-KSB for the fiscal year ended December
      31, 2006. Except as required by law, we undertake no obligation to update any
      of
      these forward-looking statements.








***Critical
      Accounting Policies***





The
      Company's discussion and analysis of its results of operations, financial
      condition and liquidity are based upon the Company's financial statements,
      which
      have been prepared in accordance with accounting principles generally accepted
      in the United States.  The preparation of these financial statements
      requires the Company to make estimates and judgments 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 period.  The Company bases its
      estimates on historical experience and on various other assumptions that it
      believes to be reasonable under the circumstances.  Actual results may
      materially differ from these estimates under different assumptions or
      conditions.  On an on-going basis, the Company reviews its estimates
      to ensure that the estimates appropriately reflect changes in its business.









***Inventories***





Inventories
      are valued at the lower of cost or market and primarily consist of wetsuits,
      sticker kits and related accessories.  Cost is determined using the
      average cost method.  The inventory balance reflects management’s
      estimate of net realizable value. Management performs periodic assessments
      based
      on our understanding of market conditions and forecasts of future product demand
      to determine the existence of obsolete, slow moving and non-salable inventories,
      and records the necessary adjustment at the time of assessment directly to
      the
      statement of operations to reduce such inventories to their net realizable
      value. If the actual amount of obsolete inventory significantly exceeds the
      inventory balance, the Company's costs of goods sold and gross profit and
      resulting net income or loss would be significantly adversely
      affected.






27




***Revenue
      recognition***





The
      Company recognizes revenue when the product is shipped to the
      customer.  At that time, the title and risk of loss transfer to the
      customer, and collectability is reasonably assured.  Collectability is
      evaluated on an individual customer basis taking into consideration historical
      payment trends, current financial position, results of independent credit
      evaluations and payment terms. Additionally, an estimate of product returns
      are
      recorded when revenue is recognized.  Estimates are based on
      historical trends taking into consideration current market conditions, customer
      demands and product sell through.  If actual sales returns significantly
      exceed the recorded estimated expense, the Company's sales would be adversely
      affected.








***Allowance
      for doubtful accounts***





The
      Company maintains an allowance for doubtful accounts for estimated losses
      resulting from the inability of its customers to make required
      payments.  An estimate of uncollectible amounts is made by management
      based upon historical bad debts, current customer receivable balances and aging,
      the customer's financial condition and current economic
      conditions.  If a significant number of customers with significant
      receivable balances in excess of the allowance fail to make required payments,
      the Company's operating results would be significantly adversely
      affected.  Based on management's assessment, the Company provides for
      estimated uncollectible amounts through a charge to earnings and a credit to
      the
      valuation allowance.  Balances that remain outstanding after the
      Company has used reasonable collection efforts are written off through a charge
      to the valuation allowance and a credit to accounts receivable.  The
      Company generally does not require collateral.









***Product
      Warranty***





The
      Company's Watersports products carry a ninety-day warranty. Warranty costs
      are
      charged against sales in the period products are sold as a reduction in the
      selling price.  Historically, warranty costs have been less than 1% of
      sales. In estimating its warranty obligations, the Company considers various
      relevant factors, including the Company's stated warranty policies, the
      historical frequency of claims, and the cost to replace or repair the
      product.  If the actual amount of warranty claims significantly
      exceeds the estimated expense, the Company's costs of goods sold and gross
      profit and resulting net income or loss would be significantly adversely
      affected.









***Income
      taxes***





On
      November 1, 2004, the Company amended its Articles of Incorporation to make
      the
      transition from an S-Corporation to a C-Corporation. Prior to the transition
      the
      S Corporation was not a tax paying entity for federal or state income tax
      purposes and thus no provision for income taxes was recognized. The Company
      accounts for income taxes using the asset and liability
      method.  Deferred tax assets and liabilities are recognized for the
      future tax consequences attributable to the differences between the financial
      statement carrying amounts of existing assets and liabilities and their
      respective tax bases and operating loss and tax credit
      carryforwards.  Deferred tax assets and liabilities are measured using
      enacted rates recovered or settled.  The effect on deferred tax assets
      and liabilities of a change in tax rates is recognized in income in the period
      that includes the enactment date.  In assessing the realizability of
      deferred income tax assets, the Company considers whether it is more likely
      than
      not that some portion or all of the deferred income tax assets will be
      realized.  The ultimate realization of deferred income tax assets is
      dependent upon the generation of future taxable income during the periods in
      which those temporary differences become deductible.  SFAS No. 109 requires
      a valuation allowance to be recorded when it is more likely than not that some
      or all of the deferred tax assets will not be realized. The Company has recorded
      a valuation allowance for the full amount of the net deferred tax asset because
      of uncertainties as to the amount of taxable income that would be generated
      in
      future years.





28





**Overview**





**Results
      of Operations**





THREE
      AND
      NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006





Net
      Sales
      for the three months ended September
      30, 2007 and 2006 were $86,910 and $531,932, respectively, representing a
      $445,022, or 84% decrease. The three month year-over-year decrease is due
      primarily to the inclusion of revenue from the Academy, Eagle
      Rider and Kampus lines in the prior year compared to no such revenue in the
      current year.





Net
      Sales
      for the nine months ended September 30, 2007 and 2006 were $1,438,429 and
      $1,634,456, respectively, representing a $196,027, or 12% decrease. The nine
      month year-over-year decrease is
      primarily due to the inclusion of revenue from the Academy, Eagle Rider and
      Kampus lines in the prior year compared to no such revenue in the current year.
      However, the watersports line gross revenue for the nine months ended September
      30, 2007 was $1,435,391 compared to $921,589 in 2006 representing a 56% increase
      and a result of the hiring of Celeste Berouty, our new President, and the
      increased confidence currently being exhibited by our existing customer
      base.





Gross
      margin for the three months ended September 30, 2007 and 2006 was $17,709,
      or
      20% and $263,557, or 50%, respectively. The decrease in gross margin over the
      previous year was primarily due to the company ceasing sales of snowboard
      products and its licensed apparel program.





Gross
      margin for the nine months ended September 30, 2007 and 2006 was $651,241,
      or
      45% and $534,047, or 33%, respectively. The $117,194 increase in gross margin
      over the previous year was due to more favorable materials prices for
      manufactured products, lower shipping rates and reduced overhead.





29


Selling,
      General and Administrative expenses for the three months ended September 30,
      2007 and 2006 was $398,857 and $683,185, respectively, representing a $284,328
      or 42% decrease. Selling, General and Administrative expenses for the nine
      months ended September 30, 2007 and 2006 was $1,132,014 and $2,651,553,
      respectively, representing a $1,519,539 or 57% decrease. The three and nine
      month year-over-year decrease was the result of no acquisition costs,
      significantly less stock based compensation expense, lower selling and
      advertising costs and lower personnel and professional service costs compared
      to
      the same periods in the prior year.





Net
      loss
      from for the three months ended September 30, 2007 and 2006 was $1,061,736
      and
      $1,065,502, respectively. Net loss for the nine months ended September 30,
      2007
      and 2006 was $2,054,264 and $2,927,446, respectively. The net loss from
      continuing operations decreased for the three and nine month periods by $3,766,
      and $873,182 or 30%, respectively. The improvement in net loss is due primarily
      to decreased operating costs described above offset by higher financing related
      costs such as interest expense and amortization of the beneficial conversion
      feature on our debentures.




***Financial
      Condition***





From
      inception to September 30, 2007, we incurred an accumulated deficit of
      $12,209,263, and we expect to incur additional losses through the fiscal year
      ending December 31, 2007 and for the foreseeable future. This loss has been
      incurred through a combination of selling and operating expenses related to
      expensing of stock, as well as in support of our plans to expand sales and
      distribution channels, as well as to develop new products.





We
      have
      financed our operations since inception primarily through debt and equity
      financing. During the nine months ended September 30, 2007, we had a net
      increase in cash of $558,343 primarily due to receipt of funds from our August
      23, 2007 debenture. Total cash resources as of September 30, 2007 was $632,729,
      compared with $74,386 at December 31, 2006.





Our
      available working capital and capital requirements will depend on numerous
      factors, including progress in our distribution and sales of our products,
      the
      timing and cost of expanding into new markets, the cost of developing new
      products, changes in our existing collaborative and licensing relationships,
      the
      resources that we devote to developing new products and commercializing
      capabilities, the status of our competitors, our ability to establish
      collaborative arrangements with other organizations, our ability to attract
      and
      retain key employees, our management of inventory and our need to purchase
      additional capital equipment.








***The
      Company’s Liquidity Plan***





Recent
      operating results give rise to concerns about the Company’s ability to generate
      cash flow from operations sufficient to sustain ongoing viability. During 2006
      and the latter half of 2005, the Company’s cost control strategies focused on
      managing general and administrative expenses through keeping headcount to a
      minimum, amongst other things, and maintaining a focused marketing and sales
      strategy that leverages existing channel partnerships.





30


The
      Company’s need to raise additional equity or debt financing and the Company’s
      ability to generate cash flow from operations will depend on its future
      performance and the Company’s ability to successfully implement business and
      growth strategies. The Company’s performance will also be affected by prevailing
      economic conditions. Many of these factors are beyond the Company’s control. If
      future cash flows and capital resources are insufficient to meet the Company’s
      commitments, the Company may be forced to reduce or delay activities and capital
      expenditures or obtain additional equity capital. In the event that the Company
      is unable to do so, the Company may be left without sufficient liquidity.





In
      September 2004, we commenced a private placement to sell up to 7,000,000 shares
      of our common stock at a per share cost of $.25. We closed the financing on
      May
      27, 2005, accepting no further subscription agreements pursuant to the September
      2004 private placement offering, and have received proceeds of $729,500 in
      connection with the financing.





On
      December 26, 2005, the Company’s SB-2 registration statement was declared
      effective by the Securities and Exchange Commission. Pursuant to the terms
      of
      the Offering, the Company offered to certain investors up to 3,571,428 shares
      of
      the Company’s common stock for consideration of $0.35 per share. As of December
      31, 2005, the Company has received $1,246,550 in proceeds $70,000 of which
      was
      received on January 3, 2006.





On
      June
      15, 2006, pursuant to the filing of another effective SB-2 registration
      statement, we finalized a private placement and received $1,900,000 of
      convertible debentures with a $10,000,000 equity line of credit whereby the
      company places stock puts with the creditor in exchange for cash or repayment
      of
      debt.





On
      August
      23, 2007, we finalized a private placement and received $5,750,000 of
      convertible debentures of which $5,000,000 was used to purchase Sugar
      Sand.





During
      the nine months ended September 30, 2007, the Company recognized $551,716 from
      the stock puts (See Footnote J to the financial statements).





Management
      is currently in the process of seeking additional equity financing with
      potential investors. Management is also working with the holders of our
      convertible debentures to finance production and provide working capital when
      needed. There can be no assurance that such additional financing will be
      obtained. The financial statements do not include any adjustments that might
      result from the outcome of this uncertainty.








31


**ITEM
      3. CONTROLS AND PROCEDURES**





(a)
      As of
      December 31, 2006, we conducted an evaluation, under the supervision and
      participation of our management, including the Company’s President and Chief
      Executive Officer (who is the principal accounting officer) of the effectiveness
      of the Company’s disclosure controls and procedures as of the end of the period
      covered by this report, as required by Rule 13a-15(b) under the Exchange Act
      of
      1934, as amended (the “Exchange Act”)





In
      connection with the audit of our Consolidated Financial Statements for the
      fiscal year ended December 31, 2006, our independent registered public
      accounting firm informed us that we had significant deficiency constituting
      material weaknesses as defined by the standards of the Public Company Accounting
      Oversight Board, which had been identified in connection with the audit of
      our
      Consolidated Financial Statements for the fiscal year ended December 31,
      2006





The
      significant deficiency in internal control identified consisted of inadequate
      segregation of duties affecting initiating, recording and processing financial
      data.





Based
      on
      the evaluation, which disclosed a deficiency in the segregation of financial
      duties, the Company’s President and Chief Executive Officer (who is the
      principal accounting officer) concluded that the Company’s disclosure controls
      and procedures were effective as of the end of the period covered by this
      report.




The
      Company has taken, and will continue to take, steps to address the specific
      problems identified by the auditors including, but not limited to, emphasizing
      enhancement of the segregation of duties based on the limited resources the
      Company has, and, where practical, the Company will continue to assess the
      cost
      versus benefit of adding additional resources that would mitigate the situation.
      Our President and Chief Executive Officer will monitor our accounting policies
      to assure proper accounting on an ongoing basis.





(b)
      There
      were no changes in the Company’s internal controls over financial reporting
      identified in connection with the evaluation by management described above
      that
      occurred during the period covered by this report that has materially effected,
      or is reasonably likely to materially effect the Company’s internal control over
      financial reporting.








32


**Part
      II - Other Information**





**Item
      1.**  **Legal
      Proceedings**





No
      change
      since previous filing.








**Item
      2. Unregistered Sales of Equity Securities and Use of
      Proceeds**





There
      were no unregistered sales of equity securities during the nine months ended
      September 30, 2007.








**Item
      3. Defaults Upon Senior Notes.**





Due
      to
      our inability to pay, the Company is currently in default on the following
      Notes:


Unsecured
                  demand note payable bearing interest at 2% per year; currently
                  in
                  default.
              
              $
              9,538Unsecured
                  demand note payable to New Heart Ministries, bearing interest at
                  4% per
                  year; currently in default.
              
              $
              2,925Unsecured
                  demand note payable to Pacific Sports Investors LLC, bearing interest
                  at
                  10% per year; currently in default.
              
              $
              40,375Secured
                  demand note payable to Christian Beckas, bearing interest at 12%
                  per year
                  collateralized by 80,000 shares of common stock; currently in
                  default.
              
              $
              19,300Secured
                  demand note payable to Hector Peneda, bearing interest at 12% per
                  year
                  collateralized by 40,000 shares of common stock; currently in
                  default.
              
              $
              8,800Secured
                  demand related party note payable to Craig Hudson, bearing interest
                  at 12%
                  per year collateralized by 116,000 shares of common stock; currently
                  in
                  default
              
              $
              32,065Total
              
              $
              113,003




**Item
      4.** **Submission of Matters to A Vote of Security Holders.**





None.





**Item
      5. Other Information.**





There
      were no matters required to be disclosed on a current report on Form 8-K during
      the period covered by this report that were not so disclosed.





There
      were no changes to the procedures by which security holders may recommend
      nominees to the Company’s Board of Directors since the Company last disclosed
      these procedures .





33







**Item
      6. Exhibits**





**Exhibit
                Number**
            
            **Description**
            
            **Incorporated
                By Reference to**10.1
            
            Addendum
                to Payment in Kind Promissory Note entered into between Execute Sports,
                Inc. andJohn
                Helms,
                dated July 31, 2007.
            
            Exhibit
                10.1 to Execute Sports, Inc.’s Form 8-K filed August 1,
                200710.2
            
            Promissory
                Note issued by Execute Sports, Inc. to Dutchess Private Equities
                Find,
                Ltd., dated August 13, 2007.
            
            Exhibit
                10.1 to Execute Sports, Inc.’s Form 8-K filed August 17,
                200710.3
            
            Asset
                Purchase Agreement dated August 29, 2007 by and between Execute Sports,
                Inc. and Challenger Powerboats, Inc. and IMAR Group, Inc.
            
            Exhibit
                10.1 to Execute Sports, Inc.’s Form 8-K filed September 12,
                200710.4
            
            Debenture,
                issued by Execute Sports, Inc. to Dutchess Private Equities Fund,
                Ltd.,
                dated August 23, 2007
            
            Exhibit
                10.2 to Execute Sports, Inc.’s Form 8-K filed September 12,
                200710.5
            
            Subscription
                Agreement, dated August 23, 2007 by and between Execute Sports, Inc.
                and
                Dutchess Private Equities Fund, Ltd.
            
            Exhibit
                10.3 to Execute Sports, Inc.’s Form 8-K filed September 12,
                200710.6
            
            Warrant,
                issued by Execute Sports, Inc. to Dutchess Private Equities Fund,
                Ltd.,
                dated August 23, 2007
            
            Exhibit
                10.4 to Execute Sports, Inc.’s Form 8-K filed September 12,
                200731.1
            
            Certification
                of Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a)
                of
                the Exchange Act
            
            *32.1
            
            Certification
                Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002
            
            *





*Filed
                herewith











34


SIGNATURES








In
      accordance with the requirements of the Exchange Act, the registrant caused
      this
      report to be signed on its behalf by the undersigned, thereunto duly
      authorized.





Signature
              Title
              Date/s/
                  Geno M. Apicella
              Chief
                  Executive OfficerName:
                  Geno M. Apicella
              and
                  Principle Accounting Officer
              November
                  14, 2007




35


**INDEX
      TO EXHIBITS**











**Exhibit
                Number**
            
            **Description**
            
            **Incorporated
                By Reference to**10.1
            
            Addendum
                to Payment in Kind Promissory Note entered into between Execute Sports,
                Inc. andJohn
                Helms,
                dated July 31, 2007.
            
            Exhibit
                10.1 to Execute Sports, Inc.’s Form 8-K filed August 1,
                200710.2
            
            Promissory
                Note issued by Execute Sports, Inc. to Dutchess Private Equities
                Find,
                Ltd., dated August 13, 2007.
            
            Exhibit
                10.1 to Execute Sports, Inc.’s Form 8-K filed August 17,
                200710.3
            
            Asset
                Purchase Agreement dated August 29, 2007 by and between Execute Sports,
                Inc. and Challenger Powerboats, Inc. and IMAR Group, Inc.
            
            Exhibit
                10.1 to Execute Sports, Inc.’s Form 8-K filed September 12,
                200710.4
            
            Debenture,
                issued by Execute Sports, Inc. to Dutchess Private Equities Fund,
                Ltd.,
                dated August 23, 2007
            
            Exhibit
                10.2 to Execute Sports, Inc.’s Form 8-K filed September 12,
                200710.5
            
            Subscription
                Agreement, dated August 23, 2007 by and between Execute Sports, Inc.
                and
                Dutchess Private Equities Fund, Ltd.
            
            Exhibit
                10.3 to Execute Sports, Inc.’s Form 8-K filed September 12,
                200710.6
            
            Warrant,
                issued by Execute Sports, Inc. to Dutchess Private Equities Fund,
                Ltd.,
                dated August 23, 2007
            
            Exhibit
                10.4 to Execute Sports, Inc.’s Form 8-K filed September 12,
                200731.1
            
            Certification
                of Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a)
                of
                the Exchange Act
            
            *32.1
            
            Certification
                Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002
            
            *





*Filed
                herewith


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