<PAGE>

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

                                   FORM 10-KSB
                                  ANNUAL REPORT

     PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
                     FOR THE FISCAL YEAR ENDED JUNE 30, 2004
                         COMMISSION FILE NUMBER: 0-17493

                                OMNI U.S.A., INC.
                               -------------------
                              (Name of Registrant)

         NEVADA                                          88-0237223
        --------                                         ----------
(State of Incorporation)                       (IRS Employer Identification No.)

                      7502 MESA ROAD, HOUSTON, TEXAS 77028
                    (Address of principal executive offices)

                    Issuer's telephone number: (713) 635-6331
                     Issuer's internet address: www.ousa.com
           Securities registered pursuant to Section 12(g) of the Act:

                         COMMON STOCK $.004995 PAR VALUE

      Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(g) of the Securities Exchange Act of 1934 during the past 12
months, and (2) has been subject to such filing requirements for the past 90
days.

                                 YES [X] NO [ ]

      Check if there is no disclosure of delinquent filers in response to Item
405 of Regulations S-B contained in this form, and no disclosure will be
contained, to the best of Registrant's knowledge in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form, 10-KSB. [ ]

      Issuer's revenues for its most recent fiscal year were $19,151,939

      The aggregate market value of the voting stock held by non-affiliates of
the Registrant as of October 12, 2004 was approximately $1,021,660 based on
quoted sales on the Over The Counter (OTC) Bulletin Board on such date.

      The number of shares of the Registrant's common stock outstanding as of
September 22, 2004 was 1,171,812.

                                       1
<PAGE>

PART I

ITEM 1. DESCRIPTION OF BUSINESS

      Overview

      History of the Company. Omni U.S.A., Inc. (the "Company"), a Nevada
corporation, through its wholly-owned subsidiary, Omni U.S.A., Inc., a
Washington corporation ("Omni-Washington") and Omni-Washington's wholly-owned
subsidiary, Omni Resources, Ltd., a Hong Kong company ("Omni Resources"),
through its wholly-owned manufacturing facility, Shanghai Omni Gear Co., Ltd.
("Shanghai Omni Gear"), designs, develops, manufactures and distributes power
transmissions (also known as "gearboxes" or "enclosed geardrives") for use in
agricultural, industrial, "off-highway" and construction equipment. The Company,
through another wholly-owned subsidiary, Butler Products Corporation, designs,
develops, manufactures and distributes trailer and implement jacks and couplers,
which include light and heavy-duty jacks and couplers used in a variety of
trailers. The Company's products are distributed to original equipment
manufacturers and distributors in North America and in several foreign countries
including Argentina, Australia, Brazil, Canada, France, Mexico, New Zealand,
South Africa and Thailand. The Company began procuring the manufacture of its
products by Chinese manufacturers in China in 1980, and since 1986 substantially
all of its geardrives have been manufactured in China; 30% of its trailer and
implement products are manufactured in China and approximately 70% of its
trailer and implement products are manufactured in the United States.

      Omni-Washington, the Company's primary operating subsidiary, was
incorporated in 1961 and in 1974, began distributing power transmissions in the
U.S., and later established Omni Resources to distribute its products in certain
foreign markets. In 1988, Omni-Washington acquired the outstanding minority
ownership interest in Omni Resources and thereafter operated it as a wholly
owned subsidiary.

      Effective July 1, 1988, Ed Daniel, the then sole shareholder, exchanged
all of the outstanding stock of Omni-Washington for 6,650,000 shares of voting
Common Stock of Triste Corporation, a Nevada corporation incorporated in 1988
("Triste"), giving him a 42.5% interest in Triste. Triste thereafter changed its
name to Omni U.S.A., Inc. ("Omni" or the "Company").

      In December 1994, Omni Resources formed Shanghai Omni Gear, a Cooperative
Joint Venture Limited Liability Company (the "Joint Venture"), with a Chinese
manufacturing company that owns a multi-building manufacturing complex in
Shanghai for the purpose of manufacturing planetary and industrial geardrives.

      The Articles of Association of the Joint Venture provide that each joint
venturer's liability for the obligations of the Joint Venture is limited to such
joint venturer's investment. The Joint Venture has a thirty-year term, which can
be extended for an additional ten years by consent of the joint venturers. The
Joint Venture may be liquidated in the event of either party's failure to
perform its obligations under the Joint Venture Agreement. Shanghai Omni Gear
manufactures the Company's planetary and helical geardrive product lines. The
facility is being used for assembly of planetary drives, helical geardrives and
inspection of drives produced in other Chinese manufacturing facilities.

      Shanghai Omni Gear was formed in accordance with the Law of the People's
Republic of China on Cooperative Joint Ventures, and its activities are governed
by all laws, decrees, rules and regulations of the People's Republic of China,
including, but not limited to, labor and employment, tax, foreign exchange and
insurance laws and regulations. Shanghai Omni Gear is obligated to contribute
five percent of its after-tax profits per year, up to a maximum of 50% of the
registered capital of the Company (or $1,312,500) to a reserve enterprise
development and welfare fund for staff and workers.

      The Chinese manufacturer contributed to the Joint Venture the use of land
and factory space in its manufacturing complex under a 30-year facilities lease;
Omni Resources agreed to contribute an aggregate of $2,625,000 in working
capital, leasehold improvements, machinery and other assets required to
establish a fully operational manufacturing facility, and, as of the date
hereof, has contributed approximately $3,270,000 to the Joint Venture. Omni
Resources controls Shanghai Omni Gear, as it appoints a majority of Shanghai
Omni Gear's Board of Directors and also appoints the General Manager of the
Joint Venture. The Chinese manufacturer has a single representative on Shanghai
Omni Gear's Board of Directors and does not participate in the profits of
Shanghai Omni Gear; its only return from Shanghai Omni Gear being a rental fee
from the facilities lease.

                                       2
<PAGE>

      On October 1, 1996, the Company acquired 100% of the common stock of
Butler Products Corporation ("Butler"). Consideration paid to the shareholders
of Butler included $225,000 in cash, $500,000 in junior subordinated notes.
Located in Butler, Kentucky, Butler is a long-standing manufacturer of jack and
trailer products typically sold to manufacturers and distributors of heavy-duty
trailers.

      Commencing July 1, 1997, all towing products designed, developed,
manufactured and sold by the Company are marketed under the "Butler" name and
associated trademarks; all power transmission products designed, developed,
manufactured and sold by the Company are marketed under the "Omni Gear" name and
associated trademarks.

      On July 16, 1999, Butler acquired the assets of Piecemaker, Inc.
("Piecemaker"), a manufacturer of horse, agricultural and utility trailer
components located in Madill, Oklahoma. Subsequent to the Piecemaker
acquisition, Butler consolidated its small jack and coupler manufacturing
facilities with that of Piecemaker in Madill, OK. During fiscal year 2003,
Piecemaker divested itself of approximately $253,000 in inventory held for
resale but not manufactured by Piecemaker.

      On June 14, 2001, the Company effected a reduction in the number of
authorized shares of common stock and a corresponding one-for-three reverse
stock split of its common stock at a special meeting of the Board of Directors.
In addition, all holders of options or warrants to purchase future shares of the
Company's common stock were reduced on an equal basis of three to one. The par
value of the common stock was unchanged. The move was initiated to raise the
Company's share price above the $1.00 minimum level, which would enable Omni's
stock to meet the requirements and continue to trade on the NADSAQ SmallCap
Market.

      On June 7, 2002, June 19, 2002 and September 10, 2002, the Company
received notification from NASDAQ that the Company's stock would be removed from
the NASDAQ listing as Omni's share price had fallen below the minimum required
ask price of $1.00 per share and as the Company's Minimum Value of Publicly Held
Securities had fallen below the minimum of $1,200,000. As of November 12, 2002
the Company is no longer listed on the NASDAQ exchange and is currently listed
and traded on the Over the Counter (OTC) Bulletin Board.

      In October 2003, the Company committed to a plan to consolidate the
operations of its Trailer and Implement Components business segment into one
manufacturing facility. The Madill, Oklahoma facility was closed and its
employees terminated or relocated to Butler, Kentucky. The inventory, machinery
and equipment are being moved to Butler, Kentucky to fill excess capacity and
space. The Company believes that the consolidation of manufacturing operations
will reduce costs with little or no adverse impact to future sales levels.

      Since the Company began selling power transmission products in 1974, it
has achieved a number of competitive advantages including:

      (i)   Strong customer relationships and a reputation for quality products
            at a good value;

      (ii)  Recognition as the low cost producer in the industry resulting from
            the Company's extensive Chinese manufacturing capability with
            Chinese contract manufacturers and with Shanghai Omni Gear;

      (iii) Substantial market penetration in the agricultural implement market
            with right-angle gear boxes;

      (iv)  Reputation for responsive customer service;

      (v)   Recognition for design innovation in response to customers needs;
            and

      (vi)  The accumulation of a substantial body of technical and industry
            specific knowledge.

      The Company plans to build on this base of strategic advantages in its
attempt to achieve growth in both sales and profits in the power transmission
segment. To achieve this objective the Company has developed a growth strategy
encompassing the following:

      (i)   Expand market share in the planetary and industrial markets for
            power transmission components;

      (ii)  Continued improvement in operating efficiencies in Shanghai Omni
            Gear;

      (iii) New product innovation and development; and

      (iv)  Evaluate new business opportunities, asset acquisitions and
            potential sales that maximize shareholder value and benefit the
            Company.

      Products

                                       3
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      OMNI GEAR

      Power Transmission Components. Power transmissions (also known as
"enclosed geardrives" or "gearboxes") are configurations of gears enclosed in a
housing or casing that transfer or transmit power from one point to another.
Omni Gear currently distributes a standard product line of over 300,000 gearbox
configurations. As a percentage of revenues, Omni Gear's power transmission
components are its most significant product, representing 83% of the Company's
revenues in fiscal years 2004 and 2003.

      Although Omni Gear distributes power transmissions for numerous
applications and purposes, the majority of its sales revenues are derived from
sales of power transmission components manufactured for three distinct
applications:

      Agricultural equipment. Omni Gear distributes power transmissions for
      tractor powered implements with capacities ranging from 3 to 300
      horsepower for use in agricultural equipment, including post hole diggers,
      which are accessories attached to tractors used to dig post holes for
      fencing and tree planting; rotary cutters, which are large, heavy-duty
      mowers for use in agriculture and highway right-of-way and recreational
      area maintenance; grain augers, which convey grain to the top of grain
      silos; and geardrives for fertilizer spreader and roto-tiller
      applications.

      Irrigation systems. Omni Gear distributes right-angle gearboxes for
      vertical turbine pumps and electro-mechanical drivetrain components for
      mechanized irrigation. Omni Gear supplies both helical gear and worm gear
      primary drive units, some of which are integrated with electric motors, as
      well as worm gear and planetary gear final drives.

      Construction, mobile off-highway, industrial and utility equipment. Omni
      Gear distributes planetary drive power transmissions for use in
      construction, mobile off-highway (which includes a wide variety of
      equipment designed for use in rugged terrain, construction sites, or
      undeveloped areas), industrial, and utility equipment, such as four-wheel
      drive forklifts, skid steer loaders, telephone and power cable
      installation and replacement equipment, road rollers and dirt compactors.
      Planetary geardrives utilize more complex configurations of gears and are
      used in applications where transmission of high torque at low speeds is
      needed. Omni Gear believes that it can expand its share of the market of
      planetary drives, and Omni Gear's goal of increased production of these
      products was a primary factor in the Company's decision to establish a
      manufacturing facility in China.

      BUTLER

      Trailer and Implement Components. Butler manufactures a wide variety of
      jacks with capacities ranging from 1,000 lbs. to 220,000 lbs. These jacks
      are used to level and lift various trailers, agricultural implements and
      equipment for recreational, utility, construction, agricultural and
      trucking industries as well as for military applications. Butler's
      products include heavy-duty implement jacks, spring return jacks,
      stabilizing jacks and wheel chocks for semi-trailers, a series of high
      density polyethylene lubricating plates for the trucking industry and a
      complete line of bumper-pull and gooseneck couplers for trailers with
      gross weights up to 30,000 lbs. Butler's Oklahoma facility manufactures
      component parts for horse, livestock and utility trailers. Their products
      include greaseable gate and hinge sleeves, back gate handles and
      extensions, roller pin assemblies, spring loaded latches, butt bars and
      plates, hinge assemblies and roof bows. As a percentage of revenues,
      trailer and implement component sales represented 17% of the Company's net
      sales in fiscal years 2004 and 2003.

      New Products. The Company continues to improve its products and expand
product application. Currently, the Company is designing gearboxes to expand its
agricultural, universal, bevel, irrigation, planetary, commercial turf and
mobile utility geardrive product lines and Butler product lines.

      Product Manufacturing

      Current Manufacturing Arrangements. A majority of the Company's geardrives
are assembled incorporating raw materials and components manufactured or
produced in China by four manufacturers, some of whom the Company has been doing
business with since 1980. The Company believes that these manufacturers can be
relied upon to provide a reliable source of quality manufactured goods for the
foreseeable future. The Company and certain manufacturers have from time to time
memorialized their working relationships in written memoranda. In the Company's
experience, business relationships in China are not established and are not
governed by written agreements of contract, and the Chinese legal system is not
sufficiently

                                       4
<PAGE>

developed to provide for the enforcement of contracts or remedies to an
aggrieved party in the event of a breach of contract. Rather, business in China
is conducted primarily upon the basis of personal relationships among the
parties, and commercial disputes are resolved almost entirely through
negotiation. The Company believes that it has established solid working
relationships with these factories. These relationships are and will continue to
be critical to the Company's ability to obtain quality manufactured products on
acceptable terms.

      The Company owns a 35,000 square foot facility in Butler, Kentucky where
all jacks from 10,000 lbs. to 220,000 lbs. capacities are manufactured. The
light-duty jacks and bumper pull and gooseneck couplers are manufactured in
China in accordance with Butler's quality specifications.

      Availability of Raw Materials and Components. Product components and raw
materials are currently purchased from numerous suppliers in the U.S. and China,
selected by the Company on the basis of available production capacity,
reputation for quality, and relative costs. The Company believes that there are
sufficient supplies of raw materials and components in China to meet its needs
for the foreseeable future, and the Company's suppliers have generally been able
to meet the Company's specifications and schedules. However, in the few
instances in which resources of sufficient quality have not been available in
China, the Company has generally encountered little difficulty in locating
substitutes outside China and importing them for production. Based on the number
of potential suppliers in China, the Company does not believe that the loss of
any supplier would have a material adverse effect on the Company.

      Manufacturing Capacity. At this time, the Company has the ability to
expand its Shanghai Omni Gear facility to accommodate customer demand. The
contract manufacturers it currently employs possess sufficient excess capacity
to meet the Company's production requirements for the foreseeable future. Based
on the number of potential manufacturers in China and excess capacity of
manufacturers currently used, the Company does not believe that the loss of
services of any single manufacturer would have a material adverse effect on the
Company.

      Distribution, Sales and Marketing

      Distribution. The Company distributes its products primarily to original
equipment manufacturers and distributors. Customers with limited requirements,
and most of the Company's North American customers, typically purchase Omni Gear
product from inventories. Omni Resources, including Shanghai Omni Gear, on the
other hand, ships parallel shaft and planetary geardrive products, marketed
under Omni Gear, directly from the factory to U.S. customers and foreign
customers located primarily in Australia, Europe, South America and Japan, or to
other customers that purchase entire containers or production runs of Omni Gear
products. Butler distributes its products to after-market distributors, trailer
OEMs and export brokers. All products are shipped from Butler's manufacturing
facility in Butler, Kentucky or prior to fiscal 2004 from Butler's facility in
Madill, Oklahoma. Sales are divided between Omni Gear, Omni Resources, and
Butler based on product line, location of the customer and size of the orders,
with the majority of the sales to customers in the United States.

      On October 3, 1994, the Company and its subsidiaries signed an exclusive
ten-year distribution agreement (the "Distribution Agreement") with the Braden
Winch division of PACCAR Inc. ("PACCAR"), an international manufacturer,
marketer and distribution of winches and planetary geardrives located in Broken
Arrow, Oklahoma. The Distribution Agreement was modified and amended on
September 9, 1999. The amendment extended the Distribution Agreement to 2014.
Under the terms of the Distribution Agreement, PACCAR will market and distribute
throughout the world (except Japan and China) planetary drives, parts and
accessories designed and manufactured by the Company. The drives and parts will
be marketed by PACCAR under the "Braden" trademark and trade name owned by
PACCAR. The Company retained the rights to sell its products in Japan and China,
and also retained the right to market its planetary drives under its own name to
certain original equipment manufacturers that it now services and to all current
and potential pivot irrigation makers or after-market resellers for products
designed exclusively for the irrigation market. By agreement dated April 30,
2001, the distribution agreement was modified to allow the Company to distribute
planetary drives, parts and accessories designed and manufactured by the Company
in the world market. PACCAR may continue to represent the Company on an
exclusive customer basis at the Company's option.

                                       5
<PAGE>

      The Company previously had a long time distribution agreement with
Champion Gear. In December 2002, the Company purchased all the assets of
Champion Gear, including customer and market information and all rights under
the product distribution agreement for $75,000, forgiveness of notes receivable
of $25,328 and settlement of all claims made by and counterclaims against the
Company. The purchase has been recorded in other assets.

      Sales. The Company's sales are influenced by a variety of seasonal,
economic and climatic factors affecting its customers, many of which are
difficult to predict. Since a large proportion of the Company's products are
utilized in the agriculture industry, the Company's sales are lower during the
fall and winter months while farming and ranching activity is slower. Drought,
flooding, commodity prices, government subsidies and U.S. Agricultural
Department policies that affect farmers also impact demand for the Company's
products. The Company believes that the seasonality in its sales will become
less pronounced as it increases its market share in the construction,
off-highway and utility equipment markets.

      The Company does not currently hold any government contracts, nor does it
sell more than an insignificant portion of its products to any governmental
agency. Accordingly, none of its contracts and subcontracts or purchase orders
are subject to governmental re-negotiation or cancellation.

      Marketing. The Company distributes product catalogs to prospects, as well
as soliciting sales directly from new customers. From time to time, the Company
has also acquired customer lists which it uses as a basis for solicitation of
new customers, as well as solicited sales by manufacturer's representatives,
distributors, direct marketing and trade shows. Sales to new customers are
rarely an effort by a salesperson alone and Company engineers are often required
to consult with prospective customers, assist in identifying, designing and
developing products that fulfill a new customer's particular requirements. After
a sale is made, Company engineers continue to consult with the customer on
product improvements and modifications. Power transmissions are usually
manufactured according to a customer's specific applications and specification.
Because incorporating a power transmission manufactured by a different supplier
may require changes in product design or expensive retooling, customers often do
not replace a current supplier's product with a standard product of another
manufacturer and therefore do not frequently change suppliers of power
transmissions. Accordingly, while the Company regularly solicits additional
sales from new customers, a large portion of its sales are made to existing
customers with minimal marketing effort.

      Inventories, Firm Orders and Backlogs. The Company maintains approximately
$1,628,000 in inventory at the Houston, Texas facility, approximately $972,000
at the Butler, Kentucky facility, approximately $985,000 at the Shanghai, China
facility, approximately $146,000 in Brazil and approximately $282,000 in
transit. Additionally, the Company has access to inventory located in bonded
warehouses and vendor facilities. The Company forecasts sales 12 months in
advance and maintains a three month rolling production schedule, which permits
the Company to maintain sufficient inventories to meet projected requirements of
its customers yet avoids excessive investments in inventory. The Company expects
that current inventory and production levels in the next fiscal year will
adequately supply product to fulfill the Company's backlog of orders.

      As of June 30, 2004, the Company's backlog was approximately $10,600,000.
The Company determines the amount of backlog by estimating purchases to be made
by established customers with blanket purchase orders with the Company. Average
delivery time for the Company's power transmission equipment varies depending
upon the product. The Company can often fill and ship an order from inventory in
twenty-four hours; orders for products that require minimal modification to an
existing product can often be shipped in a few days; and custom products
requiring extensive design and retooling for production can require a six month
production schedule. The Company believes that its entire backlog is shippable
in the next fiscal year.

      Competition. The power transmission market is supplied by numerous
American and foreign manufacturers, ranging from conglomerates that distribute
broad product lines to customers around the world, to small manufacturers that
produce a limited number of products for specific applications to limited
markets. Accordingly, the market for power transmissions is difficult to define.
The Company identifies its competition according to power transmission and
trailer and implement components.

                                       6
<PAGE>

      Power Transmission Components. In sales of power transmissions for 1)
rotary cutter, 2) tractor-powered implement and 3) universal geardrive product
lines, Omni Gear competes with a number of U.S. and foreign companies, including
Comer S.p.A. and Bondioli & Pavesi, each of which are Italian companies, and
Curtis Machine, Inc., Superior Gearbox Mfg., Inc., Hub City and Durst (both
divisions of Regal-Beloit Corporation), and ITG, all of which are American
companies, together with geardrives which are self-produced by certain OEM's.
Published statistics of the size of the market are not readily available.

      In sales of the irrigation geardrive market, Omni Gear's most significant
competitors in the marketplace are Durst and Ohio Gear (both divisions of
Regal-Beloit Corporation), U.S. Motors (a division of Emerson Electric), and
Universal Motion Components, together with irrigation geardrives which are
self-produced by certain OEM's.

      The Company estimates that the North American market for planetary
gearboxes with torque capacities up to 120,000 lbs. that Omni Gear can currently
supply is approximately $150,000,000 in sales per year, and that this market is
currently dominated by Auburn Gear, Fairfield Manufacturing and Eskridge
Manufacturing, all American companies. Other companies which supply planetary
geardrives in these rated torque capacities as a part of their overall planetary
products include Gear Products (a division of Blount), DP Manufacturing, Tulsa
Winch (a division of Dover), all American companies, and Brevini, Bosch Rexroth
AG, KYB, Carraro, Regiana & Riddutori, Teijin Seiki, and Trasmital Bonfiglioli,
all foreign companies. Omni Gear believes that it can increase its share in this
market in the future in spite of weak demand for construction and off-highway
equipment by providing quality product at reduced prices.

      Trailer and Implement Components. In sales of Butler light duty product
lines, Butler competes with a number of U.S. and foreign companies, including
Atwood, Fulton and Hammerblow. Butler's heavy-duty product lines compete with a
number of U.S. and foreign companies, including Kaiser Austin Westran, Jost,
Holland/Binkley, and Sudisa.

      The Company's most important competitive advantage is its competitive
pricing afforded by inexpensive Chinese labor and manufacturing costs. The
Company believes that it is competitive in its industry with respect to warranty
and return matters, payment terms, and product quality.

      Other

      Employment. The Company currently employs approximately two hundred
sixteen persons worldwide; (i) one hundred sixty-two by Shanghai Omni Gear, (ii)
nineteen at the Company's Houston, Texas facility, (iii) thirty at the Company's
facilities in Butler, Kentucky, (iv) three by Omni Gear do Brazil, and (v) two
by Omni Resources. Twenty-three of Butler's thirty employees are unionized. No
other Company employees are unionized or attempting to unionize. Management
believes its relations with its employees, union and non-union, are good.

      Research and Development. The Company currently employs three full-time
engineers who design products to meet new customer specification or applications
and to make refinements in product manufacturing processes and product quality.
Research and development expenses, unless otherwise specified, are reflected in
the Company's financial statements as part of operating expenses.

      Intangible Properties. The Company manufactures, advertises and sells its
products under numerous trademarks. Omni(R), Omni USA(R), Omni Gear(R), and
Butler(TM) trademarks are the primary marks under which the Company's products
are sold. The Company also owns other trademarks under which gearbox products
are sold such as RC-20(R), RC-30(R), RC-51(R), RC-61(R), RC-61T(R), RC-65T(R),
RC-71(R), RC-81(R), RC-91(R), RC-110(R), RCD-101(R), PHD-26HD(R), PHD-50A(R),
PHD-75(R), IR-15(R), IR-50(R), OFD-50(R), RC-130(TM), RC-25(TM), Irri-Torq(TM),
Voyager(R), Galaxy(TM), Enforcer(TM), Enforcer II(TM), Slick Disc(TM), and
Slider(R). Management believes that the Company's trademarks are well known in
its markets, are valuable and that their value is increasing with the
development of its business. The Company is not dependent on any one such
trademark. The Company vigorously protects its trademarks against infringement.
The Company has registered its trademarks in the appropriate jurisdictions.

      Environmental Matters. The Company is not a party to any legal or
regulatory proceedings seeking to impose liability or responsibility for any
environmental damages or violations of any environmental laws or regulations,
nor is it aware of any circumstances in which its activities in China or in the
United States have created any basis for any environmental liability or
responsibility for damages.

                                       7
<PAGE>

      Government Regulation. The Company is not subject to governmental
regulations other than those that typically apply to businesses importing
foreign manufactured goods into the United States and other countries, such as
customs laws and regulations. The Joint Venture is subject to certain Chinese
laws and regulations governing labor and employment, taxation, insurance,
foreign exchange, and other business matters, but the Company does not regard
these laws and regulations as significantly different in form or effect as those
that apply to the Company generally.

                                       8
<PAGE>

ITEM 2. DESCRIPTION OF PROPERTY

      The Company currently leases facilities located in Houston, Texas and
Shanghai, China, and owns a 35,000 square foot manufacturing facility in Butler,
Kentucky.

      The Houston facility is a combination office/warehouse facility of
approximately 40,000 square feet, which the Company uses as its headquarters and
as an Omni Gear assembly center, inventory warehouse, warranty repair, quality
control, testing and inspection, and distribution center. The Houston facility
is leased from Phenix Investment Company, a real estate investment company
located in Houston, Texas under a long-term lease expiring July 2005, at a rate
of $8,500 per month.

      Butler owns a 35,000 sq. ft. manufacturing facility in Butler. In October
2003, the Company committed to a plan to consolidate the operations of its
Trailer and Implement Components business segment into one manufacturing
facility. The Madill, Oklahoma facility was closed and its employees terminated
or relocated to Butler, Kentucky. The inventory, machinery and equipment are
being moved to Butler, Kentucky to fill excess capacity and space. While the
Company is still committed to the Madill lease, it believes that the
consolidation of manufacturing operations will reduce costs with little or no
adverse impact to future sales levels.

      Shanghai Omni Gear leases buildings in a manufacturing complex containing
approximately 130,000 square feet pursuant to a 30-year lease at a rate of
approximately $10,000 per month. The existing space is sufficient for the
activities currently conducted there; however, Shanghai Omni Gear has the
ability to acquire additional space in the complex if needed to expand future
operations.

      The Company believes that its facilities are adequate for its needs in the
foreseeable future. In the event that any of the facilities became unavailable
for use by the Company for any reason, the Company believes that alternative
facilities are available on terms and conditions acceptable to the Company.

ITEM 3. LEGAL PROCEEDINGS

      The Company, from time to time, is a party to various legal proceedings
that constitute ordinary routine litigation incidental to the Company's
business. In the opinion of management, all such matters are either adequately
covered by insurance or are not expected to have a material adverse effect on
the Company.

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

      No matters were submitted to a vote of the security holders of the Company
during the quarter or fiscal year ended June 30, 2004.

                                       9
<PAGE>

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

      The Company's Common Stock trades on the NASDAQ Over-The-Counter tier of
the NASDAQ Stock Market under the symbol "OUSA".

      The following table sets forth in the periods indicated the range of low
and high sales prices per share of the Company's Common Stock traded as reported
by the NASDAQ Stock Market (amounts have been restated to account for the
reverse stock split):

<TABLE>
<CAPTION>
Quarter Ending           Low                   High
--------------           ---                   ----
<S>                      <C>                   <C>
06/30/02                 0.86                  1.16

09/30/02                 0.55                  1.20

12/31/02                 0.25                  1.05

03/31/03                 0.25                  0.35

06/30/03                 0.35                  1.01

09/30/03                 0.50                  1.80

12/31/03                 0.70                  0.70

03/31/04                 0.36                  1.12

06/30/04                 0.88                  1.65
</TABLE>

      As of October 12, 2004, the closing price of the Company's Common Stock
was $1.11 per share. As of June 30, 2004, there were approximately 550 holders
of record of the Company's Common Stock.

      The Company has never paid cash dividends on its Common Stock. As a result
of net losses in prior fiscal years, the Company has a cumulative retained
deficit of $2,109,416 as of June 30, 2004; accordingly, the Company may be
prohibited by legal restrictions on capital from paying cash dividends for the
foreseeable future. In addition, the Company's revolving line of credit facility
prohibits the payment of dividends. While any determination as to the payment of
cash dividends will depend upon the Company's earnings, general financial
condition, capital needs, and other factors, the Company presently intends to
retain any earnings to finance working capital needs and expand its business,
and therefore does not expect to pay cash dividends in the foreseeable future.

                                       10
<PAGE>

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

      Liquidity and Capital Resources

      The Company's primary capital requirements are for routine working capital
needs that are generally met through a combination of internally generated
funds, revolving line of credit facilities and credit terms from suppliers. The
Company's line of credit facilities had an outstanding balance of $347,040 at
June 30, 2004. The Company had working capital of $2,436,127 as of June 30, 2004
and $2,108,434 as of June 30, 2003; an increase of $327,687 during the fiscal
year ended June 30, 2004. The change in working capital was due primarily to
decreases in accounts receivable, accounts payable, inventory, accrued expenses
and borrowings on long-term debt offset by payments on the Company's lines of
credit in the fiscal year ended June 30, 2004.

      The Company had negative cash flow of $176,208 which resulted in a cash
balance of $533,022 at the year ended June 30, 2004, compared to the June 30,
2003 cash balance of $709,230. The negative cash flow was generated by increases
in payments to the line of credit and notes payable and capital additions.

      The inventory balance as of June 30, 2004 was $4,013,221, a decrease of
$887 compared to the June 30, 2003 inventory of $4,014,108.

      The Company's cash used in investing activities for the year ended June
30, 2004 of ($150,160) consisted primarily of capital expenditures for fixed
assets compared to ($355,792) for the year ended June 30, 2003. The Company
believes that its present facilities and planned capital expenditures are
sufficient to provide adequate capacity for operations in the next fiscal year.

      Net cash used from financing activities for the year ended June 30, 2004
of $2,015,956 consisted primarily of net repayments of the Company's line of
credit as well as the temporary factoring agreement.

      The Company's current ratio was 1.56 as of June 30, 2004, which is a 19%
increase when compared to the June 30, 2003 current ratio of 1.31.

      On August 4, 2004, the Company entered into a revolving line of credit
agreement with a new financing company with maximum borrowings up to $5,000,000,
dependent upon qualifying trade accounts receivable and inventory balances. The
line of credit matures August 3, 2007, bears interest a prime plus 1.75% and
incurs an unused line of credit fee of .25%. The credit line is subject to
certain financial ratio and reporting covenants. The line of credit is secured
by all of the assets of the Company and personal guarantees by two officers of
the Company of $1,000,000 each. Proceeds received under the line of credit
agreement were used to repay any amounts owed under the inventory note payable.

      With its access to the line of credit and its anticipated ability to
generate funds internally, the Company believes it has adequate capital
resources to meet its working capital requirements for the next fiscal year,
given its current working capital requirements, known obligations, and assuming
current levels of operations. If however, operations do not remain at current
levels and the Company is unable to access or renew its line of credit
facilities or service its long term debt facilities, the Company will be
required to reduce its operations accordingly which may have a negative impact
on the Company's ability to meet the needs of it customers, suppliers and credit
providers. In addition, the Company believes that it has the ability to raise
additional financing in the form of debt to fund additional capital
expenditures, if required.

                                       11
<PAGE>

      Results of Operations

      Fiscal year ended June 30, 2004, compared to fiscal year ended June 30
2003. The Company's business is cyclical and dependent on industrial spending
levels and is impacted by the strength of the economy and other factors. The
Company had net sales of $19,151,939 for the year ended June 30, 2004. This
represents a decrease of 4% compared to the year ended June 30, 2003 net sales
of $19,963,387. The following table indicates the Company's net sales comparison
and percentage of change for the years ended June 30, 2004 and 2003:

<TABLE>
<CAPTION>
                                         YEAR ENDED        %      YEAR ENDED      %        DOLLAR        %
            NET SALES                     6/30/04      OF TOTAL    6/30/03     OF TOTAL    CHANGE      CHANGE
-------------------------------------------------------------------------------------------------------------
<S>                                     <C>            <C>       <C>           <C>       <C>           <C>
Power Transmission Components           $15,961,652       83%    $16,530,045      83%    $ (568,393)     (3%)
Trailer and Implement Components          3,190,287       17%      3,433,342      17%      (243,055)     (7%)

Consolidated                            $19,151,939      100%    $19,963,387     100%    $ (811,448)     (4%)
</TABLE>

The decrease of net sales of both business segments was relative to a general
market decline.

      Gross profit for the year ended June 30, 2004 decreased $96,274 to
$4,536,093, compared to gross profit for the year ended June 30, 2003 of
$4,632,367. The decrease in gross profit is due primarily to decrease in net
sales, offset by improved efficiencies in manufacturing, ongoing efforts to
manage and decrease overhead. Gross profit as a percentage of net sales was 24%
for the year ended June 30, 2004 and 23% for the year ended June 30, 2003.

      Selling, general and administrative expenses decreased $159,726 to
$3,821,650 in the year ended June 30, 2004 from $3,981,376 in the year ended
June 30, 2003. Selling, general and administrative expenses as a percentage of
sales was 20% for the year ended June 30, 2004 and 20% for the year ended June
30, 2003. The decrease in selling, general and administrative expenses are due
to decreased operational support required by the decrease in sales activity as
well as operational efficiencies gained due to consolidation of the Butler
facilities.

      Income from operations for the Company increased $63,452 to $714,443 for
the year ended June 30, 2004, compared to $650,991 for the year ended June 30,
2003. This increase is primarily the result of decreased gross profit, offset by
decreased selling, general, and administrative expenses during the year ended
June 30, 2004.

      Interest expense increased $18,589, to $438,616 for the year ended June
30, 2004 from $420,027 for the year ended June 30, 2003. The increase resulted
from increased borrowings occurring within the year which was partially offset
by declining interest rates and favorable terms on new and refinanced debt.

      Other income, net (expense) was income of $28,898 for the year ended June
30, 2004 compared to an income of $164,496 for the year ended June 30, 2003. The
change was mostly attributable to the reduction in miscellaneous income in
foreign operations.

      The Company's net income decreased $81,852 to $282,301, or $0.24 per
share, for the year ended June 30, 2004 compared to $364,153, or $0.31 per
share, for the year ended June 30, 2003.

      Critical Accounting Policies

      In December 2002, the FASB issued Statement of Financial Accounting
Standards No. 148 (SFAS 148), Accounting for Stock-Based Compensation -
Transition and Disclosure, an amendment of FASB Statement No. 123, to provide
alternative methods of transition for a voluntary change to the fair value based
method of accounting for stock-based employee compensation. In addition, this
Statement amends the disclosure requirements of FASB Statement No. 123 to
require prominent disclosures in both annual and interim financial statements
about the method of accounting for stock-based employee compensation and the
effect of the method used on reported results. The Company anticipates no
material impact on the consolidated financials from adoption of SFAS 148.

                                       12
<PAGE>

      In May 2003, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity" (SFAS
150). This Statement prescribes how an issuer classifies and measures certain
financial instruments. Financial instruments within the scope of SFAS 150 are
required to be classified as liabilities (or assets in some circumstances). Many
of those instruments were previously classified as equity. SFAS 150 is effective
for financial instruments entered into or modified after May 31, 2003, and
otherwise is effective for the Company July 1, 2003. There was no impact to the
Company from adopting SFAS 150.

      Cautionary Statement

This Annual Report on Form 10-KSB contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. The words
"believes," "anticipates," "plans," "expects," and other similar expressions are
intended to identify forward-looking statements. Investors are cautioned that
such forward-looking statements are based on the current expectations of
management and are inherently subject to a number of risks and uncertainties
that could cause the actual results of the Company to differ materially from
such forward-looking statements. Forward-looking statements involve risks and
uncertainties, including, but not limited to, continued acceptance of the
Company's products in the marketplace, competitive factors, new products and
technological changes, the Company's dependence upon third-party suppliers,
political and economic circumstances in China, ability to access or renew credit
facilities and service long term debt facilities and other risks detailed from
time to time in the Company's periodic report filings with the Securities and
Exchange Commission. Investors are directed to the Company's periodic reports
filed with the Securities and Exchange Commission. The Company is not obligated
to update or revise the aforementioned statements for those new developments.

                                       13
<PAGE>

ITEM 7. FINANCIAL STATEMENTS

                       OMNI U.S.A., INC. AND SUBSIDIARIES
                        CONSOLIDATED FINANCIAL STATEMENTS
                             JUNE 30, 2004 and 2003

                                       14
<PAGE>

                            Harper & Pearson Company
                            One Riverway, Suite 1000
                              Houston, Texas 77056

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and
Board of Directors of
Omni U.S.A., Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheets of Omni U.S.A.,
Inc. and Subsidiaries as of June 30, 2004 and 2003, and the related consolidated
statements of income and comprehensive income, changes in stockholders' equity
and cash flows for the years then ended. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Omni U.S.A., Inc.
and Subsidiaries at June 30, 2004 and 2003, and the results of their operations
and their cash flows for the years then ended, in conformity with generally
accepted accounting principles in the United States.

/s/                               HARPER & PEARSON COMPANY

Houston, Texas
September 23, 2004

                                       15
<PAGE>


                       OMNI U.S.A., INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             JUNE 30, 2004 AND 2003

<TABLE>
<CAPTION>
                                                                              2004            2003
                                                                         ------------    ------------
<S>                                                                      <C>             <C>
                                 ASSETS
CURRENT ASSETS
   Cash                                                                  $    533,022    $    709,230
   Accounts receivable, trade, net                                          2,042,392       3,891,727
   Accounts receivable, related parties                                        24,740          29,167
   Inventories, net                                                         4,013,221       4,014,108
   Notes receivable, trade                                                          -          63,810
   Prepaid expenses                                                           200,041         224,049
                                                                         ------------    ------------

               TOTAL CURRENT ASSETS                                         6,813,416       8,932,091

PROPERTY AND EQUIPMENT, net of
   accumulated depreciation and amortization                                1,522,830       1,706,669
OTHER ASSETS - primarily intangible assets, net                               329,756         330,248
                                                                         ------------    ------------

TOTAL ASSETS                                                             $  8,666,002    $ 10,969,008
                                                                         ============    ============

                  LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
   Accounts payable                                                      $  2,430,087    $  2,805,776
   Revolving line of credit                                                   347,040       2,740,030
   Accrued expenses                                                           256,031         458,244
   Current portion of notes payable                                         1,344,134         819,604
                                                                         ------------    ------------

               TOTAL CURRENT LIABILITIES                                    4,377,292       6,823,654
                                                                         ------------    ------------

NOTES PAYABLE                                                               1,014,436       1,161,953
                                                                         ------------    ------------
STOCKHOLDERS' EQUITY
   Common stock (1,227,079 shares issued and 1,171,812                          6,129           6,129
   shares outstanding)
   Additional paid-in capital                                               5,372,815       5,372,815
   Treasury stock (55,267 shares)                                            (100,071)       (100,071)
   Retained deficit                                                        (2,109,416)     (2,391,717)
   Foreign currency translation adjustment                                    104,817          96,245
                                                                         ------------    ------------

               TOTAL STOCKHOLDERS' EQUITY                                   3,274,274       2,983,401
                                                                         ------------    ------------

TOTAL LIABILITIES & STOCKHOLDERS'  EQUITY                                $  8,666,002    $ 10,969,008
                                                                         ============    ============
</TABLE>

See accompanying notes.

                                       16
<PAGE>

                       OMNI U.S.A., INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                   FOR THE YEARS ENDED JUNE 30, 2004 AND 2003

<TABLE>
<CAPTION>
                                                             2004            2003
                                                         ------------    ------------
<S>                                                      <C>             <C>
NET SALES                                                $ 19,151,939    $ 19,963,387

COST OF SALES                                             (14,615,846)    (15,331,020)
                                                         ------------    ------------

      Gross Profit                                          4,536,093       4,632,367

OPERATING EXPENSES
   Selling, general and administrative                     (3,821,650)     (3,981,376)
                                                         ------------    ------------

      Operating income                                        714,443         650,991

OTHER INCOME (EXPENSE)
   Commission income, net                                     (22,424)          9,086
   Interest expense                                          (438,616)       (420,027)
   Other, net                                                  28,898         164,496
                                                         ------------    ------------

INCOME BEFORE INCOME TAX EXPENSE                              282,301         404,546

INCOME TAX EXPENSE                                                  -          40,393

NET INCOME                                                    282,301         364,153

GAIN (LOSS) ON FOREIGN CURRENCY
  TRANSLATION ADJUSTMENT                                        8,572             (75)
                                                         ------------    ------------

COMPREHENSIVE INCOME                                     $    290,873    $    364,078
                                                         ============    ============

BASIC INCOME PER SHARE                                   $       0.24    $       0.31
                                                         ============    ============

DILUTED INCOME PER SHARE                                 $       0.24    $       0.31
                                                         ============    ============
</TABLE>

See accompanying notes.

                                       17
<PAGE>

                       OMNI U.S.A., INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                   FOR THE YEARS ENDED JUNE 30, 2004 AND 2003

<TABLE>
<CAPTION>
                                         Common Stock
                                     ---------------------
                                        Number                 Additional                                 Foreign
                                      of Shares                 Paid-In      Treasury      Retained       Currency
                                     Outstanding    Amount      Capital        Stock        Deficit      Adjustment      Total
                                     -----------    ------      -------        -----        -------      ----------      -----
<S>                                  <C>           <C>        <C>            <C>         <C>             <C>          <C>
Balance, June 30, 2002                1,207,912    $ 6,129    $ 5,372,815    $ (57,141)  $ (2,755,870)   $  96,320    $ 2,662,253

Number of Shares Repurchased            (36,100)                               (42,930)                                   (42,930)

Net Income (Loss)                                                                             364,153                     364,153

Unrealized loss on foreign
currency translation adjustment                                                                                (75)           (75)
                                      ---------    -------    -----------   ----------   ------------    ---------    -----------

Balance, June 30, 2003                1,171,812      6,129      5,372,815     (100,071)    (2,391,717)      96,245      2,983,401

Number of Shares Repurchased

Net Income (Loss)                                                                             282,301                     282,301

Unrealized gain on foreign
currency translation adjustment                                                                              8,572          8,572
                                      ---------    -------    -----------   ----------   ------------    ---------    -----------

Balance, June 30, 2004                1,171,812    $ 6,129    $ 5,372,815   $ (100,071)  $ (2,109,416)   $ 104,817    $ 3,274,274
                                      =========    =======    ===========   ==========   ============    =========    ===========
</TABLE>

See accompanying notes.

                                       18
<PAGE>

                       OMNI U.S.A., INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                   FOR THE YEARS ENDED JUNE 30, 2004 AND 2003

<TABLE>
<CAPTION>
                                                              2004            2003
                                                              ----            ----
<S>                                                      <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net Income                                             $    282,301    $    364,153
                                                         ------------    ------------
  Adjustments to reconcile net income to net cash
    provided by operating activities:
        Depreciation and amortization                         344,980         363,605
        Deferred tax expense                                        -          40,393
        Loss on disposal of assets                                  -           4,542
        Changes in operating assets and liabilities:
              Accounts and notes receivable                 1,917,572        (427,101)
              Inventories                                         887         154,418
              Prepaid expenses                                 24,008        (109,137)
              Accounts payable and accrued expenses          (577,904)        511,955
              Other assets                                    (10,509)              -
                                                         ------------    ------------

                Total adjustments                           1,699,035         538,675
                                                         ------------    ------------

                Net cash provided by operating
                  activities                                1,981,336         902,828
                                                         ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property and equipment                         (150,160)       (224,320)
  Acquisition of intangible and other assets                        -        (131,472)
                                                         ------------    ------------

                Net cash used by investing activities        (150,160)       (355,792)
                                                         ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from borrowings on lines of credit              12,818,577      14,410,218
  Payments on line of credit                              (15,211,546)    (14,520,458)
  Purchase of Treasury Stock                                        -         (42,930)
  Payments on notes payable                                   377,013        (506,105)
                                                         ------------    ------------

                Net cash used by financing
                  activities                               (2,015,956)       (659,275)
                                                         ------------    ------------

Gain (Loss) on foreign currency translation adjustment          8,572             (75)
                                                         ------------    ------------

NET DECREASE IN CASH                                         (176,208)       (112,314)

CASH AT BEGINNING OF PERIOD                                   709,230         821,544
                                                         ------------    ------------

CASH AT END OF PERIOD                                    $    533,022    $    709,230
                                                         ============    ============
</TABLE>

See accompanying notes.

                                       19

<PAGE>

NOTE 1 BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      Principles of Consolidation - Omni U.S.A., Inc. (the Company) is
      incorporated in the state of Nevada. The Company's consolidated financial
      statements include the accounts of the Company and its wholly-owned
      subsidiaries Omni U.S.A., Inc. (a Washington Company), Omni Resources,
      Ltd. (a Hong Kong Corporation), Butler Products Corporation (a Kentucky
      Corporation) and Omni Gear do Brazil (a Brazilian Company). The financial
      statements of Omni Resources, Ltd. include the activity of its
      wholly-owned subsidiary, Shanghai Omni Gear Co., Ltd. located in Shanghai,
      China. All material inter-company transactions and balances have been
      eliminated in consolidation.

      Organization and Business - The Company designs, develops, manufactures
      and distributes power transmission components and trailer and implement
      components, used primarily for agricultural, material handling, mobile
      off-highway and industrial purposes, to original equipment manufacturers
      and distributors worldwide. The Company's manufacturing and distribution
      system involves locating qualified domestic or foreign manufacturers of
      products, (in the case of contract manufacturing) contracting with such
      manufacturers, and distributing to an ultimate third party customer. The
      Company also self-produces products using both domestic and foreign
      components. Since 1986, the Company's power transmission products have
      been manufactured primarily in China and approximately 70% of the
      Company's towing products are manufactured in the United States. In 2002,
      the Company formed Omni Gear do Brazil to distribute its products in
      Brazil and South America. Currently, its operations have been minimal and
      limited to sales to primarily one customer.

      Estimates - The preparation of financial statements in conformity with
      generally accepted accounting principles 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.

      Revenue Recognition - The Company adopted The Securities and Exchange
      Commission Staff Accounting Bulletin (SAB) 101 in the fourth quarter of
      the fiscal year ended June 30, 2001 and the Company's revenue recognition
      policies are in compliance with SAB 101. The Company's acceptance
      provisions, as some products are manufactured to customer specifications,
      are that customers must approve engineered drawings in advance, place a
      firm purchase order with the Company for manufacture of the products and
      initially approve a representative sample prior to manufacture. Costs of
      shipping and handling for the Company are generally accounted for as a
      component of cost of sales with revenues recorded gross. The Company
      recognizes revenues upon shipment to the customer.

      Warranties - The Company's policy for warranties stipulates that Omni
      Gear's products and Butler Products' products are warranted to be free of
      defects in material and workmanship and to meet Omni Gear's and Butler
      Products' specifications at the time of sale. The Company accounts for
      warranties by accruing a liability for warranty provision based on the
      Company's historical analysis of warranty costs. To date, however, actual
      return rates have been very low and incremental costs associated with
      those returns have been historically immaterial to the Company. The
      Company has a policy for sales returns, whereby the customer may apply for
      and be granted the right to return product for warranty consideration.
      Once returned, the product is inspected for warranty qualification and, if
      granted, warranty work is performed and the product generally returned to
      the customer.

                                       20

<PAGE>

NOTE 1 BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

      Concentration of Credit Risk - Financial instruments which potentially
      subject the Company to concentrations of credit risk consist principally
      of trade receivables and cash. The Company places its cash with high
      credit quality financial institutions. Cash in financial institutions
      located abroad totaled $436,952 and $560,493 in 2004 and 2003,
      respectively.

      Trade accounts receivable consist of receivables from both domestic and
      foreign customers in various industries and geographic regions worldwide,
      with more than one half of consolidated sales being to customers in the
      Southern and Central United States. Generally, no collateral or other
      security is required to support customer receivables. An allowance for
      doubtful accounts is established as needed based upon factors surrounding
      the credit risk of specific customers, historical trends, and other
      information. Sales of receivables without recourse under the Company's
      factoring arrangement as further discussed in Note 2 are recorded as a
      sales of assets.

      As of June 30, 2004, one customer accounted for 15% of consolidated
      receivables. As of June 30, 2003 one customer accounted for 28% of
      consolidated receivables.

      Notes receivable result from sales made with extended credit terms and are
      payable in monthly installments and carry interest.

      The Company has inventory located in China of approximately $985,000 and
      $827,846 at June 30, 2004 and 2003, respectively and in Brazil of
      approximately $146,000 and $126,000 at June 30, 2004 and 2003,
      respectively.

      Inventories - Inventories are stated at the lower of cost or market using
      the weighted average cost for inventories on hand and the specific
      identification method for any other inventory. The Company records
      inventory and any related obligation at the time title to the goods passes
      to the Company based on the specific terms of the transaction.

      Property, Equipment, Depreciation and Amortization - Property and
      equipment are stated at cost. Depreciation and amortization are computed
      over the estimated useful lives of the assets using the straight-line
      method for financial reporting purposes as follows:

<TABLE>
<CAPTION>
                                                          Estimated useful
                                                            lives (years)
                                                            -------------
<S>                                                       <C>
Warehouse, manufacturing, and office equipment                 3 to 10
Leasehold improvements                                         5 to 10
Tooling costs                                                  5 to 10
</TABLE>

      The costs of repairs and maintenance are charged to operations when
      incurred. Major renewals or improvements are capitalized. When properties
      are sold or retired, the cost and related accumulated depreciation and
      amortization are removed from the accounts and any resulting gain or loss
      is included in the results of operations.

                                       21
<PAGE>

NOTE 1 BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

      Intangible Assets and Organizational Costs - Intangible assets consist of
      goodwill from the Butler Products acquisition, engineering plans, designs,
      trademarks and patents. Amortization of non-goodwill intangibles is
      provided on a straight-line basis over five to fifteen year periods. The
      Company adopted SFAS No. 142 effective July 1, 2001. At June 30, 2004 and
      2003, the Company had $168,000 in intangible goodwill is no longer being
      amortized as a result of this statement. Management believes that there is
      no impairment to goodwill at June 30, 2004 and 2003.

      Foreign Currency Translation - There are significant operations in
      Mainland China and some operations in Brazil; however, the functional
      exchange rate for those operations is the U.S. dollar. The foreign
      currency translation adjustment primarily arises from the translation of
      amounts from operations in Hong Kong in which the functional currency is
      that of the foreign location. Income and expense amounts are translated at
      the average rates of exchange for the periods. These translation
      adjustments are reported separately as a component of stockholders'
      equity. Current year changes are included in comprehensive income.

      Earnings Per Share - Basic earnings per share (EPS) is computed by
      dividing consolidated net income available to common shareholders by the
      weighted-average number of common shares outstanding for the year. Diluted
      EPS reflects the potential dilution that could occur if dilutive
      securities and other contracts to issue common stock were exercised or
      converted into common stock or resulted in the issuance of common stock
      that then shared in the consolidated net income of the Company.

      Fair Value of Financial Instruments - The fair values of financial
      instruments approximate their reported carrying amounts at June 30, 2004
      and 2003 due to their relative short lives for current assets and
      liabilities and long-term liabilities are at interest rates comparable to
      current market rates. As of June 30, 2004 and 2003, the Company does not
      have any derivatives and has experienced no impact from adoption of SFAS
      No. 133.

      Other Income - Other income consists of income received from sales of
      scrap inventory and gains and losses on the sales of assets. Value added
      tax rebates classified as other income at June 30, 2003 amounting to
      approximately $199,000 has been reclassified to cost of goods sold to
      conform to the presentation at June 30, 2004.

                                       22
<PAGE>

NOTE 1 BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

      In December 2002, the FASB issued Statement of Financial Accounting
      Standards No. 148 (SFAS 148), Accounting for Stock-Based Compensation -
      Transition and Disclosure, an amendment of FASB Statement No. 123, to
      provide alternative methods of transition for a voluntary change to the
      fair value based method of accounting for stock-based employee
      compensation. In addition, this Statement amends the disclosure
      requirements of FASB Statement No. 123 to require prominent disclosures in
      both annual and interim financial statements about the method of
      accounting for stock-based employee compensation and the effect of the
      method used on reported results. The Company anticipates no material
      impact on the consolidated financials from adoption of SFAS 148.

      In May 2003, the Financial Accounting Standards Board (FASB) issued
      Statement of Financial Accounting Standards No. 150, "Accounting for
      Certain Financial Instruments with Characteristics of both Liabilities and
      Equity" (SFAS 150). This Statement prescribes how an issuer classifies and
      measures certain financial instruments. Financial instruments within the
      scope of SFAS 150 are required to be classified as liabilities (or assets
      in some circumstances). Many of those instruments were previously
      classified as equity. SFAS 150 is effective for financial instruments
      entered into or modified after May 31, 2003, and otherwise is effective
      for the Company July 1, 2003. There was no impact to the Company from
      adopting SFAS 150.

NOTE 2 ACCOUNTS RECEIVABLE

      Accounts receivable at June 30 consisted of the following:

<TABLE>
<CAPTION>
                                                   2004              2003
                                                   ----              ----
<S>                                             <C>                <C>
Accounts receivable, trade                      $2,167,540         $4,127,126
Allowance for doubtful accounts                   (125,148)          (235,399)
                                                ----------         ----------
                                                $2,042,392         $3,891,727
                                                ==========         ==========
</TABLE>

      In May 2004, the Company entered into a factoring agreement with a
      financing company which temporarily replaced the Company's revolving line
      of credit. Under the factoring agreement, the financing company purchases
      qualifying accounts receivable without recourse subject to a residual
      payment of 15% of the receivable balance less factoring fees. The Company
      accounts for the factoring of the receivables as a sale of assets in
      accordance with Statement of Financial Accounting Standards No. 140
      "Accounting for Transfers and Servicing of Financial Assets and
      Extinguishments of Liabilities. Total receivables sold under the factoring
      agreement were $1,419,630 at June 30, 2004. Included in accounts
      receivable at June 30, 2004 are $212,944 in residual payments due to the
      Company from the financing company. Subsequent to June 30, 2004, the
      factoring arrangement was replaced with a revolving line of credit as
      further discussed in Note 18.

                                       23
<PAGE>

NOTE 3 INVENTORIES

      Inventories at June 30 consisted of the following:

<TABLE>
<CAPTION>
                                     2004           2003
                                     ----           ----
<S>                              <C>            <C>
Raw materials                    $   299,755    $   225,106
Work in process                      196,438        225,634
Finished Goods                     3,646,008      3,684,368
Reserve for obsolete inventory      (128,980)      (121,000)
                                 -----------    -----------
                                 $ 4,013,221    $ 4,014,108
                                 ===========    ===========
</TABLE>

NOTE 4 PROPERTY AND EQUIPMENT

      Property and equipment at June 30 consisted of the following:

<TABLE>
<CAPTION>
                                                     2004           2003
                                                     ----           ----
<S>                                              <C>            <C>
Warehouse, manufacturing, and office equipment   $ 3,842,786    $ 3,730,611
Land, buildings, and leasehold improvements          634,209        620,669
Tooling costs                                        546,651        522,206
                                                 -----------    -----------
                                                   5,023,646      4,873,486
Accumulated depreciation and amortization         (3,500,816)    (3,166,817)
                                                 -----------    -----------
                                                 $ 1,522,830    $ 1,706,669
                                                 ===========    ===========
</TABLE>

NOTE 5 OTHER ASSETS

      Other assets at June 30 consisted of the following:

<TABLE>
<CAPTION>
                                            2004         2003
                                            ----         ----
<S>                                      <C>          <C>
Intangible assets                        $ 439,412    $ 931,113
Cash surrender value of life insurance           -       12,419
                                         ---------    ---------
                                         $ 439,412    $ 943,532
Accumulated amortization                  (124,671)    (613,284)
                                         ---------    ---------
                                         $ 314,741    $ 330,248
                                         =========    =========
</TABLE>

                                       24
<PAGE>

NOTE 6 REVOLVING LINES OF CREDIT

      The Company also maintains a line of credit with a foreign financial
      institution, which provides for maximum borrowings of $1,000,000, based on
      the creditworthiness of the Company's customers serviced by the Company's
      foreign subsidiary. Outstanding borrowings amounted to $347,040 and
      $224,569 at June 30, 2004 and June 30, 2003, respectively. The line of
      credit matures November 30, 2004 and bears interest at 5.625%.

      The Company previously had a revolving line of credit with a financing
      company which provided for maximum borrowings of $4,000,000. The line of
      credit bore interest at prime plus 1-2% dependent upon certain financial
      ratios, required maintenance of certain levels of income and tangible net
      worth and was secured by essentially all of the U.S. assets of the
      Company. The line of credit matured in June 2003 and was not in compliance
      with its minimum financial reporting covenants at June 30, 2003. The
      Company continued to borrow under the line of credit under verbal
      extensions and waivers from the financing company until the financing
      company halted borrowings in May 2004. The line of credit was repaid and
      replaced with a factoring facility and inventory term loan with another
      financing company as discussed in Notes 2 and 7. Borrowings under the line
      of credit at June 30, 2004 and 2003 amounted to $0 and $2,515,461,
      respectively.

      On August 4, 2004, the Company entered into a revolving line of credit
      agreement with a new financing company with maximum borrowings up to
      $5,000,000, dependent upon qualifying trade accounts receivable and
      inventory balances. The line of credit matures August 3, 2007, bears
      interest a prime plus 1.75% and incurs an unused line of credit fee of
      .25%. The credit line is subject to certain financial ratio and reporting
      covenants. The line of credit is secured by all of the assets of the
      Company and personal guarantees by two officers of the Company of
      $1,000,000 each. Proceeds received under the line of credit agreement were
      used to repay any amounts owed under the inventory note payable.

                                       25
<PAGE>

NOTE 7 NOTES PAYABLE

      Notes payable at June 30 consisted of the following:

<TABLE>
<CAPTION>
                                                                              2004         2003
                                                                              ----         ----
<S>                                                                       <C>          <C>
Notes payable to banks/finance companies, due in aggregate monthly
installments of $949 including interest ranging from 1.9% to 7.7%,
maturing at various dates through 2006, secured by vehicles               $   12,691   $   23,967

Notes payable to equipment manufacturer, due in aggregate monthly
installments of $198 including interest, maturing at various dates
through 2008                                                                   6,636            -

Note payable to equipment manufacturer, secured by equipment
Management has classified these balances and payments based upon
management's plan to repay the debt over a 60 month period in monthly
installments of $5,800 including interest at 8% through 2007.                178,683      230,985

Note payable to PACCAR, Inc. due in minimum monthly payments of $18,600
including principle and interest of approximately 11% commencing for a
period of 5 years in May 2002, unsecured                                     601,647      738,639

Note payable to supplier of $435,916 payable in a 10% premium paid on
all future purchases from the supplier until the balance is paid in
full.  Classification of current and long term portions are based upon
Management's best estimate of future repayments.                             347,902      435,916

Note payable to foreign third party principle due in one payment
January 27, 2006, interest at 0.54% due monthly and secured by certain
machinery and equipment of Shanghai Omni Gear                                362,443      302,050

Junior Subordinated Notes to Butler Products Corporation former owners
at 8% annual interest with variable payments based upon margins earned
on certain Butler product sales and from proceeds of any Butler assets
sold in the future, if any.  The former owners have the right to
further amend and accelerate the repayment terms if repayment of
principle is not deemed adequate by the former owners under the above
repayment plan.  Management has classified the balance as current.           181,974      250,000

Inventory note payable of $850,000 at 7% due in monthly payments of
$30,000 with the remaining balance due August 31, 2004.  The note
payable is subject to certain financial and reporting covenants and
secured by the assets of the Company.  The Company was in not in
compliance with its covenants at June 30, 2004.  The note was repaid in
August 2004 as further discussed in Note 18 with a new revolving line
of credit.                                                                   666,595            -
                                                                          ----------   ----------
                                                                           2,358,570    1,981,557
Less current portion                                                       1,344,134      819,604
                                                                          ----------   ----------
Long term portion                                                         $1,014,436   $1,161,953
                                                                          ==========   ==========
</TABLE>

                                       26
<PAGE>

NOTE 7 NOTES PAYABLE (CONTINUED)

      Future maturities of long-term debt by fiscal year are as follows:

<TABLE>
<S>                                                                          <C>
2005                                                                         $  1,344,134
2006                                                                              346,232
2007                                                                              367,114
2008                                                                              251,374
2009                                                                               49,716
                                                                             ------------
                                                                             $  2,358,570
                                                                             ============
</TABLE>

NOTE 8 COMMON STOCK

      The Company has authorized 50,000,000 shares of common stock with a par
      value of $.004995 per share. At June 30, 2004, the Company had issued
      1,227,079 shares with 1,171,812 shares outstanding and 55,267 treasury
      shares. The Company has never paid cash dividends on its Common Stock. As
      a result of net losses in the prior fiscal years, the Company has a
      cumulative retained deficit of $2,109,416 as of June 30, 2004;
      accordingly, the Company may be prohibited by legal restrictions on
      capital from paying cash dividends for the foreseeable future. In
      addition, the Company's revolving line of credit facility prohibits the
      payment of dividends.

NOTE 9 WARRANTS TO PURCHASE COMMON STOCK

      The Company has Class B Warrants that entitle the holder to purchase
      shares of common stock as follows:

<TABLE>
<CAPTION>
                                                                                             Number of
                                                                               Price per     Warrants
                                                           Expiration Date       Share        Issued
                                                           ---------------     ---------     ---------
<S>                                                        <C>                 <C>           <C>
Class B Series (PACCAR. Inc.)                              July 1st, 2009        6.00         166,667
</TABLE>

      On September 23, 1999, the Company entered into a $1,000,000 loan
      agreement with PACCAR Inc. (PACCAR). Under the terms of the loan, PACCAR
      received 166,667 warrants to purchase shares of the Company's common
      stock. The warrants may be exercised through July 2009 at $6.00 per share.
      The warrants to purchase stock may be reduced to 116,667 upon the
      occurrence of certain subsequent events.

                                       27

<PAGE>

NOTE 10 STOCK OPTION PLANS

      The Company maintains a Non-Qualified Stock Option Plan (the "NQSOP") and
      a 1996 Incentive Stock Option Plan (the "1996 ISOP"). The NQSOP covers
      200,000 shares of Common Stock and the 1996 ISOP covers 300,000 shares of
      Common Stock. The purpose of the NQSOP and 1996 ISOP, under the discretion
      of the Company's Board of Directors, is to offer eligible employees of the
      Company and its subsidiaries an opportunity to acquire or increase their
      proprietary interests in the Company and provide additional incentive to
      contribute to its performance and growth.

      The Board of Directors has reserved 500,000 shares under the Plans.

<TABLE>
<CAPTION>
                                                                                                          Weighted-
                                Total #    $12.00    $3.00   $4.875      $6.75     $3.564     $3.1875     Average
   Stock Option Summary        of Shares  Options  Options  Options     Options    Options    Options  Exercise Price
-----------------------------  ---------  -------  -------  -------     -------    -------    -------  --------------
<S>                            <C>        <C>      <C>      <C>         <C>        <C>        <C>      <C>
Options Outstanding at June
 30, 2002                       345,667   23,333   297,333   10,000      5,000     10,000          0        3.63
Options Granted                       0        0         0        0          0          0          0           0
Options Canceled                      0        0         0        0          0          0          0           0
Options Outstanding at June     345,667   23,333   297,333   10,000      5,000     10,000          0        3.63
 30, 2003
Options Granted                       0        0         0        0          0          0          0           0
Options Canceled                      0        0         0        0          0          0          0           0
Options Outstanding at June     345,667   23,333   297,333   10,000      5,000     10,000          0        3.63
 30, 2004
Exercisable at June 30, 2004    345,667   23,333   297,333   10,000      5,000     10,000          0        3.63
Exercisable at June 30, 2003    345,667   23,333   297,333   10,000      5,000     10,000          0        3.63
Available for future grant at
 June 30, 2004                  154,333
                                -------   ------   -------  -------      -----     ------         --        ----
Weighted-average remaining
contractual life in years           2.7        1       2.5        5          5        5.5          0
                                -------   ------   -------  -------      -----     ------         --        ----
</TABLE>

      SFAS No. 123 and 148, "Accounting for Stock-Based Compensation,"
      encourages, but does not require, companies to record compensation costs
      for stock-based employee compensation plans at fair value. The Company has
      chosen to continue to account for stock-based compensation using the
      intrinsic value method prescribed in Accounting Principles Board Opinion
      No. 25, "Accounting for Stock Issued to Employees," and related
      Interpretations. Accordingly, compensation costs for stock options is
      measured as the excess, if any, of the quoted market price of the
      Company's stock at the date of the grant over the amount an employee must
      pay to acquire the stock. No options were granted in the fiscal years
      ended June 30, 2004 and 2003 and there was no effect to the income
      statement under SFAS 123 and 148.

                                       28

<PAGE>

NOTE 11 EARNINGS PER SHARE

      The following sets forth the computation of basic and diluted earnings per
      share at June 30, 2004 and 2003.

<TABLE>
<CAPTION>
                                                                              2004                      2003
                                                                          -----------               -----------
<S>                                                                       <C>                       <C>
Numerator
   Net Income (loss)                                                      $   282,301               $   364,153
                                                                          ===========               ===========

Denominator
   Denominator for basic earnings per share -
    weighted average common shares outstanding                              1,171,812                 1,184,287

   Effect of dilutive securities:
        Conversion of dilutive stock options                                        -                         -
                                                                          -----------               -----------

    Denominator for dilutive earnings per share -
     adjusted weighted average shares and assumed conversion                1,171,812                 1,184,287
                                                                          ===========               ===========

Basic Earnings Per Share                                                  $      0.24               $      0.31
                                                                          ===========               ===========

Diluted Net Earnings Per Share                                            $      0.24               $      0.31
                                                                          ===========               ===========
</TABLE>

      Stock options at June 30, 2004 and 2003 are antidilutive as all exercise
      prices are currently higher than the market price.

NOTE 12 INCOME TAXES

      Income tax (expense) benefit is comprised of the following:

<TABLE>
<CAPTION>
                                                                              2004            2003
                                                                              ----        ----------
<S>                                                                           <C>         <C>
Current state                                                                    -                 -
Deferred - Current                                                               -            40,393
Deferred - Long-Term                                                             -                 -
                                                                              ----        ----------
                                                                                 -        $   40,393
                                                                              ====        ==========
</TABLE>

      Deferred income taxes result from timing differences in reporting income
      and expenses for financial statement and income tax purposes. The primary
      sources of deferred income taxes result from: (1) the use of different
      methods of depreciation for income tax and financial statement purposes,
      (2) the uniform capitalization of inventory for income tax purposes, (3)
      inventory obsolescence reserves, (4) direct write-off of bad debts for
      income tax purposes and (5) foreign losses.

                                       29

<PAGE>

NOTE 12 INCOME TAXES (continued)

            The components of the Company's deferred tax assets and liabilities
            at June 30 are as follows:

<TABLE>
<CAPTION>
                                                                           2004               2003
                                                                        ---------          ---------
<S>                                                                     <C>                <C>
Current deferred tax assets
    Accounts receivable                                                 $  43,000          $  71,000
    Inventory                                                              63,000             60,000
    Domestic net operating loss carry-forwards                            164,000            144,000
    Foreign subsidiary net operating loss carry-forwards                  517,000            528,000
                                                                        ---------          ---------
    Deferred tax assets                                                   787,000            803,000

Non-current deferred tax liabilities
    Depreciation                                                         (128,000)           (77,000)
                                                                        ---------          ---------
Net deferred income tax assets                                            659,000            726,000
Valuation allowance                                                      (659,000)          (726,000)
                                                                        ---------          ---------
Net deferred income taxes                                                       -                  -
                                                                        =========          =========
</TABLE>

            The valuation allowance decreased $67,000 and $30,107 during 2004
            and 2003, respectively due to losses. At June 30, 2004 the Company
            had approximately $482,000 of domestic net operating losses, which
            expire in 2022.

            The Company has not provided for income taxes on the undistributed
            earnings of its foreign subsidiaries because it intends to reinvest
            these earnings in the continuing operations of these subsidiaries.
            In determining the value of 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. Management
            considers the scheduled reversals of deferred tax assets and
            liabilities, projected future taxable income, if any, and the tax
            planning strategies in determining this value. Management does not
            believe it is more likely than not that the Company will realize the
            benefits of its deferred tax assets, net of existing valuation
            allowances at June 30, 2004. The cumulative amount of undistributed
            losses of its foreign subsidiaries is approximately $1,500,000 at
            June 30, 2004.

            The difference between the effective rate of income tax expense at
            June 30, 2004 and 2003 and the amounts which would be determined by
            applying the statutory U.S. income tax rate of 34% to income before
            income tax expense, are explained below according to the tax
            implications of various items of income or expense.

<TABLE>
<CAPTION>
                                                                          2004              2003
                                                                        --------         ----------
<S>                                                                     <C>              <C>
Provision for income tax benefit/(expense) at U.S. statutory rates      $(64,407)        $ (137,550)
Change in income tax benefit/(expense) resulting from:
    Non-deductible expense                                                (3,600)            (3,183)
    Utilization of NOL carry forwards previously reserved                      -             71,728
    Other                                                                  1,007             (1,495)
Change in valuation reserve                                               67,000             30,107
                                                                        --------         ----------
Income tax benefit (expense)                                                   -           ($40,393)
                                                                        ========         ==========
</TABLE>

                                       30

<PAGE>

NOTE 13 COMMITMENTS AND CONTINGENCIES

            Operating Leases - The Company leases equipment and office,
            warehouse and manufacturing space in Houston, Texas and Shanghai,
            China. The Houston lease is $8,500 per month through 2005. The
            Shanghai lease began in 1996 and has a thirty-year term at
            approximately $10,000 per month. At June 30, 2004, the future
            minimum rental payments required under operating leases were
            approximately:

<TABLE>
<S>                                                                                       <C>
2005                                                                                      $  232,824
2006                                                                                         137,717
2007                                                                                         129,217
2008                                                                                         129,217
2009                                                                                         127,457
Thereafter                                                                                 1,751,842
                                                                                          ----------
Total                                                                                     $2,508,274
                                                                                          ==========
</TABLE>

            Rent expense was approximately $257,000 and $303,400 during the
            years ended June 30, 2004 and 2003, respectively.

            Insurance Coverage - The Company is self-insured against product
            liability and completed operations. This situation, while not unique
            to the Company or its industry, may subject the Company to some
            future liability. The Company maintains in force and effect, product
            liability insurance for the trailer and implement segment, with
            coverage up to $1,000,000 per occurrence and in aggregate, as well
            as completed operations insurance held by Butler Products
            Corporation at the time of acquisition.

            Employment - Seventy-seven percent of one of the subsidiary's
            employees, (specifically, twenty-three of thirty Butler employees)
            are unionized and are covered by a collective bargaining agreement.
            The collective bargaining agreement expires June 13, 2005.

            Employee Benefits - The Company maintains a 401(k) plan, which
            covers substantially all employees. Contributions by the Company are
            discretionary. During the years ended June 30, 2004 and 2003, the
            Company made no contributions to the plan.

            Litigation - The Company continues to aggressively protect its
            trademarks. From time to time the Company files suit to enforce its
            trademark and other intellectual property. Historically, the Company
            has been successful in preventing others from using Omni's
            trademarks or trade dress or in seeking other relief.

                                       31

<PAGE>

NOTE 14 MAJOR CUSTOMERS AND SUPPLIERS

            The Company and its subsidiaries had consolidated sales in its power
            transmission component segment of $3,954,991 and $4,622,482 to one
            customer representing 21% and 22% of total consolidated sales in
            fiscal 2004 and 2003, respectively.

            Approximately 61% and 65% of the Company's inventory purchases were
            from two companies in China in 2004 and 2003, respectively.

NOTE 15 SUPPLEMENTAL CASH FLOW INFORMATION AND NONCASH INVESTING AND FINANCING
        ACTIVITIES

            The Company converted $466,000 in accounts payable into notes
            payable and acquired $33,000 in automobiles through direct financing
            in 2003.

            Due to net operating loss carryforwards, the Company was not
            required to pay any income taxes in 2004 and 2003.

            The Company paid interest of $438,616 and $401,230 during the fiscal
            years ended June 30, 2004 and 2003 respectively.

NOTE 16 SEGMENT INFORMATION

            The Company identifies its competition and business segments by the
            power transmission and trailer and implement components.

            Selected financial information by business segment with respect to
            these activities for the years ended June 30 is as follows:

<TABLE>
<CAPTION>
                                                                             2004                      2003
                                                                       --------------             --------------
<S>                                                                    <C>                        <C>
Net Sales
  Power Transmission Components                                        $   15,961,652             $   16,530,045
  Trailer and Implement Components                                          3,190,287                  3,433,342
                                                                       --------------             --------------
  Total Omni U.S.A., Inc.                                              $   19,151,939             $   19,963,387
                                                                       ==============             ==============

Income from Operations
  Power Transmission Components                                        $      901,049             $    1,029,695
  Trailer and Implement Components                                           (186,606)                  (378,704)
                                                                       --------------             --------------
  Total Omni U.S.A., Inc.                                              $      714,443             $      650,991
                                                                       ==============             ==============

Net Income (Loss)
  Power Transmission Components                                        $      571,980             $      872,744
  Trailer and Implement Components                                           (289,679)                  (508,591)
                                                                       --------------             --------------
  Total Omni U.S.A., Inc.                                              $      282,301             $      364,153
                                                                       ==============             ==============
</TABLE>

                                       32
<PAGE>

NOTE 16 SEGMENT INFORMATION (continued)

<TABLE>
<S>                                                <C>               <C>
Identifiable Assets
  Power Transmission Components                    $ 5,819,116       $ 8,359,439
  Trailer and Implement Components                   2,846,886         2,609,569
                                                   -----------       -----------
  Total Omni U.S.A., Inc.                          $ 8,666,002       $10,969,008
                                                   ===========       ===========

Revenues
  Domestic Customers                               $16,823,270       $17,989,668
  Foreign Customers                                  2,328,669         1,973,719
                                                   -----------       -----------
  Total Revenues                                   $19,151,939       $19,963,387
                                                   ===========       ===========

Property and Equipment (net)
  Domestic                                         $   469,990       $   533,084
  Foreign                                            1,052,840         1,173,585
                                                   -----------       -----------
  Total Property and Equipment                     $ 1,522,830       $ 1,706,669
                                                   ===========       ===========

Depreciation and amortization
  Power Transmission Components                    $   237,070       $   245,053
  Trailer and Implement Components                     107,910           118,552
                                                   -----------       -----------
  Total Omni U.S.A., Inc.                          $   344,980       $   363,605
                                                   ===========       ===========

Interest Expense
  Power Transmission Components                    $   333,370       $   292,983
  Trailer and Implement Components                     105,246           127,044
                                                   -----------       -----------
  Total Omni U.S.A., Inc.                          $   438,616       $   420,027
                                                   ===========       ===========
</TABLE>

                                       33
<PAGE>

NOTE 17 RESTRUCTURING

      In October 2003, the Company committed to a plan to consolidate the
      operations of its Trailer and Implement Components business segment into
      one manufacturing facility. The Madill, Oklahoma facility was closed and
      its employees terminated or relocated to Butler, Kentucky. The inventory,
      machinery and equipment were moved to Butler, Kentucky to fill excess
      capacity and space. The Company believes that the consolidation of
      manufacturing operations will reduce costs with little or no adverse
      impact to future sales levels.

NOTE 18 SUBSEQUENT EVENTS

      On August 4, 2004, the Company entered into a revolving line of credit
      agreement with a new financing company with maximum borrowings up to $5
      million dependent upon qualifying trade accounts receivable and inventory
      balances. The line of credit matures August 3, 2007, bears interest a
      prime plus 1.75% and incurs an unused line of credit fee of .25%. The
      credit line is subject to certain financial ratio and reporting covenants.
      The line of credit is secured by all of the assets of the Company and
      personal guarantees by two officers of the Company of $1,000,000 each.
      Proceeds received under the line of credit agreement were used to repay
      any amounts owed under the inventory note payable.

NOTE 19 FOURTH QUARTER ADJUSTMENTS (UNAUDITED)

      During the fourth quarter, the Company recorded adjustments of
      approximately $80,000 to write down inventory in its Trailer Implement
      Components business segment as a result of its consolidation of facilities
      to Butler, Kentucky during the second quarter of fiscal year 2004, the
      adjustments were the result of determinations that certain transferred
      inventory from discontinued operations retained no value.

                                       34
<PAGE>

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

        None.

                                    PART III

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

      The directors, executive officers, promoters and control persons of the
Company are set forth below. All directors hold office for a term of one year or
until their successors are duly elected and qualified. Each executive officer of
the Company is appointed by the Board of Directors at each annual meeting and
serves until a successor is duly elected and qualified.

<TABLE>
<CAPTION>
     Name                               Age                                  Position
     ----                               ---                                  --------
<S>                                     <C>                 <C>
Jeffrey K. Daniel                       43                  President, Chief Executive Officer and Director

Craig L. Daniel                         44                  Vice President-Manufacturing and Director

Kevin Guan                              46                  Director

Didi Duan                               57                  Director
</TABLE>

Jeffrey K. Daniel has been an employee of Omni since 1985 and is currently the
Chief Executive Officer and President of the Company. He has a Bachelors degree
in Business Administration from the University of Colorado. He was Vice
President from 1987 until May 1994, when he was elected Chief Executive Officer
and President. Jeffrey K. Daniel is the brother of Craig L. Daniel. Jeffrey K.
Daniel has served as a director of the Company since January 1988.

Craig L. Daniel has been a full time employee of Omni since April, 1989, and is
currently Vice President-Manufacturing for the Company, Managing Director of
Omni Resources, Ltd. and General Manager of Shanghai Omni Gear Co., Ltd. Craig
L. Daniel is the brother of Jeffrey K. Daniel. Craig L. Daniel has served as a
director of the Company since December 1993.

Kevin Guan is currently the Managing Director of SIIC Real Estate Co., a
commercial real estate developer of projects in Hong Kong and China, (a
subsidiary of Shanghai Industrial Investment Corp.). From February 1993 through
February 1995, Mr. Guan was the General Manager, Shanghai Wai Gao Qiao
Development Corp, in the PuDong development zone of Shanghai. Mr. Guan is a
graduate of Shanghai Jiao Tong University, and received his MBA from Shanghai
University.

Didi Duan is currently the Chief Financial Officer and Director of Jiao Tong
University's Ang Li Science and Technology Co., Ltd., a specialty pharmaceutical
processor in the Chinese and East Asian markets. From January 1986 to February
1997, Ms. Duan was the Chief Financial Officer of Dong Feng Automotive Truck
manufacturing Division, vertically manufacturing 15-40 ton trucks for the
Chinese market. Ms. Duan graduated from Wuhan University in Hubei, and is an
accountant in Shanghai, under the accounting rules in China.

                                       35
<PAGE>

ITEM 10. EXECUTIVE COMPENSATION

      The following table sets forth certain information regarding compensation
paid to the Company's executive officers in each of the three most recent fiscal
years:

<TABLE>
<CAPTION>
                                          Annual Compensation                    Long Term Compensation
                                   ---------------------------------    ----------------------------------------
                                                                                 Awards                  Payouts
                                                                        ----------------------------------------
                                                                        Restricted    Securities
    Name and                                            Other Annual       Stock      Underlying                     All Other
    Position             Year       Salary      Bonus   Compensation      Awards     Options/SARs        Payouts   Compensation
-------------------------------------------------------------------------------------------------------------------------------
<S>                      <C>       <C>          <C>     <C>             <C>          <C>                 <C>       <C>
Jeffrey K. Daniel
President & CEO          2002      $ 115,000       -           -             -            -                 -            -
                         2003        110,000       -           -             -            -                 -            -
                         2004        110,000       -           -             -            -                 -            -

Craig L. Daniel
Vice President-          2002         85,000       -           -             -            -                 -            -
Manufacturing            2003         85,000       -           -             -            -                 -            -
                         2004         85,000       -           -             -            -                 -            -
</TABLE>

No other executive officer's salary or bonus exceeded $100,000 for the three
most recent fiscal years ended June 30, 2004.

---------------------------

      None of the executive officers are employed by the Company pursuant to any
employment contract or other agreement, and there are no arrangements or
understandings for the payment of bonuses or other payments upon a termination
of employment, or otherwise.

                                       36
<PAGE>

      STOCK OPTION PLANS AND STOCK OPTIONS

      The Company maintains a 1994 Non-Qualified Stock Option Plan (the "1994
NQSOP") and a 1996 Incentive Stock Option Plan (the "1996 ISOP"). The NQSOP
covers 200,000 shares of Common Stock and the 1996 ISOP covers 300,000 shares of
Common Stock. The purpose of the NQSOP and 1996 ISOP, under the discretion of
the Company's Board of Directors, is to offer eligible employees of the Company
and its subsidiaries an opportunity to acquire or increase their proprietary
interests in the Company and provide additional incentive to contribute to its
performance and growth.

      On June 6, 1997, the Board, upon recommendation from the Compensation
Committee, repriced all options granted and existing to current Company
employees under the 1996 ISOP and NQSOP from $12.00 per share to $3.00 per
share. The repriced options vest 50% twelve (12) months from date of grant and
50% twenty-four (24) months from date of grant.

      On June 6, 1997, the Board, upon recommendation of the Compensation
Committee, granted options to purchase 45,333 shares of Common Stock at $3.00
per share to each Jeffrey K. Daniel and Craig L Daniel, and granted options to
purchase 22,667 shares of Common Stock at $3.00 per share to Michael A. Zahorik,
all such options to vest three (3) years from date of grant.

      On January 25, 1999, the Board, under the NQSOP, granted 3,333 options to
purchase Company Common Stock at $4.875 per share to James L. Davis, John F.
Lillicrop, and W. Wayne Patterson. All director options were immediately vested.

      On January 3, 2000, the Board, under the NQSOP, granted 3,333 options to
purchase Company Common Stock at $3.564 per share to James L. Davis, John F.
Lillicrop, and W. Wayne Patterson. All director options were immediately vested.

      On March 8, 1999, under the 1996 ISOP, David M. Sallean was granted
options to purchase 10,000 shares of Common Stock at an exercise price of
$3.564, vesting 100% three (3) years from date of grant.

      On February 24, 2000, under the 1996 ISOP, David M. Sallean was granted
options to purchase 10,000 shares of Common Stock at an exercise price of
$3.1875, vesting 100% three (3) years from date of grant.

      Effective October 1, 2001, Michael A. Zahorik was terminated as an
employee of Omni USA, Inc. By operation of the ISOP Agreement, Mr. Zahorik's
options were not exercised, and accordingly all 46,000 options were cancelled.

      Effective October 24, 2001, David M. Sallean was terminated as an employee
of Omni USA, Inc. By operation of the ISOP Agreement, Mr. Sallean's options were
not exercised, and accordingly all 20,000 options were cancelled.

                                       37
<PAGE>

      The following table provides repricing information for options held by the
Company's five most highly compensated executive officers. The repricing was
implemented in 1997 on the recommendation of the Compensation Committee to
conform the options to prevailing market prices and provide an incentive for
which the options were designed.

                         Ten-Year Options/SAR Repricings

<TABLE>
<CAPTION>
                            Number of                                                Length
                            Securities       Market          Exercise              of Original
                            Underlying   Price of Stock  Price of Stock            Option Term
                           Options/SARs    at Time of      at Time of      New     Remaining at
                           Repriced or    Repricing or    Repricing or   Exercise    Date of
      Name         Date      Amended       Amendment       Amendment      Price     Repricing
-----------------  ------  ------------  --------------  --------------  --------  ------------
<S>                <C>     <C>           <C>             <C>             <C>       <C>
Jeffrey K. Daniel  6/6/97     53,334         $ 2.25         $  12.00      $ 3.00     9 years
Craig L. Daniel    6/6/97     53,334         $ 2.25         $  12.00      $ 3.00     9 years
</TABLE>

                                       38
<PAGE>

      Under the 1996 ISOP, options for 318,334 shares had been granted as of
June 30, 20042003. Under the 1994 NQSOP, options for 93,333 shares had been
granted as of June 30, 2004. The following table shows how the 1996 ISOP options
are distributed to groups within the Company based on the dollar value of
exercisable options in effect during fiscal year 2004 based on the closing price
of Common Stock at June 30, 2004 of :

<TABLE>
<CAPTION>
                                                        1994 NQSOP and 1996 ISOP
                                      ---------------------------------------------------------
                                                                         Total Number of Shares
        Name and Position             Dollar Value / Shares Exercisable  Represented by Options
        -----------------             ---------------------------------  ----------------------
<S>                                   <C>                                <C>
Jeffrey K. Daniel                                 $ 0/98,667                     98,667
   President and CEO

Craig L. Daniel                                   $ 0/98,667                     98,667
   Vice President-Manufacturing

Executive Officer Group                           $0/197,334                    197,334

Non-Executive Officer Employee Group              $ 0/71,666                     71,666

Total                                             $0/269,000                    269,000
</TABLE>

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

<TABLE>
<CAPTION>
                                                                               Value of Unexercised
                                                  Number of Unexercised        in-the-money Options/
                   Shares Acquired    Value      Options/SARs at FY-End         SARs at FY-End (2)
      Name           on Exercise    Realized  (1) Exercisable/Unexercisable  Exercisable/Unexercisable
      ----         ---------------  --------  -----------------------------  -------------------------
<S>                <C>              <C>       <C>                            <C>
Jeffrey K. Daniel
President & CEO          N/A           N/A                98,667                 $ 0
                                                        --------                 ---
                                                        98,667/0                            $0/$0
Craig L. Daniel
Vice President-
   Manufacturing         N/A           N/A                98,667                 $ 0
                                                        --------                 ---
                                                        98,667/0                            $0/$0
</TABLE>

----------------
N/A Not applicable. No options were exercised during the fiscal year ended June
30, 2004.

(1) Indicates number of options exercisable and unexercisable as of June 30,
2004.

(2) Based upon closing price of Common stock at June 30, 2004 of $1.01.

      OTHER COMPENSATION

      The Company has paid no bonuses to its executive officers. The Company has
a group medical plan which provides medical and hospital benefits and term life
insurance to its officers and employees, at no cost. Jeffrey K. Daniel and Craig
L. Daniel are not compensated as directors.

                                       39
<PAGE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

EQUITY COMPENSATION

      The following table sets forth information relating to compensation plans
under which equity securities of the Company are authorized for issuance:

<TABLE>
<CAPTION>
                                                                                               Number of securities
                                                                                              remaining available for
                               Number of securities to be     Weighted-average exercise    future issuance under equity
                                issued upon exercise of     price of outstanding options,       compensation plans
                              outstanding option, warrants       warrants and rights           (excluding securities
                                       and rights                                            reflected in column (a))
                                          (a)                            (b)                            (c)
                              ----------------------------  -----------------------------  ----------------------------
<S>                           <C>                           <C>                            <C>
Equity compensation plans               345,667                        $ 3.63                         154,333
approved by security holders
                              ----------------------------  -----------------------------  ----------------------------
Equity compensation plans
not approved by security
holders                                       -                             -                               -
                              ----------------------------  -----------------------------  ----------------------------
Total                                   345,667                        $ 3.63                         154,333
                              ----------------------------  -----------------------------  ----------------------------
</TABLE>

CAPITALIZATION

      The Company's currently authorized equity securities are as follows: (i)
50,000,000 shares of Common Stock, par value $.004995 per share (see Note 2),
(ii) 454,258 Class B Common Stock Purchase Warrants ("Class B Warrants"). As of
September 30, 2004, the Company had outstanding 1,227,079 shares of Common
Stock, and Class B Warrants to purchase 166,667 shares of Common Stock.

      Class B Warrants. There are 166,667 Class B Warrants to purchase Common
Stock. The Class B Series 1 Warrants, which were exercisable by the holder
thereof at any time between 90 days after issuance and March 15, 2001, at $6.00
per share, expired on March 15, 2001. None of these Class B Warrants were
exercised. The 166,667 Class B Series 2 Warrants issued to PACCAR, Inc. may be
exercised at any time and expire July 1, 2009 (see Note 10 in the footnotes to
the financial statements).

                                       40
<PAGE>

      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following table sets forth certain information regarding the
beneficial ownership of Common Stock as of the close of business on June 30,
2004, by each person who is known to the Company to be a beneficial owner of 5%
or more of the Common Stock, by each current and Nominee director, and by all
directors and executive officers as a group.

<TABLE>
<CAPTION>
                                             Amount and Nature
                                              Of Beneficial
   Name and Address of Beneficial Owner          Ownership      Percent of Class(1)
   ------------------------------------      -----------------  -------------------
<S>                                          <C>                <C>
Edward L. Daniel (3)                              175,689              15.0%
Joan J. Daniel (3)                                175,689              15.0%
PACCAR, Inc. (6)                                  166,667              14.2%
Craig L. Daniel (2)(5)                            134,837              10.6%
Jeffrey K. Daniel (2)(4)                          116,561               9.9%
Executive Officers and Directors as a Group       251,398              21.4%
</TABLE>

----------
(1)   Based upon 1,171,812 shares of Common Stock outstanding as of June 30,
      2004.

(2)   The address for all officers is 7502 Mesa Road, Houston, Texas 77028.

(3)   Includes 125,000 shares each subject to certain conditions and limitations
      set forth in the Registration Rights Agreement (see Exhibit 10.11). The
      address for such beneficial owner is 2476 Bolsover, #626, Houston, Texas
      77005.

(4)   Includes 98,667 shares purchasable under options at $3.00 per share and
      1,255 shares held in street name and 257 shares held of record by the
      Jeffrey K. Daniel Individual Retirement Account, a self-directed IRA and
      4,129 shares purchased through the Company's 401(k) plan.

(5)   Includes 98,667 shares purchasable under options exercisable at $3.00 per
      share and 2,267 shares held of record by the Craig L. Daniel Individual
      Retirement Account, a self-directed IRA.

(6)   Includes 166,667 shares purchasable under Class B Warrants exercisable at
      $6.00 per share and expire July 1, 2009. The address of such beneficial
      owner is 777 106th Avenue NE, Bellevue, WA 98004.

                                       41
<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      None.

ITEM 13. CONTROLS AND PROCEDURES

      EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.

      Within 90 days prior to the date of this report, the Company carried out
      an evaluation, under the supervision and with the participation of its
      management, including the Chief Executive Officer and Controller, of the
      effectiveness of the design and operation of the Company's disclosure
      controls and procedures. Based on this evaluation, the Company's Chief
      Executive Officer and Controller concluded that the Company's disclosure
      controls and procedures (as defined in Rules 13a-14(c) under the
      Securities Exchange Act of 1934 (the"Exchange Act") are effective.

      CHANGES IN INTERNAL CONTROLS.

      Subsequent to the date of the most recent evaluation, there were no
      significant changes in the Company's internal controls or in other factors
      that could significantly affect the Company's disclosure controls and
      procedures, and there were no corrective actions with regard to
      significant deficiencies and material weaknesses based on such evaluation.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES


      The following table presents fees for professional audit services rendered
      by Harper & Pearson Company for the years ended June 30, 2004 and 2003.

<TABLE>
<CAPTION>
                                                          2004           2003
                                                      -----------    -----------
<S>                                                   <C>            <C>
      Audit Fees: (1)                                 $101,892.85    $ 90,652.49
      Audit-Related Fees (2)                                    0              0
      Tax Fees: (3)                                      9,300.00      17,158.00
      All Other Fees: (4)                                       0              0
                                                      -----------    -----------
      Total                                           $101,892.85    $107,810.49
                                                      ===========    ===========
</TABLE>

        (1) Audit Fees: Fees for professional services performed by Harper &
      Pearson Company for the audit of our annual financial statements and
      review of financial statements included in our 10-QSB filings, and
      services that are normally provided in connection with statutory and
      regulatory filings.

        (2) Audit-Related Fees: Harper & Pearson Company did not provide any
      audit-related services.

        (3) Tax Fees: Fees for professional services performed by Harper &
      Pearson Company with respect to tax compliance, such as preparation and
      filing of original and amended returns for us and our consolidated
      subsidiaries, refund claims, payment planning, tax audit assistance and
      tax work stemming from "Audit-Related" items.

        (4) All Other Fees: Harper & Pearson Company did not provide other
      permissible work for us that does not meet the above category
      descriptions.

PRE-APPROVAL POLICY

Our Board of Directors is responsible for approving all Audit, Audit-Related,
Tax and Other Non-Audit Services. The Board of Directors approves all auditing
services and permitted non-audit services, including all fees and terms to be
performed for us by our independent auditor at the beginning of the fiscal year.

Non-audit services are reviewed and pre-approved by project at the beginning of
the fiscal year. Any additional non-audit services contemplated by the company
after the beginning of the fiscal year are submitted to the Audit Committee
chairman for pre-approval prior to engaging the independent auditor for such
services. Such interim pre-approvals are reviewed with the full Audit Committee
at its next meeting for ratification.


                                       42
<PAGE>

                                   SIGNATURES

PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934, THE COMPANY HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF
BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.

                                                  OMNI U.S.A., INC.

                                                  BY: /s/ JEFFREY K. DANIEL
                                                      -------------------------
                                                      JEFFREY K. DANIEL
                                                      CHIEF EXECUTIVE OFFICER
                                                      AND PRESIDENT

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1934, THIS REPORT HAS BEEN
SIGNED BY THE FOLLOWING PERSONS ON BEHALF OF THE COMPANY AND IN THE CAPACITIES
AND ON THE DATE INDICATED.

<TABLE>
<CAPTION>
     SIGNATURE                            TITLE                        DATE
     ---------                            -----                        ----
<S>                        <C>                                   <C>
/S/ JEFFREY K. DANIEL      CHIEF EXECUTIVE OFFICER & PRESIDENT   SEPTEMBER 29, 2004
-----------------------
JEFFREY K. DANIEL
</TABLE>

                                       43
<PAGE>

                                INDEX OF EXHIBITS

<TABLE>
<CAPTION>
Exhibit No.                         Name of Exhibit
-----------                         ---------------
<S>          <C>
3.1          Amended and Restated Articles of the Company, as amended November
             30, 1994. Incorporated by reference from the Company's Amendment
             No. 1 to Registration Statement on Form SB-2 filed with the
             Commission on December 22, 1994.

3.2          Certificate of Designation of Series A Redeemable Convertible
             Preferred Stock. Incorporated by reference from the Company's
             Registration Statement on Form SB-2 filed with the Commission on
             October 12, 1994.

3.3          Certificate of Designation of Series B Convertible and Series C
             Convertible Preferred Stock. Incorporated by reference from the
             Company's Registration Statement on Form SB-2 filed with the
             Commission on October 12, 1994.

3.4          By-laws of the Company. Incorporated by reference from the
             Company's Registration Statement on Form SB-2 filed with the
             Commission on October 12, 1994.

4.1          Certificate of Designation of Series A Redeemable Convertible
             Preferred Stock. Incorporated by reference from the Company's
             Registration Statement on Form SB-2 filed with the Commission on
             October 12, 1994.

4.2          Certificate of Designation of Series B Convertible and Series C
             Convertible Preferred Stock. Incorporated by reference from the
             Company's Registration Statement on Form SB-2 filed with the
             Commission on October 12, 1994.

4.3          Form of Class A Common Stock Purchase Warrant. Incorporated by
             reference from the Company's Registration Statement on Form SB-2
             filed with the Commission on October 12, 1994.

4.4          Form of Class B Common Stock Purchase Warrant. Incorporated by
             reference from the Company's Registration Statement on Form SB-2
             filed with the Commission on October 12, 1994.

4.5          Equity Contract Note dated as of June 30, 1994 issued to Edward L.
             Daniel in the original principal amount of $918,304. Incorporated
             by reference from the Company's Amendment No. 1 to Registration
             Statement on Form SB-2 filed with the Commission on December 22,
             1994.

4.6          Equity Contract Note dated as of November 29, 1991 issued to Edward
             L. Daniel in the principal amount of $1,000,000. Incorporated by
             reference from the Company's Amendment No. 2 to Registration
             Statement on Form SB-2 filed with the Commission on January 30,
             1995.

4.7          Corrected Registered Equity Contract Note dated as of June 30, 1993
             issued to Edward L. Daniel in the original principal amount of
             $1,968,304.02. Incorporated by reference from the Company's
             Amendment No. 2 to Registration Statement on Form SB-2 filed with
             the Commission on January 30, 1995.

10.1         Settlement Agreement dated as of June 30, 1994 by and among the
             Company, Edward L. Daniel, Joan J. Daniel, and Daniel Development
             Corporation. Incorporated by reference from the Company's
             Registration Statement on Form SB-2 filed with the Commission on
             October 12, 1994.

10.2         1994 Qualified Stock Option Plan. Incorporated by reference from
             the Company's Registration Statement on Form SB-2 filed with the
             Commission on October 12, 1994.

10.3         1994 Non-Qualified Stock Option Plan. Incorporated by reference
             from the Company's Registration Statement on Form SB-2 filed with
             the Commission on October 12, 1994.

10.4         Stock Option Grant to Jeffrey Daniel. Incorporated by reference
             from the Company's Registration Statement on Form SB-2 filed with
             the Commission on October 12, 1994.
</TABLE>

                                       44
<PAGE>

<TABLE>
<S>          <C>
10.5         Stock Option Grant to Craig Daniel. Incorporated by reference from
             the Company's Registration Statement on Form SB-2 filed with the
             Commission on October 12, 1994.

10.6         Letter Agreement dated November 1, 1994 between the Company, Edward
             L. Daniel, and LaPlante Compressor Limited. Incorporated by
             reference from the Company's Amendment No. 1 to Registration
             Statement on Form SB-2 filed with the Commission on December 22,
             1994.

10.7         Articles of Association for Omni Gear Shanghai Ltd. dated December
             21, 1994 between the Company and Shanghai Shengang Metallurgical
             Industry Company. Incorporated by reference from the Company's
             Amendment No. 6 to Registration Statement on Form SB-2 filed with
             the Commission on April 17, 1995.

10.8         Cooperative Joint Venture Contract for the Formation and Operation
             of Shanghai Omni Gear Co., Ltd. dated December 12, 1994 between
             Omni Resources (H.G.) Limited and Shanghai Shengang Metallurgical
             Industry Company. Incorporated by reference from the Company's
             Amendment No. 6 to Registration Statement on Form SB-2 filed with
             the Commission on April 17, 1995.

10.9         Butler Products Corporation Share Purchase Agreement dated October
             1, 1996, together with exhibits. Incorporated by reference from the
             Company's Form 8-K filed on October 18, 1996 and from the Company's
             Amended Form 8-K filed on December 11, 1996.

10.10        Mutual Release and Settlement Agreement between Edward L. Daniel,
             Joan J. Daniel and their affiliates effective June 30, 1997.
             Incorporated by reference from the Company's Form 8-K filed on
             September 10, 1997.

10.11        Registration Rights Agreement between Edward L. Daniel, Joan J.
             Daniel and their affiliates effective June 30, 1997. Incorporated
             by reference from the Company's Form 8-K filed on September 10,
             1997.

10.12        Amendment to Lease Agreement dated August 1, 1997. Incorporated by
             reference from the Company's Form 8-K filed on September 10, 1997.

10.13        Assignment Agreement between Edward L. Daniel, Joan J. Daniel and
             their affiliates dated August 15, 1997. Incorporated by reference
             from the Company's Form 8-K filed on September 10, 1997.

21.1         Subsidiaries of the Registrant. Incorporated by reference from the
             Company's Registration Statement on Form SB-2 filed with the
             Commission on October 12, 1994.

31.1         Certification of Jeffrey Daniel, CEO and Chairman of the Board
             pursuant to Rule 13a-14 (a) 15d-14(a) and pursuant to Section 302
             of the Sarbanes-Oxley Act of 2002.

31.2         Certification of Craig Daniel, Vice-President pursuant to Rule
             13a-14 (a) 15d-14(a) and pursuant to Section 302 of the
             Sarbanes-Oxley Act of 2002.

32.1         Certification of Jeffrey Daniel, CEO and Chairman of the Board
             pursuant to 18 U.S.C. Section 1350, as adapted pursuant to Section
             906 of the Sarbanes-Oxley Act of 2002.

32.2         Certification of Craig Daniel, Vice-President pursuant to 18 U.S.C.
             Section 1350, as adapted pursuant to Section 906 of the
             Sarbanes-Oxley Act of 2002.

99.1         Press Release dated September 10, 1997. Incorporated by reference
             from the Company's Form 8-K filed on September 10, 1997.
</TABLE>

                                       45