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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-KSB

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended **October 31, 2006**

OR

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to ______________

Commission File Number333-122870

AEGIS INDUSTRIES, INC.(formerly Major Creations Incorporated)(Exact name of
registrant as specified in its charter)

|NEVADA                         | 98-0420577         
|------------------------------ | -------------------
|State or other jurisdiction of | (I.R.S. Employer   
|incorporation or organization  | Identification No.)

**104 South Second Street, Bellevue, Idaho, USA,
83313**(Address of principal executive offices) (Zip Code)

Registrants telephone number, including area code:
**(831) 402-4445**

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

Securities registered under Section 12(g) of the Exchange Act:

**Common Stock, $0.001 Par Value**(Title of class)

Check whether the issuer is not required to file reports
pursuant to Section 13 or 15(d) of the Exchange Act. [   ]

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

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

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes [X] No [   ]

Net revenues for its most recent fiscal year: **$nil**

State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at
which the common equity was sold, or the average bid and asked price of such
common equity, as of a specified date within the past 60 days. (See
definition of affiliate in Rule 12b-2 of the Exchange Act):

Aggregate market value of the voting common equity held by
non-affiliates computed by reference to the price at which 
  the common equity was sold as of January 29, 2007: $69,768,000

Note: If determining whether a person is an affiliate will
involve an unreasonable effort and expense, the issuer may calculate the

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aggregate market value of the common equity held by
non-affiliates on the basis of reasonable assumptions, if the assumptions
are stated.

(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST 5
YEARS)

Check whether the issuer has filed all documents and reports
required to be filed by Section 12, 13, or 15(d) of the Exchange Act after
the distribution of securities under a plan confirmed by a court. Yes
[   ]  No [   ]

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:

Number of common voting shares outstanding as of January 29,
2007: 91,800,000

DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference,
briefly describe them and identify the part of the Form 10-KSB (e.g. Part I,
Part II, etc.) into which the document is incorporated: (1) any annual
report to security holders; (2) any proxy or information statement; and (3)
any prospectus filed pursuant to Rule 424(b) or (c) of the Securities Act of
1933. The listed documents should be clearly described for identification
purposes (e.g., annual report to security holders for fiscal year ended December
24, 1990).

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

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TABLE OF CONTENTS

|                                                                                                   | Page
|-------------------------------------------------------------------------------------------------- | ----
|                                                                                                   |     
|                                                                                                   |     
|PART I                                                                                             |     
|Item 1. Description of Business                                                                    | 5   
|Item 2. Description of
      Properties                                                            | 7   
|Item 3. Legal Proceedings                                                                          | 8   
|Item 4. Submission of
      Matters to a Vote of Security Holders                                  | 8   
|                                                                                                   |     
|PART II                                                                                            |     
|Item 5. Market For Registrants Common
      Equity and Related Stockholder Matters                | 8   
|Item 6. Plan of
      Operation                                                                    | 10  
|Item 7. Financial Statements and
      Supplementary Data                                          | 13  
|Item 8. Changes in and
      Disagreements With Accountants on Accounting and Financial Disclosure | 24  
|                                                                                                   |     
|PART III                                                                                           |     
|Item 9. Directors, Executive Officers,
      Promoters and Control Persons                         | 24  
|Item 10. Executive
      Compensation                                                              | 25  
|Item 11. Security Ownership of Certain
      Beneficial Owners and Management                      | 26  
|Item 12. Certain
      Relationships and Related Transactions                                      | 27  
|Item 13. Exhibits, Financial Statement
      Schedules and Reports on Form 8 -K                    | 27  
|Item 14. Principal
      Accountant Fees and Services                                              | 27  
|Signatures                                                                                         | 28  

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FORWARD-LOOKING STATEMENTS

This Report on Form 10KSB contains forward-looking statements,
in particular in our Plan of Operations, that relate to our current expectations
and views of future events. These statements relate to events that involve known
and unknown risks, uncertainties and other factors, including those listed under
Risk Factors, which may cause our actual results, performance or achievements
to be materially different from any future results, performances or achievements
expressed or implied by the forward-looking statements.

In some cases, these forward-looking statements can be
identified by words or phrases such as may, will, expect, anticipate,
aim, estimate, intend, plan or planned believe, potential,
continue, is/are likely to, hope or other similar expressions. We have
based these forward-looking statements largely on our current expectations and
projections about future events and financial trends that we believe may affect
our financial condition, results of operations, business strategy and financial
needs.

YOU SHOULD NOT PLACE UNDUE RELIANCE ON THESE FORWARD LOOKING
STATEMENTS

The forward-looking statements made in this Report on Form
10KSB relate only to events or information as of the date on which the
statements are made in this Report on Form 10KSB. Except as required by law, we
undertake no obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events or otherwise,
after the date on which the statements are made or to reflect the occurrence of
unanticipated events. You should read this Report and the documents that we
reference in this report, including documents referenced by incorporation,
completely and with the understanding that our actual future results may be
materially different from what we expect or hope.

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PART I

ITEM 1.      DESCRIPTION OF
BUSINESS.

Aegis Industries, Inc. (formerly Major Creations Incorporated )
(Aegis or the Company) was incorporated under the laws of the state of
Nevada on February 5, 2004, and has been engaged in the business of selling new,
small diesel tractors which we have modified to have a vintage styled
appearance. In order to carry out our business we purchased name-brand compact
tractors and we then modified them to reflect the appearance of an early 20th century tractor.

This is accomplished by taking the standard, modern tractor
and, without touching the mechanical workings, making several external
modifications. We proceed to change the metal work of the tractor in order to
modify the outward appearance of the exhaust system, air intake, hood and
fenders. We also replace the standard wheels with spoke wheels. By using a
modern tractor retro-fitted to have a vintage appearance, we retain the
comfort, gauges, reliability and controls of the modern compact tractor, while
appealing to the consumer who enjoys the esthetic appearance of an antique.

During our fiscal year ended October 31, 2006, we had very
limited operations and assets.

With the appointment of new directors and officers of the
Company in November 2006, the Company no longer intends to pursue its previous
business. The Company has entered into a non-binding Letter of Intent (Letter)
with Aegis Industries, Inc., a Delaware corporation (AI Inc.), a company in
the business of designing, developing and manufacturing intermediate force
options for military, law enforcement and security forces, to acquire all of the
issued and outstanding shares of AI Inc.. The shareholders of AI Inc. are not
signatories to the Letter and, as a result, it is not binding upon them.

The Letter contemplates the Company performing a number of due
diligence procedures on the business and affairs of AI Inc., including review of
its financial statements. AI Inc. does not at this time have significant
revenues. By amending agreement dated January 25, 2007, the Letter further
contemplates that the Company and the shareholders of AI Inc. enter into a
definitive agreement on or before February 28, 2007 on similar terms and
conditions as outlined in the Letter.

The Letter calls for the issuance of up to 15,000,000 common
shares of the Company in exchange for the purchase of all of the issued and
outstanding shares of AI Inc. The intent is that the shareholders of AI Inc.
should hold, after closing, that number of common shares of the Company which is
equal to approximately 25% of the issued and outstanding shares of the Company.

The Letter provides that the definitive agreement shall state
that closing is to occur on or before February 28, 2007. It is the intention, as
stated in the Letter, that the Company should raise funds totaling $11,000,000
as follows: $2,000,000 on or before February 28, 2007; $2,000,000 on or before
May 31, 2007; $2,000,000 on or before August 30, 2007; and an additional
$5,000,000 on or before April 30, 2008.

As of the date of this Report, the Company does not have these
funds available to it at this time and cannot say that these funds will be made
available to it. Any attempt to raise these funds, through debt or equity
financing, would likely result in dilution to existing shareholders and / or the
granting of security on the assets of the Company, if any.

Pursuant to the Letter, the Company has loaned approximately
$295,300 to AI Inc.

There can be no assurance given that the Company will proceed
with any proposed acquisition of AI Inc. or that a definitive agreement will be
entered into by the Registrant and the shareholders of AI Inc. There can be no
assurance given that any terms and conditions on closing of the acquisition of
AI Inc. will be met including the condition that AI Inc.s financial history
must be auditable according to US GAAP standards so that audited, pro forma
financial statements can be filed upon closing of any proposed acquisition.

As of the date of this Report, the Company has no business
operations at present and no working capital.

The Companys future operations are dependent upon the
identification and successful completion of additional long-term or permanent
equity financing, the support of creditors and shareholders, and, ultimately,
the achievement of profitable operations. There can be no assurances that the
Company will be successful. We will continue to evaluate possible business
projects and our projected expenditures thereon relative to our available cash
and to seek additional means of financing in order to satisfy our working
capital and other cash requirements.

Principal Products and ServicesIf the
Company enters into a definitive agreement with AI Inc. and is successful in
closing an acquisition of AI Inc. the Companys business will focus on
developing intermediate-force devices and unique training programs that are
effective with acceptable Human Effects. Non-Lethal devices are of great
interest to the military and civilian sectors and are used increasingly around
the world in peacekeeping missions. The philosophy is to innovate beyond current
market products by designing devices that can be used intelligently to
facilitate the transfer throughout the force continuum and are full dimensional
in scope, ranging from a warning to full engagement and final threat resolution.
Key to the Aegis approach is simplicity, multi-functionality and compatibility
with other NLW including features for increased stand-off and effective crowd
control.

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The Market

At present, the Company has no products. In the event the
Company closes its acquisition of AI Inc., it would be required to disclose in a
Report on Form 8K with 10SB registration statement disclosure, the potential
market for AI Inc.s products.

Employees

As of the date of this Report, the Company has no employees.
Officers and directors are responsible for all planning, developing and
operational duties, and will continue to do so throughout the early stages of
growth.

Effective December 1, 2006, the Company entered into a
compensation agreement for consulting services with Dennis Mee, the Companys
CFO and a director. The compensation agreement calls for Mr. Mee to receive
US$4,000 in compensation per month plus applicable sales taxes as the party to
the agreement itself is his consulting company. There is not, as of the date of
this Report, an equity incentive, stock option or other similar arrangement in
place between Mr. Mee and the Company.

The Company does not intend to hire employees until its new
business has been successfully launched and there is sufficient and reliable
revenue streams from operations.

RISKS RELATED TO OUR BUSINESS

Investors should carefully consider the risks described
below before deciding whether to invest in our common stock. The risks described
below are not the only ones we face. Additional risks not presently known to us
or that we currently believe are immaterial may also impair our business
operations and financial results. If any of the following risks actually occurs,
our business, financial condition or results of operations could be adversely
affected. In such case, the trading price of our common stock could decline and
you could lose all or part of your investment. Our filings with the Securities
and Exchange Commission also contain forward-looking statements that involve
risks and uncertainties. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including the risks we face described below. See "Forward-Looking Statements."

Our limited operating history may not serve as an
adequate basis to judge our future prospects and results of operations.
We have a limited operating history. As such, our historical operating
results may not provide a meaningful basis for evaluating our business,
financial performance and prospects. We may not be able to achieve a similar
growth rate in future periods. Accordingly, you should not rely on our results
of operations for any prior periods as an indication of our future performance.

We have incurred losses in prior periods and may incur
losses in the future. We incurred a net loss in all prior financial
periods and we have not yet completed a financial year in our contemplated new
business. We expect our operating expenses to increase as we start our new
operations. Our ability to achieve profitability depends on our ability to
penetrate the intermediate forces products and services industry, the continued
market acceptance of our products and services, the competitiveness of products
and services as well as our ability to provide new products and services to meet
the demands of our customers.

Our business depends substantially on the continuing
efforts of our executive officers and our ability to maintain a skilled labor
force, and our business may be severely disrupted if we lose their services.Our future success depends substantially on the continued services
of our executive officer, especially Paul Evancoe, our President and chief
executive officer, and Mr. David M. Kirby, our director and finally, our CFO and
third director, Mr. Dennis Mee. We do not maintain key man life insurance on our
executive officers. If our executive officers are unable or unwilling to
continue in their present positions, we may not be able to replace them readily,
if at all. Therefore, our business may be severely disrupted, and we may incur
additional expenses to recruit and retain new officers. Our executive officer
has entered into an employment agreement with AI Inc., which contains
confidentiality and non-competition provisions. However, we cannot assure you
the extent to which any of these agreements could be enforced.

Inability of Our Officers and Directors to Devote
Sufficient Time to the Operation of the Business May Limit Our Success.Presently, the officers and directors of the Company allocate only a
portion of their time to the operation of our business. If the business requires
more time for operations than anticipated or the business develops faster than
anticipated, the officers and directors may not be able to devote sufficient
time to the operation of the business to ensure that it continues as a going
concern. Even if this lack of sufficient time of our management is not fatal to
our existence, it may result in limited growth and success of the business.

If we are unable to attract, train and retain technical
personnel, our business may be materially and adversely affected.
Our future success depends, to a significant extent, on our ability to
attract, train and retain technical personnel. Recruiting and retaining capable
personnel, particularly those with expertise in the intermediate forces
industry, are vital to our success. There is substantial competition for
qualified technical personnel, and there can be no assurance that we will be
able to attract or retain our technical personnel. If we are unable to attract
and retain qualified employees, our business may be materially and adversely
affected.

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If we grant employee share options and other share-based
compensation in the future, our net income could be adversely affected.
The Company may grant share purchase options to employees in the future although
it does not have a share based compensation plan in place as of today. If the
Company does this, it will account for options granted to our directors and
employees in accordance with Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees, or APB 25, and its related
interpretations, and according FASB Statement No. 123 (Revised 2004),
Share-Based Payments, or SFAS 123R, which requires all companies to recognize,
as an expense, the fair value of share options and other share-based
compensation to employees. As a result, if we were to grant options to directors
and employees, we would have to account for compensation costs for all share
options using a fair-value based method and recognize expenses in our
consolidated statement of operations in accordance with the relevant rules under
U.S. GAAP, which may have a material and adverse effect on our reported
earnings. If we try to avoid incurring these compensation costs, we may not be
able to attract and retain key personnel, as share options are an important
employee recruitment and retention tool. If we grant employee share options or
other share-based compensation in the future, our net income could be adversely
affected.

We are subject to new corporate governance and internal
control reporting requirements, and our costs related to compliance with, or our
failure to comply with existing and future requirements, could adversely affect
our business.We may face new corporate governance requirements
under the Sarbanes-Oxley Act of 2002, as well as new rules and regulations
subsequently adopted by the SEC and the Public Company Accounting Oversight
Board. These laws, rules and regulations continue to evolve and may become
increasingly stringent in the future. In particular, under rules proposed by the
SEC on August 6, 2006 we will be required to include management's report on
internal controls as part of our annual report for the fiscal year ending
September 30, 2008 pursuant to Section 404 of the Sarbanes-Oxley Act.
Furthermore, under the proposed rules, an attestation report on our internal
controls from our independent registered public accounting firm will be required
as part of our annual report for the fiscal year ending September 30, 2009. We
are in the process of evaluating our control structure to help ensure that we
will be able to comply with Section 404 of the Sarbanes-Oxley Act. The financial
cost of compliance with these laws, rules and regulations is expected to be
substantial. We cannot assure you that we will be able to fully comply with
these laws, rules and regulations that address corporate governance, internal
control reporting and similar matters. Failure to comply with these laws, rules
and regulations could materially adversely affect our reputation, financial
condition and the value of our securities.

Shell companyWe are a shell company, have no
operations and do not generate revenue. We have entered into the LOT with AI
Inc. to enter into a business combination. If that transaction is not
consummated, we will pursue another acquisition of an operating company. There
can be no assurance that the business combination with AI Inc. will be
consummated or that we will be able to acquire an operating company or business.
Further, if we are able to acquire an operating company or business, there is no
assurance that we will be able to operate profitably. Although there arc many
companies that are looking to become public through a reverse acquisition /
shell merger, there is competition for attractive acquisition candidates and
there can be no assurance that we will be able to find a suitable acquisition.

The original shareholders and other shareholders acquired
shares at extremely low prices.Our original shareholders acquired
shares at $0.001 and $ 0.01 per share, and we have other shareholders who have
acquired shares under the prospectus, filed on November 14, 2005, who paid $0.1
per share. The closing price of our common stock was trading at the market close
on January 26, 2007 was $0.85. The original shareholders could liquidate their
shares at prices substantially below the price paid by the later shareholders
and still realize a substantial profit. The shareholders who purchased their
shares for $0.1 could liquidate their shares at prices substantially below the
price paid by shareholders in the private placement and still realize a
substantial profit.

Risks Relating to an Investment in our Securities

Our Independent Auditors Report States that there is a
Substantial Doubt that we will be able to Continue as a Going Concern.Our independent auditors, Amisano Hanson, Chartered Accountants,
state in their audit report, dated January 18, 2007, except as to Note 10(iv)
which is as of January 25, 2007, that since we are a development stage company,
have no established source of revenue and are dependent on our ability to raise
capital from shareholders or other sources to sustain operations, there is a
substantial doubt that we will be able to continue as a going concern.

ITEM 2.      DESCRIPTION OF
PROPERTY.

We rent office space. When we commence our operations, we plan
on initially manufacturing our product in shop facilities owned by the
President, who will also provide this space free of charge.

We do not have any plants and have minimal equipment for the
operation of our business.

We do not have any investments or interests in any real estate.

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ITEM 3.      LEGAL PROCEEDINGS.

We are not a party to any legal proceedings, nor are we aware
of any contemplated or pending legal proceedings against us.

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

None.

PART II

ITEM 5.      MARKET FOR
REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

Our shares of common stock did not trade on the OTC Bulletin
Board before November 8, 2006 and the Companys securities currently trade under
the symbol AGIN. The following is a summary of the high and low closing prices
of our common stock on the OTCBB during the periods presented. Such prices
represent inter-dealer prices, without retail mark-up, mark down or commissions,
and may not necessarily represent actual transactions. Trading in our common
stock has not been extensive in all the periods presented below, and such trades
may not constitute an active trading market in all the periods presented below.

|                                          |   | High |  |   | Low  | 
|----------------------------------------- | - | ---- |  | - | ---- | 
|Year Ending October 31,
      2006        |   |      |  |   |      | 
|Quarter ended April 30, 2006              | $ | N/A  |  | $ | N/A  | 
|Quarter ended July 31, 2006               | $ | N/A  |  | $ | N/A  | 
|Quarter ended October 31, 2006            | $ | N/A  |  | $ | N/A  | 
|Quarter ending January 31, 2007 (to date) | $ | 1.01 |  | $ | 0.55 | 

On January 26, 2007, the closing sales price for the common stock
  was $0.85, as reported on the website of the OTCBB. As of January 29, 2007,
  there were 23 stockholders of record of the common stock (which does not include
  the number of persons or entities holding stock in nominee or street name through
  various brokerage firms).

Dividends

We have neither declared nor paid any cash dividends on our
capital stock and do not anticipate paying cash dividends in the foreseeable
future. Our current policy is to retain any earnings in order to finance the
expansion of our operations. Our board of directors will determine future
declaration and payment of dividends, if any, in light of the then-current
conditions they deem relevant and in accordance with applicable corporate law.

Forward Stock Split

On June 26, 2006, 3 previous directors returned 2,550,000
(pre-forward stock split) common shares to the treasury for cancellation.
Effective September 9, 2006, the Company forward split its issued common shares
on the basis of thirty-six new shares for one old share. The number of shares
referred to in these consolidated financial statements has been restated
wherever applicable, except where noted, to give retroactive effect on the
forward stock split.

The retroactive restatement of the issued common shares is
required by the Securities and Exchange Commissions Staff Accounting Bulletin
No. 1, Topic 4(c). The number of common shares outstanding pre-forward stock
split was 2,550,000, and after giving effect to the forward split, the
outstanding common shares totaled 91,800,000.

Effective September 9, 2006, the Company authorized the
increase of its authorized capital stock from 75,000,000 common shares with a
par value of $0.001 to 200,000,000 common shares with a par value of $0.001.
This increase in its authorized capital has been filed with the Nevada Secretary
of State.

RECENT SALES OF UNREGISTERED SECURITIES

During the year ended October 31, 2006, we did not issue
securities without registration under the Securities Act.

SALE OF REGISTERED SECURITIES AND USE OF PROCEEDS

On November 15, 2005, Major Creations registration statement
on Form SB-2 became effective and on November 17, 2005, Major Creations
commenced the offering of 950,000 shares of its common stock for $95,000,
pursuant to such registration statement. The

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commission file number assigned to the registration statement
is 333-122870. A total of forty (40) persons subscribed for our shares at the
offering price of $0.10 per share and all 950,000 shares of the offering were
subscribed for with total proceeds of $95,000. No underwriters were used, and no
commissions or other remuneration was paid except to our Company.

Following is the use of proceeds for actual expenses incurred
for our account from November 17, 2005 to January 20, 2006 in connection with
the issuance and distribution of the securities:

|Expense        | Amount of direct or indirect payments           | Amount of direct or indirect
|-------------- | ----------------------------------------------- | ----------------------------
|               | to directors, officers, general
      partners, | payments to others          
|               | 10% shareholders or affiliates of the           |                             
|               | Issuer                                          |                             
|Legal          | 0                                               | $2,000                      
|Transfer agent | 0                                               | $1,400                      

The costs of the offering described above were paid directly
from existing working capital.

Following is a table detailing the use of net offering proceeds
from the offering of the securities.

| | Computer and office          |   | 8,402  |  |  |  | 
| | ---------------------------- | - | ------ |  |  |  | 
| | Consulting                   |   | 4,341  |  |  |  | 
| | Inventory                    |   | 29,187 |  |  |  | 
| | Legal and accounting         |   | 16,490 |  |  |  | 
| | Marketing and promotion      |   | 20,707 |  |  |  | 
| | Miscellaneous administration |   | 349    |  |  |  | 
| | Supplies and materials       |   | 4,264  |  |  |  | 
| | Tools                        |   | 7,871  |  |  |  | 
| | Travel and accomodation      |   | 1,389  |  |  |  | 
| | Website development          |   | 2,000  |  |  |  | 
| |                              | $ | 95,000 |  |  |  | 

Rules Governing Low-Price Stocks that May Affect Our
Shareholders' Ability to Resell Shares of Our Common Stock

Our stock trades under the symbol AGIN on the NASDs
OTCBB.

Quotations on the OTCBB reflect inter-dealer prices, without
retail mark-up, markdown or commission and may not reflect actual transactions.
Our common stock may be subject to certain rules adopted by the SEC that
regulate broker-dealer practices in connection with transactions in "penny
stocks". Penny stocks generally are securities with a price of less than $5.00,
other than securities registered on certain national exchanges or quoted on the
Nasdaq system, provided that the exchange or system provides current price and
volume information with respect to transaction in such securities. The
additional sales practice and disclosure requirements imposed upon
broker-dealers are may discourage broker-dealers from effecting transactions in
our shares which could severely limit the market liquidity of the shares and
impede the sale of our shares in the secondary market.

The penny stock rules require broker-dealers, prior to a
transaction in a penny stock not otherwise exempt from the rules, to make a
special suitability determination for the purchaser to receive the purchasers
written consent to the transaction prior to sale, to deliver standardized risk
disclosure documents prepared by the SEC that provides information about penny
stocks and the nature and level of risks in the penny stock market. The
broker-dealer must also provide the customer with current bid and offer
quotations for the penny stock. In addition, the penny stock regulations require
the broker-dealer to deliver, prior to any transaction involving a penny stock,
a disclosure schedule prepared by the SEC relating to the penny stock market,
unless the broker-dealer or the transaction is otherwise exempt. A broker-dealer
is also required to disclose commissions payable to the broker-dealer and the
registered representative and current quotations for the securities. Finally, a
broker-dealer is required to send monthly statements disclosing recent price
information with respect to the penny stock held in a customer's account and
information with respect to the limited market in penny stocks.

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ITEM 6.      MANAGEMENTS PLAN OF
OPERATION.

The following discussion of the plan of operation, financial
condition, results of operations, cash flows and changes in financial position
of our Company should be read in conjunction with our audited consolidated
financial statements and notes appearing elsewhere in this Form 10-KSB; and
Reports on Form 8-K filed during our most recent fiscal year and subsequent to
the period end of this fiscal year.

Limited Operating History

There is limited historical financial information about our
company upon which to base an evaluation of our future performance. Our company
has yet to generate revenues from operations. We cannot guarantee that we will
be successful in our business. We are subject to risks inherent in a fast
growing company, including limited capital resources, possible delays in product
development and manufacturing, and possible cost overruns due to price and cost
increases. There is no assurance that future financing will be available to our
company on acceptable terms. Additional equity financing could result in
dilution to existing shareholders.

In November of 2006, the Company undertook to change its focus
from providing customers with vintage style tractors to the business of
designing, developing and manufacturing intermediate force options for military,
law enforcement and security forces.

In keeping with its intention to develop a business in the
intermediate force, the Company:

| | 1. | Retained new officers and directors;                                        
| | -- | ----------------------------------------------------------------------------
| | 2. | Entered into a Letter of intent with Aegis Industries,
      Inc. (AI Inc.);
| | 3. | Increased its authorized capital;                                           
| | 4. | changed its name to Aegis Industries, Inc.; and                             
| | 5. | Initiated due diligence of the business operations of AI
      Inc.;        

For the fiscal year ended October 31, 2006, we had no revenues
and we incurred losses of $105,201 (2005: $15,064). Our operating expenses
included significant legal and accounting expenses, as well as marketing and
promotion expenses. We expect to continue to use cash in our operating
activities as we enter into our new business.

Management Discussion and Analysis

Results of Operations

We have financed our operations since inception primarily
through sales of securities. As of October 31, 2006 we had no cash (2005:
$5,811), and working capital deficiency of $45,167 (2005: surplus of
$1,411).

Fiscal Year Ended October 31, 2006

The following table sets forth our statements of operations for
the year ended October 31, 2006.

| | Results of operations             |   |         |  |  |  | 
| | --------------------------------- | - | ------- |  |  |  | 
| |                                   |   |         |  |  |  | 
| |                                   |   |         |  |  |  | 
| | Expenses                          |   |         |  |  |  | 
| | Marketing and promotion           | $ | 20,707  |  |  |  | 
| | Consulting fees                   |   | 4,341   |  |  |  | 
| | Professional fees                 |   | 61,536  |  |  |  | 
| | Other, general and administrative |   | 18,617  |  |  |  | 
| | Net loss                          | $ | 105,201 |  |  |  | 

As discussed above, in 2005, we had no business, and in 2006,
we attempted to start a business as a seller of vintage style tractors, but we
will now change our business focus to the designing, developing and
manufacturing intermediate force options for military, law enforcement and
security forces. Due to these significant changes, we believe that a comparison
of results of operations for the years ended October 31, 2006 and October 31,
2005 should not be relied on as an indication of future performance. Factors
that may cause our results of operations to fluctuate include those discussed in
the Risk Factors.

Page 10

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Revenues

For the year ended October 31, 2006, we had no revenues from
operations. Assuming we close our acquisition of AI Inc., We expect to start
earning revenues in our third quarter of fiscal 2007, as distribution of our
intermediate force products and services begins. Our future revenues will depend
not only on successful completion of an acquisition of AI Inc., but also on AI
Inc.s sales efforts and ability to penetrate the market.

Expenses and general and administrative expenses

During the fiscal year ended October 31, 2006, the Company
incurred total expenses from operations of $105,201. These expenses were related
mainly to start up costs associated with regulatory requirements and filings
such as legal and accounting fees, and to activities associated with the change
in business, such as communication to shareholders and corporate development and
promotion. Some of these expenses, as well as cash disbursements of $42,125 for
the purchase of inventory and assets such as tools are one time expenses
resulting from start up costs of the Companys former business as seller of
vintage style tractors. The anticipated expenditures for the Company are
described elsewhere. Readers should not assume that expenses or other cash flows
in this period are indicative of future periods as the Company is in the
development stage.

Discontinued Operations

We anticipate that, in future periods, the loss incurred to
date of $127,290 will be presented as a loss from discontinued operations.

Net Loss

Our net loss was $105,201 for fiscal 2006. The net loss
reflects our expenses relating to professional fees incurred in the pursuit of
our former business strategy. These expenses have been incurred ahead of our
ability to recognize material revenues from this strategy.

Liquidity and Capital Resources

As of October 31, 2006, we had no cash and working capital
deficiency of $45,167. During the year ended October 31, 2006, we funded our
operations from sales of equity. As of the date of this Report, we have
approximately $35,000 in working capital. We believe we will be able to fund
operations via short term borrowings and sale of equity for at least the next 12
months assuming the ability to realize sales within the first three quarters of
fiscal 2007. Changes in our operating plans, an increase in our inventory,
increased expenses, additional acquisitions, or other events, may cause us to
seek additional equity or debt financing in the future.

For the year ended October 31, 2006, we used $76,286 of cash in
operations. Net cash used by operating activities reflected $2,159 in
depreciation and an increase in accounts payable of $21,044. Investment
activities used $44,125 of cash during the year, which was primarily related to
the acquisition of 2 tractors and $12,938 in tools.

Financing activities provided $114,600 of cash during the year,
with $19,600 from a loan, and $95,000 in sales of common stock.

Our current cash requirements are significant due to our change
in business, including the acquisition of AI Inc., start up and other
operational expenses. During the third quarter of our fiscal year 2007, we
expect to need significant cash as we begin to ramp up the operations. We will
need money to build inventory, build working capital and to fund operations.
Accordingly, we expect to continue to use cash for at least fiscal 2007 as we
commence our new business operations (See Plan of Operations below).

In the past, we paid cash for our inventory purchases. With
this new business, we plan on negotiating credit terms with our vendors. We also
paid cash for our equipment purchases. In the future, we plan to finance some of
our equipment purchases by short term bank borrowings and by establishing a
working capital line of credit.

Recent Financings

Note payable

On October 12, 2006, a loan payable in the amount of $19,600,
bearing interest at 12% per annum, was received. Principal and accrued interest
due in 90 days. As at October 31, 2006, we had accrued $123 in interest in
relation to this note.

Critical Accounting Policies

The preparation of financial statements in conformity with
United States generally accepted accounting principles requires management of
our company to make estimates and assumptions that affect the reported amounts
of assets and liabilities, the disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting periods.

Our management routinely makes judgments and estimates about
the effects of matters that are inherently uncertain. As the number of

Page 11

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variables and assumptions affecting the probable future
resolution of the uncertainties increase, these judgments become even more
subjective and complex. Our significant accounting policies are discussed in
Note 2 to our consolidated financial statements for the fiscal year ended
October 31, 2006 included in this Report. We have identified the following
accounting policy, described below, as the most important to an understanding of
our current financial condition and results of operations.

Development stage company

As defined by SFAS No. 7, Consolidated Financial
Statements, the Company has been in the development stage since its
formation on February 5, 2004, and has not yet realized any revenues from its
planned operations. The Company is devoting substantially all of its present
efforts towards the change of business as described elsewhere in this
Report.

Plan of Operations

Our future operations are dependent upon the identification and
successful completion of additional long-term or permanent equity financing, the
support of creditors and shareholders, and, ultimately, the achievement of
profitable operations. There can be no assurances that we will be successful,
which would in turn significantly affect our ability to roll out our business
plan. If not, we will likely be required to reduce operations or liquidate
assets. We will continue to evaluate our projected expenditures relative to our
available cash and to seek additional means of financing in order to satisfy our
working capital and other cash requirements.

We continue to operate with very limited administrative
support, and our current officers and directors continue to be responsible for
many duties to preserve our working capital.

Projected Expenditures Over The Next 12
Months

The following chart provides an overview of our budgeted
expenditures by major area of activity, for the next 12 months from the date of
this Annual Report, assuming the closing of the acquisition of AI Inc.:

|(a)    | Personnel costs
      in the United States:                | $ | 100,000   |  |  |  | 
|------ | ---------------------------------------------------------- | - | --------- |  |  |  | 
|(b)    | Product research &
      development:                      | $ | 360,000   |  |  |  | 
|(c)    | Medical research
      & development                       | $ | 2,700,000 |  |  |  | 
|(d)    | US Army research &
      development                       | $ | 100,000   |  |  |  | 
|(e)    | Administration,
      sales and marketing office:          | $ | 160,000   |  |  |  | 
|(f)    | General and administrative
      expenses:                 | $ | 110,000   |  |  |  | 
|(g)    | Professional fees
      and expenses, regulatory expenses: | $ | 155,000   |  |  |  | 
|(h)    | Shareholder communications:                                | $ | 85,000    |  |  |  | 
|(i)    | Travel,
      Miscellaneous, Unallocated                   | $ | 95,000    |  |  |  | 
|       |                                                            |   |           |  |  |  | 
|Total: |                                                            | $ | 3,865,000 |  |  |  | 

As of the date of this report, we have approximately $35,000 in
working capital. The amounts noted above reflect our current cash resources and
assume that we will raise, through equity or convertible debt, approximately
$3,835,000 over the next 12 months. There can be no assurance that the Company
will be successful in raising these additional funds and, if the Company is
unsuccessful in raising these additional funds, its plans for expanding
operations and business activities may have to be curtailed.

Other than as detailed above, we do not anticipate making any
major purchases of capital assets in the next 6 months, or conducting any
large-scale research and development. Any development of research and
development functions would be dependent upon securing additional equity or
other financing to add to our working capital. The Company plans to hire
personal for development and product development research but that is the extent
of its planned research and development activities. Under US GAAP, these
activities may possibly not be classified as research and development but may be
classified as expenses given that the costs are associated with paying salaries
to the two individuals.

We believe we have sufficient cash resources to satisfy our
needs over the next twelve months. Our ability to satisfy cash requirements
thereafter will determine whether we achieve our business objectives, including
but not limited to completion of our manufacturing facilities and production
lines. Should we require additional cash in the future, there can be no
assurance that we will be successful in raising additional debt or equity
financing on terms acceptable to our company, if at all.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, as defined
in Item 303(c)(2) of Regulation S-B.

Page 12

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ITEM 7.      FINANCIAL STATEMENTS
AND SUPPLEMENTARY DATA.















Aegis Industries, Inc.(formerly
Major Creations Incorporated) (A Development Stage Company)







Report and Financial Statements October 31, 2006 and
2005 (Stated in US Dollars)

Page 13

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|**A PARTNERSHIP OF INCORPORATED PROFESSIONALS** | **AMISANO HANSON**
      **C**HARTERED **A**CCOUNTANTS
|----------------------------------------------- | ------------------------------------------------------

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
  FIRM

To the Stockholders, Aegis Industries, Inc. (formerly
Major Creations Incorporated) (A Development Stage Company)

We have audited the accompanying balance sheets of Aegis
Industries, Inc. (formerly Major Creations Incorporated) (A Development Stage
Company) as of October 31, 2006 and 2005 and the related statements of
operations, stockholders equity and cash flows for the years ended October 31,
2006 and 2005 and for the period from February 5, 2004 (Date of Inception) to
October 31, 2006. These financial statements are the responsibility of the
Companys management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, these financial statements referred to above
present fairly, in all material respects, the financial position of Aegis
Industries, Inc (formerly Major Creations Incorporated) as of October 31, 2006
and 2005 and the results of its operations and its cash flows for the years
ended October 31, 2006 and 2005 and the period from February 5, 2004 (Date of
Inception) to October 31, 2006 in conformity with accounting principles
generally accepted in the United States of America.

The accompanying financial statements referred to above have
been prepared assuming that the Company will continue as a going concern. As
discussed in Note 1 to the financial statements, the Company is in the
development stage, has no established source of revenue and is dependent on its
ability to raise capital from shareholders or other sources to sustain
operations. These factors, along with other matters as set forth in Note 1,
raise substantial doubt that the Company will be able to continue as a going
concern. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

|Vancouver, Canada                                      | ***"AMISANO HANSON"***
|------------------------------------------------------ | ----------------------
|January 18, 2007, except as to Note 10(iv) which is as | CHARTERED ACCOUNTANTS 
|of January 25, 2007                                    |                       

|750 WEST PENDER STREET, SUITE 604
      VANCOUVER, CANADA
      V6C 2T7 | TELEPHONE: 604-689-0188
      FACSIMILE: 604-689-9773
      E-MAIL: amishan@telus.net
|----------------------------------------------------------------------- | -------------------------------------------------------------------------------------

Page 14

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Aegis Industries, Inc.(formerly Major Creations
Incorporated) (A Development Stage Company) Balance Sheets October 31,
2006 and 2005 (Stated in US Dollars)

|                                                                   |   | 2006     |   |   | 2005    |  
|------------------------------------------------------------------ | - | -------- | - | - | ------- | -
|ASSETS                                                             |   |          |   |   |         |  
|                                                                   |   |          |   |   |         |  
|Current                                                            |   |          |   |   |         |  
|Cash                                                               | $ | -        |   | $ | 5,811   |  
|                                                                   |   |          |   |   |         |  
|                                                                   |   |          |   |   |         |  
|Inventory(note 4)                                                  |   | 23,598   |   |   | -       |  
|Equipment,net (note 5)                                             |   | 11,279   |   |   | -       |  
|Web site development,net of accumulated amortization
      of $500 |   | 1,500    |   |   | -       |  
|                                                                   |   |          |   |   |         |  
|                                                                   | $ | 36,377   |   | $ | 5,811   |  
|                                                                   |   |          |   |   |         |  
|LIABILITIES                                                        |   |          |   |   |         |  
|                                                                   |   |          |   |   |         |  
|Current                                                            |   |          |   |   |         |  
|Accounts payable and accrued liabilities                           | $ | 25,444   |   | $ | 4,400   |  
|Loan payable (note 6)                                              |   | 19,723   |   |   | -       |  
|                                                                   |   |          |   |   |         |  
|                                                                   |   | 45,167   |   |   | 4,400   |  
|                                                                   |   |          |   |   |         |  
|STOCKHOLDERS' EQUITY                                               |   |          |   |   |         |  
|Capital stock (note 8)                                             |   |          |   |   |         |  
|Common $0.001 par value                                            |   |          |   |   |         |  
|200,000,000 shares authorized (2005:
      75,000,000);            |   |          |   |   |         |  
|91,800,000 shares
      issued and outstanding                     |   |          |   |   |         |  
|(2005: 148,400,000)                                                |   | 2,550    |   |   | 4,150   |  
|Additional paid in capital                                         |   | 115,950  |   |   | 19,350  |  
|Deficit
      accumulated during development stage                 |   | (127,290 | ) |   | (22,089 | )
|                                                                   |   |          |   |   |         |  
|                                                                   |   | (8,790   | ) |   | 1,411   |  
|                                                                   |   |          |   |   |         |  
|                                                                   | $ | 36,377   |   | $ | 5,811   |  
|                                                                   |   |          |   |   |         |  
|Nature and Continuance of Operations(note 1)                       |   |          |   |   |         |  
|Commitments(note 10)                                               |   |          |   |   |         |  
|Subsequent Events(notes 1 and 10)                                  |   |          |   |   |         |  
|Related Party Transactions(notes
      8(b), 9 and 10)             |   |          |   |   |         |  

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

Page 15

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Aegis Industries, Inc.(formerly Major Creations
Incorporated) (A Development Stage Company) Statements of Operations
for the year ended October 31, 2006 and 2005 and for the period from
February 5, 2004 (Date of inception) to October 31, 2006 (Stated in US
Dollars)

|                                             |   |             |  |   |             |  |   | Cumulative from  | 
|-------------------------------------------- | - | ----------- |  | - | ----------- |  | - | ---------------- | 
|                                             |   |             |  |   |             |  |   | February 5, 2004 | 
|                                             |   |             |  |   |             |  |   | (Date of         | 
|                                             |   |             |  |   |             |  |   | Inception) to    | 
|                                             |   | 2006        |  |   | 2005        |  |   | October 31, 2006 | 
|                                             |   |             |  |   |             |  |   |                  | 
|Expenses                                     |   |             |  |   |             |  |   |                  | 
|Amortization                                 | $ | 2,159       |  | $ | -           |  | $ | 2,159            | 
|Consulting fees                              |   | 4,341       |  |   | -           |  |   | 4,341            | 
|Marketing and promotion                      |   | 20,707      |  |   | -           |  |   | 21,605           | 
|Office and administrative                    |   | 6,605       |  |   | 464         |  |   | 7,132            | 
|Organizational costs                         |   | -           |  |   | -           |  |   | 1,189            | 
|Professional fees                            |   | 61,536      |  |   | 14,600      |  |   | 77,636           | 
|Supplies and materials                       |   | 4,264       |  |   | -           |  |   | 7,639            | 
|Write-down of inventory (note 4)             |   | 5,589       |  |   | -           |  |   | 5,589            | 
|                                             |   |             |  |   |             |  |   |                  | 
|Net loss                                     | $ | 105,201     |  | $ | 15,064      |  | $ | 127,290          | 
|                                             |   |             |  |   |             |  |   |                  | 
|Net loss per share - basic
      and diluted | $ | 0.00        |  | $ | 0.00        |  |   |                  | 
|                                             |   |             |  |   |             |  |   |                  | 
|Weighted Average Shares
      Outstanding    |   | 143,506,849 |  |   | 149,400,000 |  |   |                  | 

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

Page 16

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AegisIndustries,Inc.(formerlyMajorCreationsIncorporated)(ADevelopmentStageCompany)StatementsofStockholders'Equity(Deficit)For theperiodfromFebruary5, 2004 [Date ofInception]toOctober31, 2006(Statedin USDollars)

AccumulatedDeficit during
      
      
      TotalCommon Stock
      
      
      Additional Paid-in
      
      
      Development
      
      
      Stockholders'Shares
      
      
      Amount
      
      
      Capital
      
      
      Stage
      
      
      Equity (Deficit)Balance, at inception
      
      -
      
      $
      -
      
      $
      -
      
      $
      -
      
      $
      -Stock issued for cash at $0.000027778
      
      72,000,000
      
      
      2,000
      
      
      -
      
      
      -
      
      
      2,000Stock issued for cash at $0.000277778
      
      77,400,000
      
      
      2,150
      
      
      19,350
      
      
      -
      
      
      21,500Net
        loss for the period
      
      -
      
      
      -
      
      
      -
      
      
      (7,025
      )
      
      (7,025
      )Balance, October 31, 2004
      
      149,400,000
      
      
      4,150
      
      
      19,350
      
      
      (7,025
      )
      
      16,475Net loss for the year
      
      -
      
      
      -
      
      
      -
      
      
      (15,064
      )
      
      (15,064
      )Balance, October 31, 2005
      
      149,400,000
      
      
      4,150
      
      
      19,350
      
      
      (22,089
      )
      
      1,411Stock issued for cash at $0.002777778
      
      34,200,000
      
      
      950
      
      
      94,050
      
      
      -
      
      
      95,000Stock returned to treasury
      
      (91,800,000
      )
      
      (2,550
      )
      
      2,550
      
      
      -
      
      
      -Net
        loss for the year
      
      -
      
      
      -
      
      
      -
      
      
      (105,201
      )
      
      (105,201
      )Balance, October
        31, 2006
      
      91,800,000
      
      $
      2,550
      
      $
      115,950
      
      $
      (127,290
      )
      $
      (8,790
      )


The number of shares issued and outstanding have been restated
to give retrospective effect for a forward stock split on a thirty-six to one
basis effective September 9, 2006.

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

Page 17

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Aegis Industries, Inc.(formerly Major Creations
Incorporated) (A Development Stage Company) Statements of Cash Flows
for the years ended October 31, 2006 and 2005 and for the period from
February 5, 2004 (Date of inception) to October 31, 2006 (Stated in US
Dollars)

|                                           |   |          |   |   |         |   |   | Cumulative from  |  
|------------------------------------------ | - | -------- | - | - | ------- | - | - | ---------------- | -
|                                           |   |          |   |   |         |   |   | February 5, 2004 |  
|                                           |   |          |   |   |         |   |   | (Date of         |  
|                                           |   |          |   |   |         |   |   | Inception) to    |  
|                                           |   | 2006     |   |   | 2005    |   |   | October 31, 2006 |  
|                                           |   |          |   |   |         |   |   |                  |  
|Cash Flows from (used
      in)            |   |          |   |   |         |   |   |                  |  
|Operating Activities                       |   |          |   |   |         |   |   |                  |  
|Net loss for the year                      | $ | (105,201 | ) | $ | (15,064 | ) | $ | (127,290         | )
|Items not affecting cash:                  |   |          |   |   |         |   |   |                  |  
|- amortization                             |   | 2,159    |   |   | -       |   |   | 2,159            |  
|- office and administration                |   | 123      |   |   | -       |   |   | 123              |  
|- write-down of
      inventory            |   | 5,589    |   |   | -       |   |   | 5,589            |  
|Change in non-cash working capital         |   |          |   |   |         |   |   |                  |  
|balance related to
      operations:       |   |          |   |   |         |   |   |                  |  
|- accounts payable and accrued             |   |          |   |   |         |   |   |                  |  
|liabilities                                |   | 21,044   |   |   | 2,900   |   |   | 25,444           |  
|                                           |   |          |   |   |         |   |   |                  |  
|Cash Flows - Operating Activities          |   | (76,286  | ) |   | (12,164 | ) |   | (93,975          | )
|                                           |   |          |   |   |         |   |   |                  |  
|Cash flows used in                         |   |          |   |   |         |   |   |                  |  
|Investing Activities                       |   |          |   |   |         |   |   |                  |  
|Acquisition of equipment                   |   | (12,938  | ) |   | -       |   |   | (12,938          | )
|Web site development                       |   | (2,000   | ) |   | -       |   |   | (2,000           | )
|Acquisition of inventory                   |   | (29,187  | ) |   | -       |   |   | (29,187          | )
|                                           |   |          |   |   |         |   |   |                  |  
|Cash Flows - Investing Activities          |   | (44,125  | ) |   | -       |   |   | (44,125          | )
|                                           |   |          |   |   |         |   |   |                  |  
|Cash flows from Financing
      Activities |   |          |   |   |         |   |   |                  |  
|Proceeds from loan payable                 |   | 19,600   |   |   | -       |   |   | 19,600           |  
|Proceeds from issue of common stock        |   | 95,000   |   |   | -       |   |   | 118,500          |  
|                                           |   |          |   |   |         |   |   |                  |  
|Cash Flows - Financing Activities          |   | 114,600  |   |   | -       |   |   | 138,100          |  
|                                           |   |          |   |   |         |   |   |                  |  
|Net Decrease in Cash                       |   | (5,811   | ) |   | (12,164 | ) |   | -                |  
|                                           |   |          |   |   |         |   |   |                  |  
|Cash, Beginning of Period                  |   | 5,811    |   |   | 17,975  |   |   | -                |  
|                                           |   |          |   |   |         |   |   |                  |  
|Cash, End of Period                        | $ | -        |   | $ | 5,811   |   | $ | -                |  

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

Page 18

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|1. | Nature of operations and going concern                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Aegis Industries, Inc. (the Company) was incorporated
      in the State of Nevada, United States of America, on February 5, 2004
      under the name Major Creations Incorporated. On December 5, 2006, the
      Company changed its name to Aegis Industries, Inc. (see note 10). The
      Company is listed on the Over-the-Counter Bulletin Board.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The Company has had limited operations as a retailer of
      vintage style compact diesel tractors. The Company intends to engage in
      the business of designing, developing and manufacturing intermediate force
      options for military, law enforcement and security forces. To facilitate
      this change in business, on November 30, 2006, the Company signed a letter
      of intent whereby it would acquire substantially all the assets of Aegis
      Industries, Inc. (AI Inc.) for the issuance of 15,000,000 shares of
      common stock (see note 10).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | These financial statements have been prepared in
      accordance with generally accepted accounting principles applicable to a
      going concern, which assumes that the Company will be able to meet its
      obligations and continue its operations for its next fiscal year.
      Realization values may be substantially different from carrying values as
      shown and these financial statements do not give effect to adjustments
      that would be necessary to the carrying values and classification of
      assets and liabilities should the Company be unable to continue as a going
      concern. At October 31, 2006, the Company had not yet achieved profitable
      operations, has accumulated losses of $127,290 since its inception, has a
      working capital deficiency of $45,167 and expects to incur further losses
      in the development of its business, all of which casts substantial doubt
      about the Companys ability to continue as a going concern. The Companys
      ability to continue as a going concern is dependent upon its ability to
      generate future profitable operations and/or to obtain the necessary
      financing to meet its obligations and repay its liabilities arising from
      normal business operations when they come due.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The Company expects to continue to incur substantial
      losses as it executes its business plan and does not expect to attain
      profitability in the near future. Since its inception, the Company has
      funded operations through short-term borrowings and equity investments in
      order to meet its strategic objectives. The Company's future operations
      are dependent upon external funding and its ability to execute its
      business plan, realize sales and control expenses. Management believes
      that sufficient funding will be available from additional borrowings and
      private placements to meet its business objectives including anticipated
      cash needs for working capital, for a reasonable period of time. However,
      there can be no assurance that the Company will be able to obtain
      sufficient funds to continue the development of its business
    operation.                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|2. | Summary of significant accounting
  policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The financial statements of the Company have been
      prepared in accordance with generally accepted accounting principles in
      the United States of America. Because a precise determination of many
      assets and liabilities is dependent upon future events, the preparation of
      financial statements for a period necessarily involves the use of
      estimates, which have been made using careful judgment. Actual results may
      vary from these estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The financial statements have, in managements opinion,
      been properly prepared within reasonable limits of materiality and within
      the framework of the significant accounting policies summarized
    below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | a.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | b.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | c.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

| | Computer equipment      | 30% per annum
| | ----------------------- | -------------
| | Furniture and equipment | 20% per annum
| | Tools                   | 20% per annum

| | d. | Inventory                                                                                                                                                                              
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    | Inventory consists of parts used to produce final
      products for resale and is valued at the lower of cost and market value in
      accordance with SFAS No. 151, Inventory
Costs.

Page 19

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| | e. | Website development                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    | The Company recognizes the costs incurred in the
      development of the Companys website in accordance with Emerging Issues
      Task Force (EITF) 00-2, Accounting for Website Development Costs,
      and, with provisions of American Institute of Certified Public Accountants
      (AICPA) Statement of Position No. 98-1, Accounting for the Costs of
      Computer Software Developed or Obtained for Internal Use.Accordingly,
      direct costs incurred during the application stage of development are
      capitalized and amortized over the estimated useful life of three years.
      Fees incurred for website hosting are expensed over the period of the
      benefit. Costs of operating a website are expensed as incurred.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | f. | Loss per share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | In accordance with SFAS No. 128, Earnings Per
      Share, the basic loss per common share is computed by dividing net
      loss available to common stockholders by the weighted average number of
      common shares outstanding. Diluted loss per share is computed by dividing
      net loss by the weighted average number of shares of common stock, common
      stock equivalents and potentially dilutive securities outstanding during
      each period. Diluted loss per common share is not presented because it is
      anti-dilutive.                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | g. | Income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    | The Company accounts for income taxes under SFAS No. 109,
      Accounting for Income Taxes.Under SFAS No.109, deferred tax assets
      and liabilities are recognized for the future tax consequences
      attributable to differences between their financial statement carrying
      amounts and their respective tax bases. Deferred tax assets and
      liabilities are measured using enacted tax rates expected to apply to
      taxable income in the years in which those temporary differences are
      expected to be recovered or settled. Under SFAS No. 109, the effect on
      deferred tax assets and liabilities of a change in tax rates is recognized
      in income in the period that includes the enactment date.               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | h. | Impairment of long-lived assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    | In accordance with SFAS No. 144, Accounting for the
      Impairment or Disposal of Long-lived Assets, the carrying value of
      intangible assets and other long-lived assets are reviewed on a regular
      basis for the existence of facts or circumstances that may suggest
      impairment. The Company recognizes impairment when the sum of the expected
      undiscounted future cash flows is less than the carrying amount of the
      asset. Impairment losses, if any, are measured as the excess of the
      carrying amount of the asset over its estimated fair value.                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | i. | Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | Management does not believe that there are any recently
      issued accounting pronouncements but not yet effective accounting
      standards that could have a material effect on the accompanying financial
      statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

|3. | Financial instruments                                                                                                                                                                                                                       
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                             
|   | a.                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                             
|   | b.                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                             
|   | c.                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                             
|4. | Inventory                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                             
|   | During the year ended October 31, 2006, the Company
      acquired inventory of two Kubota tractors at a cost of $29,187. At October
      31, 2006, the Company wrote down these tractors to their estimated market
      value of $23,598.

Page 20

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|5. | Equipment
|-- | ---------

2006AccumulatedCost
      
      
      Amortization
      
      
      NetComputer equipment
    $
    4,680
    
    $
    702
    
    $
    3,978Office furniture
    
    386
    
    
    39
    
    
    347Tools
    
    7,872
    
    
    918
    
    
    6,954$
    12,938
    
    $
    1,659
    
    $
    11,279


|   | At October 31, 2005, the Company had no
  equipment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|6. | Loan payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The loan payable is unsecured, bears interest at 12% per
      annum and is due January 9, 2007. Accrued interest of $123 is included in
      loan payable at October 31, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|7. | Income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Under Internal Revenue Code Section 382, the utilization
      of a corporation's net operating loss carry forwards may be limited or
      eliminated following a greater than 50% change in ownership of the value
      of the Company. Due to prior transactions, the Company's net operating
      loss carry forwards are subject to an annual limitation. Any unused annual
      limitation may be carried forward to future years for the balance of the
      net operating loss carry forward period. The Company has not yet
      determined the limitation as defined by Internal Revenue Code Section 382.
      Additionally, because U.S. tax laws limit the time during which these
      carry forwards may be applied against future taxes, the Company may not be
      able to take full advantage of these attributes for Federal income tax
      purposes.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The following table summarizes the significant components
      of the Companys deferred tax asset:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

2006
      
      
      2005Deferred tax assetNon-capital loss carryforward
    $
    26,930
    
    $
    3,313Valuation
      allowance for deferred tax asset
    
    (26,930
    )
    
    (3,313
    )$
    -
    
    $
    -


Deferred income taxes reflect the net
tax effects of operating loss and tax credit carry forwards and temporary
differences between carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. In assessing
the realizability 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. The ultimate realization of deferred tax assets is dependent
upon the generation of future taxable income during the periods in which
temporary differences representing net future deductible amounts become
deductible. Due to the uncertainty of the Company's ability to realize the
benefit of the deferred tax assets, the deferred tax assets are fully offset by
a valuation allowance at October 31, 2006 and 2005.

As of October 31, 2006, Company had
approximately $122,000 of U.S. federal and state net operating loss carry
forwards available to offset future taxable income which, if not utilized, begin
expiring in 2024.

Page 21

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|8. | Capital stock                                                                                                                                                                         
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                       
|   | a.                                                                                                                                                                                    
|   |                                                                                                                                                                                       
|   |                                                                                                                                                                                       
|   |                                                                                                                                                                                       
|   |                                                                                                                                                                                       
|   |                                                                                                                                                                                       
|   |                                                                                                                                                                                       
|   | b.                                                                                                                                                                                    
|   |                                                                                                                                                                                       
|   |                                                                                                                                                                                       
|   | c.                                                                                                                                                                                    
|   |                                                                                                                                                                                       
|   |                                                                                                                                                                                       
|9. | Related party transactions Notes 8 and
  10                                                                                                                                          
|   |                                                                                                                                                                                       
|   | During the period February 5, 2004 (Date of Inception) to
      October 31, 2004, the Company issued 149,400,000 shares of common stock
      for $23,500 to directors of the Company.

|10. | Subsequent Events
|--- | -----------------
|    |                  
|    | i)               
|    |                  
|    | ii)              
|    |                  
|    | iii)             
|    |                  
|    | iv)              
|    |                  
|    |                  

| | (i)   | $2,000,000 on or before February 28, 2007;                      
| | ----- | ----------------------------------------------------------------
| | (ii)  | an additional $2,000,000 on or before May 31,
  2007;           
| | (iii) | an additional $2,000,000 on or before August 30, 2007;
      and
| | (iv)  | an additional $5,000,000 on or before April 30,
    2008.       

By amending agreement dated January
25, 2007, a definitive agreement will be entered into on or before February 28,
2007. The definitive agreement will provide for the payment of 600,000 shares of
the Companys common stock as a finders fee.

The acquisition of Target Co. will
constitute a change in business to the design, development and manufacture of
intermediate force options for military, law enforcement and security forces.

On December 1, 2006, $295,283 was
advanced to AI Inc. The principal amount is non-interest bearing and is due on
demand. Any payments in arrears bear interest at 10% per annum calculated
annually.

Page 22

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| | v)    | On December 1, 2006, the Company entered into a contract
      for investor relations services requiring the payment of $10,000 per month
      expiring on November 30, 2008. This commitment can be terminated by either
      party with 30 days written notice.                                                                                                                                  
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                       
| | vi)   | On December 1, 2006, the Company entered into a contract
      for management services with a director and officer of the Company
      requiring the payment of $4,000 per month for a period of two years
      expiring on November 30, 2008. This commitment can be terminated by either
      party with 30 days notice.                                                                        
| |       |                                                                                                                                                                                                                                                                                                                                                                                                       
| | vii)  | On November 29, 2006, the Company incorporated a Colorado
      subsidiary with the name Aegis Industries, Inc. and merged with it on
      December 7, 2006 for the purpose of effecting a name change.                                                                                                                                                                                              
| |       |                                                                                                                                                                                                                                                                                                                                                                                                       
| | viii) | On December 20, 2006, the Company received loan proceeds
      of $100,000. This amount is unsecured, bears interest at 12% per annum
      calculated annually and is due on demand. Any payments of principle or
      interest in arrears bear interest at 30% per annum calculated annually.
      Default in payment shall, at the option of the holder, render the entire
      balance payable.
| |       |                                                                                                                                                                                                                                                                                                                                                                                                       
| | ix)   | On January 2nd, 2007, the Company entered into
      an office lease at $2,350 per month expiring June 30, 2007. Occupancy
      beyond the expiry date will be on a month to month basis subject to a
      sixty day notice of termination by either party.                                                                                                                                         

Page 23

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

None.

ITEM 8A.   Controls and procedures

Evaluation of disclosure controls and procedures.

An evaluation was performed under the supervision and with the
participation of our management, including the chief executive officer and the
chief financial officer, of the effectiveness of the design and operation of our
disclosure procedures. Based on management's evaluation as of the end of the
period covered by this Annual Report, our principal executive officer and chief
financial officer have concluded that our disclosure controls and procedures (as
defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) were sufficiently effective to ensure
that the information required to be disclosed by us in the reports that we file
under the Exchange Act is gathered, analyzed and disclosed with adequate
timeliness, accuracy and completeness.

Changes in internal controls.

There have been no significant changes in our internal controls
or in other factors that could significantly affect these controls subsequent to
the date of the evaluation referred to above, nor were there any significant
deficiencies or material weaknesses in our internal controls. Accordingly, no
corrective actions were required or undertaken.

ITEM 8B.   Other Information

None

PART III

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

The following sets forth certain biographical information
concerning our current directors and executive officers:

Directors and Executive Officers

Paul Evancoe, President, Member of the Board of DirectorsPaul Evancoe has been appointed, effective November 5, 2006, as
President and Director of the Registrant. Mr. Evancoe is a former Navy SEAL with
extensive experience in military special operations (1965-1989). He served as
the director Special Operations, Office of the Coordinator for Counterterrorism,
U.S. Department of State (1989-1993), and director, Office of Emergency Response
at DoEs National Nuclear Security Administration (1994-2004) where he headed
the Nuclear Emergency Support Team (NEST) and its nuclear counterterrorism
world-wide mission. From 2004 through 2006 he was the Vice President for
Military Operations at FNH USA, the largest military firearms manufacturer in
the world, and is responsible for all military marketing and sales in the US as
well as strategic development of new weapon systems to meet emergent and future
customer requirements. Mr. Evancoe has extensive experience in special
operations, political-military strategic planning and policy analysis and weapon
systems engineering. He holds a Bachelor of Science in Industrial Technology and
graduate degrees and certificates in Human Resource Development,
Political-Military Strategic Planning and Weapon Systems Engineering.

Dennis Mee, Chief Financial Officer, Member of the Board of
DirectorsMr. Mee is the founder of D.W. MEE and Associates, a
Management Consulting firm for companies since 2002. His services include
providing financing/accounting, strategic planning and other operational
management expertise for small start-up companies. Prior to 2002, Mr. Mee acted
as a CFO for Essentially Yours Industries, a distributor of wellness and health
products in North America. From 1988-1993, Mr. Mee was Vice President, Finance
for Cable & Wireless Telecommunications Inc., a provider of
telecommunication services, networks and equipment with annual sales of over $80
million. Mr. Mee managed an extensive staff and oversaw and had direction of all
finance, purchasing, human resources, corporate affairs and MIS functions during
his tenure with the company.

David Kirby, Member of the Board of DirectorsMr.
Kirby has been employed, for the last five years, as an independent financial
advisor and placement agent specializing in advising and raising capital for US
and international private equity and mezzanine debt partnerships. His employer
for the previous five years has been Kirby Capital Advisors of New Canaan, CT.
Mr. Kirby is a graduate of Harvard Graduate School of Business Administration
(MBA) and also holds a Bachelor of Science in Civil Engineering from the Georgia
Institute of Technology. Mr. Kirby has performed work for AI Inc. over the past
two years.

Page 24

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Audit Committee Financial Expert

We currently do not have an audit committee financial expert or
an independent audit committee expert on our Board of Directors.

Section 16(a) Beneficial Ownership Reporting

Section 16(a) of the Securities and Exchange Act of 1934
requires any person who is our director or executive officer or who beneficially
holds more than 10% of any class of our securities which have been registered
with the Securities and Exchange Commission, to file reports of initial
ownership and changes in ownership with the Securities and Exchange Commission.
These persons are also required under the regulations of the Securities and
Exchange Commission to furnish us with copies of all Section 16(a) reports they
file.

Based solely on a review of copies of such reports furnished to
us and written representations that no other reports were required during the
fiscal year ended October 31, 2006, we believe that all persons subject to the
reporting requirements of Section 16(a) filed the required reports on a timely
basis with the SEC, except as follows:

Date ofInsider
      Filing
      Transaction
      Filing DateStanley Major
    Form 3
    15-Nov-05
    25-Jan-06William Major
    Form 3
    15-Nov-05
    01-Feb-06Terence Major
    Form 3
    15-Nov-05
    01-Mar-06


Code of Ethics

We have not yet prepared written code of ethics and employment
standards for our company. We have not commenced operations. Because we are a
small company, we expect that when we commence operations, management will
communicate our ethical and business expectations effectively on an informal and
personal basis with employees. As the Company grow, we expect we will need to
develop written and codified ethics for employees.

ITEM 10.     EXECUTIVE COMPENSATION.

The Executive Officers have not received compensation during
the fiscal year ended October 31, 2006. As of the date of this Report, we have a
compensation agreement with an officer.

Equity Compensation

There are no securities authorized for issuance under any
equity compensation plan, or any options, warrants, or rights to purchase our
common stock.

Compensation of Directors

We do not compensate our directors for their time spent on
behalf of our Company, but they are entitled to receive reimbursement for all
out of pocket expenses incurred for attendance at our Board of Directors
meetings.

Pension and Retirement Plans

Currently, we do not offer any annuity, pension or retirement
benefits to be paid to any of our officers, directors or employees, in the event
of retirement. There are also no compensatory plans or arrangements with respect
to any individual named above which results or will result from the resignation,
retirement or any other termination of employment with our company, or from a
change in the control of our Company.

Employment Agreements

We do not have written employment agreements with any of our
key employees. AI Inc. entered into an employment agreement, dated December 15,
2006 but effective December 1, 2006, with Paul Evancoe, the Companys president.
The term of the employment agreement is for a period of three years, expiring on
December 14, 2009. Pursuant to the terms of the employment agreement, AI Inc.
agreed to pay Mr. Evancoe $250,000 per year, plus benefits.

Page 25

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Management AgreementWe entered into a contract for
management services dated December 1, 2006, with Dennis Mee. The term of the
consulting agreement is for a period of two years, expiring on November 30,
2008. Pursuant to the terms of the management agreement, we agreed to pay Mr.
Mee $4,000 per month. This agreement can be terminated by either the Company or
the Mr. Mee with 30 days written notice.

Audit Committee

Presently the Board of Directors is performing the duties that
would normally be performed by an audit committee. We intend to form a separate
audit committee, and are seeking potential independent directors. We have
initialized discussions with experienced businesspeople and plan to appoint an
individual qualified as an audit committee financial expert.

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

The following table sets forth certain information, as of
January 29, 2007 with respect to any person (including any group, as that term
is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended
(the Exchange Act)) who is known to the Company to be the beneficial owner of
more than five percent of any class of the Companys voting securities, and as
to those shares of the Companys equity securities beneficially owned by each
its director, the executive officers of the company and all of its directors and
executive officers of the Company and all of its directors and executive
officers as a group. Unless otherwise specified in the table below, such
information, other than information with respect to the directors and officers
of the Company, is based on a review of statements filed, with the Securities
and Exchange commission (the Commission) pursuant to Sections 13 (d), 13 (f),
and 13 (g) of the Exchange Act with respect to the Companys Common Stock. As of
January 29, 2007, there were 91,800,000 shares of Common Stock outstanding.

The number of shares of Common Stock beneficially owned by each
person is determined under the rules of the Commission and the information is
not necessarily indicative of beneficial ownership for any other purpose. Under
such rules, beneficial ownership includes any shares as to which such person has
sole or shared voting power or investment power and also any shares which the
individual has the right to acquire within 60 days after the date hereof,
through the exercise of any stock option, warrant or other right. Unless
otherwise indicated, each person has sole investment and voting power (or shares
such power with his or her spouse) with respect to the shares set forth in the
following table. The inclusion herein of any shares deemed beneficially owned
does not constitute an admission of beneficial ownership of those shares.

The table also shows the number of shares beneficially owned as
of January 29, 2007 by each of the individual directors and executive officers
and by all directors and executive officers as a group.

Name and Address of
    Number of Shares
    Percent of ClassBeneficial Owner
    Beneficially OwnedMr. Paul Evancoe
    
    0%104 South Second
      Street
    NONEBellevue, Idaho, 83313Mr. Dennis Mee
    
    0%1480 Foster Street,
      Suite 28
    NONEWhite Rock, BC V4B 3X7Mr. David Kirby
    
    0%24 Father Peters'
      Lane
    NONENew Canaan, Connecticut, 06840-
    0%All officers and
      directors as a group-
    91,800,000


Percent of Ownership is calculated in accordance with the
Securities and Exchange Commissions Rule 13(d)  13(d)(1). Shares of common
stock subject to warrants currently exercisable or exercisable within 60 days of
January 29, 2007 are deemed outstanding for computing the percentage ownership
of the stockholder holding the warrants, but are not deemed outstanding for
computing the percentage ownership of any other stockholder. Unless otherwise
indicated in the footnotes to this table, we believe that stockholders named in
the table have sole voting and sole investment power with respect to the shares
set forth opposite such stockholder's name. Unless otherwise indicated, the
officers, directors and stockholders can be reached at our principal offices.
Percentage of ownership is based on 91,800,000 shares of our common stock
outstanding as of January 29, 2007.

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ITEM 12.     CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS.

Other than the stock transactions disclosed below, we have not
entered into any transactions in which any of our former directors, directors,
executive officers, or affiliates of our Company, including any member of an
immediate family, had or is to have a direct or indirect material interest.

Mr. Stanley Major, a former President and former member of our
board of directors, purchased 2,000,000 (72,000,000 post-split) shares of common
stock on February 5, 2004 for $2,000 or $0.001 per share.

On March 31, 2004, Mssrs. Stanley Major, William Major and
Terence Major, both former directors of the Company, purchased 1,600,000
(57,600,000 post-split), 300,000 (10,800,000 post-split) and 250,000 (9,000,000
post-split) shares of common stock respectively, for an aggregate of $21,500 or
$0.01 per share.

On June 28, 2006, Mssrs. Stanley Major, William Major and
Terence Major returned 2,000,000 (7,200,000 post-split), 300,000 (10,800,000
post-split), 250,000 (9,000,000 post-split) shares of common stock respectively
to the treasury for cancellation.

ITEM 13.     EXHIBITS.

|Exhibit | **Index**                                                                                                                                                                                      
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                
|3.1     | Articles of Incorporation, incorporated
        by reference to the Exhibits filed with our Registration Statement on
        Form SB-2 filed on February 17, 2005, SEC File Number 333-122870.
|3.2     | By-laws, incorporated by reference
        to the Exhibits filed with our Registration Statement on Form SB-2 filed
        on February 17, 2005, SEC File Number 333-122870.                  
|3.3     | Article of Merger filed with
        the Secretary of State of Nevada, incorporated by reference from Exhibit
        3.1 to the Form 8-K filed April 10, 2006.                                
|10.1    | Management agreement with Dennis
        Mee, incorporated by reference from Exhibit 10.1 to our Form 8-K filed
        December 5, 2006.                                                      
|10.2    | Non-binding Letter of Intent
        between the Company and AI Inc., dated November 16, 2006, incorporated
        by reference from Exhibit 10.1 to our Form 8-K filed November 17, 2006.    
|31.1    | Section
        302 Certification  Chief Executive Officer                                                                                                                                    
|31.2    | Section
        302 Certification  Chief Financial Officer                                                                                                                                    
|32.1    | Certification
        Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
        of the Sarbanes-Oxley Act of 2002  Chief Executive Officer.                              
|32.2    | Certification
        Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
        of the Sarbanes-Oxley Act of 2002  Chief Financial Officer.                              

ITEM 14.     PRINCIPAL ACCOUNTANT FEES
AND SERVICES

Audit Fees.

The aggregate fees billed by our auditors, for professional
services rendered for the audit of our annual financial statements for the year
ended October 31, 2006 and 2005, and for the reviews of the financial statements
included in our Quarterly Reports on Form 10-QSB during that fiscal year were
$19,296, and $9,100, respectively.

Audit Related Fees.

We incurred nil fees to auditors for audit related fees during
the fiscal year ended October 31, 2006 and 2005.

Tax Fees.

We incurred nil fees to auditors for tax compliance, tax advice
or tax compliance services during the fiscal year ended October 31, 2006 and
2005.

All Other Fees.

We did not incur any other fees billed by auditors for services
rendered to our Company, other than the services covered in "Audit Fees" for the
fiscal year ended October 31, 2006 and 2005.

The Board of Directors has considered whether the provision of
non-audit services is compatible with maintaining the principal accountant's
independence.

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this Report to be signed on it behalf by the undersigned,
thereto duly authorized.

| | AEGIS INDUSTRIES, INC.
| | ----------------------
| |                       
| |                       
| | By:                   
| |                       
| |                       
| |                       
| |                       

In accordance with the Exchange Act, this Report has been
signed by the following persons on behalf of the registrant and in the
capacities and on the dates included:

| | By: | /s/ Dennis Mee                                       
| | --- | -----------------------------------------------------
| |     | Dennis Mee                                           
| |     | Chief Financial Officer,
      Secretary and Director
| |     |                                                      
| |     | Date: January 29, 2007                               
| |     |                                                      
| |     |                                                      
| | By: | /s/ David Kirby                                      
| |     | David Kirby                                          
| |     | Director                                             
| |     |                                                      
| |     | Date: January 29, 2007                               

Supplemental information to be furnished with reports filed
pursuant to Section 15(d) of the Exchange Act by non-reporting issuers

No annual report or proxy material was sent to security holders
during the financial year ended October 31 2006.

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