**U.S.
      SECURITIES AND EXCHANGE COMMISSION**


**WASHINGTON,
      DC 20549**




**FORM
      10-QSB**


(MARK
          ONE)


þ  Quarterly
      Report Pursuant to Section 13 or 15(d) of Securities Exchange Act of
      1934




For
      the
      quarterly period ended **March
      31, 2006**




o  Transition
      report under Section 13 or 15(d) of the Securities Exchange Act of
      1934




For
      the
      transition period from _______ to _______.




**Commission
      File No. 000-28321**




U NITED  C OMPANIES  C ORPORATION


(Name
      of
      Small Business Issuer in Its Charter)




**Nevada**
            **88-0374969**(State
                or Other Jurisdiction of Incorporation or Organization)
            (I.R.S.
                Employer Identification No.)**940
                N.W. 1****st****Street, Fort Lauderdale, Florida**
            **33311**(Address
                of Principal Executive Offices)
            (Zip
                Code)




(954)
                462-5570(Issuer’s
                Telephone Number, Including Area
                Code)





A VID  S PORTSWEAR & G OLF  C ORP .


(Former
      Name)






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, and (2) has been subject
      to
      such filing requirements for the past 90 days. Yes x No o




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




There
      were 148,970,677 shares of common stock outstanding as of May 1, 2006.




1




**PART
      I**




ITEM1.  FINANCIAL
      STATEMENTS




**Financial
      Information**





UNITED
        COMPANIES CORPORATION
 CONSOLIDATED
        BALANCE SHEET
 MARCH
        31,
        2006


(UNAUDITED)
  ASSETSCurrent
                  assetsCash
              
              $
              11,784Accounts
                  receivable, net of $29,000 allowance for doubtful accounts
              
              
              129,975Inventory
              
              
              442,188Prepaid
                  expense and other current assets
              
              
              35,255Deferred
                  tax asset, net - current
              
              
              7,597Total
                  current assets
              
              
              626,799Fixed
                  assets, net
              
              
              34,749Other
                  assetsDeferred
                  tax asset, net - non-current
              
              
              16,609Other
                  assets, net of $59,950 accumulated amortization
              
              
              9,518Total
                  other assets
              
              
              26,127Total
                  assets
              
              $
              687,675LIABILITIES
                  AND STOCKHOLDERS' DEFICITCurrent
                  liabilitiesAccounts
                  payable and accrued liabilities
              
              $
              531,703Lease
                  payable - related party
              
              
              30,425Customer
                  deposits
              
              
              91,253Other
                  liabilities
              
              
              36,972Royalties
                  payable - related parties
              
              
              25,540Notes
                  payable - current portion
              
              
              10,115Notes
                  payable - related parties - current portion
              
              
              30,321Secured
                  convertible debentures
              
              
              269,610Total
                  current liabilities
              
              
              1,025,939Long-term
                  liabilitiesNotes
                  payable - long-term portion
              
              
              10,724Notes
                  payable - related parties - long-term portion
              
              
              644,775Total
                  liabilities
              
              
              1,681,438Commitments
                  and contingenciesStockholders'
                  deficitCommon
                  stock; $0.001 par value; 250,000,000 shares authorized148,970,677
                  shares issued and outstanding
              
              
              148,971Additional
                  paid-in capital
              
              
              624,146Commitment
                  fees related to equity line of credit
              
              
              (50,452
              )Accumulated
                  deficit
              
              
              (1,716,428
              )Total
                  stockholders' deficit
              
              
              (993,763
              )Total
                  liabilities and stockholders' deficit
              
              $
              687,675




See
        Accompanying Notes to Consolidated Financial
        Statements


2


UNITED
        COMPANIES CORPORATION
 CONSOLIDATED
        STATEMENTS OF OPERATIONS
 (UNAUDITED)





Three
                  Months Ended March 31,2006
              
              2005Net
                  revenues
              
              $
              702,738
              
              $
              690,341Cost
                  of net revenues
              
              
              436,680
              
              
              492,230Gross
                  profit
              
              
              266,058
              
              
              198,111Operating
                  expensesResearch
                  and development costs
              
              
              2,841
              
              
              4,538Selling,
                  general and administrative
              
              
              248,395
              
              
              239,326Total
                  operating expenses
              
              
              251,236
              
              
              243,864Income
                  (loss) from operations
              
              
              14,822
              
              
              (45,753
              )Other
                  (income) expensesOther
                  (income) expenses
              
              
              4,307
              
              
              2,040Interest
                  expense
              
              
              20,042
              
              
              22,602Total
                  other (income) expenses
              
              
              24,349
              
              
              24,642Net
                  loss before provision for income taxes
              
              
              (9,527
              )
              
              (70,395
              )Provision
                  for income tax benefit (expense)
              
              
              --
              
              
              --Net
                  loss
              
              $
              (9,527
              )
              $
              (70,395
              )Basic
                  loss per common share
              
              $
              --
              
              $
              --Diluted
                  loss per common share
              
              $
              --
              
              $
              --Basic
                  and diluted weighted average commonshares
                  outstanding
              
              
              142,234,566
              
              
              114,486,712




See
      Accompanying Notes to Consolidated Financial
      Statements


3


UNITED
        COMPANIES CORPORATION
 CONSOLIDATED
        STATEMENT OF STOCKHOLDERS' DEFICIT
  Commitment
                  FeesRelated
                  toAdditional
              
              Standby
                  Equity
              
              
              
              TotalCommon
                  Stock
              
              Paid-in
              
              Distribution
              
              Accumulated
              
              Stockholders'Shares
              
              Amount
              
              Capital
              
              Agreement
              
              Deficit
              
              DeficitBalance,
                  December 31, 2005
              
              
              136,470,677
              
              $
              136,471
              
              $
              616,489
              
              $
              (86,205
              )
              $
              (1,706,901
              )
              $
              (1,040,146
              )Conversion
                  of Secured Convertible Debenture tocommon
                  stock pursuant to the SecuritiesPurchase
                  Agreement dated April 4, 2004
              
              
              12,500,000
              
              
              12,500
              
              
              17,500
              
              
              --
              
              
              --
              
              
              30,000Amortization
                  of commitment fees related toStandby
                  Equity Distribution Agreement
              
              
              --
              
              
              --
              
              
              (35,753
              )
              
              35,753
              
              
              --
              
              
              --Consulting
                  expense recognized for stockwarrants
                  issued in conjunction with theconsulting
                  agreement effective January 1, 2005
              
              
              --
              
              
              --
              
              
              25,910
              
              
              --
              
              
              --
              
              
              25,910Net
                  loss
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              (9,527
              )
              
              (9,527
              )Balance,
                  March 31, 2006 (Unaudited)
              
              
              148,970,677
              
              $
              148,971
              
              $
              624,146
              
              $
              (50,452
              )
              $
              (1,716,428
              )
              $
              (993,763
              )




See
      Accompanying Notes to Consolidated Financial
      Statements




4


UNITED
        COMPANIES CORPORATION
 CONSOLIDATED
        STATEMENTS OF CASH FLOWS
 (UNAUDITED)


Three
                  Months Ended March 31,2006
              
              2005Cash
                  flows from operating activities:Net
                  loss
              
              $
              (9,527
              )
              $
              (70,395
              )Adjustments
                  to reconcile net loss to netcash
                  (used) provided by operating activities:Depreciation
                  and amortization
              
              
              4,491
              
              
              14,489Stock
                  based compensation
              
              
              25,910
              
              
              25,910Change
                  in deferred tax asset
              
              
              --
              
              
              --Loss
                  on disposal of fixed assets
              
              
              --
              
              
              2,033Changes
                  in operating assets and liabilities:Change
                  in accounts receivable, net
              
              
              (77,357
              )
              
              (18,847
              )Change
                  in inventory
              
              
              (13,505
              )
              
              35,789Change
                  in prepaid expenses and other current assets
              
              
              (16,085
              )
              
              (468
              )Change
                  in other assets
              
              
              5,928
              
              
              (66
              )Change
                  in accounts payable and accrued liabilities
              
              
              84,846
              
              
              14,708Change
                  in lease payable - related party
              
              
              11,475
              
              
              --Change
                  in customer deposits
              
              
              (37,878
              )
              
              8,567Change
                  in other liabilities
              
              
              4,312
              
              
              549Change
                  in royalties payable - related parties
              
              
              7,975
              
              
              --Net
                  cash (used) provided by operating activities
              
              
              (9,415
              )
              
              12,269Cash
                  flows from investing activities:Purchase
                  of fixed assets
              
              
              --
              
              
              (4,154
              )Net
                  cash used by investing activities
              
              
              --
              
              
              (4,154
              )Cash
                  flows from financing activities:Change
                  in due to related parties
              
              
              --
              
              
              5,333Proceeds
                  from borrowings on notes payable - related parties
              
              
              --
              
              
              10,779Principal
                  payments on notes payable
              
              
              (2,438
              )
              
              (3,786
              )Principal
                  payments on notes payable related parties
              
              
              (6,708
              )
              
              (2,767
              )Principal
                  payments on capital lease obligations
              
              
              --
              
              
              --Net
                  cash (used) provided by financing activities
              
              
              (9,146
              )
              
              9,559Net
                  change in cash
              
              
              (18,561
              )
              
              17,674Cash,
                  beginning of period
              
              
              30,345
              
              
              2,328Cash,
                  end of period
              
              $
              11,784
              
              $
              20,002Supplemental
                  disclosure of cash flow information:Cash
                  paid for interest
              
              $
              5,681
              
              $
              1,813Cash
                  paid for taxes
              
              $
              --
              
              $
              --Supplemental
                  disclosure of non-cash financing activities:Conversion
                  of Secured Convertible Debenture into Stock as provided in Stock
                  Purchase
                  Agreement
              
              $
              30,000
              
              $
              20,000Amortization
                  of commitment fees related to Standby Equity Distribution
                  Agreement
              
              $
              35,753
              
              $
              35,753
 See
        Accompanying Notes to Consolidated Financial
        Statements


5




UNITED
          COMPANIES CORPORATION
 NOTES
          TO
          CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
 
 1.  DESCRIPTION
          OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Description
          of business –
          United Companies
          Corporation (hereinafter referred to as the “Company”) designs, tests,
          manufactures and distributes recreational hookah diving, yacht based scuba
          air
          compressor and Nitrox Generation Systems, and scuba and water safety products
          through its wholly owned subsidiary Trebor Industries, Inc. The Company
          sells
          its products both on a wholesale and retail basis, and does so from its
          headquarters and manufacturing facility in Fort Lauderdale, Florida. The
          Company
          does business as (dba) Brownie’s Third Lung, the dba name of Trebor Industries,
          Inc.
 
 History –
United
          Companies Corporation (UCC) was incorporated under the laws of Nevada on
          November 26, 2001, with authorized common stock of 250,000,000 shares with
          a par
          value of $0.001.
 
 On
          March
          23, 2004, UCC consummated an agreement to acquire all of the outstanding
          capital
          stock of Trebor Industries, Inc., dba Brownies Third Lung, in exchange
          for
          95,000,000 shares of the Company’s common stock (“the UCC Transaction”). Prior
          to the UCC Transaction, UCC was a non-operating public shell company with
          no
          operations, nominal assets, accrued liabilities totaling $224,323 and 14,483,718
          shares of common stock issued and outstanding; and Trebor Industries, Inc.,
          dba
          Brownies Third Lung, was a manufacturer and distributor of hookah diving,
          and
          yacht based scuba air compressor and Nitrox Generation Systems from its
          factory
          in Ft. Lauderdale, Florida. The UCC Transaction is considered to be a capital
          transaction in substance, rather than a business combination. Inasmuch,
          the UCC
          Transaction is equivalent to the issuance of stock by Trebor Industries,
          Inc.,
          dba Brownies Third Lung, for the net monetary assets of a non-operational
          public
          shell company (UCC), accompanied by a recapitalization. UCC issued 95,000,000
          shares of its common stock for all of the issued and outstanding common
          stock of
          Trebor Industries, Inc., dba Brownies Third Lung. The accounting for the
          UCC
          Transaction is identical to that resulting from a reverse acquisition,
          except
          goodwill or other intangible assets will not be recorded. Accordingly,
          these
          financial statements are the historical financial statements of Trebor
          Industries, Inc., dba Brownies Third Lung. Trebor Industries, Inc., dba
          Brownies
          Third Lung, was incorporated in September 17, 1981. Therefore, these financial
          statements reflect activities from September 17, 1981 (Date of Inception
          for
          Trebor Industries, Inc,. dba Brownies Third Lung) and forward.
 
 Definition
          of fiscal year –
The
          Company’s fiscal year end is December 31.
 
 Use
          of
          estimates - The
          preparation of financial statements in conformity with accounting principles
          generally accepted in the United States of America requires management
          to make
          estimates and assumptions that affect the reported amounts of assets and
          liabilities and disclosure of contingent assets and liabilities at the
          date of
          the financial statements and the reported amounts of revenue and expenses
          during
          the reporting period. Actual results could differ from those
          estimates.
 
 Reclassifications –
Certain
          reclassifications have been made to the 2005 financial statement amounts
          to
          conform to the 2006 financial statement presentation.
 
 Inventory –
          Inventory is stated at the lower of cost or market. Cost is principally
          determined by using the average cost method that approximates the First-In,
          First-Out (FIFO) method of accounting for inventory. Inventory consists
          of raw
          materials as well as finished goods held for sale. The Company’s management
          monitors the inventory for excess and obsolete items and makes necessary
          valuation adjustments when required.
  6
  UNITED
          COMPANIES CORPORATION
 NOTES
          TO
          CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
  1. DESCRIPTION
          OF BUSINESS AND SUMMARY OF SIGNIFICANT POLICIES (continued)
 
 Fixed
          assets –
Fixed
          assets are stated at cost less accumulated depreciation. Depreciation is
          provided principally on the straight-line method over the estimated useful
          lives
          of the assets, which is primarily 3 to 5 years. The cost of repairs and
          maintenance is charged to expense as incurred. Expenditures for property
          betterments and renewals are capitalized. Upon sale or other disposition
          of a
          depreciable asset, cost and accumulated depreciation are removed from the
          accounts and any gain or loss is reflected in other income
          (expense).
 
 The
          Company periodically evaluates whether events and circumstances have occurred
          that may warrant revision of the estimated useful lives of fixed assets
          or
          whether the remaining balance of fixed assets should be evaluated for possible
          impairment. The Company uses an estimate of the related undiscounted cash
          flows
          over the remaining life of the fixed assets in measuring their
          recoverability.
 
 Revenue
          recognition –
          Revenues from product sales are recognized when the Company’s products are
          shipped or when service is rendered. Revenues from fixed-price contracts
          are
          recognized on the percentage-of-completion method, measured by the percentage
          of
          cost incurred to date to estimated total cost of each contract. This method
          is
          used because management considers the percentage of cost incurred to date
          to
          estimated total cost to be the best available measure of progress on the
          contracts.
 
 Contract
          costs include all direct material and labor costs and those indirect costs
          related to contract performance, such as indirect labor, supplies, tools,
          repairs, and depreciation costs. General and administrative costs are charged
          to
          expense as incurred. Provisions for estimated losses on uncompleted contracts
          are made in the period in which such losses are determined. Change in job
          performance, job conditions, and estimated profitability may result in
          revisions
          to costs and income and are recognized in the period in which the revisions
          are
          determined.
 
 Revenue
          and costs incurred for time and material projects are recognized currently
          as
          the work is performed.
 
 Product
          development costs –
Product
          development expenditures are charged to expenses as incurred.
 
 Advertising
          and marketing costs –
The
          Company recognizes advertising expenses in accordance with Statement of
          Position
          93-7 “Reporting on Advertising Costs.” Accordingly, the Company expenses the
          costs of producing advertisements at the time production occurs, and expenses
          the costs of communicating advertisements in the period in which the advertising
          space or airtime is used. Advertising and trade show expense incurred for
          the
          three months ended March 31, 2006 and 2005 was $8,330, and $13,762,
          respectively.
  7
  UNITED
          COMPANIES CORPORATION
 NOTES
          TO
          CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
 
 1.  DESCRIPTION
          OF BUSINESS AND SUMMARY OF SIGNIFICANT POLICIES (continued)
 
 Income
          taxes –
The
          Company accounts for its income taxes in accordance with Statement of Financial
          Accounting Standards No. 109, which requires recognition of deferred tax
          assets
          and liabilities for future tax consequences attributable to differences
          between
          the financial statement carrying amounts of existing assets and liabilities
          and
          their respective tax bases and tax credit carryforwards. 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. 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.
 
 As
          of
          March 31, 2006, the Company has available a net operating loss carryforward
          that
          will expire in 2024. The Company has established a valuation allowance
          for 50%
          of the tax benefit of the operating loss carryover due to the uncertainty
          regarding realization.
 
 Comprehensive
          income (loss) –
The
          Company has no components of other comprehensive income. Accordingly, net
          loss
          equals comprehensive loss for all periods.
 
 Stock-based
          compensation –
The
          Company accounts for stock based compensation in accordance with Statement
          of
          Financial Accounting Standards No. 123 revised that requires that the Company
          measures the cost of employee services received in exchange for an award
          of
          equity instruments based on the grant-date fair value of the award. That
          cost is
          recognized over the period the employee is required to provide service
          in
          exchange for the award.
 
 The
          Company did not issue any stock, warrants or options to employees for
          compensation for the three months ended March 31, 2006.
 
 Fair
          value of financial instruments - The
          carrying amounts and estimated fair values of the Company’s financial
          instruments approximate their fair value due to the short-term
          nature.
 
 Earnings
          (loss) per common share –
Basic
          earnings (loss) per share excludes any dilutive effects of options, warrants
          and
          convertible securities. Basic earnings (loss) per share is computed using
          the
          weighted-average number of outstanding common shares during the applicable
          period. Diluted earnings (loss) per share is computed using the weighted
          average
          number of common and common stock equivalent shares outstanding during
          the
          period. Common stock equivalent shares are excluded from the computation
          if
          their effect is antidilutive. As a result, 101,029,323 common stock equivalent
          shares were excluded from the computation at March 31, 2006 since their
          effect
          was antidilutive.
  8
  UNITED
          COMPANIES CORPORATION
 NOTES
          TO
          CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
 
 1. DESCRIPTION
          OF BUSINESS AND SUMMARY OF SIGNIFICANT POLICIES (continued)
 
 New
          accounting pronouncements –
In
          May
          2005, the Financial Accounting Standards Board (“FASB”) issued Statement of
          Financial Accounting Standards (“SFAS”) No. 154, Accounting Changes and Error
          Corrections - a replacement of APB Opinion No. 20 and FASB Statement No.
          3. The
          statement changes the requirements for the accounting for and reporting
          of a
          voluntary change in accounting principle. The Statement requires retrospective
          application of prior periods’ financial statement of changes in accounting
          principle, unless it is impracticable to determine either the period-specific
          effects or the cumulative effect of the change. When it is impracticable
          to
          determine the period-specific effects of an accounting change on one of
          more
          individual periods presented, this Statement requires that the new accounting
          principle be applied to the balances of assets and liabilities as of the
          beginning of the earliest period for which retrospective application is
          practicable and that a corresponding adjustment be made to the opening
          balance
          of retained earnings (or other appropriate components of equity or net
          assets in
          the statement of financial position) for that period rather than being
          reported
          in an income statement. When it is impracticable to determine the cumulative
          effect of applying a change in accounting principle to all prior periods,
          this
          Statement requires that the new accounting principle be applied as if it
          were
          adopted prospectively from the earliest date practicable. The Statement
          carries
          forward the without change the guidance contained in APB opinion No. 20
          for
          reporting the correction of an error in previously issued financial statements,
          a change in accounting estimate, and guidance regarding justification of
          a
          change in accounting principle on the basis of preferability. The Statement
          is
          effective for all fiscal years beginning after December 31, 2005. As allowed
          by
          the Statement, the Company adopted early application in June 2005 with
          no
          significant financial impact.
 
 In
          March,
          2005, the FASB issued Summary of Interpretation No. 47, Accounting for
          Conditional Asset Retirement Obligations – an interpretation of FASB Statement
          No. 143. The Interpretation clarifies that the term “conditional asset
          retirement obligation” as used in FASB Statement No. 143, Accounting for Asset
          Retirement Obligations, refers to legal obligation to perform an asset
          retirement activity in which the timing and (or) method of settlement are
          conditional on a future event that may or may not be within control of
          the
          entity. The Interpretation directs that the entity is required to recognize
          a
          liability for the fair value of the conditional asset retirement obligation
          if
          the fair value of the liability can be reasonably estimated. The fair value
          of a
          liability for the conditional asset retirement obligation should be recognized
          when incurred - generally upon acquisition, construction, or development
          and
          (or) through the normal operation of the asset. The Interpretation further
          clarifies when an entity would have sufficient information to reasonably
          estimate the fair value of an asset retirement obligation acknowledging
          that in
          some cases this information may not be available. The Interpretation is
          effective no later than the end of the fiscal years ending after December
          15,
          2005 (December 31, 2005 for calendar year enterprises). As encouraged by
          the
          FASB, the Company elected early application of this Interpretation in the
          year
          ended December 31, 2005 without significant financial impact.
 
 In
          December 2004, the FASB issued SFAS No. 123 revised, Accounting for Stock-Based
          Compensation. Under SFAS No. 123 revised, the Company will measure the
          cost of
          employee services received in exchange for an award of equity instruments
          based
          on the grant-date fair value of the award. That cost will be recognized
          over the
          period the employee is required to provide service in exchange for the
          award.
          SFAS No. 123 revised, replaces SFAS No.123, and supersedes Accounting Principles
          Board (“APB”) Opinion No. 25, Accounting for Stock Issued to Employees, and its
          related implementation guidance. In addition, SFAS No. 123 revised amends
          SFAS
          No. 95, Statement of Cash Flows, to require that excess tax benefits be
          reported
          as financing cash inflow rather than as a reduction of taxes paid. The
          Company
          elected early adoption of SFAS No. 123 during the year ended December 31,
          2004
          without significant financial impact. Previously, the Company had applied
          APB
          Opinion No. 25, in accounting for stock-based compensation to employees.
          For
          stock options and warrants issued to non-employees, the Company was applying
          SFAS No. 123, Accounting for Stock-Based Compensation, which requires the
          recognition of compensation cost based upon the fair value. Fair value
          is
          measured based on whichever is more reliable, the cost of the good or service,
          or the fair value of the equity instrument issued. SFAS No. 123 revised
          did not
          change the accounting treatment as it relates to non-employee compensation
          based
          equity awards issued.
  9
  UNITED
          COMPANIES CORPORATION
 NOTES
          TO
          CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
 
 1.  DESCRIPTION
          OF BUSINESS AND SUMMARY OF SIGNIFICANT POLICIES (continued)
 
 In
          December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary
          Assets-Amendment of APB Opinion No. 29. This statement amends APB Opinion
          29
          that is based on the principle that exchanges of nonmonetary assets should
          be
          measured based on the fair value of the assets exchanged, with certain
          exceptions. SFAS No. 153 eliminates APB No. 29’s exception for nonmonetary
          exchanges of similar productive assets and replaces it with a general exception
          for exchanges of nonmonetary assets that do not have commercial substance.
          Commercial substance is assumed if the future cash flows of the entity
          are
          expected to change significantly as a result of the exchange. The Company
          elected early adoption of this statement during the year ended December
          31, 2004
          with no significant financial impact.
 
 In
          November 2004, the FASB issued SFAS No. 151, Inventory Costs-Amendment
          of ARB
          No. 43. The statement amends the guidance in ARB No. 43 regarding “inventory
          pricing” to clarify the accounting for “abnormal” amounts of idle facility
          expense, freight, handling costs, and wasted material (spoilage). SFAS
          No. 151
          calls for the treatment of these costs as period costs regardless of the
          normal
          or “abnormal” nature of them. SFAS No. 151 eliminates the “so abnormal”
classification provision found in ARB No. 43. The Company elected early
          adoption
          of this statement during the year ended December 31, 2004, with no significant
          financial impact.
 
 In
          December 2003, the FASB issued Interpretation No. 46 revised , Consolidation
          of
          Variable Interest Entities, an interpretation of Accounting Research Bulletin
          No. 51, Consolidated Financial Statements. The Interpretation addresses
          consolidation by business enterprises of variable interest entities and
          was
          effective immediately for variable interest entities created after January
          31,
          2003. It applies in the first fiscal year or interim period beginning after
          June
          15, 2003, to variable interest entities acquired before February 1, 2003.
          The
          Company adopted the Interpretation during the year ended December 31, 2004
          with
          no significant financial impact.
 
 2.  INVENTORY
 
 Inventory
          consists of the following as of March 31, 2006:
  Raw
                    materials
                
                $
                237,012Work
                    in process
                
                
                —Finished
                    goods
                
                
                205,176$
                442,188
 
 3.  PREPAID
          EXPENSE AND OTHER CURRENT ASSETS
 
 Prepaid
          expense and other current assets totaling $35,255 at March 31, 2006, consists
          of
          $16,800 of prepaid insurance, tradeshow, advertising and software maintenance
          expenses, and $18,455 of prepaid inventory.
 
 4.  FIXED
          ASSETS
 Fixed assets consists of the following as of March 31, 2006:
 Furniture,
                    vehicles, and equipment
                
                $
                212,324Leasehold
                    improvements
                
                
                7,000219,324Less:
                    accumulated depreciation and amortization
                
                
                (184,575
                )$
                34,749
 10


UNITED
      COMPANIES CORPORATION


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





5. CUSTOMER
        CREDIT CONCENTRATIONS





Sales
      to
      Brownie’s Southport Diver’s, Inc. for the three months ended March 31, 2006 and
      2005 represented 22.0% and 38.2%, respectively, of total Company Net revenues.
      Sales to West Marine for the three months ended March 31, 2006 and 2005
      represented 4.7% and 11.1%, respectively, of total Company Net revenues.
      Accounts receivable from Brownie’s Southport Diver’s Inc. at March 31, 2006 was
      $23,110. Sales to no other customer represented greater than 10% of Net revenues
      for the three months ended March 31, 2006 and 2005. Brownie’s Southport Diver’s
      Inc, is owned by the brother of Robert Carmichael, the Company’s Chief Executive
      Officer, as further discussed in Note 6 - RELATED
      PARTY TRANSACTIONS.





6.  RELATED
      PARTY TRANSACTIONS





Notes
      payable – related parties consists
      of the following as of March 31, 2006:





Promissory
                note payable to the Chief Executive Officer of the
                Company,unsecured,
                bearing interest at 10% per annum, due in monthly principaland
                interest payments of $3,924, maturing on March 1, 2010, with aballoon
                payment of $431,795 due. The note will be discounted 15%
                ofthe
                outstanding principal balance if it is paid in full by April, 1
                2007.
            
            $
            444,842Promissory
                note payable to an entity owned by the Company’s ChiefExecutive
                Officer, unsecured, bearing interest at 10% per annum, duein
                monthly principal and interest payments of $1,802, maturing onMarch
                1, 2010, with a balloon payment of $198,264 due. The notewill
                be discounted 15% of the outstanding principal balance if
                itis
                paid in full by April 1, 2007.
            
            
            204,255Promissory
                note payable due an entity owned by the Company’s ChiefExecutive
                Officer, unsecured, bearing 0% interest per annum, due inmonthly
                principal only payments of $2,292, maturing on February
                15,2007.
            
            
            25,999675,096Less
                amounts due within one year
            
            
            30,321Long-term
                portion of Notes payable – related parties
            
            $
            644,775





As
      of
      March 31, 2006, principal payments on the Notes payable – related parties are as
      follows:





2006
            
            $
            24,6992007
            
            
            8,9002008
            
            
            4,7692009
            
            
            5,2682010
            
            
            631,460$
            675,096


11


UNITED
      COMPANIES CORPORATION


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





6.
            RELATED
                PARTY TRANSACTIONS(continued)





Revenues –
The
      Company sells products to two entities owned by the brother of the Company’s
      Chief Executive Officer, Brownie’s Southport Divers, Inc. and Brownie’s Palm
      Beach Divers. Terms of sale are no more favorable than those extended to any
      of
      the Company’s other customers. Combined revenue from these entities for the
      three months ended March 31, 2006 and 2005, was $177,762 and $312,717,
      respectively. Accounts receivable from Brownie’s SouthPort Diver’s, Inc. and
      Brownie’s Palm Beach Divers at March 31, 2006 was $23,110 and $29, respectively.





Royalties –
The
      Company has Non-Exclusive License Agreements with an entity that the Company’s
      Chief Executive Officer has an ownership interest to license product patents
      it
      owns. Based on the agreements with the entity, the Company pays royalties
      ranging from $1.00 to $50.00 per licensed products sold, with rates increasing
      5% annually. With the same entity, the Company has a Non-Exclusive License
      Agreement to license a trademark of products owned by the entity. Based on
      the
      agreement, the Company will pay the entity $0.25 per licensed product sold,
      with
      rates increasing $0.05 annually.





The
      Company has Non-Exclusive License Agreements with an entity owned by the
      Company’s Chief Executive Officer to license product patents it owns. Under
      the terms of the agreements, the Company pays the other related entity $2.00
      per
      licensed product sold, rates increasing 5% annually. With the same entity,
      the
      Company has an Exclusive License Agreement to license the trademark “Brownies
      Third Lung”, “Tankfill”, “Brownies Public Safety” and various other related
      trademarks as listed in the agreement. Based on the renegotiated agreement
      effective January 1, 2006, the Company pays the entity 2.5% of gross revenues
      per quarter, with a 66% royalty fee discount period through December 31, 2006,
      after which time the royalty rate will return to 100%. In addition, the
      agreement provides for a $600 advertising credit per month against the royalties
      due quarterly. At December 31, 2006, whatever cumulative portion of the
      advertising credit the Company has not used for advertising, if any, will become
      due and payable to the related party entity as royalty.





Total
      royalty expense for the above agreements for the three months ended March 31,
      2006 and 2005, was $7,975 and $4,737, respectively. As of March 31, 2006, the
      Company was in arrears on royalty payments by $25,540. The related parties
      continue to work with the Company regarding payment and no notices of default
      have been issued as a result.





Lease
      Expense – The Company leases its facility from an entity in which the Chief
      Executive Officer has an ownership interest. For the three months ended March
      31, 2006 and 2005, lease expense was $30,475, and $30,475, respectively. As
      of
      March 31, 2006, the Company was in arrears on lease payments by $30,425. The
      Company is making reduced rental payments, with the intention to bring the
      liability current by mid 2006. The landlord continues to work with the Company
      under this arrangement and has not issued a notice of default as a result.


12


UNITED
      COMPANIES CORPORATION


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





7. CUSTOMER
        DEPOSITS AND RETURN POLICY





The
      Company takes a minimum 50% deposit against custom and large tankfill systems
      prior to ordering and/or building the systems. The remaining balance due is
      payable upon delivery, shipment, or installation of the system. There is no
      provision for cancellation of custom orders once the deposit has been accepted,
      nor return of the custom ordered product. Additionally, returns of all other
      merchandise is subject to a 20% restocking fee as stated on each sales invoice.





8.  OTHER
      LIABILITIES





Other
      liabilities totaling $36,972 as of March 31, 2006, consists of $23,472 on-line
      training liability, and $13,500 related to a notice of amount due from a
      government agency discussed below.





On
      July
      8, 2005, the Company received a notice of delinquency and amount due associated
      with a settlement the Company had with a government agency for payment of a
      fine. On June 28, 2005 the Company made the last payment due under the
      settlement agreement of $24,000. Pursuant to the settlement agreement, if all
      payments were not made strictly in accordance with the payment schedule then
      the
      amount due would revert back to the original assessed amount of $37,500. No
      notice of default or official change in amount due was received prior to this
      notice request.





The
      notice of delinquency asserts that the amount now due by the Company is $28,133.
      The Company is currently in the process of investigating the assertion of the
      amount due as it feels there is no basis for the total assessment. The Company
      has requested abatement of the total additional amount shown due and is awaiting
      resolution. However, based on receipt of this notice, the Company recorded
      an
      other liability in the amount of $13,500 (the $37,500 original assessment less
      the $24,000 settlement amount paid).





Effective
      July 1, 2005, the Company began including on-line training certificates with
      all
      hookah units sold. The training certificates entitle the holder to an on-line
      interactive course at no additional charge to the holder. The number of on-line
      training certificates issued per unit is the same as the number of divers the
      unit as sold is designed to accommodate (i.e., a three diver unit configuration
      comes with three on-line training certificates). The certificates have an
      eighteen-month redemption life after which time they expire. The eighteen-month
      life of the certificates begins at the time the customer purchases the unit.
      The
      Company owes the on-line training vendor the agreed upon negotiated rate for
      all
      on-line certificates redeemed payable at the time of redemption. For
      certificates that expire without redemption, no amount is due the on-line
      training vendor. The Company has no historical data with regard to the
      percentage of certificates that will be redeemed versus those that will expire.
      Therefore, until the Company accumulates historical data related to the
      certificate redemption ratio, it will assume that 100% of certificates issued
      with unit sales will be redeemed. Accordingly, at the time a unit is sold,
      the
      related on-line training liability is recorded. The same liability is reduced
      as
      certificates are redeemed and the related payments are made to the on-line
      training vendor.


13


UNITED
      COMPANIES CORPORATION


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





9.
            NOTES
                PAYABLE





Notes
      payable consists of the following as of March 31, 2006:





Promissory
                note payable secured by a vehicle of the Company having acarrying
                value of $7,784 at March 31, 2006, bearing interest at10.16%
                per annum, due in monthly principal and interest payments of$553,
                maturing on October 28, 2007.
            
            $
            9,672Promissory
                note payable secured by a vehicle of the Company having aCarrying
                value of $10,992 at March 31, 2006, bearing no interest,due
                in monthly principal and interest payments of $349,
                maturingon
                November 14, 2008.
            
            
            11,16720,839Less
                amounts due within one year
            
            
            10,115Long-term
                portion of Notes payable
            
            $
            10,724





As
      of
      March 31, 2006, principal payments on the Notes payable are as
      follows:





2006
            
            $
            7,5292007
            
            
            9,4712008
            
            
            3,839$
            20,839





10.  SECURED
      CONVERTIBLE DEBENTURES





On
      April
      2, 2004, the Company issued a Secured Convertible Debenture to Cornell Capital
      Partners, LP in the principal amount of $250,000. The Secured Convertible
      Debenture is convertible into shares of the Company’s common stock at a price
      per share that is equal to the lesser of: (i) an amount equal to 120% of the
      closing bid price of our common stock as of the date of the convertible
      debenture or (ii) an amount equal to 80% of the average of the lowest daily
      volume weighted average price of our common stock for the five trading days
      immediately preceding the conversion date. The Secured Convertible Debenture
      accrues interest at a rate of 5% per year and is convertible at the holder’s
      option. The Secured Convertible Debenture has a term of two (2) years. At the
      Company’s option, the Secured Convertible Debenture may be paid in cash or
      converted into shares of common stock unless converted earlier by the holder.
      Except after an event of default, as set forth in the Secured Convertible
      Debenture, Cornell Capital Partners, LP is not entitled to convert such
      debenture for a number of shares of common stock of the Company in excess of
      that number of shares which, upon giving effect to the debenture if such
      conversion would cause the aggregate number of shares of common stock
      beneficially held by such holder and its affiliated to exceed 4.99% of the
      outstanding shares of common stock of the Company. The Company has the right
      to
      redeem with fifteen (15) business days advance notice, a portion or all of
      the
      outstanding Secured Convertible Debenture. The redemption price shall be one
      hundred twenty (120%) of the redeemed amount plus accrued interest. In addition,
      if the Company avails itself of the redemption right, the Company shall,
      concurrent with the redemption, issue warrants to the holder at a rate of 50,000
      per $100,000 redeemed on a pro-rata basis. The exercise price of the warrants
      shall be 120% of the closing bid price of common stock on the closing date.
      The
      warrants shall have “piggy-back” and demand registration rights and shall have a
      term of two (2) years from the closing date.


14


UNITED
      COMPANIES CORPORATION


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


(UNAUDITED)





10.
            SECURED
                CONVERTIBLE DEBENTURES(continued)





On
      July
      23, 2004, the Company issued a second Secured Convertible Debenture to Cornell
      Capital Partner, LP in the principal amount of $125,000. The Secured Convertible
      Debenture has a term of 2 years with all the same terms and conditions of the
      first Secured Convertible Debenture issued on April 2, 2004.





Secured
      convertible debentures consist of the following as of March 31,
      2006:





Secured
                convertible debenture secured by all assets of the Company,bearing
                interest at 5% per annum, maturing on April 2, 2006.
            
            $
            144,610Secured
                convertible debenture secured by all assets of the Company,bearing
                interest at 5% per annum, maturing on July 28, 2006.
            
            
            125,000269,610Less
                amounts due within one year:
            
            
            269,610Long-term
                portion of Secured convertible debentures
            
            $
            –








As
      of
      March 31, 2006, principal payments on the Secured convertible debentures are
      as
      follows:





2006
            
            $
            299,610





The
      following table represents conversions by Cornell Capital Partners LP under
      the
      terms of the Secured Convertible Debentures from inception through March 31,
      2006 for common stock, which shares were registered with the Securities and
      Exchange Commission in a registration statement on Form SB-2:




Conversion
                  Notice Date
              
              Date
                  of Conversion
              
              Conversion
                  $ Amount
              
              Conversion
                  $ Per Share Price
              
              Number
                  of SharesFebruary
                  15, 2005
              
              March
                  3, 2005
              
              $10,000
              
              0.0128
              
              781,250March
                  8, 2005
              
              March
                  24, 2005
              
              10,000
              
              0.0082
              
              1,219,512June
                  21, 2005
              
              July
                  15, 2005
              
              10,000
              
              0.0028
              
              3,571,429August
                  3, 2005
              
              September
                  13, 2005
              
              10,000
              
              0.0025
              
              4,000,000September
                  19, 2005
              
              September
                  19, 2005
              
              10,000
              
              0.0046
              
              2,173,913October
                  19,2005
              
              October
                  19, 2005
              
              10,000
              
              0.0026
              
              3,773,585November
                  14, 2005
              
              November
                  14, 2005
              
              10,000
              
              0.0023
              
              4,347,826December
                  7, 2005
              
              December
                  7, 2005
              
              5,390
              
              0.0018
              
              2,994,444$75,390
              
              
              
              22,861,959


15
  UNITED
        COMPANIES CORPORATION
 NOTES
        TO
        CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
 
 1.
            SECURED
                CONVERTIBLE DEBENTURES(continued) 
 The
        following table represents conversions by Cornell Capital Partners LP under
        the
        terms of the Secured Convertible Debentures from inception through March
        31,
        2006 for restricted common stock:
 
 Conversion
                  Notice Date
              
              Date
                  of Conversion
              
              Conversion
                  $ Amount
              
              Conversion
                  $ Per Share Price
              
              Number
                  of SharesJanuary
                  6, 2006
              
              February
                  2, 2006
              
              $10,000
              
              0.0016
              
              6,250,000February
                  10, 2006
              
              March
                  7, 2006
              
              10,000
              
              0.0032
              
              3,125,000March
                  1, 2006
              
              March
                  7,2006
              
              10,000
              
              0.0032
              
              3,125,000$30,000
              
              
              
              12,500,000
 
 As
        of
        March 31, 2006, loan fees associated with the Secured Convertible Debentures
        of
        $2,550 (net of $59,950 amortization expense) were included in other assets,
        totaling $9,518. See Note 14. SUBSEQUENT
        EVENTS for
        discussion of default regarding the Secured Convertible Debenture due on
        April
        1, 2006.
 
 11.  STANDBY
        EQUITY DISTRIBUTION AGREEMENT
  On
        April
        2, 2004, the Company entered into a Standby Equity Distribution Agreement
        with
        Cornell Capital Partners, LP. Pursuant to the Standby Equity Distribution
        Agreement, the Company may, at its discretion, periodically issue and sell
        shares of its common stock for a total purchase price of $5 million. If the
        Company requests advances under the Standby Equity Distribution Agreement,
        Cornell Capital Partners, LP will purchase shares of common stock of United
        for
        95% of the lowest closing bid price on the Over-the-Counter Bulletin Board
        or
        other principal market on which our common stock is traded for the 5 days
        immediately following the advance notice date. Cornell Capital Partners,
        LP will
        retain 5% of each advance under the Standby Equity Distribution Agreement.
        The
        Company may not request advances in excess of a total of $5 million. The
        maximum
        of each advance is equal to $100,000 and up to a maximum of $400,000 in any
        thirty-day period.
 
 In
        addition, the Company issued 3,625,000 shares of the Company’s common stock in
        April 2004 for commitment fees totaling $290,000 related to the Standby Equity
        Distribution Agreement that was effective August 6, 2004, the date the Company’s
        registration statement on Form SB-2 was declared effective by the Securities
        and
        Exchange Commission. The commitment fees are being amortized to additional
        paid
        in-capital over the term of the Standby Equity Distribution Agreement. The
        Company also issued an additional 517,857 shares of the Company’s common stock
        in April 2004 to Cornell Capital Partners, LP in relation to the commitment
        fees
        which exceeded the agreed upon fees of $290,000. Cornell Capital Partners,
        LP
        agreed to return the shares and accordingly, the Company recorded an other
        receivable related to the issuance of common stock totaling $41,429. As
        originally stated in the Company’s audited financial statements for the year
        ended December 31, 2004, “other receivable related to issuance of common stock”
was stated as $207,143, or an overstatement of $165,714. This overstatement
        was
        a result of a different stock price used in the calculation of the $290,000
        loan
        fee between the Company and Cornell Capital Partners, LP. March 31, 2005. This
        difference was resolved in the first quarter of 2005, and the Company made
        the
        reclassification from other receivable related to the issuance of common
        stock
        to additional paid -in capital for the quarter ended March 31, 2005. On June
        15,
        2005, Cornell Capital Partners, LP returned the 517,857 shares and was reflected
        on the face of the of the Statement of Stockholders’ Deficit as activity during
        the quarter ended June 30, 2005. As of March 31, 2006, the Company had not
        taken
        any advances under the Standby Equity Distribution Agreement. The Standby
        Equity
        Distribution Agreement expires on August 6, 2006.
  16
  UNITED
        COMPANIES CORPORATION
 NOTES
        TO
        CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
 
 12. COMMITMENTS
        AND CONTINGENCIES
 
 Consulting
        Agreement –
The
        Company entered into a two-year consulting agreement effective January 1,
        2005,
        for management and strategic services. The consulting agreement calls for
        payments of $6,000 per month and provides for warrants to purchase 28,571,428
        shares of the Company’s common stock. The exercise price of the warrants is
        $.007 per share, which equaled the bid/ask price of the Company’s common stock
        on January 1, 2005, the effective date of the agreement. The right to exercise
        the warrants shall vest in four equal tranches of 7,142,857 common shares
        at six
        months, twelve months, eighteen months, and twenty-four months. The warrants
        expiration date is twenty-four months after the vest date. Further, the warrants
        have “piggy-back” registration rights and provide for either a cash or cashless
        exercise. The cashless exercise provision provides for a discount in the
        amount
        of shares provided at exercise based on a formula that takes into account
        as one
        of its factors the average of the closing sale price on the common stock
        for
        five trading days immediately prior to but not including the date of exercise.
        The Company can terminate the consulting agreement at any time for “Cause” as
        defined in the consulting agreement. The consultant may terminate the consulting
        agreement at any time for non-payment of monies due, and such condition remains
        uncured for a period of sixty days. If the Company terminates the consultant
        during the term of the agreement without “Cause”, the right to exercise all
        warrants will vest immediately. The Company calculated the total fair value
        of
        the stock options as $198,643 using the Black-Scholes model. For the three
        months ended March 31, 2006, the Company recognized $25,910 as compensation
        expense related to the stock options. As of March 31, 2006, the rights to
        exercise 14,285,714 warrants had vested under the consulting agreement and
        none
        of the warrants had been exercised.
 
 Property
        Lease Agreement –
The
        Company operates from a leased facility in which the Company’s Chief Executive
        Officer has an ownership interest. The lease is non-cancelable and calls
        for an
        annual base rent of approximately $115,000 plus sales tax with a 10% base
        rent
        increase every five (5) years. The lease expires in April 2013, and has three
        5- year
        renewal options. In addition, up to $15,000 in real estate taxes is provided
        for
        in the base rental payment. Any real estate taxes over and above $15,000
        are
        billed as additional rent to the Company and included in rent expense. For
        the
        three months ended March 31, 2006, and 2005, total rent expense for the leased
        facility was $30,475 and $30,475, respectively. Additionally, the Company
        is
        responsible for all other operating expenses on the property such as insurance,
        repairs and maintenance, etc. as the lease is termed a triple net lease.
        The
        triple net expenses are recorded to the applicable expense accounts on the
        Company’s statement of operations. As of March 31, 2006, the Company was in
        arrears on property lease payments by $30,425. The Company is making reduced
        rental payments, with the intention to bring the liability current by mid
        2006.
        The landlord continues to work with the Company under this arrangement and
        has
        not issued a notice of default as a result.
 
 Equipment
        Lease Agreement –
The
        Company leases various office equipment under either a month-to-month basis
        or
        under an operating lease. Currently there is one non-cancelable operating
        lease
        for an office copier at a rate of $313 per month plus sales tax. The lease
        expires in August 2009.
  17
  UNITED
        COMPANIES CORPORATION
 NOTES
        TO
        CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
 
 12. COMMITMENTS
        AND CONTINGENCIES (continued)
 
 Future
        minimum lease payments required under the property lease and the equipment
        lease
        as of March 31, 2006, are as follows:
 
 2006
              
              $
              124,8342007
              
              
              125,8782008
              
              
              125,8782009
              
              
              124,5522010
              
              
              121,900Thereafter
              
              
              284,433$
              907,475
 
 13. INCOME
        TAXES
 
 The
        net
        deferred tax asset at March 31, 2006 was $24,206 and is recorded as $7,597
        in
        current assets, and $16,609 in non-current assets. At March 31, 2006, the
        Company had a federal operating loss carryforward of $315,057. This operating
        loss carryforward is available to offset future taxable income over the next
        nineteen years. The Company anticipates utilization of approximately $42,000
        of
        the net operating loss carryforward for the year ended 2005. Due to a change
        in
        management’s estimate of the utilization of the operating loss carryforward at
        the end of 2005, the valuation allowance was decreased from $50,052 (100%
        of the
        2004 net deferred tax asset) in 2004 to $24,206 (50% of the 2005 net deferred
        tax asset) in 2005. In assessing the likelihood of the utilization of existing
        deferred tax assets, management has considered the historical results of
        operations and the current operating environment. As of March 31, 2006,
        Management believes that future taxable income will be sufficient to utilize
        the
        net deferred tax asset of $24,206. As a result there has been no change to
        the
        net deferred asset from December 31, 2005 to March 31, 2006.
 
 14. SUBSEQUENT
        EVENTS
 
 On
        April
        2, 2006, the first Secured Convertible Debenture due to Cornell Capital Parners,
        LP having an outstanding principal balance of $144,610 matured. The Secured
        Convertible Debenture was neither redeemed in shares, nor paid off by the
        Company due to cash constraints. As a result, the Company is in contact with
        Cornell Capital Partners, LP about the matter. No official notice of default
        has
        been issued and the Company is currently seeking a third party to buy-out
        both
        of the Secured Convertible Debentures held by Cornell Capital Partners, LP
        with
        the total outstanding principal balance of $269,610. Our obligations under
        the
        Secured Convertible Debentures issued to Cornell Capital Partners, LP are
        secured by all of our assets. As a result, under the terms of default, Cornell
        Capital Partners LP can foreclose its security interest and liquidate all
        of the
        assets of the Company. This would force us to cease our operations.
  On
        April 28, 2006 the Company received a purchase
        order and required deposit toward an approximate $800,000 sale of a complete
        dive system with hyperbaric support. The system is to be delivered by the
        end of
        August 2006. Revenue on the contract sale is expected to be recognized under
        the
        percentage-of-completion method.
  On
        May 3, 2006, Cornell Capital Partners, LP issued a
        conversion notice in the amount of $59,110, representing a conversion under
        the
        terms of the Secured Convertible Debenture. Accordingly, based on a conversion
        price of $.0088, Cornell Capital Partners, LP will be issued 6,717,045 shares
        of
        restricted common stock.
  18




**I** **TEM**2**** **.**  **M** **ANAGEMENT’S** **P** **LAN
        OF** **O** **PERATION
        AND** **D** **ISCUSSION
        AND** **A** **NALYSIS**




**Introductory
      Statements**




Information
      included or incorporated by reference in this filing may contain forward-looking
      statements within the meaning of Section 27A of the Securities Act and
      Section 21E of the Exchange Act. This information may involve known and
      unknown risks, uncertainties and other factors which may cause our actual
      results, performance or achievements to be materially different from the future
      results, performance or achievements expressed or implied by any forward-looking
      statements. Forward-looking statements, which involve assumptions and describe
      our future plans, strategies and expectations, are generally identifiable by
      use
      of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,”
“believe,” “intend” or “project” or the negative of these words or other
      variations on these words or comparable terminology.




This
      filing contains forward-looking statements, including statements regarding,
      among other things, (a) our projected sales and profitability, (b) our
      Company’s growth strategies, (c) our Company’s future financing plans and
      (d) our Company’s anticipated needs for working capital. These statements
      may be found under “Management’s Discussion and Analysis of Financial Condition
      and Results of Operations” and “Business,” as well as in this prospectus
      generally. Actual events or results may differ materially from those discussed
      in forward-looking statements as a result of various factors, including, without
      limitation, the risks outlined under “Risk Factors” and matters described in
      this filing generally. In light of these risks and uncertainties, there can
      be
      no assurance that the forward-looking statements contained in this filing will
      in fact occur.




**Overview**




United
      Companies Corporation, (referred to herein as “United” or “the Company”), a
      Nevada corporation, entered into a Share Exchange Agreement, dated
      March 23, 2004, by and among United, Trebor Industries, Inc., d/b/a
      Brownie’s Third Lung, a Florida corporation (referred to herein as “Trebor”),
      and Robert Carmichael. Pursuant to the Share Exchange Agreement, Mr. Carmichael
      exchanged 377 shares of common stock, par value $1.00 per share, of Trebor,
      which constituted all of the issued and outstanding shares of capital stock
      of
      Trebor, for 95,000,000 shares of common stock, par value $0.001 per share,
      of
      United. Pursuant to the Share Exchange Agreement, Trebor became a wholly-owned
      subsidiary of United.




Since
      April 16, 2004, Mr. Carmichael has served as President, Acting Principal
      Accounting Officer and Acting Chief Financial Officer of the Company. From
      March
      23, 2004 to April 26, 2004, Mr. Carmichael served as United’s Executive
      Vice-President and Chief Operating Officer. Mr. Carmichael has operated Trebor
      as its President since 1986. He is the holder or co-holder of numerous patents
      that are used by Trebor and several other major players in the diving industry.
      Prior to the share exchange transaction with Trebor, United had no on-going
      operations. United had been seeking potential operating businesses and business
      opportunities, with the intent to acquire or merge with such
      businesses.




On
      February 12, 2002, United filed with the Securities and Exchange Commission
      a
      Form S-4 Proxy Statement and Registration Statement in conjunction with Avid
      Sportswear & Golf Corp., a Nevada corporation (“Avid”), describing a
      proposed merger of Avid with and into Merger Co., a wholly-owned subsidiary
      of
      United (“Merger Co.”). On January 28, 2003, the Commission declared the Form S-4
      Proxy Statement and Registration Statement effective. At a special meeting
      of
      Avid shareholders held on February 20, 2003, the shareholders approved (i)
      the
      Merger Agreement, dated June 18, 2002, by and among Avid, United and Merger
      Co.
      and (ii) the related Articles of Merger. Merger Co. became the surviving entity
      and assumed all of Avid’s assets and liabilities. At the time of the merger,
      outstanding shares of Avid common stock were converted automatically into shares
      of United common stock on a fifty (50) for one (1) basis. In the opinion of
      Avid’s management, the excess of Avid’s liabilities over its assets and the lack
      of available funding made any other acquisition or merger, other than the merger
      with Merger Co., unlikely.




Effective
      March 23, 2004, United sold all of its ownership interest in its wholly-owned
      subsidiary, Merger Co., to Gateway Connections Limited, an international
      business company formed under the laws of Belize.




Through
      Trebor, the Company designs, tests, manufactures and distributes recreational
      hookah diving, yacht based scuba air compressor and Nitrox Generation Systems,
      and scuba and water safety products. Through Trebor, United sells its products
      both on a wholesale and retail basis, and does so from its headquarters and
      manufacturing facility in Fort Lauderdale, Florida. The Company does business
      as
      (dba) Brownie’s Third Lung, the dba name of Trebor.




19




**Financial
      Performance**




United
      has a history of losses. Trebor acquired by share exchange on March 23, 2004,
      has historically had both profitable and unprofitable years. For the years
      ended
      December 31, 2005 and 2004, United sustained losses of $96,310 and $510,922,
      respectively, which includes United’s wholly-owned subsidiary Trebor. For the
      three months ended March 31, 2006, United had a net loss of $9,527.




**Results
      Of Operations For The Three Months Ended March 31, 2006, As Compared To The
      Three Months Ended March 31, 2005**




**Net
      Revenues** .
      For the
      three months ended March 31, 2006, we had net revenues of $702,738 as compared
      to net revenues of $690,341 for the three months ended March 31, 2005, an
      increase of $12,397 or 1.80%. This increase is primarily attributable to sales
      price increases instituted in the third and fourth quarter of 2005.




**Cost
      of Net Revenues** .
      For the
      three months ended March 31, 2006, we had cost of net revenues of $436,680,
      as
      compared with cost of net revenues of $492,230 for the three months ended March
      31, 2005, a decrease of $55,550 or 11.29%. This decrease is primarily
      attributable to a decline in cost of material sold of approximately $52,000.
      This decline is the result of lower raw material prices achieved through buying
      from alternative vendors and in larger quantities at discounted prices, and
      an
      approximately $40,000 engineering service sale during the period that was 100%
      labor cost, with no associated material cost.




**Gross
      Profit.** For the
      three months ended March 31, 2006, we had a gross profit of $266,058, as
      compared to gross profit of $198,111 for the comparable period in 2005, an
      increase of $67,947 or 34.30%. This increase is primarily attributable to an
      increase in sales prices and a decrease in cost of material sold.




**Operating
      Expense** .
      For the
      three months ended March 31, 2006, we had total operating expenses of $251,236,
      as compared to total operating expenses of $243,864 for the three months ended
      March 31, 2005, an increase of $7,372 or 3.02%. This increase is attributable
      to
      a decrease in research and development expense of $1,697 and an increase in
      other operating costs of $9,069. The net increase in other operating costs
      for
      the quarter ended March 31, 2006 as compared to the quarter ended March 31,
      2005, is comprised mainly of approximately $9,000 of higher insurance liability
      cost due to increased premium rates effective July 1, 2005, an approximately
      $8,000 net increase in payroll expense, primarily a result of hiring a public
      relations and marketing professional at the beginning of 2006, offset by a
      decrease in legal expense of about $10,000, a decrease in advertising and trade
      show expenses of about $6,500, and various net decreases in multiple other
      operating expense accounts. The Company continues to focus on implementing
      cost
      cutting measures in various areas to improve profitability and cash flows.
      Research and Development (R&D) cost has predominantly been an allocation of
      in-house labor from its various functional categories to R&D for time spent
      in this area. Therefore, the reason for the slight decline in R&D expense
      for the three months ended March 31, 2006, as compared to the three months
      ended
      March 31, 2005, was that in line with cost cutting measures and to focus on
      profits and cash flows, labor was utilized more in the area of generating
      revenue rather than on R&D.




**Interest
      Expense** .
      For the
      three months ended March 31, 2006, we had interest expense of $20,042, as
      compared to $22,602 for the three months ended March 31, 2005, a decrease of
      $2,560 or 11.33%. This decrease is primarily **** attributable
      to the payoff of one loan on a Company vehicle that was sold in April 2005
      and
      declining principal balances on the remaining outstanding notes payable.




**Net
      Loss.** For
      the
      three months ended March 31, 2006, we had a net loss of $9,527, as compared
      to a
      net loss of $70,395 for the three months ended March 31,2005, a decrease in
      net
      loss of $60,868 or 86.47%. The decrease is primarily attributable to the
      increase in Gross Profit and the decrease in Operating Expenses in the first
      quarter of 2006 as compared to the first quarter of 2005.




**Liquidity
      And Capital Resources**




As
      of
      March 31, 2006, we had cash and current assets of $626,799. As of March 31,
      2006, we had current liabilities of $1,025,939, consisting primarily of accounts
      payable and accrued liabilities of $531,703, lease payable - related party
      of
      $30,425, customer deposits of $91,253, other liabilities of $36,972, royalties
      payable - related parties of $25,540, notes payable - current portion of
      $10,115, notes payable - current portion - related parties of $30,321, and
      secured convertible debentures of $269,610. As of March 31, 2006, we had a
      working capital deficit of $399,140. Management believes that external financing
      will be necessary to fund some of our operations for the foreseeable future.






20




On
      April
      2, 2004, we entered into a Standby Equity Distribution Agreement with Cornell
      Capital Partners, LP. Pursuant to the Standby Equity Distribution Agreement,
      we
      may, at our discretion, periodically issue and sell shares of our common stock
      for a total purchase price of $5 million. If we request advances under the
      Standby Equity Distribution Agreement, Cornell Capital Partners, LP will
      purchase shares of common stock of United for 95% of the lowest closing bid
      price on the Over-the-Counter Bulletin Board or other principal market on which
      our common stock is traded for the 5 days immediately following the advance
      notice date. Cornell Capital Partners, LP will retain 5% of each advance under
      the Standby Equity Distribution Agreement. We may not request advances in excess
      of a total of $5 million. The maximum of each advance is equal to $100,000,
      and
      up to a maximum of $400,000, in the aggregate, in any thirty-day period. As
      of
      March, 31, 2006, we had not taken any advances under the Standby Equity
      Distribution Agreement. The Standby Equity Distribution Agreement expires on
      August 6, 2006.




As
      of
      April 2, 2004, we issued a Secured Convertible Debenture to Cornell Capital
      Partners, LP in the principal amount of $250,000. The Secured Convertible
      Debenture is convertible into shares of our common stock as a price per share
      that is equal to the lesser of: (i) an amount equal to 120% of the closing
      bid
      price of our common stock as of the date of the convertible debenture or (ii)
      an
      amount equal to 80% of the average of the lowest daily volume weighted average
      price of our common stock for the five trading days immediately preceding the
      conversion date. The Secured Convertible Debenture accrues interest at a rate
      of
      5% per year and is convertible at the holder’s option. The Secured Convertible
      Debenture has a term of two (2) years. At United’s option, the Secured
      Convertible Debenture may be paid in cash or converted into shares of our common
      stock unless converted earlier by the holder. Except after an event of default,
      as set forth in the Secured Convertible Debenture Agreement, Cornell Capital
      Partners, LP is not entitled to convert such Secured Convertible Debenture
      for a
      number of shares of common stock of United in excess of that number of shares
      which, upon giving effect to such conversion, would cause the aggregate number
      of shares of common stock beneficially held by such holder and its affiliated
      to
      exceed 4.99% of the outstanding shares of common stock of United. On July 23,
      2004, we issued a second Secured Convertible Debenture in the principal amount
      of $125,000, with the same terms and conditions as the Secured Convertible
      Debenture issued on April 2, 2004, as described above. On April 2, 2006, the
      first Secured Convertible Debenture having an outstanding principal balance
      of
      $144,610 matured and was neither redeemed in shares, nor paid off. United is
      in
      contact with Cornell Capital Partners, LP about the matter, and is currently
      seeking a third party to buy-out both of the Secured Convertible Debentures
      held
      by Cornell Capital Partners, LP. Under the terms of these Secured Convertible
      Debentures, Cornell Capital Partners, LP can foreclose on its security interest
      and liquidate all of the assets of the Company. This would force us to cease
      our
      operations.




**Certain
      Business Risks**




*The
      Company is subject to various risks, which may materially harm its business,
      financial condition and results of operations. You should carefully consider
      the
      risks and uncertainties described below and the other information in this filing
      before deciding to purchase the Company’s common stock. These are not the only
      risks and uncertainties that the Company faces. If any of these risks or
      uncertainties actually occur, the Company’s business, financial condition or
      operating results could be materially harmed. In that case, the trading price
      of
      the Company’s common stock could decline and you could lose all or part of your
      investment.*




***We
      Have Historically Lost Money And Losses May Continue In The
      Future***




On
      March
      23, 2004, United entered into a share exchange transaction with Trebor and
      Robert Carmichael. Pursuant to this share exchange transaction, United acquired
      all of the issued and outstanding capital stock of Trebor and Trebor became
      a
      wholly owned subsidiary of United. Trebor designs, manufactures and sells
      both retail and wholeseale surface-supplied air units for the recreational
      diving industry, yacht based scuba air compressor and Nitrox Generation Systems,
      and scuba and water safety products. United has a history of losses.
      Historically, Trebor has had both profitable and unprofitable years. As of
      March
      31, 2006, we had an accumulated deficit of $1,716,428. For the three months
      ended March 31, 2006, we incurred a net loss of $9,527. For the year ended
      December 31, 2005 we incurred a net loss of $96,310. For the year ended December
      31, 2004 we incurred a net loss of $510,922.




If
      we are
      not successful in reaching and maintaining profitable operations, we may not
      be
      able to attract sufficient capital to continue our operations. Our inability
      to
      obtain adequate financing will result in the need to curtail business operations
      and will likely result in a lower stock price. Our ability to take advances
      under our $5 million Standby Equity Distribution Agreement with Cornell Capital
      Partners, LP will expire on August 6, 2006.




21




***We
      May Need To Raise Additional Capital To Finance
      Operations***




As
      of
      March 31, 2006 we had $11,784 of cash on hand and our total current assets
      were $626,799. Our current liabilities were $1,025,939 as of March 31, 2006.
      We
      may need to raise additional capital to fund our anticipated operating expenses.
      Among other things, external financing may be required to cover our operating
      costs. Unless we obtain profitable operations, it is unlikely that we will
      be
      able to secure additional financing from external sources. As of May 1, 2006,
      we
      estimate that we will require $1 million to fund our anticipated operating
      expenses for the next twelve months if we maintain sales growth at the same
      rate. To step up sales growth at a more aggressive rate, we would require
      approximately $1.5 to $2.5 million to fund our anticipated operating expenses
      for the next twelve months. The sale of our common stock to raise capital may
      cause dilution to our existing shareholders. Our inability to obtain adequate
      financing will result in the need to curtail business operations. Any of these
      events would be materially harmful to our business and may result in a lower
      stock price. Our inability to obtain adequate financing will result in the
      need
      to curtail business operations and you could lose your entire investment. Our
      financial statements do not include any adjustments that might result from
      the
      outcome of this uncertainty.




***We
      Are Subject To A Working Capital Deficit, Which Means That Our Current Assets
      On
      March 31, 2006 Were Not Sufficient To Satisfy Our Current
      Liabilities***




We
      had a
      working capital deficit $399,140 at March 31, 2006, which means that our current
      liabilities as of that date exceeded our current assets by $399,140. Current
      assets are assets that are expected to be converted to cash within one year
      and,
      therefore, may be used to pay current liabilities as they become due. Our
      working capital deficit means that our current assets on March 31, 2006 were
      not
      sufficient to satisfy all of our current liabilities on that date. If our
      ongoing operations do not begin to provide sufficient profitability to offset
      the working capital deficit we may have to raise capital or debt to fund the
      deficit.




***Our
      Obligations Under The Secured Convertible Debentures Issued to Cornell Capital
      Partners, LP Are Secured By All Of Our Assets***




Our
      obligations under the Secured Convertible Debentures in the principal amount
      of
      $269,610 issued to Cornell Capital Partners,  LP are secured by all of our
      assets. As a result, if we default under the terms of these Secured Convertible
      Debentures, Cornell Capital Partners, LP could foreclose its security interest
      and liquidate all of the assets of the Company. This would force us to cease
      our
      operations. On April, 2, 2006, the first Secured Convertible Debenture having
      an
      outstanding principal balance amount of $144, 610 matured and was neither
      redeemed in shares, or paid off. Under the terms of the Secured Convertible
      Debenture, Cornell Capital Partners, LP can foreclose on its security interest
      and liquidate all of our assets.




***The
      Manufacture And Distribution Of Recreational Diving Equipment Could Result
      In
      Product Liability Claims***




We,
      like
      any other retailer, distributor and manufacturer of products that are designed
      for recreational sporting purposes, face an inherent risk of exposure to product
      liability claims in the event that the use of our products results in injury.
      Such claims may include, among other things, that our products are designed
      and/or manufactured improperly or fail to include adequate instructions as
      to
      proper use and/or side effects, if any. We do not anticipate obtaining
      contractual indemnification from parties **-** supplying
      raw materials **,** manufacturing
      our products or marketing our products. In any event, any such indemnification
      if obtained will be limited by our terms and, as a practical matter, to the
      creditworthiness of the indemnifying party. In the event that we do not have
      adequate insurance or contractual indemnification, product liabilities relating
      to defective products could have a material adverse effect on our operations
      and
      financial conditions, which could force us to curtail or cease our business
      operations.




***Our
      Common Stock May Be Affected By Limited Trading Volume And May Fluctuate
      Significantly***




Our
      common stock is traded on the Over-the-Counter Bulletin Board. Prior to this
      offering, there has been a limited public market for our common stock and there
      can be no assurance that an active trading market for our common stock will
      develop. As a result, this could adversely affect our shareholders’ ability to
      sell our common stock in short time periods, or possibly at all. Thinly traded
      common stock can be more volatile than common stock traded in an active public
      market. Our common stock has experienced, and is likely to experience in the
      future, significant price and volume fluctuations, which could adversely affect
      the market price of our common stock without regard to our operating
      performance. In addition, we believe that factors such as quarterly fluctuations
      in our financial results and changes in the overall economy or the condition
      of
      the financial markets could cause the price of our common stock to fluctuate
      substantially.




22




***Our
      Common Stock Is Deemed To Be “Penny Stock,” Which May Make It More Difficult For
      Investors To Sell Their Shares Due To Suitability
      Requirements***




Our
      common stock is deemed to be “penny stock” as that term is defined in Rule
      3a51-1 promulgated under the Securities Exchange Act of 1934. Penny stocks
      are
      stock:




·  With
      a
      price of less than $5.00 per share;




·  That
      are
      not traded on a “recognized” national exchange;




·  Whose
      prices are not quoted on the Nasdaq automated quotation system (Nasdaq listed
      stock must still have a price of not less than $5.00 per share); or




·  In
      issuers with net tangible assets less than $2.0 million (if the issuer has
      been
      in continuous operation for at least three years) or $5.0 million (if in
      continuous operation for less than three years), or with average revenues of
      less than $6.0 million for the last three years.




Broker/dealers
      dealing in penny stocks are required to provide potential investors with a
      document disclosing the risks of penny stocks. Moreover, broker/dealers are
      required to determine whether an investment in a penny stock is a suitable
      investment for a prospective investor. These requirements may reduce the
      potential market for our common stock by reducing the number of potential
      investors. This may make it more difficult for investors in our common stock
      to
      sell shares to third parties or to otherwise dispose of them. This could cause
      our stock price to decline.




***We
      Could Fail To Attract Or Retain Key Personnel***




Our
      success largely depends on the efforts and abilities of Robert M. Carmichael,
      our President and Chief Executive Officer. Mr. Carmichael has been instrumental
      in securing our existing financing arrangements. Mr. Carmichael is primarily
      responsible for the development of our technology and the design of our
      products. The loss of the services of Mr. Carmichael could materially harm
      our
      business because of the cost and time necessary to recruit and train a
      replacement. Such a loss would also divert management attention away from
      operational issues. We do not presently maintain a key-man life insurance policy
      on Mr. Carmichael.




In
      addition, our continued growth depends on our ability to attract and retain
      a
      Chief Financial Officer, a Chief Operations Officer, and additional skilled
      associates. We are currently utilizing the services of two professional
      consultants in the absence of a Chief Financial Officer and Chief Operations
      Officer. The loss of the services of these consultants prior to our ability
      to
      attract and retain a Chief Financial Officer or Chief Operations Officer may
      have a material adverse effect upon us. Also, there can be no assurance that
      we
      will be able to retain our existing personnel or attract additional qualified
      associates in the future.




Effective
      January 1, 2005, the Company entered into a two-year consulting agreement with
      one of the consultants as referred to above for management and strategic
      services. The consulting agreement calls for a monthly consulting fee and
      provides for warrants to purchase 28,571,428 shares of the Company’s common
      stock. The exercise price of the warrants is $.007 per share, which equaled
      the
      closing price of the Company’s Common stock on January 1, 2005, the effective
      date of the agreement. The rights to exercise the warrants shall vest in four
      equal tranches of 7,142,857 current shares at six months, twelve months,
      eighteen months, and twenty-four months. The Company can terminate the
      consulting agreement at any time for “Cause” as defined in the consulting
      agreement. The consultant may terminate the consulting agreement at any time
      for
      non-payment of monies due, and such condition remains uncured for a period
      of
      sixty days. As of March 31, 2006, 14,285, 714 warrants had vested with none
      being exercised.




***Our
      Failure To Obtain Intellectual Property And Enforce Protection Would Have A
      Material Adverse Effect On Our Business***




Our
      success depends in part on our ability, and the ability of our patent and
      trademark licensors, entities owned and controlled by Robert M. Carmichael,
      our
      President and Chief Executive Officer, to obtain and defend our intellectual
      property, including patent protection for our products and processes, preserve
      our trade secrets, defend and enforce our rights against infringement and
      operate without infringing the proprietary rights of third parties, both in
      the
      United States and in other countries. Despite our efforts to protect our
      intellectual proprietary rights, existing copyright, trademark and trade secret
      laws afford only limited protection.




23




Our
      industry is characterized by frequent intellectual property litigation based
      on
      allegations of infringement of intellectual property rights. Although we are
      not
      aware of any intellectual property claims against us, we may be a party to
      litigation in the future.




***We
      May Be Unable To Manage Growth***




Successful
      implementation of our business strategy requires us to manage our growth. Growth
      could place an increasing strain on our management and financial resources.
      If
      we fail to manage our growth effectively, our business, financial condition
      or
      operating results could be materially harmed, and our stock price may
      decline.




***Reliance
      On Vendors And Manufacturers***




We
      deal
      with suppliers on an order-by order basis and have no long-term purchase
      contracts or other contractual assurances of continued supply or pricing. In
      addition, we have no long-term contracts with our manufacturing sources and
      compete with other companies for production facility capacity. Historically,
      we
      have purchased enough inventory of products or their substitutes to satisfy
      demand. However, unanticipated failure of any manufacturer or supplier to meet
      our requirements or our inability to build or obtain substitutes could force
      us
      to curtail or cease operations.




***Dependence
      On Consumer Spending***




The
      success of the products in the Brownie’s Third Lung and Brownie’s Tank Fill
      lines depend largely upon a number of factors related to consumer spending,
      including future economic conditions affecting disposable consumer income such
      as employment, business conditions, tax rates, and interest rates. In addition
      our opportunities are highly dependent upon the level of consumer spending
      on
      recreational marine accessories and dive gear, discretionary spending items.
      There can be no assurance that consumer spending in general will not decline,
      thereby adversely affecting our growth, net sales and profitability or that
      our
      business will not be adversely affected by future downturns in the economy,
      boating industry, or dive industry. If consumer spending on recreational marine
      accessories and dive gear declines, we could be forced to curtail or cease
      operations.




***Government
      Regulations May Impact Us***




The
      SCUBA
      industry is self-regulating; therefore, Brownie’s is not subject to government
      industry specific regulation. Nevertheless, Brownie’s strives to be a leader in
      promoting safe diving practices within the industry and is at the forefront
      of
      self-regulation through responsible diving practices. Brownie’s is subject to
      all regulations applicable to “for profit” companies as well as all trade and
      general commerce governmental regulation. All required federal and state
      permits, licenses, and bonds to operate its facility have been obtained. There
      can be no assurance that our operations will not be subject to more restrictive
      regulations in the future, which could force us to curtail or cease
      operations.




***Bad
      Weather Conditions Could Have An Adverse Effect On Operating
      Results***




Our
      business is significantly impacted by weather patterns. Unseasonably cool
      weather, extraordinary amounts of rainfall, or unseasonably rough surf, may
      decrease boat use and diving, thereby decreasing sales. Accordingly, our results
      of operations for any prior period may not be indicative of results of any
      future period.




***Investors
      Should Not Rely On An Investment In Our Stock For The Payment Of Cash
      Dividends***




We
      have
      not paid any cash dividends on our capital stock and we do not anticipate paying
      cash dividends in the future. Investors should not make an investment in our
      common stock if they require dividend income. Any return on an investment in
      our
      common stock will be as a result of any appreciation, if any, in our stock
      price.




24




**I** **TEM** **3.**  **C** **ONTROLS** **** **AND** **** **P** **ROCEDURES**




**(A)**  **Evaluation
      Of Disclosure Controls And Procedures**




As
      of the
      end of the period covered by this report, the Company carried out an evaluation,
      under the supervision and with the participation of the Company’s Principal
      Executive Officer/Principal Financial Officer, of the effectiveness of the
      design and operation of the Company’s disclosure controls and procedures. The
      Company’s disclosure controls and procedures are designed to provide a
      reasonable level of assurance of achieving the Company’s disclosure control
      objectives. The Company’s Principal Executive Officer/Principal Accounting
      Officer has concluded that the Company’s disclosure controls and procedures are,
      in fact, effective at this reasonable assurance level as of the of period
      covered.




**(B)**  **Changes
      In Internal Controls Over Financial Reporting**




In
      connection with the evaluation of the Company’s internal controls during the
      Company’s last fiscal quarter, the Company’s Principal Executive
      Officer/Principal Financial Officer has determined that there are no changes
      to
      the Company’s internal controls over financial reporting that has materially
      affected, or is reasonably likely to materially effect, the Company’s internal
      controls over financial reporting.




25




**PART
      II**




**I** **TEM** **1.**  **L** **EGAL** **** **P** **ROCEEDINGS**




None




**I** **TEM** **2.**  **C** **HANGES
        IN** **** **S** **ECURITIES
        AND** **U** **SE
        OF** **** **P** **ROCEEDS**




On
      February 6, 2006, Cornell Capital Partners LP was issued 6,250,000 shares of
      restricted common stock representing a $10,000 conversion under the terms of
      the
      Secured Convertible Debenture.




On
      March
      7, 2006, Cornell Capital Partners LP was issued 6,250,000 shares of restricted
      common stock representing a $20,000 conversion under the terms of the Secured
      Convertible Debenture.




United
      believes that all transactions were transactions not involving any public
      offering within the meaning of Section 4(2) of the Securities Act of 1933,
      since
      (a) each of the transactions involved the offering of such securities to a
      substantially limited number of persons; (b) each person took the securities
      as
      an investment for his own account and not with a view to distribution; (c)
      each
      person had access to information equivalent to that which would be included
      in a
      registration statement on the applicable form under the Act; (d) each person
      had
      knowledge and experience in business and financial matters to understand the
      merits and risk of the investment; therefore no registration statement need
      be
      in effect prior to such issuances.




**I** **TEM** **3.**  **D** **EFAULTS** **** **U** **PON** **** **S** **ENIOR** **S** **ECURITIES**




On
      April
      2, 2006, the first Secured Convertible Debenture due to Cornell Capital Parners,
      LP having an outstanding principal balance of $144,610 matured. The Secured
      Convertible Debenture was neither redeemed in shares, nor paid off by the
      Company. The Company is in contact with Cornell Capital Partners, LP about
      the
      matter, and is currently seeking a third party to buy-out both of the Secured
      Convertible Debentures held by Cornell Capital Partners, LP with the total
      outstanding principal balance of $269,610. Our obligations under the Secured
      Convertible Debentures issued to Cornell Capital Partners, LP are secured by
      all
      of our assets. As a result, under the terms of default, Cornell Capital
      Partners, LP can foreclose on its security interest and liquidate all of the
      assets of the Company. This would force us to cease our operations.




**I** **TEM** **4.**  **S** **UBMISSION** **** **OF** **** **M** **ATTERS
        TO** **A** **V** **OTE
        OF** **** **S** **ECURITY** **H** **OLDERS**




None.




**I** **TEM** **5.**  **O** **THER** **I** **NFORMATION**


Not
      applicable.




26




**Item
      6. Exhibits, Lists And Reports On Form 8-K**




**(a)**  **Exhibits.**




**E****XHIBIT********NO****.**
            
            **D****ESCRIPTION**
            
            **L****OCATION**2.2
            
            Merger
                Agreement, dated June 18, 2002 by and among United Companies Corporation,
                Merger Co., Inc. and Avid Sportswear & Golf Corp.
            
            Incorporated
                by reference to Exhibit 2.02 to Avid Sportswear & Golf Corp.’s
                Amendment No. 1 to Form S-4 filed June 24, 20022.3
            
            Articles
                of Merger of Avid Sportswear & Golf Corp. with and into Merger Co.,
                Inc.
            
            Incorporated
                by reference to Exhibit 2.03 to Avid Sportswear & Golf Corp.’s
                Amendment No. 1 to Form S-4 filed June 24, 20023.1
            
            Articles
                of Incorporation
            
            Incorporated
                by reference to Exhibit 3.05 to United Companies Corporation’s Amendment
                No. 1 to Form S-4 filed June 24, 20023.2
            
            Bylaws
            
            Incorporated
                by reference to Exhibit 3.04 to the Registration Statement on Form
                10-SB10.1
            
            Share
                Exchange Agreement, dated March 23, 2004 by and among United, Trebor
                Industries, Inc. and Robert Carmichael
            
            Incorporated
                by reference to Exhibit 16.1 to Current Report on From 8-K filed
                April 9,
                200410.2
            
            Securities
                Purchase Agreement, dated April 2, 2004 by and between United and
                Cornell
                Capital Partners, L.P.
            
            Incorporated
                by reference to Exhibit 10.2 to United Companies Corporation’s
                Registration Statement on Form SB-2 filed July 16,
                200410.3
            
            Investor
                Registration Rights Agreement, dated April 2, 2004 by and between
                United
                and Cornell Capital Partners, L.P.
            
            Incorporated
                by reference to Exhibit 10.3 to United Companies Corporation’s
                Registration Statement on Form SB filed July 16,
                200410.4
            
            Security
                Agreement, dated April 2, 2004 by and between United and Cornell
                Capital
                Partners, L.P.
            
            Incorporated
                by reference to Exhibit 10.4 to United Companies Corporation’s
                Registration Statement on Form SB filed July 16,
                200410.5
            
            Irrevocable
                Transfer Agent Instructions, dated April 2, 2004, by and among United,
                Cornell Capital Partners, L.P. and First American Stock
                Transfer
            
            Incorporated
                by reference to Exhibit 10.5 to United Companies Corporation’s
                Registration Statement on Form SB filed July 16,
                200410.6
            
            Escrow
                Agreement, dated April 2, 2004 by and among United, Cornell Capital
                Partners, L.P. and Butler Gonzalez, LP
            
            Incorporated
                by reference to Exhibit 10.6 to United Companies Corporation’s
                Registration Statement on Form SB filed July 16,
                200410.7
            
            Form
                of Secured Convertible Debenture
            
            Incorporated
                by reference to Exhibit 10.7 to United Companies Corporation’s
                Registration Statement on Form SB filed July 16,
                200410.8
            
            Form
                of Warrant
            
            Incorporated
                by reference to Exhibit 10.8 to United Companies Corporation’s
                Registration Statement on Form SB filed July 16,
                200410.9
            
            Standby
                Equity Distribution Agreement, dated April 2, 2004 by and between
                United
                and Cornell Capital Partners, L.P.
            
            Incorporated
                by reference to Exhibit 10.9 to United Companies Corporation’s
                Registration Statement on Form SB filed July 16,
                200410.10
            
            Registration
                Rights Agreement, dated April 2, 2004 by and between United and Cornell
                Capital Partners, L.P.
            
            Incorporated
                by reference to Exhibit 10.10 to United Companies Corporation’s
                Registration Statement on Form SB filed July 16,
                2004




27




****E****XHIBIT********N****O****.****
            
            ****D****ESCRIPTION****
            
            ****L****OCATION****10.11
            
            Escrow
                Agreement, dated April 2, 2004 by and among United, Cornell Capital
                Partners, L.P. and Butler Gonzalez, LP
            
            Incorporated
                by reference to Exhibit 10.11 to United Companies Corporation’s
                Registration Statement on Form SB filed July 16,
                200410.12
            
            Placement
                Agent Agreement, dated April 2, 2004, by and among United, Cornell
                Capital
                Partners, L.P. and Newbridge Securities Corporation
            
            Incorporated
                by reference to Exhibit 10.12 to United Companies Corporation’s
                Registration Statement on Form SB filed July 16,
                200410.13
            
            Irrevocable
                Transfer Agent Instructions, dated April 2, 2004 by and among United,
                Cornell Capital Partners, L.P. and First American Stock
                Transfer
            
            Incorporated
                by reference to Exhibit 10.13 to United Companies Corporation’s
                Registration Statement on Form SB filed July 16,
                200410.14
            
            Two
                Year Consulting Agreement with Jeff Morris effective January 1, 2005
                for
                Management and Strategic Services and Warrants issued in conjunction
                with
                the same.
            
            Incorporated
                by reference to Exhibit 10.14 to
              Current
                Report on Form 8-K filed on March 11,
              2005.10.15
            
            Promissory
                Note, dated February 15, 2005, principal amount of $54,998.00 payable
                to
                Robert M. Carmichael.
            
            Incorporated
                by reference to Exhibit 10.15 to United Companies Corporation's 10QSB
                for
                the quarter ended March 31, 2005 filed May 13, 2005.10.16
            
            Prommissory
                Note, dated March 7, 2005, in the principal amount of $205,296.53
                payable
                to 940 Associates, Inc.
            
            Incorporated
                by reference to Exhibit 10.16 to United Companies Corporation's 10QSB
                for
                the quarter ended March 31, 2005 filed May 13, 2005.10.17
            
            Prommissory
                Note, dated March 7, 2005, in the principal amount of $447,111.13
                payable
                to Robert M. Carmichael.
            
            Incorporated
                by reference to Exhibit 10.17 to United Companies Corporation's 10QSB
                for
                the quarter ended March 31, 2005 filed May 13, 2005.10.18
            
            Non-Exclusive
                License Agreement -
              BC
                Keel Trademark
            
            Incorporated
                by reference to Exhibit 10.18 to United Companies Corporation's 10QSB
                for
                the quarter ended June 30, 2005 filed August 15, 2005.10.19
            
            Non-Exlusive
                License Agreement - Bouyancy
              Compensator
                (and Dive Belt) Weight System
            
            Incorporated
                by reference to Exhibit 10.18 to United Companies Corporation's 10QSB
                for
                the quarter ended June 30, 2005 filed August 15, 2005.10.20
            
            Exclusive
                License Agreeement - Brownie's Third Lung, Brownie's Public Safety,
                Tankfill, and Related Trademarks and Copyrights
            
            Incorporated
                by reference to Exhibit 10.18 to United Companies Corporation's 10QSB
                for
                the quarter ended June 30, 2005 filed August 15, 2005.10.21
            
            Non-Exclusive
                License Agreement -
              Drop
                Weight Dive Belt
            
            Incorporated
                by reference to Exhibit 10.18 to United Companies Corporation's 10QSB
                for
                the quarter ended June 30, 2005 filed August 15, 2005.10.22
            
            Non-Exclusive
                License Agreement -
              Garment
                Integrated or Garment Attachable
              Flotation
                Aid and/or PFD
            
            Incorporated
                by reference to Exhibit 10.18 to United Companies Corporation's 10QSB
                for
                the quarter ended June 30, 2005 filed August 15,
                2005.




28






****E****XHIBIT********N****O****.****
            
            **DESCRIPTION**
            
            ****L****OCATION****10.23
            
            Non-Exclusive
                License Agreement -
              Inflatable
                Dive Market and Collection Bag
            
            Incorporated
                by reference to Exhibit 10.18 to United Companies Corporation's 10QSB
                for
                the quarter ended June 30, 2005 filed August 15, 2005.10.24
            
            Non-Exclusive
                License Agreement - SHERPA
              Trademark
                and Inflatable Flotation Aid/Signal
              Device
                Technology
            
            Incorporated
                by reference to Exhibit 10.18 to United Companies Corporation's 10QSB
                for
                the quarter ended June 30, 2005 filed August 15, 2005.10.25
            
            Non-Exclusive
                License Agreement - Tank-
              Mounted
                Weight, BC or PFD-Mounted Trim Weight or Trim Weight Holding System
            
            Incorporated
                by reference to Exhibit 10.18 to United Companies Corporation's 10QSB
                for
                the quarter ended June 30, 2005 filed August 15, 2005.10.26
            
            Exclusive
                License Agreement - Brownie’s Third Lung and Related Trademarks and
                Copyright
            
            Incorporated
                by reference to Exhibit 10.26 to United Companies Corporation’s 10KSB for
                the year ended December 31, 2005 filed March 30, 2006.31.1
            
            Certification
                Pursuant to Section 302
            
            Provided
                herewith31.2
            
            Certification
                Pursuant to Section 302
            
            Provided
                herewith32.1
            
            Certification
                Pursuant to Section 1350
            
            Provided
                herewith32.2
            
            Certification
                Pursuant to Section 1350
            
            Provided
                herewith




**(b)**  **Reports
      On Form 8-K.**




None.




29




**SIGNATURES**




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




Date:May
              12, 2006**U****NITED****C****OMPANIES****C****ORPORATION**By:
            /s/
              Robert M. CarmichaelRobert
                M. CarmichaelPresident,
                Chief Executive Officer,Chief
              Financial Officer, andPrincipal
              Accounting Officer




30