SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549





**FORM
      10-K**


**(Mark
      One)**


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





**FOR
      THE FISCAL YEAR ENDED JUNE 30, 2005**





**OR**





**[  ]**  **TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15 (d) OF**


**THE
      SECURITIES EXCHANGE ACT OF 1934**





For
      the
      period from _________ to _________.





Commission
      file number 0-17458





**AHPC
                HOLDINGS, INC.**(Exact
                name of registrant as specified in its
                charter)





**Maryland**
              
              **73-1326131**(State
                  of incorporation)
              
              (I.R.S.
                  Employer Identification No.)
  **80
                  Internationale Boulevard, Unit A**
                **Glendale
                  Heights, IL 60139**


(Address
        of principal executive offices)


**REGISTRANT’S
      TELEPHONE NUMBER, INCLUDING AREA CODE:** (630) 407-0242





**SECURITIES
      REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:** None





**SECURITIES
      REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:**





**TITLE
                OF EACH CLASS**
            **NAME
                OF EACH EXCHANGE**
              **ON
                WHICH REGISTERED**Common
                Stock, par value $0.01 per share
            None





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the Registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days.





Yes [X] No [   ]





Indicate
      by check mark if disclosure of delinquent filers pursuant to Item 405 of
      Regulation S-K is not contained herein, and will not be contained, to the best
      of Registrant’s knowledge, in definitive proxy or information statements
      incorporated by reference in Part III of this Form 10-K or any amendment to
      this
      Form 10-K.   [X]





Indicate
      by check mark whether the registrant is an accelerated filer (as defined in
      Exchange Act Rule 12b-2).





Yes[  
      ]   No [X]







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





Yes[  
      ]   No [X]





Aggregate
      market value of the voting common stock held by non-affiliates of the Registrant
      as of June 30, 2005 (the last business day of the registrant’s most recently
      completed fiscal year end) was $5,522,969. Shares of voting common stock held
      as
      of June 30, 2005 by any person who was an executive officer or director of
      the
      registrant as of June 30, 2005 have been excluded from this computation because
      such persons may be deemed to be affiliates. This determination of affiliate
      status is not a conclusive determination for other purposes.




At
      October 13, 2005, 1,224,137 shares of the Registrant’s Common Stock were
      outstanding.





As
      used
      in this report, the terms “we,”  “us,”  “our” and the “Company” mean
      AHPC Holdings, Inc. and its subsidiaries, unless the context indicates another
      meaning, and the term “common stock” means our common stock, par value $0.01 per
      share.








**AHPC
      HOLDINGS, INC.**


**FORM
      10-K**


**FOR
      THE YEAR ENDED JUNE 30, 2005**








**TABLE
      OF CONTENTS**







**PART
                I**
            
            **Page**





Item
                1.
            Business
            1Item
                2.
            Properties
            5Item
                3.
            Legal
                Proceedings
            6Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            6





**PART
      II**





Item
                5.
            Market
                for Registrant’s Common Equity, RelatedStockholder
                Matters and Issuer Purchases of Equity Securities
            8Item
                6.
            Selected
                Consolidated Financial Data
            8Item
                7.
            Management’s
                Discussion and Analysis of FinancialCondition
                and Results of Operations
            9Item
                7A.
            Quantitative
                and Qualitative Disclosures aboutMarket
                Risk
            17Item
                8.
            Financial
                Statements and Supplementary Data
            22Item
                9.
            Changes
                In and Disagreements With Accountants onAccounting
                and Financial Disclosure
            22Item
                9A.
            Controls
                and Procedures
            22Item
                9B.
            Other
                Information
            23





**PART
      III**





Item
                10.
            Directors
                and Executive Officers of the Registrant
            24Item
                11.
            Executive
                Compensation
            26Item
                12.
            Security
                Ownership of Certain Beneficial Ownersand
                Management and Related Stockholder Matters
            28Item
                13.
            Certain
                Relationships and Related Transactions
            30Item
                14.
            Principal Fees
                and Services of Independent Registered
              Public
                Accounting Firm
            30





**PART
      IV**





Item
                15.
            Exhibits
                and Financial Statement Schedules
            31








**PART
      I**





This
      Form
      10-K contains certain forward-looking statements. For this purpose, any
      statements contained in this Form 10-K that are not statements of historical
      fact may be deemed to be forward-looking statements. Without limiting the
      foregoing, words such as “may,”  “will,”  “expect,”  “believe,”
       “anticipate,”  “estimate,” or “continue” or comparable terminology
      are intended to identify such forward-looking statements. These statements
      by
      their nature involve substantial risks and uncertainties, and actual results
      may
      differ materially depending upon a variety of factors, including those set
      forth
      in the section below entitled “Risks Affecting Forward Looking Statements
      and Stock Prices .”





**ITEM
      I.**  **BUSINESS**





***General***





AHPC
      Holdings, Inc., formerly known as WRP Corporation, through our wholly owned
      subsidiary, American Health Products Corporation (“AHPC”), is a leading marketer
      of foodservice and medical examination gloves in the United States. Prior to
      April 30, 2004, we were also a manufacturer of disposable latex examination
      and
      food service gloves through a formerly 70% owned Indonesian manufacturing
      facility, PT WRP Buana Multicorpora (“PT Buana”), which we sold in April
      2004.  We were reincorporated in Maryland in December 1995 and have
      been
      involved in several business operations.





From
      March 1998 until April 30, 2004, WRP Asia Pacific Sdn Bhd (“WRP Asia”) owned a
      majority of our outstanding common stock. As of April 30, 2004, WRP Asia owned
      53.2% of our outstanding securities, which consisted of 833,333 shares of common
      stock and 417,513 “Class A” shares of common stock (the latter of which was
      convertible into our common stock and entitled WRP Asia to elect a majority
      of
      our directors). WRP Asia is one of the world’s leading manufacturers of high
      quality disposable gloves, primarily for use by healthcare professionals in
      the
      acute care, alternative care and foodservice markets, and for critical
      environments in the electronics industries, scientific laboratories,
      pharmaceutical industries and other related industries. AHPC had been purchasing
      the majority of its powder-free latex exam gloves from WRP Asia for several
      years.





On
      April
      30, 2004, pursuant to the terms of our stock redemption and exchange agreement
      with WRP Asia, we redeemed all of WRP Asia’s shareholdings in the Company, which
      consisted of the 417,513 shares of Class A Common Stock and the 833,333 shares
      of common stock. These share amounts reflected the 1-for-3 reverse stock split
      which occurred on January 20, 2004. As consideration for the redemption we
      conveyed to WRP Asia, our 70% ownership interest in our subsidiary PT Buana
      and
      excused all indebtedness owing to us from WRP Asia and PT Buana, with the
      exception of certain mutually agreed obligations related to certain purchases
      of
      our products. We also entered into a five year supply agreement whereby we
      agreed to purchase certain minimum quantities of our latex glove needs from
      WRP
      Asia. On the closing of the transaction, the three of our seven directors who
      were employees of WRP Asia resigned as our officers and directors.





Under
      the
      Stock Redemption and Exchange Agreement we also agreed to change our corporate
      name from WRP Corporation to AHPC Holdings, Inc. The name change was made
      effective on May 14, 2004.





1


Additionally,
      during the fiscal year ended June 30, 2004, we made the decision to increase
      our
      presence in the healthcare market. The healthcare market includes dental and
      integrated delivery network/medical distribution channels. With respect to
      the
      healthcare market our focus is on marketing our existing products, including
      the
      development of a separate branding identity for our DermaSafe versus Glovetex
      products. This decision was a reversal of the direction that our organization
      had taken in March 2, 2002 when we decided to substantially reduce our presence
      in the healthcare market.





***Glove
      Products***





Through
      our wholly owned subsidiary, AHPC, we market a full product line of disposable
      gloves including latex, vinyl, synthetic and nitrile examination used primarily
      in the foodservice, non-acute medical, dental, nursing home and retail
      industries. PT Buana, WRP Asia and other third parties manufacture gloves
      marketed by AHPC. Gloves are marketed by AHPC under the brand names
“DermaSafe ® ,” 
      “Glovetex ® ,”
      and
“SafePrepTM” to foodservice distributors, medical distributors, dental
      distributors and nursing homes. AHPC also sells gloves to other companies,
      which
      market the gloves under their own brand names or “private labels.” The gloves
      are sold in cases that are generally comprised of ten boxes with 100 gloves
      per
      box.





For
      the
      year ended June 30, 2005, AHPC’s sales ratios of latex powdered, latex
      powder-free and non-latex glove sales were approximately 28%, 27% and 36%,
      respectively. We anticipate that our sales ratio of latex powdered exam gloves
      will continue to decline and be replaced with powder-free and synthetic gloves,
      which is consistent with market trends.





Manufacturing
      Operations. The
      production of latex gloves begins with the tapping of raw latex from rubber
      trees located on plantations in Malaysia and Indonesia. Once gathered, the
      raw
      latex is sent to a centrifuge where the latex is concentrated. PT Buana and
      other similar manufacturers of latex gloves purchase the latex concentrate
      and
      ship it to their respective production plants where the latex concentrate is
      compounded in a proprietary formula to enhance glove durability, elasticity
      and
      tactility. A controlled dipping process causes consistency from batch to batch
      and eliminates air bubbles that can create pinholes. Glove-making formers,
      which
      are in five sizes and designed for the American hand, are dipped in the latex
      compound. The formers are cleansed both chemically and mechanically to prevent
      residue buildup which could compromise glove integrity.





The
      PT
      Buana factory, which was 70% owned by us through April 30, 2004, had a
      production capacity of approximately 840,000,000 latex gloves per year. Under
      our Stock Redemption and Exchange Agreement with WRP Asia, we conveyed our
      70%
      interest in PT Buana to WRP Asia and entered into a five year supply agreement.
      We continue to purchase powdered latex exam gloves from PT Buana under the
      supply agreement.





Powdered
      Latex Examination and Foodservice Glove Suppliers. PT Buana
      and unrelated Malaysian and Indonesian glove manufacturers supplied AHPC with
      its powdered latex gloves inventory during the year ended June 30, 2005.





Powder-Free
      Latex Examination and Foodservice, Nitrile and Surgical Glove
      Supplier. AHPC
      continues to purchase the majority of its latex powder-free gloves from
      Indonesia and Malaysia. In addition, AHPC is supplied with its nitrile and
      other
      synthetic gloves from China. AHPC also purchases latex powder-free gloves from
      PT Buana.





2


Non-Latex
      Examination and Foodservice Glove Suppliers. AHPC
      purchases its non-latex gloves from two unrelated suppliers with facilities
      in
      Taiwan, China, and Thailand.




***Complimentary
      Products***





The
      foodservice, industrial and retail industries view our current line of product
      offerings as one of a bundle of safety products used by their customers.
      Developing a profitable line of complimentary products will be important to
      the
      future success of our business. During 2003, we diversified our product offering
      with additional synergistic product lines that address the current safety
      requirements of our markets. These additional product offerings include
      polygloves, heavy-duty gloves, headwear, aprons and bibs, food storage bags
      and
      educational services. These products are being offered under our SafePrep brand
      and under private label. During our fiscal year ended June 30, 2005, these
      complimentary products represented 8.4% of our total net sales.





Markets
      and Methods of Distribution. AHPC
      markets its gloves through a network of national, regional and local
      foodservice, retail and medical distributors that sell primarily to restaurants,
      hotels, hospitals and nursing homes. AHPC also markets to alternate care and
      home health care dealers, dental dealers and major retail outlets. Our principal
      methods of marketing our products are trade shows, advertising, seminars, direct
      mail and brokers, as well as sales representatives. AHPC employs a sales force
      comprised of regional sales managers and representatives, manufacturer sales
      representatives and an in-house sales and marketing staff to cover the
      U.S.





FDA
      Regulation of Examination Glove Products. The
      quality control procedures for the manufacture of examination gloves marketed
      in
      the United States are regulated by the U.S. Food and Drug Administration
      (“FDA”). Included within such procedures are minimum testing requirements, as
      well as FDA current Quality Systems Regulations and American Society for Testing
      and Materials standards.





Competition. Our
      business of providing barrier protection products is highly competitive in
      the
      markets in which we operate including healthcare and foodservice. The primary
      basis of competition includes, but is not limited to, price, product quality,
      breadth of product line, service and product availability. Additionally, among
      our direct competitors are several large firms with significantly greater
      resources available than us. Nonetheless, we believe we have certain competitive
      advantages that enable us to compete favorably with larger competitors including
      our ability to provide high service levels and to react quickly to changing
      customer requirements.





Customers. Our
      customers include leading foodservice distributors and healthcare product
      suppliers. During the year ended June 30, 2005, AHPC’s national customer group,
      accounted for 89.1% of its net sales. The customer group is comprised of
      approximately 60 independent customers. The loss of these national customers
      would have a materially adverse effect on us. Our customers tend to limit the
      number of qualified vendors they purchase from in order to gain efficiencies
      across their product lines. We, therefore, expend substantial efforts to
      maintain and grow our relationships with our existing major customers. However,
      our products are ultimately distributed by three diversified distribution
      companies, through their combined networks of over 100 operating companies,
      to
      thousands of foodservice organizations and medical facilities throughout the
      United States. The ultimate end-users of our products are the foodservice
      organizations and medical facilities, healthcare professionals and individuals
      who use our gloves.





3


Patents
      and Trademarks. AHPC
      owns the trademarks “SafePrep,”“DermaSafe” and “Glovetex,” which are registered
      in the United States.





Segment
      Financial Information. The
      segment information of the Company for the year ended June 30, 2005, is included
      in Note L to our Consolidated Financial Statements which are attached to this
      report and includes two segments, manufacturing and distribution, for fiscal
      2004 and one segment, distribution, for fiscal 2005.





Inventory. Since
      the majority of our products are imported from Southeast Asia, it is our
      practice to maintain a certain level of inventory as safety stock. Inventories
      are accounted for on a first-in, first-out basis and are valued at the lower
      of
      actual cost or market.





**Employees**





As
      of
      June 30, 2005, our U.S. operations employed a total of 26 full-time employees.
      AHPC also uses the services of one manufacturer sales representative
      organization and 32 broker representative organizations that do not work
      exclusively for AHPC and are paid on a commission basis. None of our employees
      are represented by a collective bargaining agreement. We consider relations
      with
      our employees to be good.





***Background
      Information Regarding Our Ownership and Business***





At
      December 31, 1997, MBf International owned all 1,252,538 shares of our Series
      A
      Common Stock and 1,682,275 shares of our common stock. On March 31, 1998, we
      announced that our majority shareholder, MBf International, had consummated
      the
      closing of two separate agreements (entered into in May 1997) with WRP Asia
      Pacific Sdn. Bhd. (“WRP Asia”), formerly known as Wembley Rubber Products (M)
      Sdn. Bhd., our supplier of latex powder-free exam gloves. These agreements
      transferred majority ownership of the Company to WRP Asia and were effected
      as
      follows:





1.
            MBf
                International sold all of our issued and outstanding Class A Common
                Stock
                (1,252,538 shares) to WRP Asia for $5.00 per share or $6,262,690;
                and





2.
            WRP
                Asia purchased 2,500,000 shares of our common stock for $2.70 per
                share
                for a total of $6,750,000. The purchase price of $2.70 per share
                reflected
                a 12% discount from the average stock price over a seven consecutive
                business day range ended May 9, 1997, as detailed by a fairness opinion
                received from an independent valuation
                firm.





At
      December 31, 1998, MBf International still owned 1,682,275 shares of our common
      stock, which represented a 24.4% ownership interest in the Company as of that
      date. In January 1999, MBf International sold its remaining 1,682,275 shares
      to
      several U.S. institutional investors, thus transferring all of its holdings
      in
      the Company at that time.





These
      transactions provided WRP Asia with a 55.0% ownership interest in the Company
      at
      March 31, 1998. The above share amounts are prior to the 1-for-3 reverse stock
      split which was effected on January 20, 2004. Effective April 30, 2004, we
      redeemed all shares of our common stock and Class A Common Stock held by WRP
      Asia. As a result, subsequent to April 30, 2004, WRP Asia is no longer
      our
      majority shareholder.





4


On
      March
      1, 2002, we announced that AHPC had entered into a Transition Services Agreement
      with Maxxim Medical, Inc., (“MAXXIM”), whereby MAXXIM would service certain of
      our acute-care medical customers. As a result of this transition, we
      substantially reduced our personnel in our medical division and transitioned
      our
      business with respect to most of our customers in the medical division to
      MAXXIM. On February 11, 2003, MAXXIM filed for bankruptcy. As of June 30, 2005,
      we had an outstanding account receivable from MAXXIM of $280,115.41. This amount
      has been fully reserved on our balance sheet.





***Executive
      Officers***





Our
      executive officers are as follows:





**Name**
            **Age**
            **Position**Alan
                E. Zeffer
            52
            President
                and Chief Executive OfficerDeborah
                Bills
            37
            Chief
                Financial Officer, Secretary and
                Treasurer





Biographies
      for each of the executive officers are included below.





***Alan
      E. Zeffer*** has been
      Chief Executive Officer and President of the Company since May 2004. He was
      the
      Chief Financial Officer, Secretary/Treasurer for WRP Corporation, our
      predecessor, prior to becoming our Chief Executive Officer and President. He
      joined WRP Corporation in April 2001. Prior to joining WRP Corporation, Mr.
      Zeffer was Managing Partner for Quest Capital Corporation, a corporate finance
      advisory firm that he founded in 1993. He also served as treasurer for Sybron
      International Corp, from 1987 until 1993.





***Deborah
      Bills*** has
      been
      our Chief Financial Officer, Secretary and Treasurer since May 1, 2004. Prior
      to
      becoming Chief Financial Officer, Secretary and Treasurer, she served as the
      Company’s corporate controller. She joined us in October 2000, as an accounting
      manager. Prior to joining us in October 2000, she served as accounting manager
      for Advanced Dial Company.




**ITEM
      2.**  **PROPERTIES**





On
      April
      7, 2005, we entered into a Lease Agreement with ProLogis to lease warehouse
      and
      office space in the building known as 80 Internationale Boulevard, Unit A in
      Glendale Heights, Illinois. This facility includes our executive and
      administrative offices and our primary distribution center. The term of the
      Lease Agreement commenced on May 1, 2005 and will terminate on June 30, 2010,
      subject to our option to extend the lease term for an additional term of 5
      years. The average base rent for the premises for the first year of the Lease
      Agreement is approximately $2.23 per square foot, or approximately $176,000.
      The
      average rent for the premises during the remaining four years of the initial
      term of the Lease Agreement will be approximately $3.88 per square foot, or
      $306,000 per year. In addition, we expect common area, real estate taxes, and
      insurance to approximate $110,000 during the first year of the lease term and
      to
      average approximately $140,000 per year over the remaining four years of the
      initial term. For the year ended June 30, 2005, our lease expense for this
      facility was $45,950.





Our
      principal executive and administrative office was previously located in Itasca,
      Illinois. The lease for this location was renewed on April 9, 2000, for a term
      of five years, and terminated on September 9, 2005 without renewal. For the
      year
      ended June 30, 2005, our lease expense for this facility was
      $181,645.





5


In
      May
      1999, we entered into a five-year lease agreement for a 55,000 square-foot
      warehouse facility located in Itasca, Illinois. The lease term for this location
      commenced on August 1, 1999 and was to expire in July 2004; however we extended
      the term of this lease for one additional year to May 2005. This lease expired
      as of May 31, 2005. The rental expense for this lease, through May 31, 2005,
      was
      approximately $289,052.





We
      also
      use public warehouse facilities, as needed, to store our inventory in Oakland,
      California; Fond Du Lac, Wisconsin; and Hanover, Pennsylvania. Public warehouse
      charges are dependent upon the volume of products stored and the frequency
      of
      shipping or receiving products.





**ITEM
      3.**  **LEGAL
      PROCEEDINGS**





At
      June
      30, 2005, we were actively involved or otherwise named in nine latex glove
      product liability suits pending throughout the United States. We were an active
      defendant in one claim, and were named as a third party defendant in the other
      eight claims. We have challenged the sufficiency of service in the eight
      third-party actions. There are no latex glove product liability claims pending
      directly against the Company.





All
      of
      the claims referred to above involve plaintiffs that have worked in the medical
      and health industries and who allege injuries associated with the continued
      use
      and/or exposure to latex glove products. In each of the claims, we are one
      of
      several glove distributors, manufacturers or users named in the suits. Each
      of
      the claims alleges damages of an unspecified amount and is in a different stage
      of discovery or other pre-trial proceeding.





We
      have
      obtained product liability insurance coverage, which covers the defense costs,
      and certain damage awards associated with the product liability claims against
      the Company and the indemnity of the Company’s customers to the limits of the
      policies. However, there is no assurance that our insurance will be sufficient
      to meet all damages, for which we may be held liable, or the product liability
      insurance for these claims will continue to be available to us or, if available,
      that it will be available in sufficient amounts and at affordable terms.
      Likewise, there is no assurance that the outcome of these suits will not
      adversely affect our operations or financial condition. We intend to vigorously
      contest any latex claim initiated against us or one of our indemnities, but
      will
      enter into a settlement agreement, where, after careful consideration, our
      management determines that our best interests will be served by settling the
      matter.





From
      time
      to time we are involved in other litigation relating to claims arising out
      of
      our operations in the normal course of business. At June 30, 2005, we were
      not a
      party to any other legal proceedings, the adverse outcome of which, in
      management’s opinion, individually or in the aggregate, would have a material
      adverse effect on our financial condition. Management believes all legal claims
      are adequately provided for and if not provided for, are without merit or
      involve such amounts that would not materially adversely affect us.





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





Our
      annual meeting of the shareholders was held on June 22, 2005. The purpose of
      the
      annual meeting was to consider the vote on the following matters:





1.
            To
                elect two directors to hold office until their three-year term expires
                or
                otherwise as provided in our
                by-laws.


6





Director
      Nominees





George
      Jeff Mennen


Robert
      J.
      Simmons





Each
      of
      the nominees for directors identified above received the following number of
      votes:





George
                Jeff Mennen
            Robert
                J. SimmonsFor
            902,747
            979,538Abstain
            81,084
            4,293Broker
                Non-votes
            0
            0





Each of George Jeff Mennen and Robert J. Simmons were elected as directors
      by
      the shareholders.




2.
            To
                  ratify the appointment of Grant Thornton, LLP to serve as our auditors
                  for
                  the next fiscal year ending June 30,
                  2005.





Votes
                For:
            979,759Votes
                Against:
            66Abstentions:
            4,006Broker
                Non-votes:
            0





The
      above
      matter was approved by the shareholders.





7





**PART
      II**





**ITEM
      5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
      PURCHASES OF EQUITY SECURITIES**





Our
      common stock is traded on the National Association of Securities Dealers
      Automated Quotation System (“Nasdaq”) SmallCap Stock Market under the symbol
“GLOV”. The table below sets forth for each quarter of the fiscal year indicated
      the reported closing high and low sale prices of our common stock. The
      information shown below gives effect to (for all periods shown) our 1-for-3
      reverse stock split which was effected on January 20, 2004.





**COMMON
      STOCK PRICES**


**Period
                  Ended**
              **Low**
              **High****June
                  30, 2005**
                4thquarter
                3rdquarter
                2ndquarter
                1stquarter
                
                **June
                  30, 2004**
                4thquarter
                3rdquarter
                2ndquarter
                1stquarter
              $2.90
                $3.10
                $1.95
                $3.02
                
                
                $2.39
                $1.02
                $1.47
                $1.02
              $4.40
                $4.47
                $4.09
                $4.60
                
                
                $4.95
                $2.70
                $2.91
                $1.98




There
      were approximately 270 shareholders of record of our common stock as of June
      30,
      2005. We believe that the number of beneficial owners of our common stock on
      that date was substantially greater.





We
      have
      not paid any cash dividends with respect to our common stock. We expect to
      reinvest any earnings for expansion of our operations and do not intend to
      pay a
      dividend in the foreseeable future.





**ITEM
      6.**  **SELECTED
      CONSOLIDATED FINANCIAL DATA**





The
      selected consolidated financial data of the Company presented below for the
      years ended June 30, 2005, 2004, 2003, 2002 and 2001 should be read in
      conjunction with the Consolidated Financial Statements, related notes and other
      financial information referred to in Item 8 of this report.  The table
      below contains restated (loss) earnings per share information for the
      fiscal years ended June 30, 2003, 2002 and 2001 (refer to
      Note O).





8





**Year
                Ended June 30,**(In
                thousands except per share amounts)
            
            **2005**
            
            **2004**
            
            **2003**
            
            **2002**
            
            **2001******STATEMENT
                OF OPERATIONS DATA:Net
                sales
            
            $
            26,553
            
            $
            36,560
            
            $
            36,989
            
            $
            47,357
            
            $
            51,889Gross
                profit
            
            
            6,290
            
            
            6,027
            
            
            5,737
            
            
            11,580
            
            
            14,698Selling,
                general & administrative expenses
            
            
            7,674
            
            
            9,134
            
            
            8,939
            
            
            17,640
            
            
            13,784Minority
                interest in loss (income)of subsidiary, net of tax
            
            
            -
            
            
            243
            
            
            250
            
            
            202
            
            
            (185
            )Net
                (loss) income
            
            
            ($1,152
            )
            
            ($2,850
            )
            
            ($5,560
            )
            
            ($4,293
            )
            
            $529PER
                SHARE DATA:(Loss)
                earnings per share
            
            
            ($1.13
            )
            
            ($2.97
            )
            
            ($2.51
            )
            
            ($1.94
            )
            
            $0.24(restated)
            
            
            (restated)
            
            
            (restated)Total
                assets
            
            $
            7,684
            
            $
            9,983
            
            $
            25,965
            
            $
            32,947
            
            $
            36,072Long-term
                debt
            
            $
            0
            
            $
            0
            
            $
            5
            
            $
            19
            
            $
            13Total
                shareholders' equity
            
            $
            3,296
            
            $
            3,837
            
            $
            11,266
            
            $
            16,836
            
            $
            21,176





**ITEM
      7.**  **MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS**





Management’s
      discussion and analysis of financial condition and results of operations is
      to
      provide shareholders with an understanding of our financial condition, changes
      in financial condition and results of operations. We will discuss and provide
      our analysis for the following:




·
            Business
                Overview


·
            Results
                of Operations


·
            Liquidity
                and Capital Resources


·
            Business
                Segments


·
            Critical
                Accounting Policies


·
            New
                Accounting Standards and
                Announcements


·
            Information
                Regarding Forward-Looking
                Statements


·
            Subsequent
                Events





***Business
      Overview***





Our
      wholly owned subsidiary, American Health Products Corporation (“AHPC”), is
      engaged in the marketing and distribution of high quality medical grade
      examination, foodservice gloves, and other complimentary items within the United
      States and Canada. We have been in the glove business since our incorporation
      in
      January 1989. For the year ended June 30, 2005, we recorded net glove sales
      of
      approximately $26.6 million.





We
      formerly owned a 70% interest in a subsidiary, PT WRP Buana Multicorpora
      (“PT Buana”), whose primary operations consist of an Indonesian glove
      manufacturing plant, which commenced operations in April 1996. PT Buana
      manufactures high quality, disposable powdered and powder-free latex examination
      gloves. Under our Stock Redemption and Exchange Agreement with WRP Asia, we
      conveyed our 70% interest in PT Buana to WRP Asia and entered into a five year
      supply agreement with WRP Asia whereby we agreed to purchase certain minimum
      quantities of our latex glove needs from WRP Asia and PT Buana.


9


This
      analysis of our results of operations and financial condition should be viewed
      in conjunction with the financial statements and other information concerning
      us
      referenced in Item 8 of this report. The consolidated financial statements
      for
      the years ended June 30, 2005, 2004 and 2003 include our results of operations
      and statements of cash flows, which include the results for AHPC for all such
      periods and the results for PT Buana through April 30, 2004 (refer to Note
      B of
      the financial statements attached to this report).





**Results
      of Operations**





The
      following table summarizes our operating results as a percentage of net sales
      for the periods indicated.





**Year
                Ended June 30,****2005**
            
            
            **2004**
            
            
            **2003**
            
            
            **2002**
            
            
            **2001****STATEMENT
                OF OPERATIONS DATA:**Net
                sales
            
            
            100
            %
            
            100
            %
            
            100
            %
            
            100
            %
            
            100
            %Cost
                of goods sold
            
            
            76.3
            
            
            83.5
            
            
            84.5
            
            
            75.5
            
            
            71.7Gross
                profit
            
            
            23.7
            
            
            16.5
            
            
            15.5
            
            
            24.5
            
            
            28.3Selling,
                general & administrative expenses
            
            
            28.9
            
            
            25.0
            
            
            24.2
            
            
            37.3
            
            
            26.6(Loss)
                income from operations
            
            
            (5.2
            )
            
            (8.5
            )
            
            (8.7
            )
            
            (12.8
            )
            
            1.7Interest
                (expense) / other income, net
            
            
            (0.6
            )
            
            (0.3
            )
            
            (1.9
            )
            
            (0.6
            )
            
            (0.9
            )Provision
                for (benefit from) income taxes
            
            
            (1.5
            )
            
            (0.3
            )
            
            5.1
            
            
            (3.9
            )
            
            (0.5
            )Minority
                interest in loss (income) of subsidiary
            
            
            -
            
            
            0.7
            
            
            0.7
            
            
            0.4
            
            
            (0.3
            )Net
                loss from discontinued operations
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Net
                (loss) income
            
            
            (4.33
            %)
            
            (7.80
            %)
            
            (15.00
            %)
            
            (9.10
            %)
            
            1.00
            %





**Year
      Ended June 30, 2005, Compared to the Year Ended June 30,
      2004**





Our
      consolidated net sales for the fiscal year ended June 30, 2005 were $26,553,241,
      which represented a decrease in net sales compared to the fiscal year ended
      June
      30, 2004 of $10,007,189 or 27.4%. The decrease in net sales was due to the
      redemption of our common stock from WRP Asia and the resulting loss of PT Buana
      sales. Our net sales are derived from the sales of finished product net of
      allowable rebates, discounts and returns.





Consolidated
      gross profit increased $263,288 or 4.4% for the fiscal year ended June 30,
      2005
      compared to the prior year. In determining gross profit, we calculate cost
      of
      goods sold by including all costs to manufacture and purchase the finished
      product plus the related costs associated with ocean freight, customs duty
      and
      warehousing. The increase in our consolidated gross profit during fiscal 2005
      over fiscal 2004 was primarily due to the redemption of our common stock from
      WRP Asia resulting in the loss of PT Buana corresponding expenses, improved
      acquisition costs, and reductions in inventory storage at our outside warehouse
      facilities. We continue to expect our gross margins to be affected by the cost
      of latex, changes in product mix, competition, manufacturing capacity levels
      and
      other factors. We continuously monitor all costs impacting our profitability,
      including raw material costs such as latex and poly vinyl chloride.





10


Operating
      loss decreased $1,723,372 or 55.5% for fiscal year ended June 30, 2005 from
      the
      prior fiscal year. In determining operating loss, we calculate selling expenses
      to include all salaries and payroll-related costs for sales and marketing staff
      together with other sales related expenses such as sales commissions, travel
      costs, trade shows, advertising, promotions and delivery costs.  During
      our fiscal year ended June 30, 2005, our selling, general, administrative and
      other expenses decreased by $1,460,084 or 16.0%. As a percentage of net sales,
      selling, general, administrative and other expenses increased from 25.0% for
      the
      year ended June 30, 2004, to 28.9% for the year ended June 30, 2005. This
      decrease was primarily due to the redemption of our common stock from WRP Asia
      and the resulting loss of PT Buana selling, general, administrative and other
      expenses of $1,289,364 offset with an increase in sales consulting services
      due
      to our strategic decision to increase our market share in the healthcare
      industry.





Loss
      before minority interest and income taxes, operations decreased by
      $1,667,780 or 52.1% for the year ended June 30, 2005 compared to the prior
      fiscal year. The decrease in our loss from continuing operations was primarily
      due to better acquisition costs and a reduction in inventory storage at our
      outside warehouse facilities. Included in this computation is other income
      which
      consists of rental, interest and miscellaneous income. Other income decreased
      $110,221 during the year ended June 30, 2005 from the prior year ended June
      30,
      2004. This decrease in other income was related the resulting loss of PT Buana,
      through the redemption of our common stock from WRP Asia.





The
      benefit for income taxes for the year ended June 30, 2005 and June 30, 2004
      was
      $(383,160) and $(109,860), respectively. The change in tax benefit was due
      to
      the write-down of expired tax reserves.





As
      a
      result of the factors discussed above, we reported net loss of $(1,151,549)
      for
      the year ended June 30, 2005, which compares to a net loss of $(2,849,943)
      during the prior year ended June 30, 2004. Loss per share for the years ended
      June 30, 2005 and June 30, 2004, were $(1.13) and $(2.97),
      respectively.





**Year
      Ended June 30, 2004, Compared to the Year Ended June 30,
      2003**





Our
      consolidated net sales for the fiscal year ended June 30, 2004 were $36,560,430,
      which represents a decrease in our net sales compared to the year ended June
      30,
      2003 of $428,137 or 1.2%. Our net sales are derived from the sales of finished
      product net of allowable rebates, discounts and returns. The decrease in net
      sales during fiscal 2004 over fiscal 2003 was primarily attributable to the
      sale
      of our 70% ownership interest in PT Buana to WRP Asia at April 30, 2004, which
      resulted in our recognition of revenues from PT Buana net sales for only the
      first 10 months of the year ended June 30, 2004, compared to a full 12 months
      for the year ended June 30, 2003.





Consolidated
      gross profit increased $289,916 or 5.1% during the year ended June 30, 2004
      compared to the prior year. In determining gross profit we calculate cost of
      goods sold to include all costs to manufacture and purchase the finished product
      plus the related costs associated with ocean freight, customs duty and
      warehousing. The increase in our consolidated gross profit during fiscal 2004
      over fiscal 2003 was primarily due to better acquisition costs and a reduction
      in inventory storage at our outside warehouse facilities . We
      continue to expect our gross margins to be affected by the cost of latex,
      changes in product mix, competition, manufacturing capacity levels and other
      factors. We continuously monitor all costs impacting our profitability,
      including raw material costs such as latex and poly vinyl chloride.





11


Operating
      loss decreased $95,482 or 3.0% for the fiscal year ended June 30, 2004 from
      the
      prior year. In determining operating loss, we calculate selling expenses to
      include all salaries and payroll-related costs for sales and marketing staff
      together with other sales related expenses such as sales commissions, travel
      costs, trade shows, advertising, promotions and delivery costs.  During
      our fiscal year ended June 30, 2004, our selling, general, administrative and
      other expenses increased by $194,434 or 2.2% over the year ended June 30, 2003.
      As a percentage of net sales, selling, general, administrative and other
      expenses increased from 24.2% for the year ended June 30, 2003, to 25.0% for
      the
      year ended June 30, 2004. This increase was primarily to due to an increase
      in
      sales consulting services due to our strategic decision to increase our market
      share in the healthcare industry.





Loss
      from
      continuing operations decreased by $709,025 or 18.1% for the year ended June
      30,
      2004 compared to the prior year. This significant decrease in the loss was
      due
      to our recording of a goodwill impairment loss of $(1,042,094) for the year
      ended June 30, 2003. Also included in this computation is other income which
      consists of rental, interest and miscellaneous income. Other income decreased
      $406,381 during the year ended June 30, 2004 from the prior year. This was
      primarily due to our billing of $375,000 to MAXXIM for the Transition Services
      Agreement in the fiscal year ended June 30, 2003.





The
      benefit for income taxes for the year ended June 30, 2004 was $(109,860)
      compared to a prior year expense of $1,898,169. The prior year tax expense
      was
      due to the establishment of a valuation allowance against our deferred tax
      assets.





As
      a
      result of the factors discussed above, we reported a net loss of $(2,849,943)
      for the year ended June 30, 2004, which compared to a net loss of $(5,559,769)
      during the prior year. Diluted earnings per share for the years ended June
      30,
      2004 and June 30, 2003, were $(2.97) and $(2.54), respectively, which numbers
      were “restated” (refer to Note O of our consolidated financial
      statements).




***Business
      Segments***





During
      the year ended June 30, 2005, we were engaged solely in the business of
      distributing disposable gloves and complimentary products. During the year
      ended
      June 30, 2004 we were engaged in the business of manufacturing, through April
      30, 2004, and distributing disposable gloves and complimentary products. During
      the fiscal year ended June 30, 2004, we had two business segments, manufacturing
      (through April 30, 2004), and distribution. During the fiscal year ended June
      30, 2005, we had one business segment, distribution. These segments were managed
      as separate strategic business units. The manufacturing segment, which
      represented the Indonesian operations of PT Buana, manufactured powdered and
      powder-free latex gloves and sold them primarily to AHPC and WRP Asia. Our
      distribution segment involves the procurement and sale of gloves purchased
      from
      the manufacturing segment (prior to April 30, 2004) and other glove
      manufacturers and then sold to national and regional healthcare, foodservice,
      retail and other distributors within the U.S. The distribution segment also
      includes, to a significantly lesser extent, the sale of non-glove disposable
      products. Discussion of the operations of each segment is included throughout
      the Results of Operations and Liquidity and Capital Resources sections of our
      management's discussion and analysis of financial condition and results of
      operations contained herein.





12


***Liquidity
      and Capital Resources***





***Cash
      Flows***





Set
      forth
      below is a summary of our cash flows during the fiscal years ended June 30,
      2005, 2004 and 2003.





**Fiscal
                Years Ended June 30,****2005**
            
            
            **2004**
            
            
            **2003****(In
                thousands)**Net
                cash provided by operating activities
            
            $
            137.5
            
            $
            339.4
            
            $
            3,884.7Net
                cash used in investing activities
            
            $
            (33.2
            )
            $
            (15.9
            )
            $
            (699.0
            )Net
                cash used in financing activities
            
            $
            (446.9
            )
            $
            (385.4
            )
            $
            (3,216.7
            )Net
                decrease in cash and cash equivalents
            
            $
            (342.6
            )
            $
            (61.9
            )
            $
            (31.0
            )





***Cash
      and Cash Equivalents*** :
      Our
      cash and cash equivalents decreased from $359,012 to $16,434 in fiscal year
      2005. Our operations provided cash of $137,528 during the 2005 fiscal year.
      Net
      inventories were $4,992,385, a decrease of $1,702,045 from $6,694,430 at June
      30, 2004. This decrease was due to a general reduction in our inventory levels
      in connection with improved purchasing policies.





Management
      currently believes that existing cash, funds generated from operations, and
      our
      credit facility, including our subsequent amended credit facility and
      subordinated debt (refer to Note P of our consolidated financial
      statements), will be sufficient to provide for our anticipated requirements
      for
      working capital for the next 12 months and the foreseeable future.





There
      can
      be no assurance, however, that our business will continue to generate cash
      flow
      at current levels, or that anticipated operational improvements will be
      achieved. Our ability to make debt payments or pay interest on or extend our
      credit facility depends on our future performance and financial results, which,
      to a certain extent, are subject to general conditions in, or affecting, our
      business (refer to Item 7A, Quantitative and Qualitative Disclosure About Market
      Risk).





***Net
      cash provided by operating activities:*** Our
      net
      cash provided by operating activities was $137,528 in fiscal year 2005 compared
      to $339,399 in the prior fiscal year. The positive cash flows from operating
      activities in fiscal year 2005 are due to our improved purchasing policies
      and
      general reduction in our inventory levels.





Net
      trade
      accounts receivable at June 30, 2005 increased by 1.2% to 1,844,349 from
      $1,823,149 at June 30, 2004.





Net
      inventories, at June 30, 2005, decreased by 25.4% to $4,992,385 from June 30,
      2004 net inventory of $6,694,430. This decrease of $1,702,045 was primarily
      due
      to a general reduction of inventory levels through improved inventory
      management.





***Net
      cash used in investing activities:*** Our net
      cash used in investing activities was $33,236 in fiscal year 2005 compared
      to
      cash used of $15,915 in fiscal year 2004. This net difference was due to the
      increase in capital expenditures relating to computer software, leasehold
      improvements and office equipment.





13


***Net
      cash used in financing activities:*** Our net
      cash used in financing activities in fiscal year 2005 was $446,870 compared
      to
      $385,421 during fiscal year 2004. This increase was due to an increase in our
      credit line borrowings.





Interest
      rates in many Asian-Pacific countries have been heavily dependent upon
      international trade and are, accordingly, affected by protective trade barriers
      and the economic conditions of our trading partners in these Asian-Pacific
      countries. The enactment by the governments of our principal trading partners
      of
      protectionist trade legislation, reduction of foreign investment or general
      declines in the international securities markets could have a significant
      adverse effect upon the economies of the Asian-Pacific countries from which
      we
      purchase our products.





***Capital
      Structure and Resources***





On
      December 1, 1998, we obtained a domestic three-year credit facility from GE
      Capital, a large commercial credit company. This asset-based loan and
      security agreement included a $10,000,000 revolving line of credit with a
      $7,000,000 letter of credit sub-facility. On March 31, 1999, we amended our
      Loan
      and Security Agreement by increasing the maximum credit loan limit from
      $10,000,000 to $15,000,000 subject to availability, based on a formula using
      accounts receivable and inventory. As part of the amendment, the letter of
      credit sub-facility was increased from $7,000,000 to $11,000,000. These line
      of
      credit borrowings carried an interest rate of commercial paper plus 4.5% (5.54%
      at June 30, 2004). At June 30, 2004, we had outstanding $448,084 on the
      revolving line of credit and $1,364,806 of letter of credit liabilities under
      the credit facility. As of June 30, 2004, we were not in compliance with certain
      of our covenants and had obtained waivers of these covenant violations from
      the
      financial institution. This credit facility was terminated on September 13,
      2004.





On
      September 9, 2004, we signed a commitment for a one-year credit facility with
      Greenfield Commercial Credit, LLC, a privately held commercial financing
      company. This credit facility consisted of an asset-based loan and security
      agreement that provided us with a $3 million revolving line of credit. Pursuant
      to the line of credit, we may borrow up to the lesser of (i) $3 million or
      (ii)
      the sum of 75% of eligible receivables and 35% of eligible inventory, with
      a
      limit of $1,000,000 on the amount of borrowing availability on the eligible
      inventory. The line of credit borrowings carry an interest rate of prime plus
      8.0%.  At anytime prior to maturity date, the Lender has the unrestricted
      right to demand payment of all outstanding indebtedness. It contains certain
      penalties for early termination.  These bank obligations are secured
      by a
      security interest in substantially all of AHPC tangible and intangible assets.
      The credit facility contains certain penalties for early termination. As of
      June
      30, 2005 we had an outstanding balance of $783,806 under this credit facility.
      This credit facility was renewed on September 9, 2005.





The
      renewal of our loan and security agreement with Greenfield Commercial Credit,
      LLC, on September 9, 2005, includes a $5 million revolving line of credit,
      in
      which we may borrow up to the lesser of (i) $5 million or (ii) the sum of 80%
      of
      eligible receivables and 50% of eligible inventory on hand and 35% of eligible
      inventory in-transit, with a sub limit of $500,000, and an overall inventory
      cap
      of $2,500,000. The line of credit borrowings carry an interest rate of prime
      plus 4.5%.  At anytime prior to maturity date, the Lender has the
      unrestricted right to demand payment of all outstanding indebtedness. It
      contains certain penalties for early termination.  These bank obligations
      are secured by a security interest in substantially all of AHPC tangible and
      intangible assets. It contains certain penalties for early
      termination.





We
      have
      prepared the consolidated financial statements under the assumption that we
      are
      a going concern.




We
        have experienced recurring net losses of $1.152 million, $2.850 million
        and
        $5.560 million during the fiscal years ending June 30, 2005, 2004, and 2003,
        respectively. Although, we have benefited from several cost reduction
        programs, the volatility of raw material costs and rising oil prices together
        has limited the benefits of these programs in our results of operations.
 
 Despite
        the negative cash flow, we have been able to secure both short-term and
        long-term financing to support future operations (refer to Note P). We believe
        that this short-term and long-term financing will be sufficient to support
        our
        liquidity through June 30, 2006, depending on operating results and the
        continued trade support. We have reduced significant operating expenses this
        fiscal year and plans on continuing the cost reduction efforts during fiscal
        2006. We expect to continue to consume cash through the end of fiscal year
        June
        30, 2006. The rate at which cash will be consumed is primarily dependent
        on the
        revenues realized during such period. There can be no assurances that the
        current financing will be sufficient and that favorable operating results
        will
        be achieved, or that additional financing will be available to us, or that
        the
        terms of any additional financing will be favorable to us.
  Our
        independent registered public
        accountants have included a "going concern" emphasis paragraph in their audit
        report accompanying the June 30, 2005 financial statements.
 
 As
        of September 9, 2004, we
        signed a commitment for a one-year credit facility with Greenfield Commercial
        Credit, LLC, a privately held commercial financing company (refer to Note
        F). On
        September 9, 2005, we renewed this credit facility for another one
        year
        term with an option to automatically extend the credit facility for an
        additional one year term (refer to Note P).


14


***Critical
      Accounting Policies***





While
      all
      of our accounting policies are important in assuring that we adhere to current
      accounting standards, certain policies are particularly important to their
      impact on our financial statements. These are described in detail
      below.




******Revenue
      Recognition. Revenues
      from product sales are recognized at the time the product is shipped from the
      Company’s warehouse or upon the customer’s pick-up receipt of the goods,
      depending upon the terms of the sale. Product sales are stated net of rebates,
      sales returns, and sales discounts and allowances. 
 The
        Company records a liability
        for rebates and sales discounts in accordance with the terms of such rebate
        or
        discount as contracted for by the Company and its customers.




Reserves
      for Accounts
      Receivable and Inventory. We
      review on an ongoing basis the realizability of our trade and inter company
      receivables and the need for establishing reserves. As of June 30, 2005, we
      have
      established reserves of $336,351 in relation to trade and inter company
      receivables. We determine our allowances by considering a number of factors,
      including, but not limited to, the length of time trade accounts receivable
      are
      past due, our previous loss history, our customers' current ability to pay
      their
      obligations, and the condition of the general economy and the industry as a
      whole.





We
      review
      on an ongoing basis the realizability of our inventory value and the need for
      establishing reserves. We established the inventory reserves for valuation,
      shrinkage, excess and obsolete inventory. As of June 30, 2005, we have
      established reserves of $225,941.





Sales
      Incentives. Certain
      customers are granted discounts, rebates or other allowances which are intended
      to assist in the promotion of our products. We record these discounts and
      rebates as our customers earn them. All discounts, rebates and allowances are
      shown as a deduction from gross sales to arrive at Net Sales in the consolidated
      statements of income.





Deferred
      Taxes. Deferred
      taxes result from the effect of transactions that are recognized in different
      periods for financial and tax reporting purposes. A valuation allowance is
      established when it is more likely than not that any portion of the deferred
      tax
      assets will not be realized. The valuation allowance is adjusted if the
      realization of deferred tax assets becomes more likely than not. Should our
      income projections result in the conclusion that realization of deferred tax
      assets is more likely than not, further adjustments to the valuation are made.





***Contractual
      Obligations***





The
      following table summarizes our significant contractual commitments at June
      30,
      2005:





**Payments
                Due by Period****Total**
            
            
            **Less
                than 1year**
            
            
            **1-3
                years**
            
            
            **4-5
                years**
            
            
            **After
                5 years**Operating
                Leases (1)
            
            $
            2,039,229
            
            $
            457,182
            
            $
            1,238,124
            
            $
            343,923
            
            
            --Purchase
                Commitments (2)
            
            $
            20,122,247
            
            $
            5,240,168
            
            $
            14,882,079
            
            
            --
            
            
            --


______________





(1)
      On
      March 31, 2005, we entered into a Lease Agreement with ProLogis to lease
      warehouse and office space in the building known as 80 Internationale Boulevard,
      Unit A in Glendale Heights, Illinois. The term of the Lease Agreement commenced
      on May 1, 2005 and will end on June 30, 2010, subject to our option to extend
      the lease term for an additional term of 5 years.




(2)
      On
      April 30, 2004, we entered into a five year supply agreement with WRP Asia.
      This
      agreement calls for us to purchase no less than a minimum of seven forty-foot
      containers of product per month and no less than 125 forty-foot containers
      of
      product per each 12 month period commencing on April 30, 2004. Our estimated
      12
      month liability, for 125 forty-foot containers, would be $5,240,168. However,
      in
      the event that our majority customer ceases purchasing latex gloves from us,
      we
      shall only be obligated to purchase from WRP Asia as many forty-foot containers
      of product per month as needed to meet 100% of our products needs, or the
      minimum annual amount, whichever is less.





15


***New
      Accounting Standards and Pronouncements***




In
      December 2004, the FASB
      issued SFAS No.123, “Share-Based Payment” (Revised 2004) (“SFAS 123R”). SFAS No.
      123R is a revision of SFAS No. 123, “Accounting for Stock Based Compensation”
      and supersedes Accounting Principles Board (“APB”) Opinion No. 25,
“Accounting for Stock Issued to Employees”. SFAS 123R establishes standards for
      the accounting for transactions in which an entity exchanges its equity
      instruments for goods or services that are based on the fair value of the
      entity’s equity instruments or that may be settled by the issuance of those
      equity instruments. We have granted stock options to our employees in connection
      with the provisions of services. Accordingly, SFAS 123 requires us to disclose
      the pro forma effect of compensation expense for these stock options. Under
      SFAS
      123R, we will be required to record this compensation expense in our results
      of
      operations. In April 2005, however, the SEC voted to delay the
      implementation of SFAS 123R for certain companies. Accordingly, SFAS 123R will
      be effective for us beginning the first annual reporting period that begins
      after June 15, 2005.  We have adopted the provisions of SFAS
      123R
      using the modified prospective method.  We determined that the adoption
      of
      this standard will not have a material impact on our financial
      statements.





***Information
      Regarding Forward-Looking Statements***





Forward-looking
      statements in this Item 7, Management’s Discussion and Analysis of Financial
      Condition and Results of Operations, including statements regarding new products
      and markets, gross margins, selling, general and administrative expenses,
      liquidity and cash needs and our plans and strategies, are all based on current
      expectations, and we assume no obligation to update this information. Numerous
      factors could cause actual results to differ from those described in the
      forward-looking statements, including the factors set forth below under the
      heading “Risks Affecting Forward-Looking Statements and Stock Prices.” We
      caution investors that our business is subject to significant risks and
      uncertainties.





***Subsequent
      Events***





On
      September 9, 2005, we renewed our loan and security agreement with Greenfield
      Commercial Credit, LLC for another one year term, with an additional one-year
      renewal option. The renewed security agreement includes a $5 million revolving
      line of credit, in which we may borrow up to the lesser of (i) $5 million or
      (ii) the sum of 80% of eligible receivables and 50% of eligible inventory on
      hand and 35% of eligible inventory in-transit, with a sub limit of $500,000,
      and
      an overall inventory cap of $2,500,000. The line of credit borrowings carry
      an
      interest rate of prime plus 4.5%. On September 9, 2005 we incurred a renewal
      fee
      of $100,000 and the fee to renew the security agreement after the one year
      term
      will be $50,000. The security agreement contains certain penalties for early
      termination.




On
        October 3, 2005, we announced a private placement of $1.2 million in
        subordinated promissory notes (the "Secured Notes"). The Secured Notes bear
        interest at a rate of 7% per annum with a maturity date of two years after
        the
        date of the issuance of the Secured Notes. Each Secured Note has attached
        a
        Class A Warrant and a Class B Warrant granting the holder of the Secured
        Note
        the right to purchase shares of the common stock at an exercise price of
        $3.50
        per share and $4.50 per share, respectively. Each of the Class A Warrants
        and
        the Class B Warrants has an exercise term of five years. In connection with
        the
        private placement, we issued an aggregate number of Class A Warrants enabling
        the holders to purchase up to 192,000 shares of common stock and an aggregate
        number of Class B Warrants enabling the holders to purchase up to 120,000
        shares
        of the common stock.


16


**ITEM
      7A.**  **QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**





We
      are
      exposed to the impact of interest rate changes, foreign currency fluctuations
      and changes in the market value of investments. We have not entered into
      interest rate caps or collars or other hedging instruments.





Our
      exposure to changes in interest rates is limited to borrowings under our
      revolving credit and debt agreements, which have variable interest rates, tied
      to the prime and commercial paper rates. We estimate that the fair value of
      each
      debt instrument approximated its market value at June 30, 2005 and 2004.





We
      were
      subject to fluctuations in the value of the Indonesian Rupiah vis-à-vis the U.S.
      dollar through April 30, 2004, the date of the stock redemption and exchange
      agreement. Our prior investment in the Indonesian subsidiary through April
      30,
      2004 was re-measured into the U.S. dollar and the book value of the assets
      and
      liabilities of this operation at June 30, 2004 approximated its fair value.
      For
      the years ended June 30, 2005 and 2004, the foreign exchange included in the
      determination of net loss was approximately $0 and $12,130,
      respectively.





**Risks
      Affecting Forward Looking Statements and Stock Prices**





In
      addition to those matters already set forth in Item 1, Business, and in Item
      7,
      Management's Discussion and Analysis of Financial Condition and Results of
      Operations, our operating results and financial position may be adversely
      affected or fluctuated, on a quarterly basis, as a result of the following
      general factors: (1) increases in raw latex and poly vinyl chloride pricing
      can
      adversely affect our earnings; (2) a decline in the demand for our products
      and
      the ability of our customers to meet their financial obligations; (3)
      competition from other companies, some of which are larger and more diversified
      than us; (4) anticipated acquisition cost saving projections can be no assurance
      that such cost savings will be achieved; (5) increased competition with respect
      to pricing would reduce future revenues; (6) ability to maintain a substantial
      credit facility to fund the current business and future opportunities and other
      items discussed below and the pricing of such a facility. Moreover, the
      following additional factors may result in us not achieving certain results
      included in any statement that may be considered a forward looking statement.
      We
      caution the reader that the following risks may not be exhaustive.




*Variations
      in Quarterly Results.* Our
      quarterly operating results are subject to various risks and uncertainties,
      including risks and uncertainties related to: local and international political
      and economic conditions; foreign currency volatility; competitive pressures;
      the
      composition, timing and size of orders from and shipments to major customers;
      variations in product mix and the size mix between sales; variations in product
      cost; infrastructure costs; obsolescence of inventory; and other factors as
      discussed below. Accordingly, our operating results may vary materially from
      quarter to quarter.





17


We
      operate with little backlog and, as a result, net sales in any quarter are
      substantially dependent on the orders booked and shipped in that quarter.
      Because our operating expenses are based on anticipated revenue levels and
      because a high percentage of our expenses are relatively fixed, if anticipated
      shipments in any quarter do not occur as expected, our operating results may
      be
      adversely affected and may fall significantly short of expectations. Any other
      unanticipated decline in the growth rate of our net revenues, without a
      corresponding and timely reduction in the growth of operating expenses, could
      also have an adverse effect on us and our future operating results.





We
      aim to
      prudently control our operating expenses. However, there is no assurance that,
      in the event of any revenue, gross margin or other shortfall in a quarter,
      we
      will be able to control expenses sufficiently to meet profitability objectives
      for the quarter.





*Financing.* Our
      credit facility with Greenfield Commercial Credit, LLC, which was due to expire
      in September 9, 2005, has been renewed with new terms. The amended loan and
      security agreement terms and conditions include for a credit line of up to
      $5,000,000 of borrowings versus $3,000,000 of borrowings. Advances under it
      are
      subject to numerous objective and certain subjective contingencies not fully
      within our control. There can be no assurances that such a credit facility
      will
      cover all of our needs.





On
      October 3, 2005, we announced a private placement of $1.2 million in Secured
      Notes effective September 29, 2005. The Secured Notes bear interest as a rate
      of
      7% per annum with a maturity date of two years after the date of the issuance.





*Dependence
      on Gloves.* We are
      currently almost exclusively engaged in the sale of disposable gloves.
      Accordingly, our results of operations and financial condition are highly
      dependent on the level of supply of and demand for disposable gloves. There
      can
      be no assurance that the supply of or demand for disposable gloves will continue
      at current levels or that changes in such supply or such demand will not have
      a
      material adverse effect on our results of operations or financial
      condition.





*Dependence
      on Rubber Harvest and Latex Concentrate.* Our
      ability to purchase our latex products profitably is entirely dependent
      upon the consistent availability, at competitive prices, of raw rubber harvested
      by independent growers in Malaysia, Thailand and Indonesia and locally processed
      by others and us into latex concentrate. Any disruption in the consistent supply
      of rubber for latex concentrate due to weather or other natural phenomena,
      labor
      or transportation stoppages, shortages or other factors, could cause significant
      adverse effects to our results of operations and financial condition. In
      addition, rubber is a commodity traded on world commodities exchanges and is
      subject to price fluctuations driven by changing market conditions over which
      we
      have no control. During the year ended June 30, 2005, the price of latex
      concentrate remained constant from our fiscal year ended June 30,
      2004. There can be no assurance that we will not experience similar
      margin
      pressures in the future or that we will be able to pass on these increased
      costs
      in the future to our customers.





18


*Asia
      Pacific Risk Factors.* Social,
      political and economic instability may be significantly greater in many of
      the
      Asian-Pacific countries than that typically associated with the United States
      and other industrialized countries. Varying degrees of social, political and
      economic instability could significantly disrupt the source of our supply of
      glove products.





Currencies
      of several Asian-Pacific countries, including Indonesia, Korea, Malaysia,
      Philippines, Singapore, Taiwan, China and Thailand, have experienced significant
      fluctuations against the U.S. dollar. The WRP Asia Indonesian factory maintains
      its books in the Indonesian currency, the Rupiah, and reports its Indonesian
      income taxes with Rupiah financial reports. The Indonesian Rupiah experienced
      volatile currency fluctuations against the U.S. dollar, which caused significant
      income tax adjustments in 1999. Foreign currency exchange volatility may
      continue and could cause us to incur significant price fluctuations to us in
      the
      future with respect to Indonesian-sourced product.





In
      the
      past, interest rates in many Asian-Pacific countries have been heavily dependent
      upon international trade and were accordingly affected by protective trade
      barriers and the economic conditions of their trading partners, principally,
      the
      United States, Japan, China and the European Union. The enactment by the United
      States or other principal trading partners of protectionist trade legislation,
      reduction of foreign investment in the local economies and general declines
      in
      the international securities markets could have a significant adverse effect
      upon the economies of the Asian-Pacific countries and accordingly impact price
      and availability of products from our suppliers.





Governments
      in certain of the Asian-Pacific countries participate to a significant degree,
      through ownership interests or regulation, in their respective economies. Action
      by these governments could have a significant adverse effect on the economies
      of
      such countries.





*Changes
      in Gross Margins.* Certain
      of our net product sales are derived from products and markets which typically
      have lower gross margins compared to other products and markets, due to higher
      costs and/or lower prices associated with the lower gross margin products and
      markets. We currently expect that our net product sales from powder-free and
      synthetic gloves will continue to increase as a percentage of total net product
      sales. In addition, we are currently experiencing pricing pressures due to
      a
      number of factors, including competitive conditions, consolidation within
      certain groups of suppliers, excess supply of products, changing technologies
      in
      the production of powder-free gloves and increasing demand for new glove
      products. Additionally, we may not be able to pass on price increases to our
      customers in a timely manner, or at all. To the extent that these factors
      continue, our gross margins could decline, which would adversely affect us
      and
      our future operating results.





Downward
      pressure on our gross margins may be mitigated by other factors, such as a
      reduction in product costs and/or an increased percentage of new product sales
      from higher gross margin products, such as powder-free and synthetic gloves.
      We
      are aiming to reduce our product costs and to increase our percentage of net
      product sales from powder-free, synthetic gloves, and complimentary products.
      However, there is no assurance that these efforts will be
      successful.





19


*Complimentary
      Products.* The
      foodservice, industrial and retail industries look at our current line of
      product offerings as just one of a bundle of safety products used by their
      customers. Developing a profitable line of additional products will be important
      to the future success of our business. During 2003, we diversified our product
      offerings with additional synergistic product lines that address the current
      safety requirements of our markets. These additional product offerings include
      polygloves, heavy-duty gloves, headwear, aprons and bibs, food storage bags
      and
      educational services. These products are being offered under our SafePrep brand
      and under private label, but continue to represent a relatively small portion
      of
      our total sales.





*Growth
      Dependencies.* In
      general, our future growth is dependent on our ability to successfully and
      timely enhance existing products, develop and introduce new products, establish
      new distribution channels, develop affiliations with leading market participants
      and continue to develop our relationships with our existing customer
      base.





Our
      inability to achieve these and other objectives could limit future growth and
      have an adverse effect on both us and our future operating results. In addition,
      the pressure to develop and enhance products and to establish and expand markets
      may cause our selling, general, administrative and other expenses to increase,
      which could also have an adverse effect on us and our future operating results.
      In addition, to the extent that customers seek to focus primarily on price,
      versus factors such as service and quality, margins of product sales could
      compress substantially.




*Competition.* The
      various markets in which we operate are becoming increasingly competitive as
      a
      number of other companies develop and sell products that compete with our
      products in these markets. Certain of these competitors have significantly
      more
      financial and technical resources than us. We face additional competitive
      factors besides price, such as product quality, timeliness of delivery, service
      and the size and reliability of the manufacturer. These competitive factors
      may
      result in, among other things, price discounts by us and sales lost by us to
      competitors that may adversely affect our future operating results.





*Reliance
      Upon Distributors.* We use
      various channels to market and distribute our products to end-users via
      third-party distributors. Third-party distributors are a substantial channel
      for
      distribution to end-users. Accordingly, our ability to market and distribute
      our
      products depends significantly on our relationship with third-party
      distributors, as well as the performance and financial condition of these
      distributors. In the event that our relationship with these distributors
      deteriorates or the performance or financial condition of the distributor
      becomes unsatisfactory, our future operating results could be adversely
      affected.




*Reliance
      Upon Significant Contracts and Customers.* During
      the year ended June 30, 2005, 89.1% of net sales came from several of our
      national customers. The loss of these national customers could have a materially
      adverse impact on us.





*Excess
      or Obsolete Inventory.* Managing
      our inventory of various size mix and product mix is a complex task. A number
      of
      factors, including the need to maintain a significant inventory of certain
      sizes
      or products which are in short supply or which must be purchased in bulk to
      obtain favorable pricing, the general unpredictability of demand for specific
      products and customer requests for quick delivery schedules, may result in
      us
      maintaining excess inventory. Other factors, including changes in market demand
      and technology, may cause inventory to become obsolete. Any excess or obsolete
      inventory could result in price reductions and inventory write-downs, which,
      in
      turn, could adversely affect our operating results.





20


*Hiring
      and Retention of Employees.* Our
      continued growth and success depends to a significant extent on the continued
      service of senior management and other key employees and the hiring of new
      qualified employees. Competition for highly skilled business, technical,
      marketing and other personnel is intense. The loss of one or more key employees
      or our inability to attract additional qualified employees or retain other
      employees could have an adverse effect on our operating results. In addition,
      we
      may experience increased compensation costs in order to compete for skilled
      employees.





*Product
      Liability Insurance.* Participants in the medical supplies business are potentially subject to
      lawsuits alleging product liability, many of which involve significant damage
      claims and defense costs. A successful claim against us in excess of our
      insurance coverage could have a material adverse effect on our results of
      operations and financial condition. Claims made against us, regardless of their
      merit, could also have a material adverse effect on our reputation. There is
      no
      assurance that the coverage limits of our insurance policy will be adequate
      or
      that present levels of coverage will be available at affordable rates in the
      future either to cover medical-related claims or to qualify us as a supplier
      to
      key accounts (which may require product liability coverage at limits in excess
      of what we can obtain or afford). While we have been able to obtain product
      liability insurance in the past, such insurance varies in cost, is difficult
      to
      obtain and may not be available in the future on acceptable terms or at all.
      We
      are subject to a number of lawsuits filed against us and other manufacturers,
      distributors and/or end users. There can be no assurance that our insurance
      will
      be sufficient to meet any recovery for which we may be found liable, that the
      outcome of such suits will not materially adversely affect our results of
      operations or financial condition, or that our deductible obligation (to fund
      a
      portion of the initial cost of defense and/or liability of each such lawsuit)
      will not prove financially burdensome.





*Stock
      Market Fluctuations.* In
      recent years, the stock market in general, including our common stock, has
      experienced extreme price fluctuations. The market price of our common stock
      may
      be significantly affected by various factors such as: quarterly variations
      in
      our operating results; changes in our revenue growth rates; the loss of a
      significant customer or sales contract; changes in earnings estimates by market
      analysis; the announcement of new products or product enhancements by us or
      our
      competitors; speculation in the press or analyst community; the inability of
      the
      market to absorb selling pressure from one or more large institutional
      shareholders; and general market conditions or market conditions specific to
      particular industries. There can be no assurance that the market price of our
      common stock will not experience significant fluctuations in the
      future.





*Governmental
      Regulations.* Our
      products are subject to regulation by numerous governmental authorities in
      the
      United States and other countries, particularly to safety and adherence to
      Quality System Regulations (“QSR’s”) for medical devices. In the United States,
      examination gloves are classified as a Class I medical device product regulated
      by the FDA. Noncompliance with these FDA regulations can result in
      administrative enforcement, such as warning letters, import alerts,
      administrative detention or in civil penalties, product bans and recalls.
      Periodically, the FDA inspects shipments of medical gloves as they arrive in
      the
      United States ports.





The
      FDA
      inspections and reviews may cause delays in product delivery and this can result
      in a loss or delay in recognition of sales and income by us. In addition, the
      FDA may inspect the manufacturing facilities for compliance with QSR’s, which
      incorporate pre-production design and development to achieve consistency with
      quality system requirements worldwide. Failure to comply with regulatory
      requirements could have a material adverse effect on our business financial
      condition and results of operations.





21


**ITEM
      8.**  **FINANCIAL
      STATEMENTS AND SUPPLEMENTARY DATA**





Our
      consolidated financial statements and notes thereto are filed under this item
      beginning on page F-1 of this report.





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





Not
      Applicable.





**ITEM
      9A. 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 management,
      including the Company’s Chief Executive Officer and the Company’s Chief
      Financial Officer, of the Company’s disclosure controls and procedures (as
      defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act
      of
      1934, as amended). Based upon this evaluation and because of the material
      weakness described below, the Company’s Chief Executive Officer and Chief
      Financial Officer concluded that, as of the end of such period, the Company’s
      disclosure controls and procedures were not effective in recording, processing,
      summarizing and reporting, on a timely basis, information required to be
      disclosed by the Company in reports that the Company files with or submits
      to
      the Securities and Exchange Commission. It should be noted that in designing
      and
      evaluating the disclosure controls and procedures, management recognized that
      any controls and procedures, no matter how well designed and operated, can
      provide only reasonable assurance of achieving the desired control objectives,
      and management necessarily was required to apply its judgment in evaluating
      the
      cost-benefit relationship of possible controls and procedures. The Company
      has
      designed its disclosure controls and procedures to reach a level of reasonable
      assurance of achieving the desired control objectives and based upon the
      evaluation described above, the Company’s Chief Executive Officer and Chief
      Financial Officer concluded that the Company’s disclosure controls and
      procedures were effective at reaching that level of reasonable
      assurance.


During
      the process of responding
      to a recent SEC comment letter, the Company's management identified an error
      which lead to the identification of a material weakness within the Company's
      financial reporting and disclosure controls.




The
      error relates to the Company's accounting and disclosure of the reverse three
      for one stock split effective January 20, 2004 and the calculation of the
      reported basic and diluted net loss per share. The Company incorrectly included
      potential common shares in the denominator of a diluted per-share computation
      that resulted in the disclosure of an antidilutive per share amount, which
      is
      not the equivalent of a diluted earnings per share disclosure. Additionally,
      in
      connection with the reverse three for one stock split, the Company failed to
      retroactively adjust its loss per share amounts to reflect the stock split.
      It
      should be noted, however, that the Company's failure to accurately report its
      basic and diluted net loss per share did not have any affect on the Company's
      cash balance for the applicable periods.


The
        material weakness relates to
        the lack of formal policies and procedures related to the financial statement
        reporting and regulatory filing process. Management is addressing this material
        weakness by enacting the following steps:


22


·
              Develop
                  a formal policy/procedures manual for the financial statement reporting
                  and regulatory filing process
 ·
              Develop
                  monthly, quarterly and annual closing procedures checklists and
                  "close"
                  binders. These binders should include a draft of the financial
                  statements
                  and 10-K/Q with references to supporting schedules or other documentation
                  (i.e., agreements)
 ·
              Utilize
                  a Generally Accepted Accounting Principle (GAAP) checklist to help
                  ensure
                  all relevant disclosures are
                  included
 ·
              Prepare
                  white papers to address the accounting for any new account pronouncements
                  and any existing and/or new complex or unusual accounting
                  transactions
 ·
              Documented
                  detail reviews by management and others of regulatory filings and
                  financial statements
 ·
              Implement
                  training programs for technical accounting areas and SEC reporting
                  requirements
 ·
              Continue
                  to consider with outside legal counsel the filing of an 8-K upon
                  the
                  signature of any agreements made on behalf of the
                  Company
  There was no change in the Company’s internal control over financial reporting
        (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange
        Act
        of 1934, as amended) during the Company’s most recently completed fiscal quarter
        that has materially affected, or is reasonably likely to materially affect,
        the
        Company’s internal control over financial reporting.





**ITEM
      9B. OTHER INFORMATION** ******





The
      Company filed a
      Form 8-K announcing the completion of a private placement of $1.2 million in
      subordinated promissory notes and the renewal and amendment of its line of
      credit with Greenfield Commercial Credit, LLC on October 7, 2005.  The
      subordinated debt offering and amendment of the line of credit was effective
      September 30, 2005 and, accordingly, the Form 8-K should have been filed on
      or
      prior to October 6, 2005.









23


**PART
      III**





**ITEM
      10.**  **DIRECTORS
      AND EXECUTIVE OFFICERS OF THE REGISTRANT**




Certain
      information with respect
      to this item related to our executive officers appears at the end of Part I
      to
      this Form 10-K.





***Directors***




At
      October 13, 2005, our board of
      directors consists of the following members and are divided into the following
      three classes:





Class
      1
      Directors





Name
            Age
            Director
                SinceAnthony
                F. Alibrio, Sr.
            61
            2004Don
                L. Arnwine
            72
            1995





Class
      2
      Directors





Name
            Age
            Director
                SinceGeorge
                Jeff Mennen
            64
            1994Robert
                J. Simmons
            62
            1995





Class
      3
      Directors





Name
            Age
            Director
                SinceRichard
                J. Swanson
            69
            1998Alan
                E. Zeffer
            52
            2004





The
      Class
      2 Directors elected at our 2005 Annual Meeting have a term continuing until
      the
      third annual meeting following their election. The terms of the current Class
      3
      and Class 1 Directors expire at the 2006 and 2007 annual meetings,
      respectively.





The
      following sets forth brief statements of the principal occupations and other
      biographical information of each of the directors.





***George
      Jeff Mennen*** was
      elected to the Board of Directors on October 12, 1994. For over five years,
      Mr.
      Mennen has headed the G.J. Mennen Group, a consulting firm specializing in
      family-owned businesses. Mr. Mennen had a distinguished career at the Mennen
      Company, including being the Vice Chairman of that company. The Mennen Company
      was founded by Mr. Mennen’s great grandfather in 1878 and remained privately
      owned until it was sold in 1992 to Colgate-Palmolive.





***Richard
      J. Swanson*** was
      elected to the Board of Directors in June 1998. Mr. Swanson is presently a
      consultant with The Executive Committee, an international company that focuses
      on strategic coaching and corporate troubleshooting for CEO’s of public and
      private companies. Also, since 1980, Mr. Swanson has been the president of
      two
      Denver, Colorado-based companies: Investment Partners, Inc. and Real Estate
      Associates, Inc. Investment Partners is engaged in the restructuring and
      recapitalization of troubled companies and Real Estate Associates focuses on
      the
      acquisition and development of real estate projects.





24


***Robert
      J. Simmons*** was
      elected to the Board of Directors in December 1995. He is currently President
      of
      RJS Healthcare, Inc., a healthcare consulting company, founded in 1990. He
      served as Executive Vice President at Baxter International, Inc., from 1987
      until founding RJS in 1990. Mr. Simmons joined Baxter after serving over 20
      years at American Hospital Supply Corporation. His last position at American
      Hospital Supply was vice president of corporate marketing.





***Don
      L. Arnwine*** was
      elected to the Board of Directors in December 1995. He is currently President
      of
      Arnwine Associates, a company he formed in 1989 to provide specialized advisory
      services to the health care industry. Mr. Arnwine became President and CEO
      of
      Voluntary Hospitals of America (VHA) in 1982 and was named Chairman and CEO
      in
      1985, in which capacity he served until founding Arnwine Associates. From 1972
      to 1982, he served as President and CEO of the Charleston Area Medical Center.
      From 1961 to 1972, Mr. Arnwine served as Director of the Hospital at the
      University of Colorado Medical Center.





***Alan
      E. Zeffer*** was
      elected to the Board of Directors in May 2004. He currently is our President
      and
      Chief Executive Officer. He joined us in April 2001. Prior to joining us, Mr.
      Zeffer was Managing Partner for Quest Capital Corporation, a corporate finance
      advisory firm that he founded in 1993. He also served as Treasurer for Sybron
      International Corp from 1987 until 1993. Mr. Zeffer is a director of Universal
      Automotive Industries, Inc.





***Anthony
      F. Alibrio, Sr.*** was
      elected to the Board of Directors in May 2004. He is currently President
      Emeritus of Sodexho Marriot, Inc’s Health Care Division. Sodexho is the leading
      food and facilities management services company in North America. Mr. Alibrio
      has over 37 years experience in both health care and foodservice. As the
      President of Sodexho Marriott, Inc.’s Health Care Division, he led an
      organization with $3.2 billion in revenue that provided services to over 1,000
      hospitals and long-term care institutions.





***Code
      of Business Ethics***





The
      Company has adopted a Code of Business Ethics that applies to all of the
      Company's employees, including the Company's principal executive officer,
      principal financial officer and principal accounting officer. We
      will
      provide to any person without charge, upon request, a copy of our Code of
      Business Ethics. Requests for a copy of our Code of Business Ethics should
      be
      made to our Corporate Secretary at 80
      Internationale Boulevard, Unit A, Glendale Heights, IL 60139 .





***Audit
      Committee Financial Expert***





The
      Board
      has determined that one of the members of the Audit Committee, Richard J.
      Swanson, qualifies as an "audit committee financial expert" as defined by the
      rules of the SEC based on his work experience and education.





The
      Audit
      Committee of our Board of Directors is an "audit committee" for purposes of
      Section 3(a)(58)(A) of the Securities Exchange Act of 1934. The members of
      the
      Audit Committee are Don L. Arnwine, Richard J. Swanson and George Jeff
      Mennen.





25


***Compliance
      with Section 16(a) of the Securities Exchange Act of
      1934***





Section
      16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's
      executive officers, directors and beneficial owners of more than 10% of our
      common stock to file with the Securities and Exchange Commission ("SEC") initial
      reports of beneficial ownership on Form 3 and reports of changes in their
      beneficial ownership of our equity securities on Form 4 or 5. The rules
      promulgated by the SEC under section 16(a) of the Exchange Act require
      those persons to furnish the Company with copies of all reports filed with
      the
      SEC pursuant to section 16(a). Based solely upon a review of such forms
      actually furnished to the Company, and representations of certain of the
      Company's directors and executive officers that no forms were required to be
      filed, all directors, executive officers and 10% shareholders have filed
      with the SEC on a timely basis all reports required to be filed under
      section 16(a) of the Securities Exchange Act of 1934.





**ITEM
      11.**  **EXECUTIVE
      COMPENSATION**





***Compensation
      of Directors***





All
      directors who were not also our executive officers, which group is comprised
      of
      Don L. Arnwine, George Jeff Mennen, Richard J. Swanson, Robert J. Simmons,
      and
      Anthony F. Alibrio, Sr., receive (1) an annual Board member retainer of $5,000;
      (2) compensation of $1,000 for each Board meeting attended; (3) $500 for each
      committee meeting attended; and (4) an annual committee member retainer of
      $1,000. The non-executive chairman will receive an additional annual retainer
      of
      $5,000, and the chairman of the Audit Committee will receive an additional
      annual retainer of $3,000. Each new director is presently entitled to receive
      stock options under our Omnibus Equity Compensation Plan to purchase 2,000
      shares of our common stock in connection with the election and qualification
      of
      such director. Under the terms of the Plan, the Compensation Committee shall
      determine (a) the exercise price of each director option, provided that the
      exercise price may not be less than the lowest fair market value of our common
      stock during the six months preceding the election and qualification of such
      director and (b) the term and vesting criteria for such option. There were
      no
      options granted to our directors during the fiscal year ended June 30, 2005.
      Additionally, all directors are reimbursed for expenses incurred in attending
      Board and committee meetings.





***Executive
      Compensation***





The
      following table discloses the compensation paid by us for services rendered
      to
      us during the fiscal years ended June 30, 2005, 2004, and 2003, to (i) our
      Chief
      Executive Officer and (ii) our single other executive officer at June 30, 2005,
      whose aggregate annual salary and bonus exceeded $100,000 for the 2005 fiscal
      year (the "named executive officers").





26




Annual
                  Compensation
              
              Long-Term
                CompensationName
                  and
                Principal
                  Position
              
              Year
              
              Salary
              
              Bonus
              
              Other
                  Annual
                Compensation
              
              Stock
                Options
              
              All
                  Other
                CompensationAlan
                  E. Zeffer,
                President
                  and CEO
              
              
              2005
                2004
                2003
              
              $
                $
                $
              206,000
                185,000
                185,000
              
              $
                $
              33,945(1)
                --
                28,000
              
              
              --
                --
                --
              
              
              --
                20,000
                6,667
              
              $
                $
                $
              19,200(2
                19,200(2
                19,200(2
              )
                )
                )Deborah
                  J. Bills,
                CFO
                  (3)
              
              
              2005
                2004
              
              $
                $
              115,408
                93,166
              
              
              --
                --
              
              
              --
                --
              
              
              --
                20,000
              
              
              --
                --


(1)
      The
      bonus recorded was issued to Alan E. Zeffer as common stock of the Company
      and
      was based upon a closing stock price of $3.10 on the date of grant, as reported
      by the Nasdaq SmallCap Stock Market.





(2)
      Includes housing, automobile and other expenses, as described below under the
      section "Employment Agreements."




(3)
      Ms.
      Bills became an executive officer with her appointment as the Company's Chief
      Financial Officer, Secretary and Treasurer on May 1, 2004.





***Employment
      Agreements***





On
      October 1, 2002, we entered into an employment agreement with Alan E. Zeffer,
      our President and Chief Executive Officer (the "Zeffer Agreement"). The Zeffer
      Agreement had an initial term of one year, but automatically renewed for
      additional one year terms unless advance notice was provided. The Zeffer
      Agreement was most recently renewed on August 19, 2004. The Zeffer Agreement
      provides for (i) Mr. Zeffer to serve as our Chief Executive Officer; (ii) a
      base
      salary originally of $140,000 per annum (which was been increased by the
      Compensation Committee to $185,000 for fiscal 2004 and to $205,000 for fiscal
      2005); (iii) housing expenses not to exceed $1,200.00 per month; (iv) a $400.00
      per month automobile allowance; and (v) nonqualified stock options to be
      determined by the Compensation Committee. The Zeffer Agreement also provides
      for
      an incentive bonus equal to 25% of Mr. Zeffer's base salary, subject to
      achievement of certain predetermined goals set by Mr. Zeffer and the
      Compensation Committee. Additionally, the employment agreement provides that
      the
      executive officer is eligible to participate in any medical, health, dental,
      disability and life insurance policy that is in effect for the Company's other
      employees. Pursuant to the employment agreement, Mr. Zeffer has agreed not
      to
      solicit the Company's customers, clients and other business contacts or
      encourage them to terminate their relationship with the Company during
      employment and for a period of two years thereafter. Moreover, Mr. Zeffer has
      agreed not to (a) solicit the Company's employees or encourage them to terminate
      their relationship with the Company or (b) compete with the Company during
      employment and for a period of one year following termination of employment.
      Finally, Mr. Zeffer has agreed to maintain the confidentiality of the Company's
      proprietary information and trade secrets during the term of employment and
      thereafter.





***Option
      Grants During the Year June 30, 2005***





No
      stock
      options were granted to the named executive officers of the Company during
      the
      fiscal year ended June 30, 2005.





***Aggregate
      Option Exercises During the Year Ended June 30, 2005, and Fiscal Period-End
      Option Values***





The
      following table provides certain information regarding the value of unexercised
      options held by the named executive officers at June 30, 2005 and the
      value
      realized upon exercise of options during fiscal 2005.





27


**Aggregated
      Option Exercises in Last Fiscal Year and Fiscal Year-End Option
      Values**





**Name**
            **Shares
                Acquired on****Exercise
                (#)**
            **Value
                Realized ($)**
            **Number
                of Securities Underlying Unexercised Options at**
              **Fiscal
                Year-End (#)**
              **Exercisable/Unexercisable**
            **Value
                of Unexercised**
              **In-the-Money-Options
                at**
              **Fiscal-Year
                End ($)**
              **Exercisable/Unexercisable
                (1)**Alan
                E. Zeffer
            0
            0
            50,000
                / 0
            128,601
                / 0Deborah
                Bills
            0
            0
            16,192
                / 0
            42,289 / 0





(1)  Calculated
      based on a closing sale price of $4.17 per share on June 30, 2005.





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




The
      following table sets forth certain information regarding the beneficial
      ownership of our common stock as of October 13, 2005, by: (i) each
      director; (ii) each named executive officer; (iii) each person whom we know
      beneficially owns in excess of five (5%) percent of the outstanding shares
      of
      our common stock; and (iv) all directors and executive officers, as a group.





The
      following table is based on information supplied to the Company by the
      directors, officers and shareholders described above. The Company has determined
      beneficial ownership in accordance with the rules of the SEC. Unless otherwise
      indicated, the persons and entities included in the table have sole voting
      and
      investment power with respect to all shares beneficially owned, except to the
      extent authority is shared by spouses under applicable law. Shares of common
      stock subject to options that are either currently exercisable or exercisable
      within 60 days of October 13, 2005 are treated as outstanding and
      beneficially owned by the option holder for the purpose of computing the
      percentage ownership of the option holder. However, these shares are not treated
      as outstanding for the purpose of computing the percentage ownership of any
      other person. The table lists applicable percentage ownership based on 1,625,406
      shares of common stock outstanding and stock options as of October 13,
      2005.





28




***Title
                  of Class***
              ***Name
                  of Beneficial Owner***
              ***Amount
                  and Nature of**Beneficial
                  Ownership***
              ***Percent
                  of Total Voting**Stock***Common
                  Stock
                Common
                  Stock
              George
                  Jeff Mennen
                George
                  Jeff Mennen
              30,0001
                3,333
              33,333
              2.1%Common
                  Stock
                Common
                  Stock
              Robert
                  J. Simmons
                Robert
                  J. Simmons
              30,0001
                1,666
              31,666
              1.9%Common
                  Stock
                Common
                  Stock
              Don
                  L. Arnwine
                Don
                  L. Arnwine
              30,0001
                1,000
              31,000
              1.9%Common
                  Stock
                Common
                  Stock
              Richard
                  J. Swanson
                Richard
                  J. Swanson
              29,0001
                2,000
              31,000
              1.9%Common
                  Stock
              Anthony
                  L. Alibrio, Sr.
              20,0001
              20,000
              1.2%Common
                  Stock
                Common
                  Stock
              Alan
                  E. Zeffer
                Alan
                  E. Zeffer
              50,0001
                10,950
              60,950
              3.7%Common
                  Stock
              Deborah
                  J. Bills
              16,1921
              16,192
              1.0%Common
                  Stock
              Total
                  Executive Officers & Directors
                as
                  a group (7 persons)
              205,1921
                18,949
              224,141
              13.8%
 _______________


1 Represents
      shares to be issued upon exercise of options to purchase common stock granted
      under our Omnibus Equity Compensation Plan.





***Securities
      Authorized for Issuance Under Equity Compensation
      Plans***





The
      following table provides information about the securities authorized for
      issuance under our equity compensation plans as of June 30, 2005:





**Equity
      Compensation Plan Information**





Plan
                Category
            Number
                of securities to be issued
              upon
                exercise of outstanding options,
              warrants
                and rights
            Weighted-average
                exercise price of outstanding options, warrants and rights
            Number
                of securities remaining available for future issuance under equity
                compensation plansEquity
                compensation plans approved by shareholders
            282,004
            $1.81
            184,663Equity
                compensation plans not approved by shareholders
            -
            -
            -Total
            282,004
            $1.81
            184,663





The
      equity compensation plans approved by our shareholders consists solely of our
      Omnibus Equity Compensation Plan.





29


**ITEM
      13.**  **CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS**





During
      the year ended June 30, 2005, we received consulting services from Healthcare
      Alliance, Inc. (“Alliance”), a company 60% owned by Robert J. Simmons, one of
      our directors. We engaged Alliance to assist us in marketing our products with
      the express purpose of negotiating and executing a purchase agreement with
      various healthcare group-purchasing organizations. We paid Alliance $36,000
      during the year ended June 30, 2005, for its services. We expect to continue
      to
      retain Alliance during fiscal 2006. We believe that the terms for the purchase
      of services from Alliance are no less favorable to the Company than could have
      been obtained from an unaffiliated party.





**ITEM
      14.**  **PRINCIPAL FEES
      AND SERVICES OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
      FIRM**





The
      following table summarizes the fees the Company was billed for audit and
      non-audit services rendered by the Company's auditors, Grant Thornton
      LLP,
      during fiscal 2005 and 2004:





**Service
                Type**
            
            
            **Fiscal
                2005**
            
            
            **Fiscal
                2004**Audit
                Fees (1)
            
            $
            211,828
            
            $
            212,950Audit-Related
                Fees
            
            
            --
            
            
            --Tax
                Fees (2)
            
            
            42,500
            
            $
            38,300All
                Other Fees
            
            
            --
            
            
            --Total
                Fees Billed
            
            $
            254,328
            
            $
            251,250





(1)
            Includes
                fees for professional services rendered in connection with the audit
                of
                the Company's financial statements for the fiscal years ended June
                30,
                2005 and June 30, 2004; the reviews of the financial statements included
                in each of the Company's quarterly reports on Form 10-Q during
                those
                fiscal years; and consents and assistance with documents filed by
                the
                Company with the SEC.





(2)
            Primarily
                consists of fees for the preparation of statutory tax returns and
                other
                tax assistance in foreign
                jurisdictions.





The
      Audit
      Committee of the Board considered that the provision of the services and the
      payment of the fees described above are compatible with maintaining the
      independence of Grant Thornton LLP.





The
      Audit
      Committee is responsible for reviewing and pre-approving any non-audit services
      to be performed by the Company's independent auditors. The Audit Committee
      has
      delegated its pre-approval authority to the Chairman of the Audit Committee
      to
      act between meetings of the Audit Committee. Any pre-approval given by the
      Chairman of the Audit Committee pursuant to this delegation is presented to
      the
      full Audit Committee at its next regularly scheduled meeting. The Audit
      Committee or Chairman of the Audit Committee reviews and, if appropriate,
      approves non-audit service engagements, taking into account the proposed scope
      of the non-audit services, the proposed fees for the non-audit services, whether
      the non-audit services are permissible under applicable law or regulation and
      the likely impact of the non-audit services on the independence of the
      independent auditors.


Since
        the
        effective date of the SEC rules requiring pre-approval of non-audit services
        on
        May 6, 2003, each new engagement of the Company's independent auditors to
        perform non-audit services has been approved in advance by the Audit Committee
        or the Chairman of the Audit Committee pursuant to the foregoing
        procedures.





30


**PART
      IV**





**ITEM
      15.**  **EXHIBITS
      AND FINANCIAL STATEMENT SCHEDULES**





(a)  The
      following documents are filed as part of this report:





1.
            Financial
                Statements.





A
      list of
      financial statements for the Company is contained in “Index to Financial
      Statements of AHPC Holdings, Inc” on page F-1.





2.
            Financial
                Statement Schedules.





Report
      of
      Independent Registered Public Accounting Firm





3.   Exhibits. The
      following exhibits are included with this report:





3.1
            Certificate
                of Incorporation of the Company, incorporated herein by reference
                to
                Exhibit No. 3.1 to the Company’s Form S-1 Registration Statement
                (Registration No. 33-36206).





3.2
            Certificate
                of Amendment to Certificate of Incorporation of the Company, incorporated
                herein by reference to Exhibit No. 3.2 to the Company’s Form S-1
                Registration Statement (Registration No.
                33-36206).





3.3
            Certificate
                of Amendment to Certificate of Incorporation of the Company, incorporated
                herein by reference to Exhibit 3.3 to the Company’s form 10-K Annual
                Report for the fiscal year ended December 31, 1991 (File No.
                0-17458).


3.4
            Articles
                of Amendment to Certificate of Incorporation, incorporated herein
                by
                reference to Exhibit 10.42 included in the Company’s Form 10-K Annual
                Report for the fiscal year ended December 31, 1997 (File No.
                0-17458).





3.5
            Bylaws
                of the Company, incorporated herein by reference to Exhibit No. 3.4
                to the
                Company’s Form S-18 Registration Statement (Registration No.
                33-23164-FW).





3.6
            Amendment
                to Bylaws of the Company, incorporation herein by reference to Exhibit
                3.5
                to the Company’s Form 10-K Annual Report for the fiscal year ended
                December 31, 1991 (File No.
                0-17458).




10.1
                Warrant
                    Agreement with The Liberty National Bank & Trust Company, incorporated
                    by reference to Exhibit No. 4.2 to the Company’s Form S-1 Registration
                    Statement (Registration No. 33-36206).10.2
                Warrant,
                    incorporated by reference to Exhibit No. 4.3 to the Company’s Form S-1
                    Registration Statement (Registration No. 33-36206).





31


10.3
              Debenture
                  and Warrant Purchase Agreement dated October 12, 1994, between
                  the Company
                  and Wilmington Trust Company and George Jeff Mennen as Co-Trustees
                  U/A
                  dated 11/25/70 with George S. Mennen for Christina M. Andrea incorporated
                  herein by reference to Exhibit 10.37 included in the Company’s Form 10-K
                  Annual Report for the fiscal year ended December 31, 1994 (File
                  No.
                  0-17458).10.4
              Debenture
                  and Warrant Purchase Agreement dated October 12, 1994, between
                  the Company
                  and Wilmington Trust Company and George Jeff Mennen as Co-Trustees
                  U/A
                  dated 11/25/70 with George S. Mennen for John Henry Mennen incorporated
                  herein by reference to Exhibit 10.38 included in the Company’s Form 10-K
                  Annual Report for the fiscal year ended December 31, 1994 (File
                  No.
                  0-17458).10.5*
              Amended
                  and Restated Omnibus Equity Compensation Plan, incorporated herein
                  by
                  reference to Exhibit 10.43 included in the Company’s Form 10-K Annual
                  Report for the fiscal year ended December 31, 1997 (File No.
                  0-17458).10.6
              Loan
                  and Security Agreement dated as of December 1, 1998, between General
                  Electric Capital Corporation and American Health Products Corporation,
                  incorporated herein by reference to Exhibit 10.44 included in the
                  Company’s Form 10-K Annual Report for the fiscal year ended December 31,
                  1998 (File No. 0-17458).10.7
              GE
                  Waivers and Amendments to the Loan and Security Agreement dated
                  as of
                  December 1, 1998.10.8*
              Employment
                  Agreement between AHPC Holdings, Inc. and Alan Zeffer dated October
                  1,
                  2001 incorporated by reference in Exhibit 10.46 included in the
                  Company’s
                  Form 10-K Annual Report for the fiscal year ended June 30, 2002
                  (File No.
                  0-17458).10.9
              Loan
                  and Security Agreement dated as of September 9, 2004 between AHPC
                  Holdings, Inc. and Greenfield Commercial Credit, L.L.C. incorporated
                  by
                  reference to the Company's Form 8-K filed on September 17,
                  2004.10.10
              Second
                  Amendment to Loan and Security Agreement dated as of September
                  9, 2005 by
                  and among Greenfield Commercial Credit L.L.C., AHPC Holdings and
                  American
                  Health Products Corporation.10.11
              Amended
                  and Restated Revolving Credit Loan Note dated September
                  9, 2005 in
                  the principal amount of $5,000,000 made payable to Greenfield Commercial
                  Credit, L.L.C.21
              Subsidiaries
                  of the Company.23.1
              Consent
                  of Grant Thornton LLP, the Company's Independent Registered Public
                  Accounting Firm.31.1
              Certification
                  of Chief Executive Officer pursuant to Section 302 of the Sarbanes-
                  Oxley
                  Act.31.2
              Certification
                  of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
                  Act.32.1**
              Certification
                  of Chief Executive Officer and Chief Financial Officer pursuant
                  to Section
                  906 of the Sarbanes-Oxley Act.


*  Management
      contract or compensatory plan or arrangement.


**  This
      certification is not "filed" for purposes of Section 18 of the Securities
      Exchange Act  of
      1934,
      as amended, or incorporated by reference into any filing under the Securities
      Act  of
      1933,
      as amended, or the Securities Exchange Act of 1934, as amended.




32


(b) Exhibits.




The response to this portion of Item 15 is submitted as a separate section
      of
      this report.





(c) Financial
      Statement Schedules




The response to this portion of Item 15 is submitted as a separate section
      of
      this report.


33


**SIGNATURES**





Pursuant
      to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
      1934, the registrant has duly caused this report on form 10- K to
      be
      signed on its behalf by the undersigned, thereunto duly authorized.




**REGISTRANT:**
 
 AHPC
        HOLDINGS, INC
 
  Date:
        October 14,
        2005 By: /s/
        Deborah J.
        Bills
 Deborah
        J. Bills, Chief Financial Officer




Pursuant
      to the requirements of the Securities Exchange Act of 1934, this report has
      been
      signed below by the following persons on behalf of the Registrant, in the
      capacities and on the dates indicated.








Date:
                October 14, 2005
            By:/s/
                Alan E.
                Zeffer
              AlanE.
                Zeffer, President and Chief
              Executive
                Officer (Principal Executive Officer)Date:
                October 14, 2005
            By:/s/
                George Jeff
                Mennen
              George
                Jeff Mennen, Director
              andChairman of the Board of DirectorsDate:
                October 14, 2005
            By:/s/
                Richard J.
                Swanson
              Richard
                J. Swanson, DirectorDate:
                October 14, 2005
            By:/s/
                Robert J.
                Simmons
              Robert
                J. Simmons, DirectorDate:
                October 14, 2005
            By:/s/
                Don L.
                Arnwine
              Don
                L. Arnwine, DirectorDate:
                October 14, 2005
            By:/s/
                Anthony F. Alibrio,
                Sr.
              Anthony
                F. Alibrio, Sr., DirectorDate:
                October 14, 2005
            By:/s/
                Deborah J.
                Bills
              Deborah
                J. Bills, Chief Financial Officer
              (Principal
                Financial and Accounting Officer)





34




**CONSOLIDATED
        FINANCIAL STATEMENTS**
 **AND
        REPORT OF INDEPENDENT**
 **CERTIFIED
        PUBLIC ACCOUNTANTS**
 **AHPC
        HOLDINGS, INC. AND SUBSIDIARY**
 **JUNE
        30, 2005, 2004 AND 2003**
 
 
 
 
 F-1





**C
        O N T E N T S**
 
 **Page**
 
 REPORT
                    OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                F-3CONSOLIDATED
                    FINANCIAL STATEMENTSBALANCE
                    SHEETS
                F-4STATEMENTS
                    OF OPERATIONS
                F-6STATEMENT
                    OF SHAREHOLDERS’ EQUITY
                F-7STATEMENTS
                    OF CASH FLOWS
                F-8NOTES
                    TO CONSOLIDATED FINANCIAL STATEMENTS
                F-9


F-2




**REPORT
        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
 
 
 Shareholders
        and Board of Directors of
 American
        Health Products Corporation
 
 
 We
        have
        audited the accompanying consolidated balance sheets of American
        Health Products Corporation (A Maryland corporation) and Subsidiary as of
        June
        30, 2005 and 2004, and the related consolidated statements of operations,
        shareholders’ equity, and cash flows for the three years ended June 30, 2005.
        These consolidated financial statements are the responsibility of the Company’s
        management. Our responsibility is to express an opinion on these financial
        statements based on our audit.
 
 We
        conducted our audit in accordance with the standards of the Public Company
        Accounting Oversight Board (United States).Those standards require that we
        plan
        and perform the audit to obtain reasonable assurance about whether the financial
        statements are free of material misstatement. The Company is not required
        to
        have, nor were we engaged to perform an audit of its internal control over
        financial reporting. Our audit included consideration of internal control
        over
        financial reporting as a basis for designing audit procedures that are
        appropriate in the circumstances, but not for the purpose of expressing an
        opinion on the effectiveness of the Company’s internal control over financial
        reporting. Accordingly, we express no such opinion. An audit also includes
        examining, on a test basis, evidence supporting the amounts and disclosures
        in
        the financial statements, assessing the accounting principles used and
        significant estimates made by management, as well as evaluating the overall
        financial statement presentation. We believe that our audit provides a
        reasonable basis for our opinion.
 
 The
        Company has restated certain basic and fully diluted per share disclosures
        for
        fiscal 2004 and 2003 to appropriately reflect the impact of a reverse 3 for
        1
        stock split and the incorrect disclosure of anti-dilutive per share amounts
        (see
        note O).
 
 In
        our
        opinion, the consolidated financial statements referred to above present
        fairly,
        in all material respects, the financial position of American
        Health Products Corporation and Subsidiary as of June 30, 2005 and 2004,
        and the
        results of their operations and their cash flows for the three years ended
        June
        30, 2005 in conformity with accounting principles generally accepted in the
        United States of America.
 
 The
        accompanying financial statements have been prepared assuming that the Company
        will continue as a going concern. As discussed in Note B to the financial
        statements, the Company incurred a net loss of $1,151,549 for the year ended
        June 30, 2005. Recurring losses, among other factors, as discussed in Note
        B to
        the financial statements, raise substantial doubt about its ability to continue
        as a going concern. The financial statements do not include any adjustments
        that
        might result from the outcome of this uncertainty.
 
 
 /s/
        Grant
        Thornton LLP
 
 Chicago,
        Illinois
 October
        13, 2005


F-3


**AHPC
                  Holdings, Inc. and Subsidiary****CONSOLIDATED
                  BALANCE SHEETS****June
                  30,****ASSETS**
              
              2005
              
              2004**CURRENT
                  ASSETS**Cash
                  and cash equivalents
              
              $
              16,434
              
              $
              359,012Accounts
                  receivable - trade, net of allowance fordoubtful
                  accounts of $336,351 at June 30, 2005and
                  $319,851 at June 30, 2004
              
              
              1,844,349
              
              
              1,823,149Inventories,
                  net
              
              
              4,992,385
              
              
              6,694,430Prepaid
                  expenses
              
              
              488,733
              
              
              425,301Other
                  receivables
              
              
              4,694
              
              
              5,193Total
                  current assets
              
              
              7,346,595
              
              
              9,307,085**PROPERTY,
                  PLANT AND EQUIPMENT**Equipment,
                  furniture and fixtures
              
              
              2,617,934
              
              
              2,621,109Building
                  improvements
              
              
              25,866
              
              
              14,310Total
                  property, plant and equipment
              
              
              2,643,800
              
              
              2,635,419Less
                  accumulated depreciation and amortization
              
              
              2,307,985
              
              
              2,028,981Property,
                  plant and equipment, net
              
              
              335,815
              
              
              606,438**OTHER
                  ASSETS**Other
                  assets
              
              
              1,108
              
              
              69,595Total
                  other assets
              
              
              1,108
              
              
              69,595$
              7,683,518
              
              $
              9,983,118






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


F-4




**AHPC
                  Holdings, Inc. and Subsidiary****CONSOLIDATED
                  BALANCE SHEETS - CONTINUED****June
                  30,****LIABILITIES
                  AND SHAREHOLDERS’ EQUITY**
              
              2005
              
              2004**CURRENT
                  LIABILITIES**Accounts
                  payable - trade
              
              $
              2,364,366
              
              $
              2,349,617Trade
                  notes payable to bank
              
              
              783,806
              
              
              1,812,890Other
                  notes payable
              
              
              8,803
              
              
              37,054Accrued
                  rebates
              
              
              231,755
              
              
              289,010Accrued
                  expenses
              
              
              644,888
              
              
              931,832Total
                  current liabilities
              
              
              4,033,618
              
              
              5,420,403**DEFERRED
                  RENT**
              
              
              45,950
              
              
              -**DEFERRED
                  TAX LIABILITIES**
              
              
              308,291
              
              
              725,972**COMMITMENTS
                  AND CONTINGENCIES**
              
              
              -
              
              
              -**SHAREHOLDERS’
                  EQUITY**Series
                  A convertible preferred stock, $0.01 par value;220,000
                  shares authorized, 59,350 issued and outstanding atJune
                  30, 2005 and none issued and outstanding at June 30, 2004
              
              
              594
              
              
              -Common
                  stock, $.03 par value; 3,333,333 sharesauthorized;
                  1,285,052 shares issued; 1,160,787 share outstandingat
                  June 30, 2005 and 1,108,452 shares issued; 984,187 sharesoutstanding
                  at June 30, 2004
              
              
              38,551
              
              
              33,037Additional
                  paid-in capital
              
              
              18,525,456
              
              
              17,778,099Accumulated
                  deficit
              
              
              (9,262,766
              )
              
              (7,968,217
              )9,301,835
              
              
              9,842,919Less
                  common stock in treasury, at cost, 124,265 shareson
                  June 30, 2005. and June 30, 2004.
              
              
              6,006,176
              
              
              6,006,176Total
                  shareholders’ equity
              
              
              3,295,659
              
              
              3,836,743$
              7,683,518
              
              $
              9,983,118




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




F-5




**AHPC
                  Holdings, Inc. and Subsidiary****CONSOLIDATED
                  STATEMENTS OF OPERATIONS****Fiscal
                  Years Ended June 30, 2005, 2004 and 2003**Fiscal
                  Year Ended2005
              
              2004
              
              2003Net
                  sales
              
              $
              26,553,241
              
              $
              36,560,430
              
              $
              36,988,567Cost
                  of goods sold
              
              
              20,262,889
              
              
              30,533,366
              
              
              31,251,419Gross
                  profit
              
              
              6,290,352
              
              
              6,027,064
              
              
              5,737,148Operating
                  expensesSelling,
                  general and administrative
              
              
              7,673,830
              
              
              9,133,914
              
              
              8,939,480Loss
                  from operations
              
              
              (1,383,478
              )
              
              (3,106,850
              )
              
              (3,202,332
              )Other
                  Income and (Expense)Interest
                  expense
              
              
              (142,415
              )
              
              (197,044
              )
              
              (174,874
              )Other
                  income
              
              
              (8,816
              )
              
              101,405
              
              
              507,786Impairment
                  Loss
              
              
              -
              
              
              -
              
              
              (1,042,094
              )Loss
                  from operations before provisionfor
                  (benefit from) income taxesand
                  minority interest
              
              
              (1,534,709
              )
              
              (3,202,489
              )
              
              (3,911,514
              )Provision
                  for (benefit from) income taxes
              
              
              (383,160
              )
              
              (109,860
              )
              
              1,898,169Loss
                  from operations before minorityinterest
              
              
              (1,151,549
              )
              
              (3,092,629
              )
              
              (5,809,683
              )Minority
                  interest in loss of subsidiary
              
              
              -
              
              
              (242,686
              )
              
              (249,914
              )**NET
                  LOSS**
              
              $
              (1,151,549
              )
              $
              (2,849,943
              )
              $
              (5,559,769
              )Basic
                  net loss per common share
              
              $
              (1.13
              )
              $
              (2.97
              )
              $
              (2.51
              )(as
                  restated
              )Diluted
                  net loss per common share
              
              $
              (1.13
              )
              $
              (2.97
              )
              $
              (2.51
              )(as
                restated
              )
              
              (as
                  restated
              )




The
        accompanying notes are an integral part of these consolidated financial
        statements.
   F-6




**AHPC
                            Holdings, Inc. and Subsidiary**
                        **CONSOLIDATED
                          STATEMENT OF SHAREHOLDERS’ EQUITY****Fiscal
                          Years ended June 30, 2005, 2004 and 2003**
  RetainedSeries
                          A
                      
                      
                      
                      
                      
                      Series
                          A
                      
                      Additional
                      
                      earnings
                      
                      TreasuryCommon
                          Stock
                      
                      
                      Common
                          Stock
                      
                      
                      Preferred
                          Stock
                      
                      paid-in
                      
                      (accumulated
                      
                      Stock
                      
                      Shareholders'Shares
                      
                      
                      Amount
                      
                      
                      Shares
                      
                      
                      Amount
                      
                      
                      Shares
                      
                      
                      Amount
                      
                      capital
                      
                      deficit)
                      
                      Amount
                      
                      EquityBalance,
                          June 30, 2002
                      
                      
                      1,252,538
                      
                      $
                      12,525
                      
                      
                      5,803,692
                      
                      $
                      58,037
                      
                      
                      -
                      
                      $
                      -
                      
                      $
                      17,942,471
                      
                      $
                      441,493
                      
                      $
                      (1,618,376
                      )
                      $
                      16,836,150Net
                          loss
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      (5,559,769
                      )
                      
                      -
                      
                      
                      (5,559,769
                      )Common
                          stock repurchases
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      (10,800
                      )
                      (10,800
                      )Balance,
                          June 30, 2003
                      
                      
                      1,252,538
                      
                      $
                      12,525
                      
                      
                      5,803,692
                      
                      $
                      58,037
                      
                      
                      -
                      
                      $
                      -
                      
                      $
                      17,942,471
                      
                      $
                      (5,118,276
                      )
                      $
                      (1,629,176
                      )
                      $
                      11,265,581Net
                          loss
                      
                      
                      -
                      
                      $
                      -
                      
                      
                      -
                      
                      $
                      -
                      
                      
                      -
                      
                      $
                      -
                      
                      $
                      -
                      
                      $
                      (2,849,941
                      )
                      
                      -
                      
                      $
                      (2,849,941
                      )Stock
                          Redemption & Exchange
                      
                      
                      
                      
                      
                      (12,525
                      )
                      
                      
                      
                      
                      (25,000
                      )
                      
                      
                      
                      
                      
                      
                      
                      (174,372
                      )
                      
                      
                      
                      
                      (4,377,000
                      )
                      
                      (4,588,897
                      )Warrants
                          Exercised
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      10,000
                      
                      
                      
                      
                      
                      
                      
                      
                      10,000Reverse
                          Stock Split (3-1)
                      
                      
                      (835,025
                      )
                      
                      
                      
                      
                      (3,861,907
                      )
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      -Common
                          stock repurchases
                      
                      
                      (417,513
                      )
                      
                      -
                      
                      
                      (833,333
                      )
                      
                      -
                      
                      
                      
                      
                      -
                      
                      
                      -
                      
                      
                      -
                      
                      
                      
                      
                      -Balance,
                          June 30, 2004
                      
                      
                      -
                      
                      $
                      -
                      
                      
                      1,108,452
                      
                      $
                      33,037
                      
                      
                      -
                      
                      $
                      -
                      
                      $
                      17,778,099
                      
                      $
                      (7,968,217
                      )
                      $
                      (6,006,176
                      )
                      $
                      3,836,743Net
                          loss
                      
                      
                      -
                      
                      $
                      -
                      
                      
                      -
                      
                      $
                      -
                      
                      
                      -
                      
                      $
                      -
                      
                      $
                      -
                      
                      $
                      (1,151,549
                      )
                      $
                      -
                      
                      $
                      (1,151,549
                      )Issuance
                          of Series A Convertible Preferred Stock
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      220,000
                      
                      
                      2,200
                      
                      
                      569,800
                      
                      
                      
                      
                      
                      
                      
                      
                      572,000Discount
                          on Series A Convertible Preferred Stock
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      143,000
                      
                      
                      (143,000
                      )
                      
                      
                      
                      
                      -Series
                          A Preferred Share Conversions to Common Stock
                      
                      
                      
                      
                      
                      
                      
                      
                      160,650
                      
                      
                      5,036
                      
                      
                      (160,650
                      )
                      
                      (1,606
                      )
                      
                      (3,430
                      )
                      
                      
                      
                      
                      
                      
                      
                      -Issuance
                          of Common Shares
                      
                      
                      
                      
                      
                      
                      
                      
                      15,950
                      
                      
                      478
                      
                      
                      
                      
                      
                      
                      
                      
                      37,987
                      
                      
                      
                      
                      
                      
                      
                      
                      38,465Balance,
                          June 30, 2005
                      
                      
                      -
                      
                      $
                      -
                      
                      
                      **1,285,052**
                      
                      **$**
                      **38,551**
                      
                      
                      **59,350**
                      
                      **$**
                      **594**
                      
                      $
                      **18,525,456**
                      
                      $
                      **(9,262,766**
                      **)**
                      $
                      **(6,006,176**
                      **)**
                      $
                      **3,295,659**


The
        accompanying notes are an integral part of these consolidated financial
        statements.
  F-7






**AHPC
                  Holdings, Inc. and Subsidiary****CONSOLIDATED
                  STATEMENTS OF CASH FLOWS****Fiscal
                  Years Ended June 30, 2005, 2004 and 2003**Year
                  Ended2005
              
              2004
              
              2003Cash
                  flows from operating activitiesNet
                  loss
              
              $
              (1,151,549
              )
              $
              (2,849,943
              )
              $
              (5,559,769
              )Adjustments
                  to reconcile net loss to net cash provided byoperating
                  activitiesDepreciation
                  and amortization
              
              
              302,739
              
              
              350,069
              
              
              1,848,325Impairment
                  of Goodwill
              
              
              -
              
              
              -
              
              
              1,042,094Provision
                  for doubtful accounts
              
              
              16,500
              
              
              (13,774
              )
              
              183,625Deferred
                  income taxes
              
              
              (417,681
              )
              
              593,795
              
              
              3,269,913Loss
                  on disposal of property, plant and equipment
              
              
              1,120
              
              
              -
              
              
              7,486Deferred
                  rent expense
              
              
              45,950Changes
                  in operating assets and liabilitiesAccounts
                  receivable - trade
              
              
              (37,700
              )
              
              137,781
              
              
              2,345,593Inventories,
                  net
              
              
              1,702,045
              
              
              906,456
              
              
              (289,687
              )Prepaid
                  expenses
              
              
              (63,432
              )
              
              50,346
              
              
              217,030Other
                  assets
              
              
              68,986
              
              
              -
              
              
              (1,272,574
              )Accounts
                  payable - trade
              
              
              14,749
              
              
              1,194,830
              
              
              477,785Accrued
                  rebates
              
              
              (57,255
              )
              
              73,536
              
              
              (220,859
              )Accrued
                  expenses
              
              
              (286,944
              )
              
              (103,697
              )
              
              555,024Amounts
                  due to and from affiliates
              
              
              -
              
              
              -
              
              
              1,280,764Net
                  cash provided by operating activities
              
              
              137,528
              
              
              339,399
              
              
              3,884,750Cash
                  flows from investing activitiesCapital
                  expenditures
              
              
              (33,536
              )
              
              (15,915
              )
              
              (365,088
              )Proceeds
                  on sales of property, plant and equipment
              
              
              300
              
              
              -
              
              
              -Minority
                  interest in subsidiary
              
              
              -
              
              
              -
              
              
              (333,914
              )Net
                  cash used in investing activities
              
              
              (33,236
              )
              
              (15,915
              )
              
              (699,002
              )Cash
                  flows from financing activitiesGross
                  payments on trade notes payable to bank
              
              
              (23,664,622
              )
              
              (24,700,175
              )
              
              (31,360,509
              )Gross
                  borrowings on trade notes payable to bank
              
              
              22,635,538
              
              
              24,307,543
              
              
              28,166,687Gross
                  payments on notes payable
              
              
              (216,440
              )
              
              (314,396
              )
              
              (280,706
              )Gross
                  borrowings on notes payable
              
              
              188,189
              
              
              321,607
              
              
              268,581Proceeds
                  from issuance of series A convertible preferred stock
              
              
              572,000Proceeds
                  from issuance of common stock
              
              
              38,465
              
              
              -
              
              
              (10,800
              )Net
                  cash used in financing activities
              
              
              (446,870
              )
              
              (385,421
              )
              
              (3,216,747
              )Net
                  decrease in cash and cash equivalents
              
              
              (342,578
              )
              
              (61,937
              )
              
              (30,999
              )Cash
                  and cash equivalents, beginning of period
              
              
              359,012
              
              
              420,949
              
              
              451,948Cash
                  and cash equivalents, end of period
              
              $
              16,434
              
              $
              359,012
              
              $
              420,949Supplemental
                  disclosure of cash flow informationRedemption
                  of common shares
              
              $
              -
              
              $
              (211,897
              )
              $
              -Interest
                  Paid
              
              $
              141,972
              
              $
              119,416
              
              $
              144,064Income
                  Taxes Paid
              
              $
              1,384
              
              $
              4,228
              
              $
              1,253




The
        accompanying notes are an integral part of these consolidated financial
        statements.
   F-8





**NOTE
      A - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING
      POLICIES**





***Description
      of Business***





AHPC
      Holdings, Inc (formerly WRP Corporation) (the “Company”) is a leading marketer
      of medical and food-service gloves in the United States through its wholly
      owned
      subsidiary, American Health Products Corporation (“AHPC”). The Company was
      incorporated in Maryland in December 1995.





***Principles
      of Consolidation***





The
      accompanying consolidated financial statements include the accounts of AHPC
      Holdings, Inc. and AHPC for all periods presented and includes PT Buana
      Multicorpora Indonesia (“PT Buana”) through April 30, 2004, the effective date
      of the Company's sale of PT Buana to WRP Asia Pacifica Sdn Bhd (“WRP Asia”)
      (refer to Note B). All significant intercompany transactions through the period
      of sale have been eliminated.





***Cash
      and Cash Equivalents***





The
      Company considers cash in banks and highly liquid debt instruments purchased
      with a maturity of three months or less to be cash equivalents. At June 30,
      2005
      and 2004, the Company had approximately $97,383 and $259,012, respectively,
      on
      deposit at one financial institution in excess of amounts insured by the Federal
      Deposit Insurance Corporation. The Company performs a periodic evaluation of
      this institution for relative credit standing and has not experienced any losses
      in connection with the excess amounts on deposit at their
      institution.





***Accounts
      Receivable***





The
      majority of the Company’s accounts receivable are due from companies in the
      foodservice, non-acute medical, dental and retail industries. Credit is extended
      based on an evaluation of a customer’s financial condition, and generally,
      collateral is not required. Accounts receivable are due in accordance with
      agreed upon terms, and are stated at amounts due from customers net of an
      allowance for doubtful accounts. Accounts outstanding longer than the
      contractual payment terms are considered past due. The Company determines its
      allowance by considering a number of factors, including, but not limited to,
      the
      length of time trade accounts receivable are past due, the Company’s previous
      loss history, the customer’s current ability to pay its obligation to the
      Company, and the condition of the general economy and the industry as a whole.
      The Company writes off accounts receivable when they become uncollectible,
      and
      payments subsequently received on such receivables are credited to the allowance
      for doubtful accounts.





F-9


**NOTE
      A - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES -
      Continued**





***Inventories***





Inventories
      are accounted for on a first-in, first-out basis and are valued at the lower
      of
      actual cost or market. The Company established inventory reserves for valuation,
      shrinkage, and excess and obsolete inventory. The Company records provisions
      for
      inventory shrinkage based on historical experience to account for unmeasured
      usage or loss. Actual results differing from these estimates could significantly
      affect the Company’s inventories and cost of product sold. The Company records
      provisions for excess and obsolete inventories based upon the difference between
      the cost of inventory and its estimated realizable value using assumptions
      about
      future product demand and market conditions. Actual product demand or market
      conditions could be different than projected by management. Inventories consist
      of the following at June 30, 2005 and 2004:





2005
            
            2004Finished
                goods
            
            $
            5,218,326
            
            $
            6,985,675Reserves
            
            $
            (225,941
            )
            $
            (291,245
            )Total
            
            $
            4,992,385
            
            $
            6,694,430





***Property,
      Plant and Equipment***





Property,
      plant and equipment are recorded at cost. Depreciation and amortization are
      accounted for using both the straight-line and accelerated methods over lives
      ranging from 2 to 7 years. Building improvements are amortized on a
      straight-line basis over their estimated useful lives or lease terms, whichever
      is shorter. The useful lives of property, plant and equipment at June 30, 2005
      and 2004 are as follows:





Useful
                livesEquipment,
                furniture and fixtures
            2-7
                yearsBuilding
                improvements
            5
                years





F-10


**NOTE
      A - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES -
      Continued**





When
      property or equipment is retired or otherwise disposed of, the net book value
      of
      the asset is removed from the Company’s books, and the net gain or loss is
      included in the determination of income.





***Goodwill
      and Intangibles***





The
      Company accounts for intangibles in accordance with Statement of Financial
      Accounting Standards (“SFAS”) No. 142, “ *Goodwill
      and Other Intangibles Assets* ,”
      which provides that goodwill, as well as identifiable intangible assets
      with indefinite lives, should not be amortized. Accordingly, with the adoption
      of SFAS No. 142 in fiscal 2003, the Company discontinued the amortization of
      goodwill. In addition, useful lives of intangible assets with finite lives
      were
      reevaluated upon adoption of SFAS No. 142.





When
      applicable, goodwill will be tested for impairment on an annual basis and
      between annual tests whenever there is an impairment indicated. Impairment
      losses will be recognized whenever the implied fair value of goodwill is less
      than its carry value. As of June 30, 2003, the Company evaluated the goodwill
      of
      the AHPC reporting unit using a discounted cash flows method. As a result
      of this analysis, the Company recorded an impairment charge of $1,042,094 for
      2003 which reduced the balance of goodwill at June 30, 2003 to $0.





***Long-Lived
      Assets***





The
      Company follows SFAS No. 144, “ *Accounting
      for the Impairment or Disposal of Long-Lived Assets* ,”
      in
      assessing. SFAS No. 144 addresses financial accounting and reporting for the
      impairment or disposal of long-lived assets.


F-11


**NOTE
      A - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES -
      Continued**





In
      accordance with SFAS No.144, long-lived assets are reviewed for impairment
      whenever events or changes in circumstances indicate that the carrying amount
      may not be recoverable. If the fair value of an asset is determined to be less
      than the carrying amount of the asset, a loss is recognized for the
      difference.





***Revenue
      Recognition***





Revenues
      from product sales are recognized at the time the product is shipped from the
      Company’s warehouse or upon the customer’s pick-up receipt of the goods,
      depending upon the terms of the sale. Product sales are stated net of rebates,
      sales returns, and sales discounts and allowances.





The
      Company records a liability for rebates and sales discounts in accordance with
      the terms of such rebate or discount as contracted for by the Company and its
      customers.





***Shipping
      and Handling***





The
      Company records gross shipping and handling costs within selling and
      administrative expenses. Customers are typically invoiced for shipping costs
      on
      all orders under the Company’s 60 cases minimum requirement. The Company's
      shipping and handling costs totaled $274,000, $271,820 and $469,666 during
      the
      fiscal years ended 2005, 2004 and 2003, respectively.





***Income
      Taxes***





The
      Company records income taxes in accordance with SFAS No. 109, “ *Accounting
      for Income Taxes* .”
      SFAS
      No. 109 utilizes the liability method, and deferred taxes are determined based
      on the estimated future tax effects of differences between the financial
      statement and tax basis of assets and liabilities given the provisions of
      enacted tax laws. Deferred income tax provisions and benefits are based on
      the
      changes in the deferred tax asset or tax liability from period to period. Due
      to
      the uncertainty of the realization of the Company's net deferred tax asset,
      the
      Company has recorded a valuation allowance against it.





***Net
      Loss per Common Share***





Basic
      earnings per share (“EPS”) amounts are based on the weighted-average number of
      shares of common stock outstanding during each year, while diluted EPS amounts
      are based on the weighted-average number of shares of common stock outstanding
      during the year and the effect of any dilutive stock options and warrants
      (common stock equivalents). Dilution is not applicable during
      the loss years presented.





F-12


**NOTE
      A - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES -
      Continued**





***Net
      Loss per Common Share - Continued***





The
      net
      loss available to common shareholders, weighted-average number of common shares
      and common share equivalents outstanding for the years ended June 30, 2005
      and
      2004, and 2003, are as follows:





2005
            
            2004
            
            2003Net
                Loss
            
            $
            (1,151,549
            )
            $
            (2,849,943
            )
            $
            (5,559,769
            )Discount
                on Preferred Stock/Beneficial Conversion
            
            
            (143,000
            )
            
            -
            
            
            -Net
                Loss available to common shareholders
            
            $
            (1,294,549
            )
            $
            (2,849,943
            )
            $
            (5,559,769
            )





Year
                endedJune
                30,2005
            
            2004
            
            2003Basic
                weighted-average number of common shares outstanding
            
            
            1,143,887
            
            
            960,066
            
            
            2,210,911Dilutive
                effect of common share equivalents
            
            
            -
            
            
            -
            
            
            -Diluted
                weighted-average number of common shares outstanding
            
            
            1,143,887
            
            
            960,066
            
            
            2,210,911





***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 revenues and expenses
      during the reporting period. Actual results could differ from those
      estimates.





F-13


**NOTE
      A - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES -
      Continued**





***Fair
      Value of Financial Instruments***





The
      Company’s current assets and current liabilities include cash and cash
      equivalents, receivables, inventories, accounts payable, and trade note payable
      to the bank. The carrying amount of such financial instruments approximates
      estimated fair values based on the attribute of the instrument or its quoted
      price.





***Foreign
      Currency***





Gains
      and
      losses from foreign currency transactions stemmed from the Company's ownership
      interest in PT Buana and, accordingly, are included in net loss in the
      period in which they occur through April 30, 2004 (refer to Note B). For the
      years ended June 30, 2005, 2004 and 2003, the foreign exchange loss included
      in
      the determination of net loss was $0, $(12,130) and $(18,355),
      respectively.





The
      Company does not use any derivative or financial instruments to manage its
      foreign currency exchange exposure. Due to the Company's sale of PT Buana to
      WRP
      Asia Pacifica Sdn Bhd (“WRP Asia”) (refer to Note B) the Company was subject to
      foreign currency fluctuation risk in the regular course of its business on
      sales, raw materials and fixed asset purchase transactions denominated in a
      foreign currency through April 30, 2004.





***Litigation***





The
      Company is engaged in various lawsuits either as plaintiff or defendant
      involving product liability. In the opinion of management, the ultimate outcome
      of these lawsuits will not have a material impact on the Company’s consolidated
      financial statements (refer to Note G). The Company expenses legal costs related
      to such litigation as the costs are incurred.





***Stock-Based
      Compensation***





The
      Company accounts for stock-based compensation in accordance with Accounting
      Principles Board (“APB”) Opinion No. 25, “ *Accounting
      for Stock Issued to Employees* ,”
      and
      has adopted the disclosure-only provisions of SFAS No. 123, “ *Accounting
      for Stock-Based Compensation* ,”
      related to options and warrants issued to employees and directors. See Note
      H
      for additional information regarding the Company's compliance with APB Opinion
      No. 25. Exercise prices for options to purchase shares of the Company's
      common stock granted under the Company's option plan were not less than fair
      market value of the Company’s common stock on the date of grant.





F-14


**NOTE
      A - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES -
      Continued**





**Stock-Based
      Compensation - Continued**





The
      following table illustrates the effect on net earnings and earnings per share
      if
      the Company had applied the fair value recognition provisions of SFAS No. 123,
      “ *Accounting
      for Stock-Based Compensation* ,”
      to
      stock-based compensation.  The table below contains restated basic and
      dilutive net loss per share information for the fiscal years ended June30,
      2004
      and 2003 (refer to Note O).





For
                the Fiscal Years Ended June 30,2005
            
            2004
            
            2003Net
                loss available to common shareholders *(refer to Net Loss per Common
                Share in Note A)*
            
            $
            (1,294,549
            )
            $
            (2,849,943
            )
            $
            (5,559,769
            )Deduct:
                total stock-based employee compensation expense determined under
                fair
                value based method for awards granted, modified, or settled, net
                of
                related tax effects
            
            
            38,322
            
            
            90,636
            
            
            53,712Pro
                forma net loss
            
            $
            (1,332,871
            )
            $
            (2,940,579
            )
            $
            (5,613,481
            )2005
            
            
            2004
            
            
            2003Net
                loss per shareBasic
                - as reported
            
            $
            (1.13
            )
            $
            (2.97
            )
            $
            (2.51
            )(as
              restated)Basic
                - pro forma
            
            $
            (1.17
            )
            $
            (3.06
            )
            $
            (2.54
            )(as
              restated)Dilutive
                - as reported
            
            $
            (1.13
            )
            $
            (2.97
            )
            $
            (2.51
            )(as
              restated)
            
            
            (as
              restated)Dilutive
                - pro forma
            
            $
            (1.17
            )
            $
            (3.06
            )
            $
            (2.54
            )(as
              restated)
            
            
            (as
              restated)





***Employee
      Benefit Plans***





All
      employees of the Company who have completed 30 days of service are eligible
      to
      participate in the AHPC Holdings, Inc. 401(k) Profit Sharing Plan & Trust.
      Participants in such plan are allowed to contribute up to 15% of their annual
      compensation, and the Company will match up to the first 8% of the participants’
      contributions. All contributions are made to a trust, which are held for the
      sole benefit of the participant. During the fiscal years ended June 30,
      2005, 2004 and 2003, the Company contributed to the plan $49,833, $37,960 and
      $24,464, respectively. The Company’s expense, relating to the plan’s
      administration, for those years was $6,850.





F-15


**NOTE
      A - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES -
      Continued**





***Internal
      Use Software Costs***





The
      Company has capitalized or expensed as incurred certain internal use software
      costs as appropriate. As of June 30, 2005, 2004 and 2003, the net book value
      of
      capitalized software was $274,143, $517,034 and $757,605, respectively. These
      capitalized costs are included in Property, Plant and Equipment in the
      accompanying financial statements and are being amortized over seven
      years.





***Recent
      Accounting Pronouncements***





In
      December 2004, the FASB issued SFAS No.123, “Share-Based Payment” (Revised 2004)
      (“SFAS 123R”). SFAS No. 123R is a revision of SFAS No. 123, “Accounting for
      Stock Based Compensation” and supersedes Accounting Principles Board (“APB”)
      Opinion No. 25, “Accounting for Stock Issued to Employees”. SFAS 123R
      establishes standards for the accounting for transactions in which an entity
      exchanges its equity instruments for goods or services that are based on the
      fair value of the entity’s equity instruments or that may be settled by the
      issuance of those equity instruments. The Company has granted stock options
      to
      its employees in connection with the provisions of services. Accordingly,
      SFAS 123 requires the Company to disclose the pro forma effect of
      compensation expense for these stock options. Under SFAS 123R, the Company
      will
      be required to record this compensation expense in its results of operations.
      In
      April 2005, however, the SEC voted to delay the implementation of SFAS
      123R
      for certain companies. Accordingly, SFAS 123R will be effective for the Company
      beginning the first annual reporting period that begins after June 15,
      2005. The Company is currently evaluating the method of adoption and the impact
      of SFAS 123R on its financial position and results of operations.  We
      have
      adopted the provisions of SFAS 123R using the modified prospective method. 
      We determined that the adoption of this standard will not have a material
      impact on our financial statements.




***Reclassification***





Certain
      prior-period balances have been reclassified to conform with the current-year
      presentation.




F-16


**NOTE
      B - LIQUIDITY & THE STOCK REDEMPTION TRANSACTION**





***Going
      Concern***





The
      Company has experienced recurring net losses of $1.152 million, $2.850 million
      and $5.560 million during the fiscal years ending June 30, 2005, 2004, and
      2003,
      respectively. Although, the Company has benefited from several cost reduction
      programs, the volatility of raw material costs and rising oil prices together
      has limited the benefits of these programs in the Company’s results of
      operations.





Despite
      the negative cash flow, the Company has been able to secure both short-term
      and
      long-term financing to support future operations (refer to Note P). The Company
      believes that this short-term and long-term financing will be sufficient to
      support the company’s liquidity through June 30, 2006, depending on operating
      results and the continued trade support. The Company has reduced significant
      operating expenses this fiscal year and plans on continuing the cost reduction
      efforts during fiscal 2006. The Company expects to continue to consume cash
      through the end of fiscal year June 30, 2006. The rate at which cash will be
      consumed is primarily dependent on the revenues realized during such period.
      There can be no assurances that the current financing will be sufficient and
      that favorable operating results will be achieved, or that additional financing
      will be available to the Company, or that the terms of any additional financing
      will be favorable to the Company.




The
      Company's independent registered public
      accountants have included a "going concern" emphasis paragraph in their audit
      report accompanying the June 30, 2005 financial statements.





As
      of
      September 9, 2004, the Company signed a commitment for a one-year credit
      facility with Greenfield Commercial Credit, LLC, a privately held commercial
      financing company (refer to Note F). On September 9, 2005, the Company
      renewed this credit facility for another one year term with an option to
      automatically extend the credit facility for an additional one year term (refer
      to Note P).





F-17


**NOTE
      B - LIQUIDITY & THE STOCK REDEMPTION TRANSACTION -
      Continued**





***WRP
      Asia Financial Restructuring***




On
      July
      8, 2003, WRP Asia announced the completion of its financial restructuring,
      which
      included restructuring and reducing WRP Asia’s debt position and obtaining
      additional new funding. Due to the terms of the restructuring, WRP Asia was
      prohibited from repaying certain debt, including the Company’s intercompany debt
      in the short term.




On
      November 3, 2003, the Company announced the signing of a definitive stock
      redemption and exchange agreement (the "Agreement") with WRP Asia. The Company
      completed the redemption from WRP Asia, which became effective on April 30,
      2004, pursuant to the stock redemption and exchange agreement with WRP Asia.
      Through this transaction the Company redeemed 417,513 shares of its Class A
      Common Stock and 833,333 shares of its Class B Common Stock, which comprised
      all
      of WRP Asia's holdings at the effective date of the redemption. These share
      amounts reflected the 1 for 3 reverse stock split which was effective as of
      January 20, 2004. Collectively, these shares represented approximately 53.2%
      of
      the Company’s outstanding capital stock on the effective date of the redemption.
      As consideration for the redemption, the Company conveyed to WRP Asia, its
      70%
      ownership interest in PT Buana and forgave all indebtedness owing to the Company
      from WRP Asia and PT Buana, with the exception of certain mutually agreed
      obligations related to recent purchases of product. The Company also entered
      into a five (5) year supply agreement whereby the Company agreed to purchase
      certain minimum quantities of its latex glove needs from WRP Asia. In connection
      with the redemption, the Company received a fairness opinion from an independent
      professional valuation firm that the transaction was fair to the Company’s
      stockholders. On the closing of the transaction, the three of the Company’s
      seven directors who were employees of WRP Asia resigned their positions as
      officers and directors of the Company.





As
      of
      April 30, 2004, the market value of the stock redeemed at the closing of the
      stock redemption was $4,377,000. The balance sheet amounts as of April 30,
      2004
      that related to our share of PT Buana financials were assets totaling
      $11,305,439 and liabilities of approximately $2,665,854. For fiscal 2005 the
      portion of net revenues relating to PT Buana was $11,511,161 with a
      net
      operating loss of $566,268. The Company agreed to forgive all indebtedness
      owing
      to the Company or its subsidiaries from WRP Asia and from PT Buana equal
      to
      $1,401,322. The loss on this transaction was $174,361, and was recorded in
      Paid-in-Capital.





In
      connection with the redemption of WRP Asia, the Company also changed its name
      from WRP Corporation to AHPC Holding, Inc, effective May 14, 2004. Additionally,
      the Company’s NASDAQ trading symbol changed from WRPC to GLOV.





F-18


**NOTE
      C - COMMON STOCK**





On
      February 29, 2000, the Company approved a stock repurchase plan, which includes
      the repurchase of up to 10% of the Company’s issued and outstanding common
      stock. These purchases may be made in the open market up to an aggregate amount
      of 1,000,000 shares. The program is subject to market conditions and its impact
      on the Company's share price, as well as other investment options that the
      Company may consider to enhance shareholder value. As of June 30, 2005, 254,800
      shares of public common stock have been repurchased by the Company as part
      of
      this plan.





As
      noted
      in Note B, on January 20, 2004, the Company’s Board of Directors approved a
      reverse stock split on a 1-for-3 basis, bringing the stock in compliance with
      Nasdaq listing requirements. All references to per share amounts have been
      restated for this reverse stock split transaction in all periods
      presented.





**NOTE
      D - SERIES A CONVERTIBLE PREFERRED STOCK**





On
      February 2, 2005, the Company completed a private placement of 220,000 shares
      of
      Series A Convertible Preferred Stock (the “Shares”) with a closing date of
      February 1, 2005. The Shares were issued at a discount price of $2.60 per share.
      The Shares may be converted on a one-for-one basis into the Company’s Common
      Stock. The Company filed a registration statement with the Securities and
      Exchange Commission (the “SEC”) on March 25, 2005 registering the shares of
      Common Stock issuable upon conversion of the Shares. As of June 30, 2005,
      160,650 of Shares have been converted into shares of the Company’s common
      stock.




On
      February 3, 2005 the Company issued the placement company warrants to purchase
      11,000 shares of the Company's Common Stock (refer to Note N).




The
      Company recorded the Series A Convertible Preferred Stock as a beneficial
      conversion feature to additional paid-in-capital and retained earnings. The
      shares were issued at a discount amount of $143,000.





Since
      the
      Shares were sold at a discount to the closing price of the Common Stock and
      in
      order to comply with the Nasdaq Stock Market, Inc., Rule 4351 (which limits
      the
      voting rights allocable to preferred stock), the Shares possess, in the
      aggregate, that number of votes which could be cast had the purchase price
      for
      the Shares been used to purchase shares of common stock at the same closing
      price of the common stock on the business day immediately preceding the closing
      date.





The
      Shares are convertible into the Company’s Common Stock by the holders at
      anytime, or by the Company at anytime provided that the closing price of the
      Common Stock equals or exceeds 150% of the closing price per share of the Common
      Stock (i.e. $4.88 per share) for 21 consecutive trading days.





F-19


**NOTE
      E - RELATED-PARTY TRANSACTIONS**





During
      2003, the amounts due to PT Buana of $5,586,321 were assigned to the Company
      in
      partial satisfaction of intercompany amounts due from PT Buana to the Company.
      During 2003, the Company entered into a formal agreement with WRP Asia to
      provide for full and complete right of offset of any trade payables due against
      amounts it owed to the Company. The Company had accounts payable to WRP Asia
      of
      $3,890,537 at June 30, 2003, primarily resulting from the purchase of
      inventories. See Note J for additional related-party transactions.





WRP
      Asia
      owns one of the largest glove manufacturing plants in Malaysia and principally
      manufactures high-quality, powder-free, latex exam gloves. During the years
      ended June 30, 2005, 2004 and 2003, total purchases of gloves from WRP Asia
      as a
      related party were $0, $0 and $3,355,310, respectively.





In
      January 1997, the Company entered into a consulting and services agreement
      with
      Healthcare Alliance, Inc. (“Alliance”), a company 60% owned by Robert J.
      Simmons, one of the Company's directors. The agreement engaged Alliance to
      assist the Company in marketing its products with the expressed purpose of
      negotiating and executing a purchase agreement with various healthcare group
      purchasing organizations. The Company paid Alliance $36,000, $184,612 and
      $170,439, during the years ended June 30, 2005, 2004 and 2003, respectively,
      for
      its services.








**NOTE
      F - TRADE NOTES PAYABLE TO BANK**





Trade
      notes payable to bank consisted of the following as of June 30, 2005
      and
      2004, respectively:





2005  2004


Notes
      payable to bank, net, bearing interest at the


prime
      rate plus 8.0% at June 30, 2005 and


commercial
      paper plus 4.5% at June 30,


2004
      (5.54% at June 30, 2004):    $
      783,805                           
      $ 1,812 890





Trade
      notes payable to bank consisted of amounts financed through letter of credit
      arrangements and a trade note payable which totaled $783,805 and $1,812,890
      at
      June 30, 2005 and 2004, respectively.




F-20





**NOTE
      F - TRADE NOTES PAYABLE TO BANK - Continued**





As
      of
      September 9, 2004, the Company signed a commitment for a one-year credit
      facility with Greenfield Commercial Credit, LLC (Lender), a privately held
      commercial financing company. This asset based lending loan and security
      agreement includes a $3 million revolving line of credit, in which the Company
      may borrow up to the lesser of (i) $3 million or (ii) the sum of 75% of eligible
      receivables and 35% of eligible inventory, with a limit of $1,000,000 on the
      amount of borrowing availability on the eligible inventory. The line of credit
      borrowings carry an interest rate of prime plus 8.0%. At anytime prior to
      maturity date, the Lender has the unrestricted right to demand payment of all
      outstanding indebtedness. It contains certain penalties for early termination.
      At June 30, 2005, these bank obligations are secured by a security interest
      in
      substantially all of AHPC tangible and intangible assets. Refer to Note N for
      subsequent event. The Company has extended and amended the terms of the credit
      facility (refer to Note P).





As
      of
      June 30, 2004, the bank revolving line-of-credit agreement with GE Capital
      contained covenants that required, among other things, maintenance of financial
      ratios and limitations on borrowings, investments and capital expenditures.
      As a
      result of continued covenant violations, the Company entered into a forbearance
      agreement with its lender on March 12, 2003. The agreement had been extended
      to
      December 31, 2003 and was terminated on September 9, 2004 in connection with
      the
      termination of the revolving line-of-credit agreement.





As
      of
      June 30, 2005 and 2004, the Company was contingently liable for outstanding
      letter of credit liabilities totaling $1,052,337 and $0, respectively. As of
      June 30, 2005, the Company has $927,337 of contingent letters of credit
      liabilities outstanding, with Greenfield Commercial Credit, LLC, for inventory
      purchases. Also, included in the continent outstanding letters of credit is
      one
      stand by letter of credit for $125,000 which represents our warehouse and office
      space security deposit.





**NOTE
      G - COMMITMENTS AND CONTINGENCIES**





***Litigation***





Over
      the
      last several years, numerous product liability lawsuits have been filed against
      suppliers and manufacturers of latex gloves alleging, among other things,
      adverse allergic reactions. The Company is one of numerous defendants that
      have
      been named in such lawsuits. At June 30, 2005, the Company was involved in
      a
      total of nine lawsuits as a named defendant, a third-party defendant or an
      indemnitor. During the year ended June 30, 2005, the Company was named in no
      new
      lawsuits and was dismissed from or otherwise settled 14 lawsuits. The Company
      carries product liability insurance. Management believes all legal claims are
      adequately provided for or, if not provided for, are without merit, or involve
      such amounts that would not materially affect the Company’s results of
      operations or financial condition.


F-21


**NOTE
      G - COMMITMENTS AND CONTINGENCIES - Continued**





***Significant
      Customers***





The
      following summary presents the total percentage of sales to the Company’s
      significant national customer group for the fiscal years ended June 30,
      2005, 2004 and 2003. The customer group is comprised of approximately 60
      independent customers.





June
                30,2005
            
            2004
            
            2003Significant
                customer’s percentage of net sales
            
            
            89.1
            
            
            86.1
            
            
            70.1





The
      Company’s significant national customer group ship products to numerous
      food-service facilities throughout the U.S. The ultimate end users of the
      Company’s products are those various food-service organizations and
      professionals who purchase the products from these distributors.





***Operating
      Leases***





The
      Company conducts all of its operations in leased facilities.





Total
      rent expense, net of rental income, included in the accompanying consolidated
      statements of operations for the fiscal years ended June 30, 2005, 2004 and
      2003, was $516,647, $532,605 and $569,548, respectively. The following summary
      presents future minimum rental payments required under the terms of present
      operating leases:





Fiscal
                year ending June 30,2006
            
            $
            457,1822007
              2008
            
            
            412,708
              412,7082009
            
            
            412,7082010
                and thereafter
            
            
            343,923$
            2,039,229





F-22


**NOTE
      G - COMMITMENTS AND CONTINGENCIES - Continued**





***Purchase
      Commitments***





On
      April
      30, 2004, the Company entered into a five year supply agreement with WRP Asia.
      This agreement calls for the Company to purchase no less than a minimum of
      seven
      forty-foot containers of product per month and no less than 125 forty-foot
      containers of product per each 12 month period commencing on April 30, 2004.
      The
      Company’s estimated 12 month liability, for 125 forty-foot containers. However,
      in the event that our majority customer ceases purchasing latex gloves from
      us,
      we shall only be obligated to purchase from WRP Asia as many forty-foot
      containers of product per month as needed to meet 100% of our products needs,
      or
      the minimum annual amount, whichever is less. The following summary presents
      approximate future minimum purchases required under the terms of the supply
      agreement:





Fiscal
                year ending June 30,2006
            
            $
            5,240,1682007
              2008
            
            
            5,240,168
              5,240,1682009
            
            
            4,401,743$
            20,122,247





**NOTE
      H - STOCK OPTION PLAN**





On
      June
      12, 1998, the Board of Directors approved an amendment and restatement of the
      Company’s Omnibus Equity Compensation Plan (the “Plan”), which authorized and
      adjusted the number of shares issuable under the Plan from 133,333 to 466,667
      (reflective of the 3 for 1 reverse stock split effective on January 20, 2004,
      refer to Note B). Effective on February 29, 2000, the Board of Directors
      approved the repricing of all current director and employee options to $2.07,
      the closing market price on that date. This change requires the Company to
      use
      variable Plan accounting for future appreciation in stock prices. Effective
      June
      13, 2005, the Board of Directors approved the immediate vesting of managements
      remaining stock options, dated February 20, 2004, as recognition for the
      Company’s performance. As a result 44,000 stock options were immediately vested.
      A summary of options outstanding under the Plan as of the respective dates
      shown
      below is as follows:


F-23


**NOTE
      H - STOCK OPTION PLAN - Continued**





Outstanding
            
            Weighted-Averageoptions
            
            Price
            
            ExpirationBalance,
                June 30, 2002
            
            
            720,193
            
            $
            1.03Grants
            
            
            20,000
            
            
            0.24Rescissions/expirations
            
            
            (199,877
            )
            
            0.98
            
            
            2004-2012Balance,
                June 30, 2003
            
            
            540,316
            
            $
            1.02Grants
            
            
            146,000
            
            
            1.13Rescissions/expirations
            
            
            (361,434
            )
            
            0.92
            
            
            2004-2012Balance,
                June 30, 2004
            
            
            324,882
            
            $
            2.04Grants
            
            
            20,000
            
            
            1.13Rescissions/expirations
            
            
            (62,878
            )
            
            4.64
            
            
            2004-2012Balance,
                June 30, 2005
            
            
            282,004
            
            $
            1.81





The
      exercise price of the stock options granted in 2005, 2004 and 2003 was
      established at the market price on the date of the grants. The weighted-average
      fair value, at grant date, of the options granted during fiscal years 2005,
      2004
      and 2003 was $1.81, $2.04 and $1.02, respectively. On June 13, 2005 the Company
      granted immediate vesting to 44,000 options previously granted to management
      personnel, on February 20, 2004, as recognition for the Company’s performance
      over the twelve months prior to such date. Of the 282,004 options outstanding
      at
      June 30, 2005, all are currently exercisable. The Company has reserved an
      adequate number of shares of its common stock for issuance upon conversion
      of
      these options.




The
      Company accounts for employee stock options under APB Opinion No. 25 and FASB
      Interpretation No. 44, *“Accounting
      for Certain Transactions Involving Stock Compensation an Interpretation of
      APB
      No. 25”* as
      permitted under accounting principles generally accepted in the United States
      of
      America. No compensation cost has been recognized in the accompanying financial
      statements related to these options.





Had
      compensation costs for these options been determined consistent with SFAS No.
      123, which is an accounting alternative that is permitted but not required,
      the
      Company’s pro forma net loss and pro forma diluted net loss per share for the
      years ended June 30, 2005, 2004 and 2003, would have been $(1,332,871),
      $(2,940,579), $(5,613,481), and $(1.17), $(3.06) and $(2.54),
      respectively.





F-24


**NOTE
      H - STOCK OPTION PLAN - Continued**





The
      pro
      forma disclosure is not likely to be indicative of pro forma results that may
      be
      expected in future years. This primarily relates to the fact that options vest
      over several years and pro forma compensation cost is recognized as the options
      vest. Furthermore, the compensation cost is dependent on the number of options
      granted which may vary in future periods.





The
      fair
      value of each option is estimated on the date of grant based on the
      Black-Scholes option pricing model using the following assumptions:





Year
                endedJune
                30,Assumption
            
            2005
            
            2004
            
            2003Risk-free
                interest rates
            
            
            2.66
            %
            
            2.66
            %
            
            3.02
            %Dividend
                yield
            
            
            -
            
            
            -
            
            
            -Expected
                volatility
            
            
            85.00
            %
            
            85.00
            %
            
            81.14
            %Expected
                life
            
            
            4
                years
            
            
            4
                years
            
            
            4
                years





**** Options
      outstanding and exercisable at June 30, 2005, were as follows:





Range
                      of exercise prices
            
            
            Number
                    outstanding at June 30, 2005
            
            
            Remaining
                  life
            
            
            Weighted
                    average exercise price
            
            
            Number
                    exercisable at June 30, 2005
            
            
            Weighted-
                      average exercise price$6.21
            
            
            16,917
            
            
            0.5-4
                years
            
            $
            6.21
            
            
            16,917
            
            $
            6.212.31
            
            
            26,667
            
            
            7
                years
            
            
            2.31
            
            
            26,667
            
            
            2.312.25
            
            
            69,754
            
            
            7
                years
            
            
            2.25
            
            
            69,754
            
            
            2.251.13
            
            
            162,000
            
            
            9
                years
            
            
            1.13
            
            
            162,000
            
            
            1.130.72
            
            
            6,667
            
            
            7
                years
            
            
            0.72
            
            
            6,667
            
            
            0.72$.72-$6.21
            
            
            282,004
            
            
            0.5-10
                years
            
            $
            1.81
            
            
            282,004
            
            $
            1.81





F-25


**NOTE
      I - INCOME TAXES**





The
      components of the Company’s income tax provision (benefit) from continuing
      operations consisted of:





June
                30,2005
            
            
            2004
            
            
            2003CurrentFederal
            
            $
            (134,235
            )
            $
            (52,892
            )
            $
            (252,489
            )State
            
            
            -
            
            
            -
            
            
            (168,084
            )Foreign
            
            
            -
            
            
            -
            
            
            -Total
                current
            
            
            (134,235
            )
            
            (52,892
            )
            
            (420,573
            )DeferredFederal
            
            
            (248,925
            )
            
            (63,260
            )
            
            2,197,152State
            
            
            -
            
            
            -
            
            
            4,271Foreign
            
            
            -
            
            
            6,292
            
            
            117,319Total
                deferred
            
            
            (248,925
            )
            
            (56,968
            )
            
            2,318,742Total
                income tax provision (benefit)
            
            $
            (383,160
            )
            $
            (109,860
            )
            $
            1,898,169





A
      reconciliation of the statutory U.S. Federal income tax rate to the effective
      tax rate is as follows:





June
                30,2005
            
            
            2004
            
            
            2003Tax
                benefit at statutory rate of 34%
            
            $
            (521,801
            )
            $
            (1,075,246
            )
            $
            (1,419,763
            )State
                income taxes, net of Federal income tax provision
            
            $
            (68,315
            )
            $
            (113,272
            )
            
            (200,425
            )Foreign
                tax rate difference
            
            
            -
            
            
            278,792
            
            
            937,755Increase
                in deferred tax asset valuation allowance
            
            
            421,627
            
            
            790,979
            
            
            2,166,897Utilization
                of loss carryforwards
            
            
            -
            
            
            -
            
            
            -Goodwill
                amortization and other
            
            
            (214,671
            )
            
            8,887
            
            
            413,705Total
                income tax provision (benefit)
            
            $
            (383,160
            )
            $
            (109,860
            )
            $
            1,898,169







F-26


**NOTE
      I - INCOME TAXES - Continued**





The
      Company’s former subsidiary in Indonesia had generated tax losses during fiscal
      2004. As a result, the Company did not have any foreign taxes payable as of
      June
      30, 2004.




Significant
      components of the Company’s deferred tax assets and liabilities are as
      follows:





2005
            
            2004Deferred
                income tax assetAccruals
                not deductible until paid
            
            $
            71,391
            
            $
            95,566Net
                operating loss carryforwardsU.S.
            
            
            2,459,723
            
            
            2,664,328PT
                Buana
            
            
            -
            
            
            -Inventory
            
            
            124,658
            
            
            158,085Allowance
                for doubtful accounts
            
            
            130,504
            
            
            124,102Valuation
                allowance
            
            
            (2,786,276
            )
            
            (3,042,081
            )Total
                deferred tax assets
            
            $
            0
            
            $
            0Deferred
                income tax liabilitiesDifference
                between book and tax basis of property, plant and
                equipment
            
            $
            (93,877
            )
            $
            (252,751
            )Other
                noncurrent liabilities
            
            
            (214,414
            )
            
            (473,221
            )Total
                deferred tax liabilities
            
            $
            (308,291
            )
            $
            (725,972
            )





The
      Company had approximately $4.998 million net operating loss carryforwards
      available at June 30, 2005. In accordance with Federal tax regulations, usage
      of
      the net operating loss carryforwards is subject to limitations in future years
      as a direct result of the stock redemption and exchange transaction with WRP
      Asia described herein. The Company will only be able to utilize $2.8 million
      of
      these net operating loss carryforwards over the next 20 years, at which time
      all
      of the net operating loss carryforwards listed above will have expired.





The
      Company establishes valuation allowances in accordance with the provisions
      of
      SFAS No. 109. The Company continually reviews the adequacy of the valuation
      allowance and is recognizing these benefits only as reassessment indicates
      that
      it is more likely than not that the benefits will be realized.





F-27


**NOTE
      J - SUPPLEMENTAL CASH FLOW INFORMATION**





Cash
      paid
      for interest on debt outstanding for the years ended June 30, 2005, 2004 and
      2003, was $141,972, $119,416 and $144,064, respectively.





The
      following represents significant related-party operating transactions during
      the
      years ended June 30, 2005, 2004 and 2003, which are included in the consolidated
      statements of cash flows as amounts due to affiliate under the cash flows from
      operating activities:





Year
                endedJune
                30,2005
            
            
            2004
            
            
            2003Operating
                cash transactionsPurchases
                from affiliate
            
            $
            0
            
            $
            0
            
            $
            3,384,810Sales
                to affiliate
            
            
            0
            
            
            (1,086,606
            )
            
            (4,808,544
            )Cash
                payments
            
            
            0
            
            
            0
            
            
            (2,202,552
            )Cash
                receipts
            
            
            0
            
            
            516,613
            
            
            4,710,372Amounts
                due to (from) affiliate
            
            $
            0
            
            $
            (569,993
            )
            $
            1,084,086








**NOTE
      K - VALUATION AND QUALIFYING ACCOUNTS**





The
      following tables summarize the activity of the allowance for doubtful accounts
      and the Company's reserve for excess and obsolete inventory during the fiscal
      years ended June 30, 2005, 2004 and 2003, respectively:





Balance
                at
            
            Accounts
            
            Additions
            
            BalanceAllowance
                for
            
            beginning
            
            Written
            
            (Reductions)
            
            at
                enddoubtful
                accounts
            
            of 
                period
            
            Off
            
            to
                account
            
            of
                periodAllowance
                for doubtful accounts activity
              for
                the year ended June 30, 2003
            
            $
            5,736,271
            
            $
            (19,894
            )
            $
            203,519
            
            $
            5,919,896Allowance
                for doubtful accounts activity
              for
                the year ended June 30, 2004
            
            
            5,919,896
            
            
            (5,593,045
            )
            
            (7,000
            )
            
            319,851Allowance
                for doubtful accounts activity
              for
                the year ended June 30, 2005
            
            
            319,851
            
            
            0
            
            
            16,500
            
            
            336,351





F-28


**NOTE
      K - VALUATION AND QUALIFYING ACCOUNTS - Continued**






Balance
                at
            
            Accounts
            
            Additions
            
            BalanceAllowance
                for
            
            beginning
            
            Written
            
            (Reductions)
            
            at
                enddoubtful
                accounts
            
            of 
                period
            
            Off
            
            to
                account
            
            of
                period


Reserve
                for excess and obsolete inventory activity
              for
                the year ended June 30, 2003
            
            $
            503,072
            
            $
            (142,488
            )
            $
            4,041
            
            $
            364,625Reserve
                for excess and obsolete inventory activity
              for
                the year ended June 30, 2004
            
            
            364,625
            
            
            (39,180
            )
            
            (34,200
            )
            
            291,245Reserve
                for excess and obsolete inventory activity
              for
                the year ended June 30, 2005
            
            
            291,245
            
            
            (21,304
            )
            
            (44,000
            )
            
            225,941








**NOTE
      L - SEGMENT REPORTING**





Prior
      to
      the stock redemption and exchange transaction with WRP Asia, the Company had
      two
      business segments: Manufacturing and Distribution. These segments were managed
      as separate strategic business units due to the distinct nature of their
      operations and customer bases. The Manufacturing segment, which represented
      the
      operations of PT Buana, manufactured latex gloves and sold them primarily to
      the
      Company and WRP Asia. All operations of the Manufacturing segment were located
      in Indonesia. The Distribution segment involved the procurement and sale of
      gloves purchased from the Manufacturing segment and other glove vendors and
      then
      sold to national and regional healthcare, food service, retail and other
      distributors. The Distribution segment’s significant customers included those
      discussed in Note G. The operations of the Distribution segment are located
      entirely within the U.S. Effective upon completion of the stock redemption
      and
      exchange transaction, the Company has only one business segment:
      Distribution.





Accounting
      policies for measuring segment assets and earnings are substantially consistent
      with those described in Note A. The Company evaluates segment performance based
      on income from operations before provision for (benefit from) income taxes
      and
      minority interest (“Pretax (loss) income”). Management believed transactions
      between operating segments were made at prevailing market rates.




F-29


**NOTE
      L - SEGMENT REPORTING - Continued**





The
      following tables provide financial data for the years ended June 30, 2004 and
      2003, for these segments. The segment information for June 30, 2005 is not
      applicable due to the Company’s sale of PT Buana to WRP Asia Pacifica Sdn Bhd
      (“WRP Asia”) (refer to Note B). In 2005, the Company had only one segment,
      distribution.





June
                30, 2005
            
            
            Manufacturing
            
            
            Distribution
            
            
            Eliminations
            
            
            ConsolidatedRevenues
                from external customers
            
            $
            0
            
            $
            26,553,241
            
            $
            -
            
            $
            26,553,241Revenues
                from other operating segments
            
            
            0
            
            
            -
            
            
            0
            
            
            -Pretax
                loss
            
            
            0
            
            
            (1,534,709
            )
            
            -
            
            
            (1,534,709
            )Depreciation
                and amortization expense
            
            
            -
            
            
            302,739
            
            
            -
            
            
            302,739Interest
                income
            
            
            0
            
            
            0
            
            
            0
            
            
            0Interest
                expense
            
            
            0
            
            
            142,415
            
            
            0
            
            
            142,415Total
                assets
            
            
            -
            
            
            7,683,517
            
            
            -
            
            
            7,683,517Capital
                expenditures
            
            
            0
            
            
            33,536
            
            
            -
            
            
            33,536Long-lived
                assets
            
            
            -
            
            
            0
            
            
            -
            
            
            0





June
                30, 2004
            
            
            Manufacturing
            
            
            Distribution
            
            
            Eliminations
            
            
            ConsolidatedRevenues
                from external customers
            
            $
            11,511,161
            
            $
            25,049,269
            
            $
            -
            
            $
            36,560,430Revenues
                from other operating segments
            
            
            3,867,695
            
            
            -
            
            
            (3,867,695
            )
            
            -Pretax
                loss
            
            
            (802,662
            )
            
            (2,399,827
            )
            
            -
            
            
            (3,202,489
            )Depreciation
                and amortization expense
            
            
            -
            
            
            350,069
            
            
            -
            
            
            350,069Interest
                income
            
            
            28,852
            
            
            377,173
            
            
            (358,896
            )
            
            47,129Interest
                expense
            
            
            450,896
            
            
            70,871
            
            
            (358,896
            )
            
            162,871Total
                assets
            
            
            -
            
            
            9,983,118
            
            
            -
            
            
            9,983,118Capital
                expenditures
            
            
            334,154
            
            
            15,914
            
            
            -
            
            
            350,068Long-lived
                assets
            
            
            -
            
            
            676,033
            
            
            -
            
            
            676,033





June
                30, 2003
            
            
            Manufacturing
            
            
            Distribution
            
            
            Eliminations
            
            
            ConsolidatedRevenues
                from external customers
            
            $
            10,185,290
            
            $
            26,803,277
            
            $
            -
            
            $
            36,988,567Revenues
                from other operating segments
            
            
            4,586,311
            
            
            -
            
            
            (4,586,311
            )
            
            -Pretax
                loss
            
            
            (715,726
            )
            
            (3,195,788
            )
            
            -
            
            
            (3,911,514
            )Depreciation
                and amortization expense
            
            
            1,474,414
            
            
            437,341
            
            
            -
            
            
            1,911,755Interest
                income
            
            
            11,969
            
            
            452,453
            
            
            (396,053
            )
            
            68,369Interest
                expense
            
            
            499,718
            
            
            60,064
            
            
            (396,053
            )
            
            163,729Total
                assets
            
            
            11,283,099
            
            
            15,116,776
            
            
            -
            
            
            26,399,875Capital
                expenditures
            
            
            296,360
            
            
            (13,415
            )
            
            -
            
            
            282,945Long-lived
                assets
            
            
            8,629,685
            
            
            1,010,188
            
            
            -
            
            
            9,639,873





F-30


**NOTE
      M - QUARTERLY FINANCIAL SUMMARY (UNAUDITED)**




The
      tables below contain restated basic and dilutive quarterly net loss per share
      information for the fiscal years ended June 30, 2004 and June 30, 2003 (refer
      to
      Note O).




9/30/04
            
            
            12/31/04
            
            
            3/31/05
            
            
            6/30/05(In
                thousands except for per share data)Net
                revenues
            
            $
            6,543
            
            $
            6,515
            
            $
            6,413
            
            $
            7,082Income
                from operations
            
            
            (353
            )
            
            (367
            )
            
            (439
            )
            
            (224
            )Net
                loss
            
            
            (374
            )
            
            (419
            )
            
            (480
            )
            
            121Net
                income per shareBasic
            
            $
            (0.39
            )
            $
            (0.44
            )
            $
            (0.64
            )
            $
            0.34Diluted
            
            
            (0.39
            )
            
            (0.44
            )
            
            (0.64
            )
            
            0.34





9/30/03
            
            
            12/31/03
            
            
            3/31/04
            
            
            6/30/04(In
                thousands except for per share data)Net
                revenues
            
            $
            9,786
            
            $
            9,528
            
            $
            9,341
            
            $
            7,905Income
                from operations
            
            
            (560
            )
            
            (929
            )
            
            (1,066
            )
            
            (552
            )Net
                income (loss)
            
            
            (616
            )
            
            (854
            )
            
            (981
            )
            
            (399
            )Net
                income per shareBasic
            
            $
            (0.27
            )
            $
            (0.39
            )
            $
            (1.32
            )
            $
            (0.99
            )(as
              restated)
            
            
            (as
              restated)
            
            
            (as
              restated)
            
            
            (as
              restated)Diluted
            
            
            (0.27
            )
            
            (0.39
            )
            
            (1.32
            )
            
            (0.99
            )(as
              restated)
            
            
            (as
              restated)
            
            
            (as
              restated)
            
            
            (as
              restated)





9/30/02
            
            
            12/31/02
            
            
            3/31/03
            
            
            6/30/03(In
                thousands except for per share data)Net
                revenues
            
            $
            10,542
            
            $
            8,792
            
            $
            7,062
            
            $
            10,593Income
                from operations
            
            
            (75
            )
            
            (421
            )
            
            (1,440
            )
            
            (1,266
            )Net
                income (loss)
            
            
            125
            
            
            (193
            )
            
            (811
            )
            
            (4,681
            )Net
                income per shareBasic
            
            $
            0.06
            
            $
            (0.08
            )
            $
            (0.36
            )
            $
            (2.13
            )(as
              restated)
            
            
            (as
              restated)
            
            
            (as
              restated)
            
            
            (as
              restated)Diluted
            
            
            0.06
            
            
            (0.08
            )
            
            (0.36
            )
            
            (2.13
            )(as
              restated)
            
            
            (as
              restated)
            
            
            (as
              restated)
            
            
            (as
              restated)







F-31








**NOTE
        N - WARRANTS**
  On
        February 3, 2005, we issued to the LaSalle St. Securities, LLC, the placement
        agent for the private placement of 220,000 shares of Series A Convertible
        Prefered Stock, warrants to purchase 11,000 shares of common stock with an
        exercise price equal to $3.25 per share.  The warrants may be converted
        on
        a one-for-one basis into our common stock.  These warrants will be
        exercisable during the period begining August 5, 2005 and ending February
        2,
        2008.
   NOTE
      O - RESTATEMENT





This
      form
      10-K reflects a correction of our accounting and disclosure primarily related
      to
      the reverse 3-for-1 stock split effective January 20, 2004 and the calculation
      of the reported basic and diluted net loss per share. For the fiscal years
      ended
      June 30, 2004, and 2003, we have restated our financial statements to reflect
      basic and diluted net loss per share of $(2.97), $(2.97) and $(2.51),
      respectively, as noted below.





June
                30,
            
            June
                30,(as
                restated )
            
            (as
                previously reported)2004
            
            
            2003
            
            
            2004
            
            
            2003Net
                Loss
            
            $
            (2,849,943
            )
            $
            (5,559,769
            )
            $
            (2,849,943
            )
            $
            (5,559,769
            )Basic
                net loss per common share
            
            $
            (2.97
            )
            $
            (2.51
            )
            $
            (2.97
            )
            $
            (0.84
            )Diluted
                net loss per common share
            
            $
            (2.97
            )
            $
            (2.51
            )
            $
            (2.80
            )
            $
            (0.84
            )






**NOTE P
        - SUBSEQUENT EVENT**
 
 On
        September 9, 2005, the Company extended its loan and security agreement with
        Greenfield Commercial Credit, LLC for an additional one-year term through
        September 9, 2006, with an additional automatic one year renewal term. This
        renewal included an amendment to the loan and security agreement increasing
        the
        revolving line of credit borrowing limit from $3 million to $5 million. Pursuant
        to the terms of the amended loan and security agreement, we may borrow up
        to the
        lesser of (i) $5 million or (ii) the sum of 80% of eligible receivables and
        50%
        of eligible inventory on hand and 35% of eligible inventory in-transit, with
        a
        sub limit of $500,000, and an overall inventory cap of $2,500,000. These
        bank
        obligations are secured by a security interest in substantially all of AHPC
        tangible and intangible assets. The line of credit borrowings carry an interest
        rate of prime plus 4.5%. At anytime prior to maturity date, the Lender has
        the
        unrestricted right to demand payment of all outstanding indebtedness. It
        contains certain penalties for early termination.
 
 On
        October 3, 2005, the Company announced a private placement of $1.2 million
        in
        subordinated promissory notes (the “Secured Notes”) effective September 29,
        2005.  The Company's obligations under the Secured Note are secured
        by a
        Security Agreement that generally grants the holder of the Secured Note a
        secondary interest, behind Greenfield Commercial Credit LLC, in substantially
        all of the Company's assets.   The Secured Notes bear
        interest as
        a rate of 7% per annum with a maturity date of two years after the date of
        the
        issuance of the Secured Notes. Each Secured Note has attached a Class A Warrant
        and a Class B Warrant granting the holder of the Secured Note the right to
        purchase shares of the Common Stock at an exercise price of $3.50 per share
        and
        $4.50 per share, respectively. Each of the Class A Warrants and the Class
        B
        Warrants has an exercise term of five years. In connection with the private
        placement, the Company issued an aggregate number of Class A Warrants enabling
        the holders to purchase up to 192,000 shares of the Common Stock and an
        aggregate number of Class B Warrants enabling the holders to purchase up
        to
        120,000 shares of the Common Stock.
 
 During
        the period from July 1, 2005 through October 13, 2005, holders of
        the
        remaining 59,350 shares of the Company’s Series A Convertible Preferred Stock
        (refer to Note D) converted their shares of the Series A Convertible Preferred
        Stock into shares of the Common Stock.


F-32