SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549





**FORM
      10-K/A (AMENDMENT NO. 1)**


**(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.








**EXPLANATORY
      NOTE**





The
      Company is amending its Annual Report on Form 10-K for the fiscal year ended
      June 30, 2005. This Amendment No. 1 on Form 10-K/A is being filed to restate
      our
      consolidated financial statements for the fiscal years ended June 30, 2005
      and
      2004 and amend the related disclosures in our original Form 10-K, as described
      below and in Notes B and O to our Consolidated Financial Statements included
      in
      this Amended Form 10-K/A.





The
      restatement of our Consolidated Financial Statements is related to the
      correction of an error in the recording of the transaction governed by our
      Stock
      Redemption and Exchange Agreement with WRP Asia Pacific Sdn Bhd ("WRP Asia")
      pursuant to which we redeemed all of WRP Asia's shareholdings in the Company,
      consisting of 417,513 shares of Class A Common Stock and 833,333 shares of
      common stock. This transaction is described in more detail in Note B to our
      Consolidated Financial Statements included in this Amended Form 10-K/A. The
      effect of the loss incurred by the Company on this transaction of $174,361
      was
      reported incorrectly as a reduction in our Paid-in-Capital. The loss on the
      transaction should have been reported through our Statement of Operations and
      reported as a loss on disposition of assets in the Consolidated Financial
      Statements for the fiscal year ended 2004. We are also restating
      the unaudited Consolidated Condensed Financial Statements for the first three
      quarters of fiscal year 2005 that were previously reported in our quarterly
      reports on Form 10-Q, and the consolidated financial statements for the
      fiscal year 2005 that were reported in our Annual Report on Form 10-K, all
      as previously filed with the Securities and Exchange Commission.





This
      amended Form 10-K/A does not attempt to modify or update any other disclosures
      set forth in the original Form 10-K, except as required to reflect the effects
      of the restatement described above and in Notes
      B
      and O to our Consolidated Financial Statements included in this
      report .
      Additionally, this amended Form 10-K/A, except for the restatement information,
      speaks as of the filing date of the original Form 10-K and does not update
      or
      discuss any other Company developments after the date of the original filing.
      All information contained in this Amended Form 10-K/A and original Form 10-K
      is
      subject to updating and supplementing as provided in the periodic reports that
      the Company has filed and will file after the original filing date with the
      Securities and Exchange Commission.







**AHPC
      HOLDINGS, INC.**


**FORM
      10-K/A (AMENDMENT NO. 1)**


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





**TABLE
      OF CONTENTS**





**PART
                I**
            
            **Page**Item
                1.
            Business
            1Item
                2.
            Properties
            4Item
                3.
            Legal
                Proceedings
            4Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            5**PART
                II**Item
                5.
            Market
                for Registrant's Common Equity, RelatedStockholder
                Matters and Issuer Purchases of Equity Securities
            6Item
                6.
            Selected
                Consolidated Financial Data
            6Item
                7.
            Management's
                Discussion and Analysis of FinancialCondition
                and Results of Operations
            7Item
                7A.
            Quantitative
                and Qualitative Disclosures about Market Risk
            12Item
                8.
            Financial
                Statements and Supplementary Data
            15Item
                9.
            Changes
                In and Disagreements With Accountants on Accounting
                and Financial Disclosure
            15Item
                9A.
            Controls
                and Procedures
            15Item
                9B.
            Other
                Information
            16**PART
                III**Item
                10.
            Directors
                and Executive Officers of the Registrant
            17Item
                11.
            Executive
                Compensation
            18Item
                12.
            Security
                Ownership of Certain Beneficial Owners and
                Management and Related Stockholder Matters
            20Item
                13.
            Certain
                Relationships and Related Transactions
            21Item
                14.
            Principal
                Fees and Services of Independent Registered Public
                Accounting Firm
            21**PART
                IV**Item
                15.
            Exhibits
                and Financial Statement Schedules
            22













**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.





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
      "SafePrep TM "
      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.


1


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, Nitrite 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.





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.





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




2


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.





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.


3


***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.





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.


4


**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.





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.


5


**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
            
            $
            2.90
            
            $
            4.403rdquarter
            
            $
            3.10
            
            $
            4.472ndquarter
            
            $
            1.95
            
            $
            4.091stquarter
            
            $
            3.02
            
            $
            4.60**June
                30, 2004**4thquarter
            
            $
            2.39
            
            $
            4.953rdquarter
            
            $
            1.02
            
            $
            2.702ndquarter
            
            $
            1.47
            
            $
            2.911stquarter
            
            $
            1.02
            
            $
            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 net loss and net loss per share information for the
      fiscal year ended June 30, 2004 (refer to Note O).


**Year
                Ended June 30,**(In
                thousands except per share amounts)
            
            
            **2005**
              (as
                  restated, see
                Note
                  O)
            
            
            **2004**
              (as
                restated, see
              Note
                O)
            
            
            **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
            )
            
            ($3,024
            )
            
            ($5,560
            )
            
            ($4,293
            )
            $
            529PER
                SHARE DATA:(Loss)
                earnings per share
            
            
            ($1.13
            )
            
            ($3.15
            )
            
            ($2.51
            )
            
            ($1.94
            )
            
            ($0.24
            )(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




6


**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.





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). This Form 10-K/A includes
      restated net loss information for the fiscal year ended June 30, 2004 and
      restated shareholder's equity information for the years ended June 30, 2004
      and
      June 30, 2005 (refer to Note O).





**Results
      of Operations**




The following table summarizes our operating results as a percentage of net
      sales for the periods indicated. The table below contains restated net (loss)
      information for the fiscal year ended June 30, 2004 (refer to Note
      O).





****
            
            **Year
                Ended
                June 30,****2005**
            
            
            **2004**
            
            
            **2003**
            
            
            **2002**
            
            
            **2001**(as
                restated)**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
            )
            
            (0.7
            )
            
            (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
            %)
            
            (8.27
            %)
            
            (15.00
            %)
            
            (9.10
            %)
            
            1.00
            %




7


**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.





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 decreased
      by $1,460,084 or 16.0%. As a percentage of net sales, selling, general,
      administrative 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 $1,842,141
      or
      54.6%, as restated (refer to Note O to our consolidated financial statements
      included elsewhere in this report), 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, which was offset by the loss incurred
      in
      connection with the redemption of our stock from WRP Asia (refer to Note O
      to
      our consolidated financial statements included elsewhere in this report).
      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 primarily related to 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 $(3,024,304),
      as
      restated (refer to Note O to our consolidated financial statements included
      elsewhere in this report), 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
      $(3.15), as restated (refer to Note O to our consolidated financial statements
      included elsewhere in this report), 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.





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 increased
      by $194,434 or 2.2% over the year ended June 30, 2003. As a percentage of net
      sales, selling, general, administrative 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 due to an increase in sales consulting services due to our strategic
      decision to increase our market share in the healthcare
      industry.


8


Loss
        from
        continuing operations decreased by $534,664 or 13.7%, as restated (refer
        to Note
        O to our consolidated financial statements included elsewhere in this report),
        for the year ended June 30, 2004 compared to the prior year. This 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, which was offset by the loss incurred in
        connection with the redemption of our stock from WRP Asia (refer to Note
        B) to
        our consolidated financial statements included elsewhere in this report).
        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 $(3,024,304),
      as restated (refer to Note O to our consolidated financial statements included
      elsewhere in this report), 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 $(3.15), as restated
      (refer to Note O to our consolidated financial statements included elsewhere
      in
      this report), 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.





***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).




9


***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.




***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, $3,024 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 a dditional
      financing will be favorable to us.


10


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).




***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**
              **1
                year**
            
            
            **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.


11


(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.




***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.




**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.


12


**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 Result* *.* 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.




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 at 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.




*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.


13


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.




*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.


14


*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.




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




Our
      consolidated financial statements and notes thereto are filed under this item
      beginning on page F-I 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 not effective at reaching that level of reasonable
      assurance.


15


During
          the process of responding to a recent SEC comment letter, the Company's
          management identified an error that 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:




·
            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.


16




**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 DirectorsName
            Age
            Director
                SinceAnthony
                F. Alibrio, Sr.
            61
            2004Don
                L. Arnwine
            72
            1995Class
                2 DirectorsName
            Age
            Director
                SinceGeorge
                Jeff Mennen
            64
            1994Robert
                J. Simmons
            62
            1995Class
                3 DirectorsName
            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 fine 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.




***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.




17


***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.




***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").


18




Annual
                Compensation
            
            Long-TermCompensationName
                and
              Principal
                Position
            
            
            Year
            
            
            Salary
            
            
            Bonus
            
            
            Other
                Annual
              Compensation
            
            
            Stock
              Options
            
            
            All
                Other
              Compensation2005
            
            $
            206,000
            
            $
            33,945(1
            )
            
            --
            
            
            --
            
            $
            19,200(2
            )Alan
                E. Zeffer, President
                and CEO
            
            
            2004
            
            $
            185,000
            
            
            --
            
            
            --
            
            
            20,000
            
            $
            19,200(2
            )2003
            
            $
            185,000
            
            $
            28,000
            
            
            --
            
            
            6,667
            
            $
            19,200(2
            )Deborah
                J. Bills, CFO
                (3)
            
            
            2005
            
            $
            115,408
            
            
            --
            
            
            --
            
            
            --2004
            
            $
            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.




**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.




19


**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.




***Title
                of Class***
            ***Name
                of Beneficial Owner***
            ***Amount
                and Nature of Beneficial***
              ***Ownership***
            ***Percent
                of Total***
              ***Voting
                Stock***Common
                Stock
            George
                Jeff Mennen
            30,0001Common
                Stock
            George
                Jeff Mennen
            3,333
            33,333
            2.1%Common
                Stock
            Robert
                J. Simmons
            30,0001Common
                Stock
            Robert
                J. Simmons
            1,666
            31,666
            1.9%Common
                Stock
            Don
                L. Arnwine
            30,0001Common
                Stock
            Don
                L. Arnwine
            1,000
            31,000
            1.9%Common
                Stock
            Richard
                J. Swanson
            29,0001Common
                Stock
            Richard
                J. Swanson
            2,000
            31,000Common
                Stock
            Anthony
                L. Alibrio, Sr.
            20,0001
            20,000
            1.2%Common
                Stock
            Alan
                E. Zeffer
            50,0001Common
                Stock
            Alan
                E. Zeffer
            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.




20




**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
            
            
            0
            
            
            0All
                Other Fees
            
            
            --
            
            
            --Total
                Fees Billed
            
            $
            211,828
            
            $
            212,950




(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.




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.


21




**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, incorporated 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         Wa rrant,
      incorporated by reference to Exhibit No. 4.3 to the Company's Form S-1
      Registration Statement (Registration No. 33-36206).




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* A mended
      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.




22


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, Inc. and American
      Health Products Corporation incorporated by reference to Exhibit 10.10 included
      in the Company's Form 10-K Annual Report for the fiscal year ended June 30,
      2005
      (File No. 0-17458).




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.
      incorporated by reference to Exhibit 10.11 included in the Company's Form 10-K
      Annual Report for the fiscal year ended June 30, 2005 (File No.
      0-17458).




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.




(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.




23




**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/A (Amendment
      No.
      1) to be signed on its behalf by the undersigned, thereunto duly
      authorized.




**REGISTRANT:**




AHPC
      HOLDINGS, INC.




Date: 
      August 18, 2006 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: 
      August 18, 2006 By: /s/
      Alan E.
      Zeffer


Alan
      E. Zeffer, President and
      Chief


Executive
      Officer (Principal Executive Officer)




Date: 
      August 18, 2006 By: /s/
      George Jeff
      Mennen


George Jeff Mennen, Director


and Chairman of the Board of Directors




Date: 
      August 18, 2006 By: /s/
      Richard J.
      Swanson


Richard J. Swanson, Director




Date:
       August 18, 2006 By: /s/
      Robert J.
      Simmons


Robert J. Simmons, Director




Date: 
      August 18, 2006 By: /s/Don
      L.
      Arnwine


Don L. Arnwine, Director




Date: 
      August 18, 2006 By: /s/
      Anthony F. Alibrio,
      Sr.


Anthony F. Alibrio, Sr., Director




Date: 
      August 18, 2006    B y: /s/
      Deborah J.
      Bills


Deborah J. Bills, Chief Financial Officer


(Principal
      Financial and Accounting Officer)




24


**CONSOLIDATED
      FINANCIAL STATEMENTS**




**AND
      REPORT OF INDEPENDENT**




**CERTIFIED
      PUBLIC ACCOUNTANTS**




**AHPC
      HOLDINGS, INC. AND SUBSIDIARY**




**JUNE
      30, 2005, 2004 AND 2003**













**CONTENTS**




**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 audits.




We
      conducted our audits in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the financial
      statements are free of material misstatement. 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 audits provide a
      reasonable basis for our opinion.




The
      Company has restated its consolidated statement of operations for fiscal
      2004 for the loss associated with the Stock Redemption and Exchange Transaction
      described in Note B. See Note O for further information regarding the
      restatement.




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 (except for


Note
      O,
      as to which the


date
      is
      June 16, 2006)




F-3


**AHPC
      Holdings, Inc. and Subsidiary**


**CONSOLIDATED
      BALANCE SHEETS**


**June
      30,**




**ASSETS**
            
            
            2005
              (as
                restated, see Note O)
            
            
            2004
              (as
                restated, see Note O)**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**


**June
      30,**




**LIABILITIES
                AND SHAREHOLDERS' EQUITY**
            
            
            2005
              (as
                restated, see Note O)
            
            
            2004
              (as
                restated, see Note O)**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 shares outstandingat
                June 30, 2005 and 1,108,452 shares issued; 984,187 sharesOutstanding
                at June 30, 2004
            
            
            38,551
            
            
            33,037Additional
                paid-in capital
            
            
            18,699,817
            
            
            17,952,460Accumulated
                deficit
            
            
            (9,437,127
            )
            
            (8,142,578
            )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
      STATEMENT OF OPERATIONS**


**Fiscal
      Years Ended June 30, 2005, 2004 and 2003**




Fiscal
                Year Ended2005
            
            
            2004
              (as
                restated, see Note O)
            
            
            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
            
            
            507,786Loss
                on stock redemption transaction
            
            
            -
            
            
            (174,361
            )
            
            -Impairment
                Loss
            
            
            -
            
            
            -
            
            
            (1,042,094
            )Loss
                from operations before provisionfor
                (benefit from) income taxesand
                minority interest
            
            
            (1,534,709
            )
            
            (3,376,850
            )
            
            (3,911,514
            )Provision
                for (benefit from) income taxes
            
            
            (383,160
            )
            
            (109,860
            )
            
            1,898,169Loss
                from operations before minorityinterest
            
            
            (1,151,549
            )
            
            (3,266,990
            )
            
            (5,809,683
            )Minority
                interest in loss of subsidiary
            
            
            -
            
            
            (242,686
            )
            
            (249,914
            )NET
                LOSS
            
            $
            (1,151,549
            )
            $
            (3,024,304
            )
            $
            (5,559,769
            )Discount
                on Preferred Stock/Beneficial Conversion
            
            
            (143,000
            )
            
            --
            
            
            --**NET
                LOSS Available to Common Shareholders**
            
            $
            (1,294,549
            )
            $
            (3,024,304
            )
            $
            (5,559,769
            )Basic
                net loss per common share
            
            $
            (1.13
            )
            $
            (3.15
            )
            $
            (2.51
            )(as
                restated
            )Diluted
                net loss per common share
            
            $
            (1.13
            )
            $
            (3.15
            )
            $
            (2.51
            )(as
              restated
            )Weighted
                average number of common shares outstanding:Basic
            
            
            1,143,887
            
            
            960,066
            
            
            2,210,911Diluted
            
            
            1,143,887
            
            
            960,066
            
            
            2,210,911





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**




Series
                A
            
            Series
                A
            
            Additional
            
            
            Retained
                Earnings
            
            
            TreasuryCommon
                Stock
            Common
                  Stock
            Preferred
                  Stock
            
            paid-in
            
            
            (accumulated
            
            
            Stock
            
            
            Shareholders'Shares
            
            
            Amount
            
            
            Shares
            
            
            Amount
            
            
            Shares
            
            
            Amount
            
            
            capital
            
            
            deficit)
            
            
            Amount
            
            
            Equity(as
                restated, see Note O)
            
            
            (as
                restated, see Note O)Balance,
                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
            )
            $
            (11,265,581
            )Net
                loss
            
            
            -
            
            $
            -
            
            
            -
            
            $
            -
            
            
            -
            
            
            -
            
            $
            -
            
            $
            (3,024,304
            )
            
            -
            
            $
            (3,024,304
            )Stock
                Redemption & Exchange
            
            
            
            
            
            (12,525
            )
            
            
            
            
            (25,000
            )
            
            
            
            
            
            
            
            (11
            )
            
            
            
            
            (4,377,000
            )
            
            (4,414,536
            )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
              (as
                restated)
            
            $
            -
            
            $
            -
            
            
            1,108,452
            
            $
            33,037
            
            
            -
            
            $
            -
            
            $
            17,952,460
            
            $
            (8,142,578
            )
            $
            (6,006,176
            )
            $
            3,836,743Net
                loss
            
            
            -
            
            $
            -
            
            
            -
            
            $
            -
            
            
            -
            
            
            -
            
            $
            -
            
            $
            (1,151,549
            )
            
            -
            
            $
            (1,151,549
            )Issuance
                of Series A ConvertiblePreferred
                Stock
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            220,000
            
            
            2,200
            
            
            569,800
            
            
            
            
            
            
            
            
            572,000Discount
                on Series A Convertible Preferred Stock
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            143,000
            
            
            (143,000
            )
            
            
            
            
            -Series
                A Preferred Share Conversion 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
              (as
                restated)
            
            
            **-**
            
            **$**
            **-**
            
            
            **1,285,052**
            
            **$**
            **38,551**
            
            
            **59,350**
            
            **$**
            **594**
            
            **$**
            **18,699,817**
            
            **$**
            **(9,437,127**
            **)**
            **$**
            **(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
      STATEMENT OF CASH FLOWS**


**Fiscal
      Years Ended June 30, 2005, 2004 and 2003**





Year
                Ended2005
            
            
            
            2004
            
            
            
            2003(as
                restated)Cash
                flows from operating activitiesNet
                loss
            
            $
            (1,151,549
            )
            
            $
            (3,024,304
            )
            
            $
            (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 disposition of assets
            
            
            -
            
            
            
            174,361
            
            
            
            -Loss
                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
            
            
            
            2003(as
                restated)Net
                Loss
            
            $
            (1,151,549
            )
            
            $
            (3,024,304
            )
            
            $
            (5,559,769
            )Discount
                on Preferred Stock/Beneficial Conversion
            
            
            (143,000
            )
            
            
            -
            
            
            
            -Net
                Loss available to common shareholders
            
            $
            (1,294,549
            )
            
            $
            (3,024,304
            )
            
            $
            (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 June 30, 2004 (refer
      to Note O).








For
                the Fiscal Years Ended June 30,2005
            
            
            
            2004
            
            
            
            2003(as
                restated)Net
                loss available to common shareholders*(refer
                to Net Loss per Common Share in Note A)*
            
            $
            (1,294,549
            )
            
            $
            (3,024,304
            )
            
            $
            (5,559,769
            )Deduct:
                total stock-based employee compensation expense determined under
                fair
                value method for awards granted, modified, or settled, net of related
                tax
                effects
            
            
            38,322
            
            
            
            90,636
            
            
            
            53,712Pro
                forma net loss
            
            $
            (1,332,871
            )
            
            $
            (3,114,940
            )
            
            $
            (5,613,481
            )2005
            
            
            
            2004
            
            
            
            2003(as
                restated)Net
                loss per shareBasic
                - as reported
            
            $
            (1.13
            )
            
            $
            (3.15
            )
            
            $
            (2.51
            )Basic
                - pro forma
            
            $
            (1.17
            )
            
            $
            (3.24
            )
            
            $
            (2.54
            )Dilutive
                - as reported
            
            $
            (1.13
            )
            
            $
            (3.15
            )
            
            $
            (2.51
            )Dilutive
                - pro forma
            
            $
            (1.17
            )
            
            $
            (3.24
            )
            
            $
            (2.54
            )





***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, $3.024 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 as
      a
      loss in the Consolidated Statement of Operations for the fiscal year ending
      June
      30, 2004 (refer to Note O).





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 with 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
            
            2004Notes
                payable to bank, net, bearing interest at the prime rate plus 8.0%
                at June
                30, 2005 (14.25% 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
            
            
            412,7082008
            
            
            412,7082009
            
            
            412,7082010
            
            
            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
            
            
            5,240,1682008
            
            
            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
                options
            
            
            
            Weighted-
              Average
              Price
            
            
            
            ExpirationBalance,
                June 30, 2002
            
            
            720,193
            
            
            $
            1.03Grants
            
            
            20,000
            
            
            
            0.24Rescissions
            
            
            (199,877
            )
            
            
            0.98
            
            
            
            2004-2012Expirations
            
            
            -
            
            
            
            -Balance,
                June 30, 2003
            
            
            540,316
            
            
            $
            1.02Grants
            
            
            146,000
            
            
            
            1.13
            
            
            
            2004-2012Rescissions
            
            
            (360,211
            )
            
            
            0.92Expirations
            
            
            (1,223
            )
            
            
            1.47
            
            
            
            2004-2012Balance
                June 30, 2004
            
            
            324,882
            
            
            $
            2.04
            
            
            
            2004Grants
            
            
            20,000
            
            
            
            1.13Rescissions
            
            
            (62,528
            )
            
            
            0.32
            
            
            
            2004-2012Expirations
            
            
            (350
            )
            
            
            6.21
            
            
            
            2005Balance,
                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
            
            
            
            2003Federal
            
            $
            (134,235
            )
            
            $
            (52,892
            )
            
            $
            (252,489
            )State
            
            
            -
            
            
            
            -
            
            
            
            (168,084
            )Foreign
            
            
            -
            
            
            
            -
            
            
            
            -Total
                current
            
            
            (134,235
            )
            
            
            (52,892
            )
            
            
            (420,573
            )Deferred
            
            
            
            
            
            
            
            
            
            
            -Federal
            
            
            (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, containing restated effective tax rate information for the fiscal
      year
      ended June 30, 2004 (refer to Note O), is as follows:





June
                30,2005
            
            
            
            2004
            
            
            
            2003(as
                restated)Tax
                benefit at statutory rate of 34%
            
            $
            (521,801
            )
            
            $
            (1,148,129
            )
            
            $
            (1,419,763
            )State
                income taxes, net of Federal income tax provision
            
            $
            (68,315
            )
            
            
            (118,503
            )
            
            
            (200,425
            )Foreign
                tax rate difference
            
            
            -
            
            
            
            278,792
            
            
            
            937,755Increase
                in deferred tax asset valuation allowance
            
            
            421,627
            
            
            
            802,095
            
            
            
            2,166,897Utilization
                of loss carry forwards
            
            
            -
            
            
            
            -
            
            
            
            -Goodwill
                amortization and other
            
            
            (214,671
            )
            
            
            75,885
            
            
            
            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 $6.339 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:





Allowance
                for
              doubtful
                accounts
            
            
            Balance
                at
              beginning
              of
                period
            
            
            
            Accounts
              Written
              Off
            
            
            
            Additions
              (Reductions)
              to
                account
            
            
            
            Balance
              at
                end
              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 it 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**





Allowance
                for
              doubtful
                accounts
            
            
            Balance
                at
              beginning
              of
                period
            
            
            
            Accounts
              Written
              Off
            
            
            
            Additions
              (Reductions)
              to
                account
            
            
            
            Balance
              at
                end
              of
                periodReserve
                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
            
            
            
            
            
            
            
            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 (as restated, refer to Note O)
            
            
            (802,662
            )
            
            
            (2,574,188
            )
            
            
            -
            
            
            
            (3,376,850
            )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
            
            
            $
            -
            
            
            $
            36,998,567Revenues
                from other operating segments
            
            
            4,586,311
            
            
            
            -
            
            
            
            (4,586,311
            )
            
            
            -Pretax
                loss
            
            
            (715,726
            )
            
            
            (3,195,788
            )
            
            
            -
            
            
            
            -Depreciation
                and amortization expense
            
            
            1,474,414
            
            
            
            437,341
            
            
            
            -
            
            
            
            (3,911,514
            )Interest
                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 (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
            
            
            $
            7,082Loss
                from operations
            
            
            (353
            )
            
            
            (367
            )
            
            
            (439
            )
            
            
            (224
            )Net
                income (loss)
            
            
            (374
            )
            
            
            (419
            )
            
            
            (480
            )
            
            
            121Net
                income (loss) per shareBasic
            
            $
            (0.39
            )
            
            $
            (0.44
            )
            
            $
            (0.64
            )
            
            $
            0.34(as
              restated
            )Diluted
            
            
            (0.39
            )
            
            
            (0.44
            )
            
            
            (0.64
            )
            
            
            0.34(as
              restated
            )
            
            
            (as
              restated
            )
            
            
            (as
              restated
            )




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
            
            
            $
            7,905Loss
                 from operations
            
            
            (560
            )
            
            
            (929
            )
            
            
            (1,066
            )
            
            
            (552
            )Net
                loss
            
            
            (616
            )
            
            
            (854
            )
            
            
            (981
            )
            
            
            (573
            )Net
                loss per share
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (as
                restated
            )Basic
            
            $
            (0.27
            )
            
            $
            (0.39
            )
            
            $
            (1.32
            )
            
            $
            (1.17
            )(as
                restated
            )Diluted
            
            
            (0.27
            )
            
            
            (0.39
            )
            
            
            (1.32
            )
            
            
            (1.17
            )(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
            
            
            $
            10,593Loss
                from operations
            
            
            (75
            )
            
            
            (421
            )
            
            
            (1,440
            )
            
            
            (1,266
            )Net
                income (loss)
            
            
            125
            
            
            
            (193
            )
            
            
            (811
            )
            
            
            (4,681
            )Net
                income (loss) per shareBasic
            
            $
            0.06
            
            
            $
            (0.08
            )
            
            $
            (0.36
            )
            
            $
            (2.13
            )Diluted
            
            
            0.06
            
            
            
            (0.08
            )
            
            
            (0.36
            )
            
            
            (2.13
            )






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
      Preferred 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 beginning August 5, 2005 and ending February 2,
      2008.




**NOTE
      O - RESTATEMENTS**




This
      Form
      10-K/A reflects a correction to our consolidated financial statements of the
      recording of the Stock Redemption Transaction (refer to Note B). Supported
      by
      guidance APB 29 *“Accounting
      for Nonmonetary Transactions”* and Emerging
      Issues Task Force No. 01-2 *“Interpretations
      of APB No. 29”* this
      transaction should be recorded as a loss in net income/loss and not as a capital
      transaction, as previously recorded. The loss on this transaction was $174,361,
      and was originally recorded as a reduction in additional paid-in-capital in
      error for the fiscal year ending June 30, 2004. This restated Form 10-K/A
      properly records the loss on this transaction through the Consolidated Statement
      of Operations as a loss on disposition of assets for the fiscal year ending
      June
      30, 2004 and this restatement also properly reflects this loss in accumulated
      deficit for the fiscal years ending June 30, 2005 and 2004 in the Consolidated
      Statement of Shareholders Equity.





The
      impact of the restatement on our Consolidated Statement of Operations for the
      fiscal year ended June 30, 2004 is set forth below:




June
                30,
              (as
                restated)
            
            
            
            June
                30,
              (as
                previously filed)2004
            
            
            
            2004Net
                sales
            
            $
            36,560,430
            
            
            $
            36,560,430Cost
                of goods sold
            
            
            30,533,366
            
            
            
            30,533,366Gross
                profit
            
            
            6,027,064
            
            
            
            6,027,064Operating
                expensesSelling,
                general and administrative
            
            
            9,133,914
            
            
            
            9,133,914Loss
                from operations
            
            
            (3,106,850
            )
            
            
            (3,106,850
            )Other
                Income and (Expense)Interest
                expense
            
            
            (197,044
            )
            
            
            (197,044
            )Other
                income
            
            
            101,405
            
            
            
            101,405Loss
                on stock redemption transaction
            
            
            (174,361
            )
            
            
            -Loss
                from operations beforebenefit
                from income taxesand
                minority interest
            
            
            (3,376,850
            )
            
            
            (3,202,489
            )Benefit
                from income taxes
            
            
            (109,860
            )
            
            
            (109,860
            )Loss
                from operations before minorityinterest
            
            
            (3,266,990
            )
            
            
            (3,092,629
            )Minority
                interest in loss of subsidiary
            
            
            (242,686
            )
            
            
            (242,686
            )**NET
                LOSS**
            
            $
            (3,024,304
            )
            
            $
            (2,849,943
            )Basic
                net loss per common share
            
            $
            (3.15
            )
            
            $
            (2.97
            )Diluted
                net loss per common share
            
            $
            (3.15
            )
            
            $
            (2.97
            )




F-32





The
      impact of the restatement on our Consolidated Statement of Shareholders’ Equity
      for the fiscal years ended June 30, 2005 and 2004 is set forth
      below:




Retained
              
              
              
              
              
              
              
              RetainedAdditional
              
              
              
              Earnings
              
              
              
              Additional
              
              
              
              Earningspaid-in
              
              
              
              (accumulated
              
              
              
              paid-in
              
              
              
              (accumulatedcapital
              
              
              
              deficit)
              
              
              
              capital
              
              
              
              deficit)(as
                  restated)
              
              (as
                  previously filed)Balance,
                  June 30, 2003
              
              $
              17,942,471
              
              
              $
              (5,118,276
              )
              
              $
              17,942,471
              
              
              $
              (5,118,276
              )Net
                  loss
              
              $
              -
              
              
              $
              (3,024,304
              )
              
              $
              -
              
              
              $
              (2,849,941
              )Stock
                  Redemption & Exchange
              
              $
              (11
              )
              
              
              
              
              
              
              (174,372
              )Warrants
                  Exercised
              
              
              10,000
              
              
              
              
              
              
              
              10,000Reverse
                  Stock Split (3-1)Common
                  stock repurchasesBalance,
                  June 30, 2004
              
              $
              17,952,460
              
              
              $
              (8,142,578
              )
              
              $
              17,778,099
              
              
              $
              (7,968,217
              )Net
                  loss
              
              $
              -
              
              
              $
              (1,151,549
              )
              
              $
              -
              
              
              $
              (1,151,549
              )Issuance
                  of Series A ConvertiblePreferred
                  Stock
              
              
              569,800
              
              
              
              
              
              
              
              569,800Discount
                  on Series A Convertible Preferred Stock
              
              
              143,000
              
              
              
              (143,000
              )
              
              
              143,000
              
              
              
              (143,000
              )Series
                  A Preferred Share Conversion to Common Stock
              
              
              (3,430
              )
              
              
              
              
              
              
              (3,430
              )Issuance
                  of Common Shares
              
              
              37,987
              
              
              
              
              
              
              
              37,987Balance,
                  June 30, 2005
              
              $
              18,699,817
              
              
              $
              (9,437,127
              )
              
              $
              18,525,456
              
              
              $
              (9,262,766
              )


The
      impact of the restatement on our Condensed Consolidated Balance Sheets for
      the
      quarterly periods ending September 30, 2004, December 31, 2004 and March 31,
      2005 is set forth below:





Retained
            
            
            
            
            
            
            
            RetainedAdditional
            
            
            
            Earnings
            
            
            
            Additional
            
            
            
            Earningspaid-in
            
            
            
            (accumulated
            
            
            
            paid-in
            
            
            
            (accumulatedcapital
            
            
            
            deficit)
            
            
            
            capital
            
            
            
            deficit)(as
                restated)
            
            (as
                previously filed)Balance,
                June 30, 2004
            
            **$**
            17,952,460
            
            
            $
            (8,142,578
            )
            
            $
            17,778,099
            
            
            $
            (7,968,217
            )Balance,
                September 30, 2004
            
            $
            17,956,980
            
            
            $
            (8,516,227
            )
            
            $
            17,782,619
            
            
            $
            (8,341,867
            )Balance,
                December 31, 2004
            
            $
            17,990,925
            
            
            $
            (8,934,887
            )
            
            $
            17,816,564
            
            
            $
            (8,760,527
            )Balance,
                March 31, 2005
            
            $
            18,703,725
            
            
            $
            (9,558,182
            )
            
            $
            18,529,363
            
            
            $
            (9,383,821
            )






F-33




This
        Form
        10-K/A also reflects a correction of our calculation of the basic and
        diluted net loss per share for the quarter ended March 31, 2005. The
        reported basic and diluted net loss per share computation for the quarter
        ended
        March 31, 2005 did not appropriately factor the beneficial conversion feature
        recognized upon the issuance of our Convertible Series A Preferred Stock.
        In
        addition, the quarter ended March 31, 2005 improperly included potential
        common
        shares in the denominator of our diluted net loss per share computation,
        which
        caused an incorrect anti-diluted net loss per share amount. The table below
        for
        the quarter ending March 31, 2005 reflects the proper computation.
 
 March
                  31, 2005
              
              
              
              March
                  31, 2005(as
                  restated)
              
              
              
              (as
                  previously reported)Net
                  Loss
              
              $
              (480,295
              )
              
              $
              (480,295
              )Discount
                  on preferred stock/beneficial conversion
              
              
              (143,000
              )
              
              
              --Net
                  Loss available to common shareholder
              
              
              (623,295
              )
              
              
              (480,295
              )Basic
                  net loss per common share
              
              
              (0.64
              )
              
              
              (0.50
              )Diluted
                  net loss per common share
              
              
              (0.64
              )
              
              
              (0.44
              )
  The
          Company’s Form 10-K for the year ended June 30, 2005 included a restatement of
          the basic and diluted net loss per share amounts as a result of the correction
          for the reverse 3 for 1 stock split effective January 20, 2004 and an additional
          error in the calculation of the reported basic and diluted net loss per
          share.
          In the restated financial statements, the June 30, 2003 net loss per share
          was
          adjusted to reflect the reverse stock split and the June 30, 2004 financial
          statements were adjusted to eliminate anti-dilutive common stock equivalents
          that had been included in the denominator of our diluted net loss per share
          computation. The effect of those corrections was previously disclosed as
          follows:
 
 June
                    30,
                  (as
                    restated in the June 30, 2005
                  Form
                    10-K)
                
                June
                    30,
                  (as
                    originally filed in the June 30, 2004
                  Form
                    10-K)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
                )
 
 We
          have
          also noted that the 2005 Form 10-K did not label certain quarterly basic
          and
          diluted net loss per share amounts resulting from the above corrections
“as
          restated” in Note M Quarterly Financial Summary (unaudited). As part of this
          amendment, we have included “as restated” language in that footnote related to
          the March 31, 2005 basic and diluted net loss per share, December 31, 2004
          diluted net loss per share, and September 30, 2004 diluted net loss per
          share.
 **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.


F-34




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-35