U.S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-QSB

(MARK ONE)

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

                  For the quarterly period ended JUNE 30, 2004

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

               For the transition period from _______ to _______.

                          COMMISSION FILE NO. 000-28321

                          UNITED COMPANIES CORPORATION
                 (Name of Small Business Issuer in Its Charter)

<TABLE>
<CAPTION>
                             NEVADA                                                       88-0374969
                             ------                                                       ----------
<S>                                                                          <C>
(State or Other Jurisdiction of Incorporation or Organization)              (I.R.S. Employer Identification No.)

          940 N.W. 1ST STREET, FORT LAUDERDALE, FLORIDA                                     33311
          ---------------------------------------------                                     -----
            (Address of Principal Executive Offices)                                      (Zip Code)
</TABLE>

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

                          AVID SPORTSWEAR & GOLF CORP.
                                  (Former Name)

      Check  whether the issuer:  (1) filed all reports  required to be filed by
Section 13 or 15(d) of the Exchange  Act during the past 12 months,  and (2) has
been subject to such filing requirements for the past 90 days. Yes |X| No |_|

      There were 114,126,575  shares of common stock outstanding as of August 1,
2004.


<PAGE>

                                     PART I


ITEM 1.  FINANCIAL STATEMENTS


FINANCIAL INFORMATION


                                       2
<PAGE>

                          UNITED COMPANIES CORPORATION
                             CONDENSED BALANCE SHEET
                                  JUNE 30, 2004
                                   (UNAUDITED)

                                     ASSETS

Current assets
   Cash                                                             $     7,230
   Accounts receivable, net                                              56,145
   Inventory                                                            487,474
   Prepaid expense and other current assets                              51,155
        Total current assets                                            602,004
                                                                    -----------

Fixed assets, net                                                        81,175

Other assets                                                             51,752
                                                                    -----------

Total assets                                                        $   734,931
                                                                    ===========

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities
   Accounts payable and accrued liabilities                         $   594,932
   Due to related parties                                               720,811
   Customer deposits                                                    347,899
   Other liabilities                                                     41,414
   Loans payable - current portion                                       15,127
                                                                    -----------
        Total current liabilities                                     1,720,183


Long-term liabilities
   Loans payable - long-term portion                                     46,504
   Convertible debenture                                                250,000
                                                                    -----------

Total liabilities                                                     2,016,687

Commitments and contingencies                                                --

Stockholders' deficit
   Common stock; $0.001 par value; 250,000,000 shares authorized
     114,126,575 shares issued and outstanding                          114,127
   Additional paid-in capital                                           815,453
   Loan fees related to the Standby Equity Distribution Agreement      (290,000)
   Other receivable related to the issuance of common stock            (207,143)
   Accumulated deficit                                               (1,714,193)
                                                                    -----------
        Total stockholders' deficit                                  (1,281,756)
                                                                    -----------

Total liabilities and stockholders' deficit                         $   734,931
                                                                    ===========

                 See Accompanying Notes to Financial Statements


                                       3
<PAGE>


                          UNITED COMPANIES CORPORATION
                       CONDENSED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                 Three Months Ended June 30,           Six Months Ended June 30,
                                              --------------------------------      --------------------------------
                                                   2004              2003                2004              2003
                                              -------------      -------------      -------------      -------------
<S>                                           <C>                <C>                <C>                <C>
Revenues                                      $     726,106      $     497,561      $   1,172,365      $     943,931

Cost of revenues                                    514,671            440,812            876,361            791,356
                                              -------------      -------------      -------------      -------------

   Gross profit                                     211,435             56,749            296,004            152,575

Operating expenses
   Research and development costs                    14,808             14,250             30,169             28,393
   Selling, general and administrative              320,063            102,083            552,629            283,780
                                              -------------      -------------      -------------      -------------
     Total operating expenses                       334,871            116,333            582,798            312,173
                                              -------------      -------------      -------------      -------------

   Loss from operations                            (123,436)           (59,584)          (286,794)          (159,598)

Other (income) expense
   Other (income) expense                            (2,727)            (1,325)               386             (1,178)
   Interest expense                                 307,713             21,130            327,344             30,819
                                              -------------      -------------      -------------      -------------
     Total other expenses                           304,986             19,805            327,730             29,641

Net loss                                      $    (428,422)     $     (79,389)     $    (614,524)     $    (189,239)
                                              =============      =============      =============      =============

Basic loss per common share                   $       (0.00)     $       (0.00)     $       (0.01)     $       (0.00)
                                              =============      =============      =============      =============
Diluted loss per common share                 $       (0.00)     $       (0.00)     $       (0.01)     $       (0.00)
                                              =============      =============      =============      =============

Basic and diluted weighted average common
   shares outstanding                           113,827,517         95,000,000        105,129,986         95,000,000
                                              =============      =============      =============      =============
</TABLE>

                 See Accompanying Notes to Financial Statements


                                       4

<PAGE>

                          UNITED COMPANIES CORPORATION
                  CONDENSED STATEMENT OF STOCKHOLDERS' DEFICIT

<TABLE>
<CAPTION>
                                                       Common Stock
                                              ---------------------------      Additional        Treasury
                                                 Shares          Amount     Paid-in Capital       Stock
                                              -----------     -----------     -----------      -----------
<S>                                           <C>             <C>             <C>              <C>
Balance, December 31, 2003                     95,000,000     $    95,000     $   270,846      $    (4,800)

Issuance of common stock for Acquisition
  of United Companies Corporation              14,483,718          14,484        (238,807)              --

Cancellation of treasury stock                         --              --          (4,800)           4,800

Net loss January 1 to March 31, 2003                   --              --              --               --
                                              -----------     -----------     -----------      -----------

Balance, March 31, 2004 (Unaudited)           109,483,718         109,484          27,239               --

Common stock issued for loan fees related
  to Standby Equity Distribution Agreement      2,416,667           2,417         287,583               --

Common stock issued for other receivable        1,726,190           1,726         205,417               --

Common stock issued for services                  500,000             500           9,500               --

Beneficial conversion feature related to
  convertible debenture                                --              --         285,714               --

Net Loss April 1 to June 30, 2003                      --              --              --               --
                                              -----------     -----------     -----------      -----------
Balance, June 30, 2004 (Unaudited)            114,126,575     $   114,127     $   815,453      $        --
                                              ===========     ===========     ===========      ===========

<CAPTION>
                                                                 Other
                                               Loan Fees       Receivable
                                               Related to     Related to the                         Total
                                             Equity Line of    Issuance of      Accumulated      Stockholders'
                                                Credit        Common Stock         Deficit         Deficit
                                              -----------      -----------      -----------      -----------
<S>                                           <C>              <C>              <C>              <C>
Balance, December 31, 2003                    $        --      $        --      $(1,099,669)     $  (738,623)

Issuance of common stock for Acquisition
  of United Companies Corporation                      --               --               --         (224,323)

Cancellation of treasury stock                         --               --               --               --

Net loss January 1 to March 31, 2003                   --               --         (186,102)        (186,102)
                                              -----------      -----------      -----------      -----------

Balance, March 31, 2004 (Unaudited)                    --               --       (1,285,771)      (1,149,048)

Common stock issued for loan fees related
  to Standby Equity Distribution Agreement       (290,000)              --               --               --

Common stock issued for other receivable               --         (207,143)              --               --

Common stock issued for services                       --               --               --           10,000

Beneficial conversion feature related to
  convertible debenture                                --               --               --          285,714

Net Loss April 1 to June 30, 2003                      --               --         (428,422)        (416,826)
                                              -----------      -----------      -----------      -----------
Balance, June 30, 2004 (Unaudited)            $  (290,000)     $  (207,143)     $(1,714,193)     $(1,270,160)
                                              ===========      ===========      ===========      ===========
</TABLE>


                 See Accompanying Notes to Financial Statements


                                       5
<PAGE>


                           UNITED COMPANIES CORORATION
                       CONDENSED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                             Six months ended June 30,
                                                             -------------------------
                                                                 2004        2003
                                                              ---------    ---------
<S>                                                           <C>          <C>
Cash flows from operating activities:
  Net loss                                                    $(614,524)   $(189,239)
  Adjustments to reconcile net loss to net
    cash provided by operating activities:
    Depreciation and Amortization                                22,197       14,550
    Stock based compensation                                     10,000           --
    Beneficial conversion feature related to
      convertible debenture                                     285,714           --
  Changes in operating assets and liabilities:
    Change in accounts receivable, net                           (4,545)     (23,818)
    Change in inventory                                        (154,135)     (29,536)
    Change in prepaid expenses and other current assets         (51,155)          --
    Change in other assets                                      (50,058)          --
    Change in bank overdraft                                    (26,299)     (23,163)
    Change in accounts payable and accrued liabilities           39,329     (107,719)
    Change in customer deposits                                 338,979       71,226
    Change in billings in excess of cost and estimated
      earnings on uncompleted contracts                          (5,000)      (1,225)
    Change in other liabilities                                  (2,948)     (24,214)
                                                              ---------    ---------
      Net cash provided by operating activities                (212,445)    (313,138)

Cash flows from investing activities:
  Change in due from related party
  Purchase of fixed assets                                       (3,863)      (1,254)
                                                              ---------    ---------
      Net cash used by investing activities                      (3,863)      (1,254)

Cash flows from financing activities:
  Change in due to related parties                              (11,119)     486,187
  Principal payments on loans payable                            (7,709)    (144,380)
  Proceeds from issuance of convertible debenture               250,000           --
  Principal payments on capital lease obligations                (7,634)      (7,768)
                                                              ---------    ---------
      Net cash provided by financing activities                 223,538      334,039
                                                              ---------    ---------

Net change in cash                                                7,230       19,647

Cash, beginning of period                                            --           --
                                                              ---------    ---------

Cash, end of period                                           $   7,230    $  19,647
                                                              =========    =========

Supplemental disclosure of cash flow information:
  Cash paid for interest                                      $   2,282    $  10,880
                                                              =========    =========

Supplemental disclosure of non-cash financing activities
  Accounts payable and accrued liabilties assumed through
    acquistion of United Companies Corporation                $ 224,324    $      --
                                                              =========    =========

  Common stock issued for loan fees related to Standby Equity
    Distribution Debenture                                    $ 290,000    $      --
                                                              =========    =========

  Common stock issued for other receivable                    $ 207,143    $      --
                                                              =========    =========

</TABLE>

                 See Accompanying Notes to Financial Statements



                                       6
<PAGE>

                          UNITED COMPANIES CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.    DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of business - United Companies Corporation  (hereinafter referred to
as the "Company")  designs,  tests,  manufactures  and distributes  recreational
hookah  diving,  and yacht  based  scuba air  compressor  and Nitrox  Generation
Systems from its factory in Ft. Lauderdale,  Florida.  The Company also designs,
develops and produces a line of scuba and water safety products  targeted at the
public safety diver and recreational boating markets.

History - United Companies  Corporation (UCC) was incorporated under the laws of
Nevada on November  26,2001 with authorized  common stock of 250,000,000  shares
with a par value of $0.001.

On  March  23,  2004,  UCC  consummated  an  agreement  to  acquire  all  of the
outstanding  capital stock of Trebor Industries,  Inc., dba Brownies Third Lung,
in  exchange  for  95,000,000   shares  of  the  Company's  common  stock  ("UCC
Transaction").  Prior to the UCC  Transaction,  UCC was a  non-operating  public
shell company with no operations,  nominal assets,  accrued liabilities totaling
$224,324  and  14,483,718  shares of common stock  issued and  outstanding;  and
Trebor  Industries,  Inc.  dba  Brownies  Third  Lung  was  a  manufacturer  and
distributor  of hookah  diving,  and yacht based scuba air compressor and Nitrox
Generation  Systems  from  its  factor  in  Ft.  Lauderdale,  Florida.  The  UCC
Transaction is considered to be a capital transaction in substance,  rather than
a business  combination.  Inasmuch,  the UCC  Transaction  is  equivalent to the
issuance of stock by Trebor  Industries,  Inc.,  dba Brownies Third Lung for the
net monetary assets of a non-operational public shell company (UCC), accompanied
by a recapitalization.  UCC issued 95,000,000 shares of its common stock for all
of the  issued and  outstanding  common  stock of Trebor  Industries,  Inc.  dba
Brownies third Lung. The accounting for the UCC Transaction is identical to that
resulting from a reverse acquisition, except goodwill or other intangible assets
will not be recorded. Accordingly, these financial statements are the historical
financial statements of Trebor Industries,  Inc. dba Brownies Third Lung. Trebor
Industries, Inc. dba Brownies Third Lung was incorporated in September 17, 1981.
Therefore, these financial statements reflect activities from September 17, 1981
(Date of Inception  for Trebor  Industries,  Inc.  dba Brownies  Third Lung) and
forward.

Going concern - The  accompanying  financial  statements have been prepared on a
going  concern  basis,  which  contemplates  the  realization  of assets and the
satisfaction  of liabilities  in the normal course of business.  The Company has
incurred a net loss of approximately  $615,000 for the six months ended June 30,
2004.  The  Company's   current   liabilities   exceed  its  current  assets  by
approximately $1,118,179 as of June 30, 2004.

These conditions give rise to substantial  doubt about the Company's  ability to
continue as a going concern.  The Company's  management plans to introduce their
product  line  into  two  previously   non-traditional   outlets  through  major
retailers.  Concurrently,  the Company  plans to  introduce  web-based  training
related to the Hooka diving systems,  which should broaden the potential market.
The Company will need additional sources of capital through the issuance of debt
and equity financing to complete their plans, but there can be no assurance that
the Company will be successful in accomplishing its objectives.

Definition of fiscal year - The Company's fiscal year end is December 31.

Use of estimates - The  preparation of financial  statements in conformity  with
accounting  principles  generally  accepted  in the  United  States  of  America
requires  management to make estimates and assumptions  that affect the reported
amounts  of assets and  liabilities  and  disclosure  of  contingent  assets and
liabilities at the date of the financial  statements and the reported amounts of
revenue and expenses  during the reporting  period.  Actual results could differ
from those estimates.


                                       7
<PAGE>

                          UNITED COMPANIES CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.    DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT POLICIES (CONTINUED)

Inventory  -  Inventory  is  stated  at the  lower  of cost or  market.  Cost is
principally  determined by using the average cost method.  Inventory consists of
raw materials as well as finished goods held for sale. The Company's  management
monitors  the  inventory  for  excess  and  obsolete  items and makes  necessary
valuation adjustments when required.

Fixed  assets - Fixed assets are stated at cost less  accumulated  depreciation.
Depreciation  is  provided  principally  on the  straight-line  method  over the
estimated useful lives of the assets,  which is primarily 3 to 5 years. The cost
of repairs and maintenance is charged to expense as incurred.  Expenditures  for
property   betterments  and  renewals  are  capitalized.   Upon  sale  or  other
disposition  of a  depreciable  asset,  cost and  accumulated  depreciation  are
removed  from the  accounts  and any gain or loss is  reflected  in other income
(expense).

The  Company  periodically  evaluates  whether  events  and  circumstances  have
occurred that may warrant revision of the estimated useful lives of fixed assets
or  whether  the  remaining  balance of fixed  assets  should be  evaluated  for
possible  impairment.  The Company uses an estimate of the related  undiscounted
cash  flows  over the  remaining  life of the fixed  assets in  measuring  their
recoverability.

Revenue  recognition  - Revenues  from  product  sales are  recognized  when the
Company's  products  are  shipped.   Revenues  from  fixed-price  contracts  are
recognized on the percentage-of-completion method, measured by the percentage of
cost incurred to date to estimated  total cost of each contract.  This method is
used because  management  considers  the  percentage of cost incurred to date to
estimated  total  cost to be the  best  available  measure  of  progress  on the
contracts.

Contract  costs include all direct  material and labor costs and those  indirect
costs related to contract performance,  such as indirect labor, supplies, tools,
repairs, and depreciation costs. General and administrative costs are charged to
expense as incurred.  Provisions for estimated  losses on uncompleted  contracts
are made in the  period  in which  such  losses  are  determined.  Change in job
performance, job conditions, and estimated profitability may result in revisions
to costs and income and are  recognized in the period in which the revisions are
determined.

The asset,  "Costs and estimated  earnings in excess of billings on  uncompleted
contracts",  represents  revenues  recognized in excess of amounts  billed.  The
liability,  "Billings in excess of costs and estimated  earnings on  uncompleted
contracts",  represents  billings in excess of revenues  recognized.  Claims are
included in revenues when realization is probable and the amount can be reliably
estimated.

Revenue  and  costs  incurred  for time and  material  projects  are  recognized
currently as the work is performed.

Product  development  costs - Product  development  expenditures  are charged to
expenses as incurred.

Advertising and marketing costs - The Company recognizes advertising expenses in
accordance  with Statement of Position 93-7  "Reporting on  Advertising  Costs."
Accordingly,  the Company expenses the costs of producing  advertisements at the
time production occurs,  and expenses the costs of communicating  advertisements
in the period in which the  advertising  space or  airtime is used.  Advertising
expenses  incurred  for the six  months  ended  June  30,  2004 and  2003,  were
approximately $27,000 and $12,000, respectively.


                                       8
<PAGE>

                          UNITED COMPANIES CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.    DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT POLICIES (CONTINUED)

Income  taxes - The Company  accounts for its income  taxes in  accordance  with
Statement of Financial  Accounting Standards No. 109, which requires recognition
of deferred tax assets and liabilities for future tax consequences  attributable
to  differences  between the financial  statement  carrying  amounts of existing
assets  and  liabilities   and  their   respective  tax  bases  and  tax  credit
carryforwards.  Deferred tax assets and  liabilities  are measured using enacted
tax rates  expected  to apply to  taxable  income  in the  years in which  those
temporary  differences  are expected to be  recovered or settled.  The effect on
deferred tax assets and  liabilities  of a change in tax rates is  recognized in
income in the period that includes the enactment date.

As of June 30, 2004, the Company has available net operating loss  carryforwards
that will expire in various  periods  through 2024. Such losses may not be fully
deductible  due to the  significant  amounts of non-cash  service  costs and the
change in ownership  rules under Section 382 of the Internal  Revenue Code.  The
Company has  established  a valuation  allowance for the full tax benefit of the
operating loss carryovers due to the uncertainty regarding realization.

Comprehensive   income   (loss)  -  The  Company  has  no  components  of  other
comprehensive  income.  Accordingly,  net loss equals comprehensive loss for all
periods.

Stock-based  compensation  - The Company  applies  Accounting  Principles  Board
("APB")  Opinion No. 25,  Accounting for Stock Issued to Employees,  and Related
Interpretations,  in accounting for stock options issued to employees. Under APB
No. 25,  employee  compensation  cost is recognized when estimated fair value of
the  underlying  stock on date of the grant exceeds  exercise price of the stock
option.  For stock  options and warrants  issued to  non-employees,  the Company
applies Statements of Financial Accounting Standards ("SFAS") No. 123 Accounting
for  Stock-Based  Compensation,  which requires the  recognition of compensation
cost  based  upon the fair  value of stock  options  at the grant date using the
Black-Scholes option pricing model.

The Company issued no stock,  neither granted warrants nor options, to employees
for compensation for the six months ended June 30, 2004 and 2003.

In December 2002, the Financial  Accounting Standards Board ("FASB") issued SFAS
No. 148, Accounting for Stock-Based Compensation-Transition and Disclosure. SFAS
No. 148 amends the  transition  and  disclosure  provisions of SFAS No. 123. The
Company is currently  evaluating SFAS No. 148 to determine if it will adopt SFAS
No. 123 to account for employee  stock  options using the fair value method and,
if so, when to begin transition to that method.

Fair value of financial  instruments - The carrying  amounts and estimated  fair
values of the Company's financial  instruments  approximate their fair value due
to the short-term nature.

Earnings  (loss) per common share - Basic earnings (loss) per share excludes any
dilutive effects of options, warrants and convertible securities. Basic earnings
(loss) per share is computed  using the  weighted-average  number of outstanding
common shares during the applicable period. Diluted earnings (loss) per share is
computed using the weighted average number of common and common stock equivalent
shares  outstanding  during  the  period.  Common  stock  equivalent  shares are
excluded from the computation if their effect is antidilutive.


                                       9
<PAGE>

                          UNITED COMPANIES CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.    DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT POLICIES (CONTINUED)

New  accounting   pronouncements   -  Financial   Accounting   Standards   Board
Interpretation  No.  46,   Consolidation  of  Variable  Interest  Entities,   an
interpretation of Accounting  Research Bulletin No. 51,  Consolidated  Financial
Statements, addresses consolidation by business enterprises of variable interest
entities.  It is effective  immediately for variable  interest  entities created
after  January 31, 2003.  It applies in the first fiscal year or interim  period
beginning  after June 15, 2003, to variable  interest  entities  acquired before
February 1, 2003. The impact of adoption of this statement is not expected to be
significant.

SFAS No. 149,  Amendment of Statement 133 on Derivative  Instruments and Hedging
Activities,  amends and clarifies  accounting for derivative  instruments  under
SFAS No. 133. It is effective  for  contracts  entered into after June 30, 2003.
The impact of adoption of this statement is not expected to be significant.

SFAS No. 150, Accounting for Certain Financial  Instruments with Characteristics
of  both  Liabilities  and  Equity,  establishes  standards  for  how an  issuer
classifies and measures certain financial  instruments with  characteristics  of
both  liability  and  equity.  It requires  that an issuer  classify a financial
instrument  that is  within  its  scope  as a  liability  (or an  asset  in some
circumstances).  This statement is effective for financial  instruments  entered
into or modified after May 31, 2003, and otherwise is effective at the beginning
of the first  interim  period  beginning  after  June 15,  2003.  The  impact of
adoption of this statement is not expected to be significant.


                                       10
<PAGE>

                          UNITED COMPANIES CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

2.    INVENTORY

Inventory consists of the following as of June 30, 2004:

            Raw materials                                           $272,859
            Work in process                                               --
            Finished goods                                           214,615
                                                                    --------
                                                                    $487,474
                                                                    ========

3.    FIXED ASSETS

Fixed assets consist of the following as of June 30, 2004:

            Furniture and equipment                               $  233,054
            Less: accumulated depreciation and
              amortization                                           151,879
                                                                  ----------
                                                                  $   81,175
                                                                  ==========

4.    RELATED PARTY TRANSACTIONS

Due to related  parties - Due to related  parties consist of the following as of
June 30, 2004:

<TABLE>
<CAPTION>
<S>                                                                                     <C>
Loan from the Company's Chief Executive Officer, unsecured, bearing  interest at
  10% per annum, and due on demand                                                      $   513,383

Loan from an entity owned by the Company's Chief Executive  Officer,  unsecured,
  bearing interest at 10% per annum, and due on demand                                      196,904

Loan from the Company's Chief Executive Officer, unsecured,  bearing interest at
  10% per annum, principal- only payments of $5,000 per month, and due on demand             10,524
                                                                                        -----------

                                                                                        $   720,811
                                                                                        ===========
</TABLE>

Revenues - The Company sells products to an entity owned by the Company's  Chief
Executive Officer. Revenues earned from the entity for the six months ended June
30, 2004 and 2003 were approximately $345,799 and $196,485, respectively.


                                       11
<PAGE>

                          UNITED COMPANIES CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

4.    RELATED PARTY TRANSACTIONS (CONTINUED)

Royalties-  During January 2004 the Company  entered into various  Non-Exclusive
License  Agreements with entities owned by the Company's Chief Executive Officer
to license  patents of products owned by the entities.  Based on the Agreements,
the Company  will pay the entities  from $1.00 to $50.00 per  licensed  products
sold, with rates increasing 5% annually.

During January 2004,  the Company  entered into an Exclusive  License  Agreement
with an entity owned by the  Company's  Chief  Executive  Officer to license the
trademark  "Brownies Third Lung". Under the Agreement the Company is required to
pay the entity the greater of $15,000 per quarter or 2.5% of gross revenues.

During January 2004, the Company  entered into two Exclusive  License  Agreement
with an entity owned by the  Company's  Chief  Executive  Officer to license the
various Tankfill and Public Safety trademarks.  Under the Agreements the Company
is required to pay the entity 1% of gross  revenues for total  related  licensed
products sold.

During January 2004 the Company entered into a Non-Exclusive  License Agreements
with an entity  owned by the  Company's  Chief  Executive  Officer  to license a
trademark of products owned by the entity. Based on the Agreements,  the Company
will pay the entity  $0.25 per licensed  products  sold,  with rates  increasing
$0.05 annually.

For the six months  ended June 30,  2004,  total  royalty  expense for the above
agreements approximated $37,000.

Lease  Expense - The  Company  leases its  facility  from an entity in which the
Chief  Executive  Officer has an ownership  interest.  Lease expense for the six
months  ended June 30,  2004 and 2003 was  approximately  $63,000  and  $50,000,
respectively.

5.    OTHER LIABILITIES

Other  liabilities  totaling  $41,414 as of June 30,  2004  consists  of $14,000
remaining on a settlement  with a government  agency for payment of a fine,  and
$27,414 past due on payment of royalty expense.  Under the government settlement
agreement,  the  Company is  required to make  monthly  payments of $1,501.  The
government  liability is unsecured and payments continue until paid in full. The
Company owned by the Chief Executive  Officer that is owed the royalty payments,
has granted the Company a default  waiver and  extension  on payment  until such
time as the SB-2  registration  associated with the standby equity  distribution
agreement becomes  effective.  See Note 9 for further  discussion on the standby
equity distribution agreement.

6.    LOANS PAYABLE

Loans payable consists of the following as of June 30, 2004:

<TABLE>
<CAPTION>
<S>                                                                                     <C>
Promissory note payable secured by a vehicle of the Company, bearing interest at
  10.16%, due in  monthly  principal  and  interest payments of $553, due August
  2007                                                                                  $    18,707

Promissory  note  payable  secured  by a  vehicle  of the  Company,  bearing  no
  interest,  due in  monthly  principal  and  interest  payments  of $349, which
  matures November 2008                                                                      18,495

Promissory note payable secured by a vehicle of the Company, bearing interest at
  7.47%, due in monthly  principal and interest payments of $513,  which matures
  October 2008                                                                               23,058
</TABLE>


                                       12
<PAGE>

                          UNITED COMPANIES CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

6.    LOANS PAYABLE (CONTINUED)

<TABLE>
<CAPTION>
<S>                                                                                     <C>
Promissory  note  payable to an  individual,  unsecured,  bearing  no  interest,
  payable in monthly  installments  of $500,  which matured  January 2003. As of
  December 31, 2002, the Company was in default,  subsequently the Company began
  making  variable  payments in accordance  with ongoing  negotiations  with the
  individual during 2003 and 2004.                                                            1,371
                                                                                        -----------

                                                                                             61,631
Less amounts due within one year:                                                            15,127
                                                                                        -----------

Long-term portion of loan payable                                                       $    46,504
                                                                                        ===========
</TABLE>

As of June 30, 2004, principal payments on the notes payable are as follows:

            July 1, 2004 through December 31, 2004               $     9,194
            2005                                                      14,197
            2006                                                      15,122
            2007                                                      15,024
            2008                                                       8,091
                                                                 -----------

                                                                 $    61,631
                                                                 ===========

7.    SECURED CONVERTIBLE DEBENTURE

On April 2, 2004, the Company issued a Secured Convertible  Debenture to Cornell
Capital Partners in the principal amount of $250,000.  The convertible debenture
is  convertible  into  shares of our  common  stock as a price per share that is
equal to the lesser of: (i) an amount  equal to 120% of the closing bid price of
our common stock as of the date of the  convertible  debenture or (ii) an amount
equal to 80% of the average of the lowest daily volume weighted average price of
our common stock for the five trading days immediately  preceding the conversion
date. The convertible debenture accrues interest at a rate of 5% per year and is
convertible at the holder's  option.  The convertible  debenture has a term of 2
years. At the Company's option, the convertible debenture may be paid in cash or
converted into shares of the Company's common stock unless converted  earlier by
the  holder.  Except  after an event of  default,  as set  forth in the  Secured
Convertible Debenture,  Cornell Capital Partners is not entitled to convert such
debenture  for a number of  shares  of common  stock of United in excess of that
number of shares which,  upon giving effect to the debentures if such conversion
would cause the aggregate number of shares of common stock  beneficially held by
such holder and its  affiliated  to exceed  4.99% of the  outstanding  shares of
common stock of United.  Within 5 days of filing a  registration  statement with
the Securities and Exchange  Commission  registering  shares of United's  common
stock underlying the secured convertible  debenture,  United will issue a second
Secured Convertible Debenture in the principal amount of $125,000, with the same
terms and conditions as the first Secured Convertible  Debenture described above
(see Note 10).  The Company may also redeem with fifteen  business  days advance
notice, a portion or all of the outstanding convertible debenture at 120% of the
redeemed  amount plus  accrued  interest.  In  addition if the early  redemption
provision is exercised  in full or in part,  the Company must issue  warrants to
the holder at a rate of 50,000 per  $100,000  redeemed,  pro-rata.  The exercise
price of the  warrants  shall be 120% of the closing bid price of the  Company's
common stock on the closing  date.  The  warrants  shall have  "piggy-back"  and
demand  registration rights and shall survive for two (2) years from the closing
date.

The Company  recorded the estimated value of the conversion  feature as interest
expense totaling $285,714.  Additionally, upon closing, the Company paid $44,792
(net of amortization  expense of $5,208) in loan fees which were capitalized and
reflected as part of other assets totaling $51,752 and will be expensed over the
life of the debenture using the straight-line method.


                                       13
<PAGE>

                          UNITED COMPANIES CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

8.    STANDBY EQUITY DISTRIBUTION AGREEMENT

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

In addition,  the Company issued  2,416,667 shares of the Company's common stock
in April 2004 for loan fees  totaling  $290,000  related to the  Standby  Equity
Distribution  Agreement.  The loan fees will be  amortized  over the term of the
Standby Equity  Distribution  Agreement  beginning with the effective date which
begins when the filed  registration  statement Form SB-2 is declared  effective.
The Company also issued an additional  1,726,190  shares of the Company's common
stock in  April  2004 to  Cornell  Capital  in  relation  to the loan fee  which
exceeded the agreed upon fee of $290,000.  Cornell  Capital has agreed to return
the shares and accordingly the Company recorded an other  receivable  related to
the issuance of common stock totaling $207,143.

9.    COMMITMENTS AND CONTINGENCIES

Lease  Agreement  - The  Company  operates  from a leased  facility in which the
Company's  Chief  Executive  Officer  has an  ownership  interest.  The lease is
non-cancelable and calls for an annual base rent of approximately  $115,000 with
a 10% increase  every 5 years.  For the six months ended June 30, 2004 and 2003,
total rent expense for the leased facilities  approximated  $62,245 and $49,997,
respectively.

Future minimum lease payments  required under such operating  leases as of March
31, 2004, are as follows:

            April 1 through December 31, 2004                    $    57,500
            2005                                                     115,000
            2006                                                     115,000
            2007                                                     115,000
            2008                                                     115,000
            Thereafter                                               555,833
                                                                 -----------

                                                                 $ 1,073,333
                                                                 ===========


10.   SUBSEQUENT EVENTS

On July 16,  2004,  the  Company  filed a  registration  statement  on Form SB-2
registering shares of common stock underlying secured convertible debentures and
shares of common  stock  pursuant to a Standby  Equity  Distribution  Agreement,
dated April 2, 2004 with Cornell Capital Partners, LP.

On July 23, 2004, the Company issued a secured convertible  debenture to Cornell
Capital  Partners,  LP in the  principal  amount of  $125,000.  The  convertible
debenture  is  convertible  into shares of our common stock at a price per share
that is equal to the lesser of: (i) an amount  equal to 120% of the  closing bid
price of our common stock as of the date of the convertible debenture or (ii) an
amount equal to 80% of the average of the lowest daily volume  weighted  average
price of our common stock for the five trading days  immediately  preceding  the
conversion date. The convertible  debenture accrues interest at a rate of 5% per
year and is convertible at the holder's option. The convertible  debenture has a
term of 2 years. At United's  option,  the convertible  debenture may be paid in
cash or converted  into shares of our common stock unless  converted  earlier by
the  holder.  Except  after an event of  default,  as set  forth in the  Secured
Convertible  Debenture,  Cornell Capital Partner is not entitled to convert such
debenture  for a number of  shares  of common  stock of United in excess of that


                                       14
<PAGE>

number of shares which,  upon giving effect to such conversion,  would cause the
aggregate number of shares of common stock  beneficially held by such holder and
its  affiliated  to exceed  4.99% of the  outstanding  shares of common stock of
United. The Company may also redeem with fifteen business days advance notice, a
portion or all of the outstanding  convertible debenture at 120% of the redeemed
amount plus accrued interest.  In addition if the early redemption  provision is
executed in full or in part,  the Company must issue warrants to the holder at a
rate of 50,000  per  $100,000  redeemed,  pro-rata.  The  exercise  price of the
warrants shall be 120% of the closing bid price of the Company's common stock pm
the closing date. The warrants shall have  "piggy-back" and demand  registration
rights and shall survive for two (2) years from the closing date.




                                       15
<PAGE>

ITEM 2.  MANAGEMENT'S PLAN OF OPERATION AND DISCUSSION AND ANALYSIS

INTRODUCTORY STATEMENTS

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

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

OVERVIEW

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

      Trebor does  business  under the name  "Brownie's  Third Lung."  Brownie's
designs,  tests,  manufactures and distributes  recreational  hookah diving, and
yacht based SCUBA air compressor and Nitrox Generation  Systems.  Brownie's also
designs,  develops  and  produces  a line of SCUBA  and  water  safety  products
targeted at the public safety diver and recreational boating markets.  Brownie's
sells  most of its  products  from  its  factory  in Fort  Lauderdale,  Florida.
Brownie's  is divided  into three main  product  lines:  BROWNIE'S  THIRD  LUNG,
BROWNIE'S TANKFILL, AND BROWNIE'S PUBLIC SAFETY.

      BROWNIE'S  THIRD  LUNG,  the  consistent  revenue  leader  for  Brownie's,
produces a line of Surface  Supplied  Diving  products,  commonly  called hookah
systems.  These systems allow one to four divers to enjoy the marine environment
without the bulk and weight of  conventional  SCUBA gear. We believe that Hookah
diving holds  greater  appeal to families  with children of diving age than does
conventional  SCUBA.  The  reduction  of weight by  eliminating  the tank allows
smaller divers, especially children, to participate more actively and enjoyably.
In conjunction with the hookah systems,  Brownie's Third Lung supplies a variety
of other products to support this market.  These products are predominantly sold
through  SCUBA  diving  retailers,  however,  Brownie's  is in  the  process  of
approaching  sporting goods and boating retailers as well. A web-based  training
methodology is currently  being  developed to allow the consumer to initiate the
required training for use of the system on their own schedule. It is anticipated
that the final phase of the training will still be completed through traditional
dive  retailers and  instructors,  but the system will be sold to the non-diving
public.  Also,  being  investigated  is the addition of boating and  watersports
products not strictly related to diving.

      BROWNIE'S  TANKFILL  also  generates a  significant  portion of  Brownie's
revenues,  through the  design,  installation  and  maintenance  of  yacht-based
high-pressure  and  low-pressure  compressors for diving on air and mixed gases.
Many yacht owners enjoy the  convenience and freedom of filling their own diving
tanks with air,  NITROX or custom mixed gases while out on cruise,  freeing them
from  carrying  extra  cylinders  or the need to  locate a  reputable  source in
various  ports-of-call.   Brownie's  Tankfill  specializes  in  the  design  and
installation  of high-end  custom  systems to do just that.  From  surveying the
vessel for  installation  requirements  to custom  fabrication  of the necessary
components,  Brownie's  Tankfill provides all the services  necessary to satisfy
this market.  Brownie's Tankfill is currently exploring relationships with yacht
builders to allow shipyards to market and sell the Brownie's  Tankfill  systems.
We believe that every large  vessel  currently  in service,  being  re-fitted or


                                       16
<PAGE>

built,  is  a  potential   customer.   Reaching  these  customers   through  OEM
relationships  has become our goal,  and efforts are currently in process toward
this end.

      BROWNIE'S PUBLIC SAFETY provides integrated and stand-alone  flotation and
emergency/rescue  equipment  for use by fire  departments  and other  government
agencies in their on-water/near-water  activities. "Rescue, not Recovery" is the
marketing slogan for this division,  and the driving force behind development of
our products.  We believe  municipalities  and government  agencies can increase
their own safety while responding more quickly in emergencies through the use of
our products.  We are  increasing  our marketing  efforts in the current year to
raise awareness of the products we offer.

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

      On February  12,  2002,  United  filed with the  Securities  and  Exchange
Commission a Form S-4 Proxy Statement and Registration  Statement in conjunction
with Avid Sportswear & Golf Corp., a Nevada  corporation,  describing a proposed
merger of Avid with and into Merger Co., a wholly-owned subsidiary of United. On
January 28,  2003,  the  Commission  declared the Form S-4 Proxy  Statement  and
Registration Statement effective. At a special meeting of Avid shareholders held
on February 20, 2003, the shareholders approved (i) the Merger Agreement,  dated
June 18,  2002,  by and among  Avid,  United and Merger Co. and (ii) the related
Articles of Merger.  Merger Co. became the  surviving  entity and assumed all of
Avid's assets and liabilities.  At the time of the merger, outstanding shares of
Avid common  stock were  converted  automatically  into shares of United  common
stock on a fifty (50) for one (1) basis.  In the  opinion of Avid's  management,
the  excess of Avid's  liabilities  over its  assets  and the lack of  available
funding made any other acquisition or merger,  other than the merger with Merger
Co.,  unlikely.  Effective  March 23,  2004,  United  sold all of its  ownership
interest in its  wholly-owned  subsidiary,  Merger  Co., to Gateway  Connections
Limited, an international business company formed under the laws of Belize.

FINANCIAL PERFORMANCE

      United has  historically  lost money.  For the three and six months  ended
June 30, 2004,  United sustained losses of $428,422 and $614,524,  respectively,
which includes United's wholly-owned subsidiary Trebor Industries, Inc. acquired
by a share exchange transaction on March 23, 2004. United's independent auditors
have noted that United does not have  significant  cash or other material assets
to cover its operating  costs and to continue as a going  concern.  Accordingly,
United will experience significant liquidity and cash flow problems if it is not
able to raise additional capital as needed and on acceptable terms.

RESULTS OF  OPERATIONS  FOR THE THREE MONTHS ENDED JUNE 30, 2004, AS COMPARED TO
THE THREE MONTHS ENDED JUNE 30, 2003

      The  following  discussion  of  United's  results of  operations  compares
United's  operations  activities,  which  includes the results of operations for
United's wholly owned subsidiary Trebor  Industries,  Inc., d/b/a Brownies Third
Lung. The comparable  figures are the results of operation of Trebor Industries,
Inc., as United had no operation for such period.

      NET  REVENUES.  For the  three  months  ended  June 30,  2004,  we had net
revenues of $726,106, as compared to net revenues of $497,561 for the comparable
period in 2003, an increase of $228,545 or 45.93%. This increase is attributable
to an increase in hookah system and tank fill system sales in the second quarter
of 2003.  The Company  attributes the sales increase to stepped up marketing and
sales efforts in the second quarter of 2004 to promote preseason sales.

      COST OF REVENUES. For the three months ended June 30, 2004, we had cost of
revenues of  $514,671,  as  compared  to cost of  revenues  of $440,812  for the
comparable  period in 2003,  an increase of $73,859 or 16.76%.  This increase is
primarily  attributable to the net of a decrease in material costs of components
used in the  assembly  of our  hookah  and tank fill  systems,  an  increase  in
material  costs as a result of higher  quantity  sales in the second  quarter of
2004, an increase in overhead, and an increase in direct labor.

      GROSS  PROFIT.  For the three months  ended June 30, 2004,  we had a gross
profit of $211,435,  as compared to a gross profit of $56,749 for the comparable
period  in  2003,  an  increase  of  $154,686  or  272.58%.  This  is  primarily
attributable  to a decrease in material costs of components used in the assembly
of our hookah and tank fill systems and an increase in sales.


                                       17
<PAGE>

      OPERATING  EXPENSES.  For the three  months  ended June 30,  2004,  we had
operating  expenses of $334,871,  as compared to operating  expenses of $116,333
for the  comparable  period in 2003,  an increase  of $218,538 or 187.85%.  This
increase was  primarily  attributable  to increased  selling and  administrative
salaries,  consulting  fees, legal fees and accounting fees. The increased costs
were incurred mainly in conjunction with the share exchange  transaction between
United and Trebor  Industries,  Inc  consummated  on March 23,  2004,  a secured
convertible  debenture  transaction  entered  into on April 2,  2004,  a Standby
Equity Distribution Agreement entered into on April 2, 2004, newly ongoing costs
associated with now being a public,  reporting entity  (comparative  Trebor 2003
amounts are for a non-public entity), and the filing of a Registration Statement
on Form SB-2 with the United States  Securities and Exchange  Commission on July
16, 2004.

      INTEREST  EXPENSE.  For the  three  months  ended  June 30,  2004,  we had
interest expense of $307,713, as compared to interest expense of $21,130 for the
comparable  period in 2003, an increase of $286,583 or 1,356.28%.  This increase
is  primarily a result of the $285,714  interest  recorded by the Company on the
estimated value of the conversion feature of the secured  convertible  debenture
issued on April 2, 2004. In addition,  interest  expense  increased  during this
period as a result of  interest  on loans  from the  Company's  Chief  Executive
Officer, which were made subsequent to March 31, 2003.

      NET LOSS.  For the three months ended June 30, 2004,  we had a net loss of
$428,422,  as  compared to a net loss of $79,389  for the  comparable  period in
2003,   an  increase  of  $349,033  or  439.65%.   This  increase  is  primarily
attributable  to the  increased  operating  expenses  resulting  from the  share
exchange  transaction  between United and Trebor Industries,  Inc consummated on
March 23,  2004,  a Secured  Convertible  Debenture  issued on April 2, 2004,  a
Standby  Equity  Distribution  Agreement  entered  into on April 2, 2004,  newly
ongoing costs associated with now being a public,  reporting entity (comparative
Trebor  2003  amounts  are  for  a  non-public  entity),  and  the  filing  of a
Registration  Statement  on Form  SB-2 with the  United  States  Securities  and
Exchange  Commission  on July 16,  2004.  In addition,  the interest  expense of
$285,714  recognized  as of  April  2,  2004,  on  the  estimated  value  of the
conversion feature of the secured convertible  debenture  contributed heavily to
the net loss for this period  ended June 30, 2004 as compared to the same period
in 2003.


RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2004, AS COMPARED TO THE
SIX MONTHS ENDED JUNE 30, 2003

      The  following  discussion  of  United's  results of  operations  compares
United's  operations  activities,  which  includes the results of operations for
United's wholly owned subsidiary Trebor  Industries,  Inc., d/b/a Brownies Third
Lung. The comparable  figures are the results of operation of Trebor Industries,
Inc., as United had no operation for such period.

      NET REVENUES.  For the six months ended June 30, 2004, we had net revenues
of $1,172,365, as compared to net revenues of $943,931 for the comparable period
in 2003, an increase of $228,434 or 24.20%.  This increase is attributable to an
increase in hookah  system and tank fill system  sales in the second  quarter of
2003.  The Company  attributes  the sales  increase to stepped up marketing  and
sales efforts in the second quarter of 2004 to promote preseason sales.

      COST OF REVENUES.  For the six months ended June 30, 2004,  we had cost of
revenues of  $876,631,  as  compared  to cost of  revenues  of $791,356  for the
comparable  period in 2003,  an increase of $85,005 or 10.74%.  This increase is
primarily  attributable to the net of a decrease in material costs of components
used in the  assembly  of our  hookah  and tank fill  systems,  an  increase  in
material  costs as a result of higher  quantity  sales in the second  quarter of
2004, an increase in overhead, and an increase in direct labor.

      GROSS PROFIT.  For the six months ended June 30, 2004, we had gross profit
of $296,004,  as compared to gross profit of $152,575 for the comparable  period
in 2003, an increase of $143,429 or 94.01%. This is primarily  attributable to a
decrease in material costs of components  used in the assembly of our hookah and
tank fill systems and an increase in sales.

      OPERATING  EXPENSES.  For the six  months  ended  June  30,  2004,  we had
operating  expenses of $582,798,  as compared to operating  expenses of $312,173
for the  comparable  period in 2003,  an increase  of  $270,625 or 86.69%.  This
increase was  primarily  attributable  to increased  selling and  administrative
salaries,  consulting  fees, legal fees and accounting fees. The increased costs
were incurred mainly in conjunction with the share exchange  transaction between
United and Trebor  Industries,  Inc  consummated  on March 23,  2004,  a secured
convertible  debenture  transaction  entered  into on April 2,  2004,  a Standby
Equity Distribution Agreement entered into on April 2, 2004, newly ongoing costs
associated with now being a public,  reporting entity  (comparative  Trebor 2003
amounts are for a non-public entity), and the filing of a Registration Statement
on Form SB-2 with the United States  Securities and Exchange  Commission on July
16, 2004.

      INTEREST EXPENSE.  For the six months ended June 30, 2004, we had interest
expense of  $327,344,  as  compared  to  interest  expense  of  $30,819  for the
comparable period in 2003, an increase of $296,525 or 962.16%.  This increase is
primarily  a result of the  $285,714  interest  recorded  by the  Company on the
estimated value of the conversion feature of the secured  convertible  debenture


                                       18
<PAGE>

issued on April 2, 2004. In addition,  interest  expense  increased  during this
period as a result of  interest  on loans  from the  Company's  Chief  Executive
Officer, which were made subsequent to March 31, 2003.

      NET LOSS.  For the six months  ended June 30,  2004,  we had a net loss of
$614,524, as compared to $189,239 for the comparable period in 2003, an increase
of $425,285 or 224.74%. This increase is primarily attributable to the increased
operating expenses resulting from the share exchange  transaction between United
and Trebor Industries,  Inc consummated on March 23, 2004, a Secured Convertible
Debenture  issued on April 2,  2004,  a Standby  Equity  Distribution  Agreement
entered into on April 2, 2004,  newly ongoing costs  associated with now being a
public,  reporting entity  (comparative Trebor 2003 amounts are for a non-public
entity), and the filing of a Registration Statement on Form SB-2 with the United
States  Securities  and Exchange  Commission on July 16, 2004. In addition,  the
interest  expense of $285,714  recognized  as of April 2, 2004, on the estimated
value of the conversion feature of the secured convertible debenture contributed
heavily to the net loss for this  period  ended June 30, 2004 as compared to the
same period in 2003.

LIQUIDITY AND CAPITAL RESOURCES

      As of June 30, 2004,  the Company had cash and current assets of $602,004.
As of June 30, 2004, we had current  liabilities  of  $1,720,183,  consisting of
accounts  payable and accrued  liabilities  $594,932,  due to related parties of
$720,811,  customer deposits of $347,899, other liabilities of $41,414 and loans
payable-current  portion  of  $15,127.  As of June 30,  2004,  we had a  working
capital deficit of $1,118,179.  Historically our revenues increase substantially
in the second and third  quarters of the year,  but it  currently  appears  that
external  financing will be necessary to fund our operations for the foreseeable
future. In the absence of outside financing,  we believe that we have sufficient
cash, receivable  collections and projected sales to operate for approximately 5
months. This projection relies heavily on estimated sales based on the Company's
history.

      On April 2, 2004, we entered into a Standby Equity Distribution  Agreement
with Cornell Capital Partners,  LP. Pursuant to the Standby Equity  Distribution
Agreement, we may, at our discretion,  periodically issue and sell shares of our
common stock for a total  purchase price of $5 million.  If we request  advances
under the Standby Equity Distribution  Agreement,  Cornell Capital partners will
purchase  shares of common  stock of United  for 95% of the lowest  closing  bid
price on the Over-the-Counter  Bulletin Board or other principal market on which
our common  stock is traded for the 5 days  immediately  following  the  advance
notice date.  Cornell Capital  Partners will retain 5% of each advance under the
Standby Equity Distribution  Agreement. We may not request advances in excess of
a total of $5 million. The maximum of each advance is equal to $100,000,  and up
to a maximum of $400,000,  in the aggregate,  in any thirty-day  period. On July
16, 2004, we filed a registration  statement on Form SB-2 registering  shares of
common stock pursuant to the Standby Equity Distribution Agreement.

      As of April 2, 2004, we issued a Secured Convertible  Debenture to Cornell
Capital Partners in the principal amount of $250,000.  The convertible debenture
is  convertible  into  shares of our  common  stock as a price per share that is
equal to the lesser of: (i) an amount  equal to 120% of the closing bid price of
our common stock as of the date of the  convertible  debenture or (ii) an amount
equal to 80% of the average of the lowest daily volume weighted average price of
our common stock for the five trading days immediately  preceding the conversion
date. The convertible debenture accrues interest at a rate of 5% per year and is
convertible at the holder's  option.  The convertible  debenture has a term of 3
years.  At United's  option,  the  convertible  debenture may be paid in cash or
converted  into  shares of our  common  stock  unless  converted  earlier by the
holder.  Except  after  an  event  of  default,  as set  forth  in  the  Secured
Convertible  Debenture  be entitled to convert  such  debenture  for a number of
shares of common stock of United in excess of that number of shares which,  upon
giving effect to such conversion,  would cause the aggregate number of shares of
common stock beneficially held by such holder and its affiliated to exceed 4.99%
of the outstanding  shares of common stock of United.  On July 23, 2004,  United
issued a  second  Secured  Convertible  Debenture  in the  principal  amount  of
$125,000,  with  the  same  terms  and  conditions  as the  Secured  Convertible
Debenture issued on April 2, 2004, as described above.

      On July 16,  2004,  United  filed with the United  States  Securities  and
Exchange Commission a Registration  Statement on Form SB-2 registering shares of
common stock underlying the Secured Convertible Debentures.

CERTAIN BUSINESS RISKS

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


                                       19
<PAGE>

trading price of the Company's common stock could decline and you could lose all
or part of your investment.

      WE HAVE HISTORICALLY LOST MONEY AND LOSSES MAY CONTINUE IN THE FUTURE

      On March 23, 2004,  United entered into a share exchange  transaction with
Trebor  Industries,  Inc.,  d/b/a  Brownie's  Third Lung and Robert  Carmichael.
Pursuant to this share exchange  transaction,  United acquired all of the issued
and outstanding  capital stock of Trebor Industries and Trebor Industries became
a wholly-owned subsidiary of United. Trebor Industries designs, manufactures and
sells surface-supplied air units for the recreational diving industry. We have a
history of losses.  We had an  accumulated  deficit of $1,714,193 as of June 30,
2004. For the three and six month periods ended June 30, 2004, we incurred a net
loss of $428,422 and $614,524,  respectively.  Brownie's  incurred a net loss of
$187,069  for the year  ended  December  31,  2003 and  incurred a net profit of
$2,747 for the year ended December 31, 2002.

      We cannot  predict the amount of  revenues,  if any, we may  generate as a
result of our acquisitions of Trebor  Industries.  Consequently,  we will in all
likelihood,  have  to  rely  on  external  financing  for  much  of our  capital
requirements.  Future  losses  are  likely to  continue  unless we  successfully
implement our revised  business plan. Our ability to continue as a going concern
will  be  dependent  upon  our  ability  to  draw  down  on our  Standby  Equity
Distribution  Agreement that we have established with Cornell Capital  Partners.
If we incur  any  problems  in  drawing  down our  Standby  Equity  Distribution
Agreement, we may experience significant liquidity and cash flow problems. If we
are not successful in reaching and maintaining profitable operations, we may not
be able to attract sufficient capital to continue our operations.  Our inability
to  obtain  adequate  financing  will  result  in the need to  curtail  business
operations and will likely result in a lower stock price.

      WE HAVE BEEN  SUBJECT  TO A GOING  CONCERN  OPINION  FROM OUR  INDEPENDENT
AUDITORS

      Our  independent  auditors  have added an  explanatory  paragraph to their
audit opinion issued in connection  with the financial  statements for the years
ended  December  31,  2003 and  December  31,  2002,  relative to our ability to
continue as a going  concern.  Our  ability to obtain  additional  funding  will
determine  our  ability to continue as a going  concern.  Accordingly,  there is
substantial  doubt  about  our  ability  to  continue  as a going  concern.  Our
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.

      WE MAY NEED TO RAISE ADDITIONAL CAPITAL TO FINANCE OPERATIONS

      As of June 30, 2004,  we had $7,230 of cash on hand and our total  current
assets were $602,004.  Our current  liabilities  were  $1,720,183 as of June 30,
2004. We will need to raise additional capital to fund our anticipated operating
expenses.  Among other things,  external  financing may be required to cover our
operating costs. Unless we obtain profitable operations,  it is unlikely that we
will be able to secure additional  financing from external sources. As of August
1, 2004,  we estimate that we will require  $2,500,000  to fund our  anticipated
operating  expenses for the next twelve months.  The sale of our common stock to
raise capital may cause dilution to our existing shareholders.  Our inability to
obtain  adequate   financing  will  result  in  the  need  to  curtail  business
operations.  Any of these events would be materially harmful to our business and
may result in a lower stock price.  Our inability to obtain  adequate  financing
will result in the need to curtail  business  operations and you could lose your
entire investment.  Our financial statements do not include any adjustments that
might result from the outcome of this uncertainty.

      WE ARE SUBJECT TO A WORKING CAPITAL DEFICIT,  WHICH MEANS THAT OUR CURRENT
ASSETS ON JUNE 30, 2004 WERE NOT SUFFICIENT TO SATISFY OUR CURRENT LIABILITIES

      We had a working  capital  deficit of $1,118,179  at June 30, 2004,  which
means that our current  liabilities  as of that date exceeded our current assets
by  $1,118,179.  Current  assets are assets that are expected to be converted to
cash within one year and,  therefore,  may be used to pay current liabilities as
they become due. Our working  capital  deficit means that our current  assets on
June 30, 2004 were not  sufficient to satisfy all of our current  liabilities on
that  date.  If our  ongoing  operations  do not  begin  to  provide  sufficient
profitability to offset the working capital deficit we may have to raise capital
or debt to fund the deficit.

      OUR OBLIGATIONS UNDER THE SECURED CONVERTIBLE DEBENTURES ISSUED TO CORNELL
CAPITAL PARTNERS, L.P. ARE SECURED BY ALL OF OUR ASSETS

      Our obligations under the secured convertible  debentures in the principal
amount of $375,000 issued to Cornell Capital  Partners are secured by all of our
assets. As a result, if we default under the terms of these secured  convertible


                                       20
<PAGE>

debentures,  Cornell Capital Partners could foreclose its security  interest and
liquidate  all of the assets of the  Company.  This would  force us to cease our
operations.

      OUR  COMMON  STOCK MAY BE  AFFECTED  BY  LIMITED  TRADING  VOLUME  AND MAY
FLUCTUATE SIGNIFICANTLY

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

      WE MAY NOT BE ABLE TO  ACCESS  SUFFICIENT  FUNDS  WHEN  NEEDED  UNDER  THE
STANDBY  EQUITY  DISTRIBUTION  AGREEMENT  AND THE PRICE OF OUR COMMON STOCK WILL
AFFECT OUR ABILITY TO DRAW DOWN ON THE STANDBY EQUITY DISTRIBUTION AGREEMENT

      Currently,   we  are  dependent  upon  external   financing  to  fund  our
operations.  Our financing needs are expected to be provided,  in large part, by
our Standby Equity Distribution Agreement.  The amount of each advance under the
Standby  Equity  Distribution  Agreement is subject to a maximum amount equal to
$100,000 and up to an aggregate  maximum advance amount equal to $400,000 in any
thirty-calendar-day  period. Because of this maximum advance restriction, we may
not be able to access sufficient funds when needed.

      In  addition,  there is an inverse  relationship  between the price of our
common stock and the number of shares of common stock which will be issued under
the Standby Equity  Distribution  Agreement.  Based on our recent stock price of
$0.02, we would have to issue to Cornell Capital Partners  263,157,895 shares of
our common  stock in order to draw down the entire $5  million  available  to us
under the Standby Equity Distribution Agreement. On July 16, 2004, we filed with
the United States Securities and Exchange Commission a registration statement on
Form SB-2 registering  118,000,000  shares of our common stock under the Standby
Equity Distribution Agreement. Our Articles of Incorporation currently authorize
United to issue 250 million shares and, as of August 1, 2004, we had 114,126,575
shares of common  stock issued and  outstanding.  In the event we desire to draw
down any  available  amounts  remaining  under the Standby  Equity  Distribution
Agreement after we have issued the 118,000,000  shares that we registered in the
Form SB-2, we will have to obtain shareholder  approval to amend our Articles of
Incorporation  to increase our authorized  shares of common stock and file a new
registration  statement to cover such additional  shares that we would issue for
additional draw downs on the Standby Equity  Distribution  Agreement.  Unless we
obtain  profitable  operations,  it is  unlikely  that we will be able to secure
additional  financing  from  external  sources  other  than our  Standby  Equity
Distribution Agreement.  Therefore, if we are unable to draw down on our Standby
Equity Distribution Agreement, we may be forced to curtail or cease our business
operations.

      OUR  COMMON  STOCK IS DEEMED TO BE "PENNY  STOCK,"  WHICH MAY MAKE IT MORE
DIFFICULT FOR INVESTORS TO SELL THEIR SHARES DUE TO SUITABILITY REQUIREMENTS

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

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

      o     That are not traded on a "recognized" national exchange;

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

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

      Broker/dealers  dealing in penny stocks are required to provide  potential
investors  with a  document  disclosing  the  risks of penny  stocks.  Moreover,
broker/dealers  are required to determine whether an investment in a penny stock
is a suitable  investment for a prospective  investor.  These  requirements  may


                                       21
<PAGE>

reduce  the  potential  market for our common  stock by  reducing  the number of
potential investors. This may make it more difficult for investors in our common
stock to sell  shares to third  parties or to  otherwise  dispose of them.  This
could cause our stock price to decline.

      WE COULD FAIL TO ATTRACT OR RETAIN KEY PERSONNEL

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

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

      OUR FAILURE TO OBTAIN  INTELLECTUAL  PROPERTY AND ENFORCE PROTECTION WOULD
HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS

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

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

      WE MAY BE UNABLE TO MANAGE GROWTH

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

      RELIANCE ON VENDORS AND MANUFACTURERS

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

      DEPENDENCE ON CONSUMER SPENDING

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


                                       22
<PAGE>

      GOVERNMENT REGULATIONS MAY IMPACT US

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

      FUTURE  ACQUISITIONS  MAY DISRUPT OUR BUSINESS  AND DEPLETE OUR  FINANCIAL
RESOURCES

      Any future  acquisitions  we make could disrupt our business and seriously
harm our  financial  condition.  We intend to pursue  the  acquisition  of other
companies,  assets  and  product  lines  that  either  complement  or expand our
existing  business.  Acquisitions  involve a number of special risks,  including
diversion of  management's  attention to the  assimilation of the operations and
personnel of the acquired  business,  potential  adverse  short-term  effects on
operating  results and  amortization of acquired  intangible  assets.  Moreover,
there can be no assurance that we will find attractive  acquisition  candidates,
that  acquisitions  can be consummated on acceptable  terms or that any acquired
companies can be integrated  successfully  into our operations.  At this time we
are not currently engaged in any negotiations concerning acquisition which would
be material to our business.

      BAD WEATHER CONDITIONS COULD HAVE AN ADVERSE EFFECT ON OPERATING RESULTS

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

      OUR STANDBY EQUITY DISTRIBUTION  AGREEMENT COULD HAVE AN ADVERSE EFFECT ON
OUR ABILITY TO MAKE ACQUISITIONS WITH OUR COMMON STOCK

      We cannot predict the actual number of shares of common stock that will be
issued pursuant to our Standby Equity Distribution  Agreement,  in part, because
the  purchase  price of the shares will  fluctuate  based on  prevailing  market
conditions  and we have not determined the total amount of advances we intend to
draw.  It may be necessary  for our  shareholders  to approve an increase in our
authorized common stock for us to register  additional shares of common stock in
order to have sufficient  authorized shares available to make acquisitions using
our common  stock.  As we issue shares of common  stock  pursuant to the Standby
Equity Distribution  Agreement,  we may not have sufficient shares of our common
stock available to successfully attract and consummate future acquisitions.

      INVESTORS SHOULD NOT RELY ON AN INVESTMENT IN OUR STOCK FOR THE PAYMENT OF
CASH DIVIDENDS

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


                                       23
<PAGE>

      THE MANUFACTURE AND  DISTRIBUTION OF RECREATIONAL  DIVING  EQUIPMENT COULD
RESULT IN PRODUCT LIABILITY CLAIMS

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




                                       24
<PAGE>

ITEM 3. CONTROLS AND PROCEDURES

(A)   EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

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

(B)   CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING

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




                                       25
<PAGE>

                                    PART II

ITEM 1. LEGAL PROCEEDINGS

      The following legal proceedings pertain to Trebor Industries,  Inc., which
became a  wholly-owned  subsidiary  on March  23,  2004  pursuant  to the  Share
Exchange Agreement among United, Trebor Industries, Inc. and Robert Carmichael:

      1. CASE NO.: CA-M-02-180:  SUSAN BUTLER,  BENJAMIN DILELLO, AND ANTONIETTA
HILL, AS PERSONAL  REPRESENTATIVES OF THE ESTATE OF REMO DILELLO,  DECEASED, AND
PIETRANTONIO "TONY" CASSETTA, INDIVIDUALLY AND AS PERSONAL REPRESENTATIVE OF THE
ESTATE OF PASQUALLA "LINA" CASSETTA, DECEASED, PLAINTIFFS,

      V. INTERSELECT,  INC., A DELAWARE CORPORATION,  D/B/A BURDINES WATERFRONT,
DEFENDANT, INTERSELECT, INC., A DELAWARE CORPORATION, D/B/A BURDINES WATERFRONT,
THIRD PARTY PLAINTIFF,

      V.  BROWNIE'S  THIRD LUNG,  AN  INACTIVE  FLORIDA  CORPORATION,  BROWNIE'S
SOUTHPORT  DIVERS,  INC.,  A FLORIDA  CORPORATION,  DACOR  INC.,  A  CONNECTICUT
CORPORATION, DACOR INTERNATIONAL, AN ITALIAN CORPORATION, HTM SPORT S. P. A., AN
ITALIAN  CORPORATION,  BAUER COMPRESSORS,  INC., A VIRGINIA  CORPORATION AND THE
DIVING SITE, INC., A FLORIDA CORPORATION, THIRD PARTY DEFENDANTS.

      This lawsuit is a third party claim filed by Interselect, Inc., a Delaware
corporation d/b/a Burdines  Waterfront  alleging product based defect claims and
seeking  indemnification for any amounts paid out to Plaintiffs in settlement or
by judgment by Interselect in the underlying  wrongful death action. The case is
in the early stages of discovery and is not currently set for trial.  There have
been a number of third party defendants added to the case and the pleadings only
recently have been closed. The case is being vigorously defended by the company.

      2. CASE NO.: 04-CV-3546: OCEAN MANAGEMENT SYSTEMS, INC. PLAINTIFF,

      V. TREBOR  INDUSTRIES,  INC. D/B/A HALCYON;  HALCYON  MANUFACTURING  INC.,
GLOBAL  UNDERWATER  EXPLORES,  INC.;  JARROD  JABLONSKI  AND ROBERT  CARMICHAEL,
DEFENDANTS

      This lawsuit alleges that Trebor, doing business as Halcyon has violated a
Stipulation of Dismissal  with Prejudice  executed as a settlement in a previous
civil  action.  Trebor no longer  has any  ownership  interest  in  Halcyon  and
therefore has no control of its current  activities or  management.  The Company
plans to vigorously pursue the defense and dismissal of this action.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

      (a)   None.

      (b)   None.

      (c)   On March 23, 2004,  United  issued  95,000,000  shares of restricted
common stock to Robert Carmichael in connection with a Share Exchange  Agreement
among United, Mr. Carmichael and Trebor Industries, Inc., d/b/a/ Brownie's Third
Lung,  a Florida  corporation.  Pursuant to the Share  Exchange  Agreement,  Mr.
Carmichael, the sole shareholder of Trebor, exchanged 377 shares of common stock
of Trebor,  which constituted all of the issued and outstanding capital stock of
Trebor,  for 95,000,000 shares of common stock of United.  Pursuant to the Share
Exchange Agreement, Trebor became a wholly-owned subsidiary of United.

      On April 2,  2004,  we  issued  2,416,667  shares of our  common  stock to
Cornell  Capital  Partners,  L.P. as a  commitment  fee  pursuant to the Standby
Equity  Distribution  Agreement,  dated April 2, 2004, by and between United and
Cornell Capital Partners.

      On April 2, 2004, we issued 83,333 shares of our common stock to Newbridge
Securities  Corporation as a placement  agent fee in connection with the Standby
Equity  Distribution  Agreement,  dated April 2, 2004 by and between  United and
Cornell Capital Partners.


                                       26
<PAGE>

      As of April 2, 2004, we issued a Secured Convertible  Debenture to Cornell
Capital Partners in the principal amount of $250,000.  The convertible debenture
is  convertible  into  shares of our  common  stock as a price per share that is
equal to the lesser of: (i) an amount  equal to 120% of the closing bid price of
our common stock as of the date of the  convertible  debenture or (ii) an amount
equal to 80% of the average of the lowest daily volume weighted average price of
our common stock for the five trading days immediately  preceding the conversion
date. The convertible debenture accrues interest at a rate of 5% per year and is
convertible at the holder's  option.  The convertible  debenture has a term of 2
years and is  secured  by all the  assets of United.  At  United's  option,  the
convertible debenture may be paid in cash or converted into shares of our common
stock unless converted earlier by the holder.  Except after an event of default,
as set forth in the Secured  Convertible  Debenture  Cornell Capital Partners is
not entitled to convert such debenture for a number of shares of common stock of
United in excess of that  number of  shares  which,  upon  giving  effect to the
debentures  if such  conversion  would cause the  aggregate  number of shares of
common stock beneficially held by such holder and its affiliated to exceed 4.99%
of the outstanding  shares of common stock of United.  Within 5 days of filing a
registration  statement with the Securities and Exchange Commission  registering
shares of United's common stock underlying the secured  convertible  debentures,
United will issue a second Secured Convertible Debenture in the principal amount
of $125,000, with the same terms and conditions as the first Secured Convertible
Debenture  described  above.  United has the right to redeem with  fifteen  (15)
business days advance notice,  a portion or all of the  outstanding  convertible
debenture.  The  redemption  price shall be one hundred twenty percent (120%) of
the redeemed amount plus accrued interest.  In addition, if United avails itself
of the redemption  right,  United shall,  concurrent with the redemption,  issue
warrants to the holder at a rate of 50,000 per $100,000 redeemed,  pro-rata. The
exercise  price  of the  warrants  shall  be 120% of the  closing  bid  price of
United's common stock on the closing date. The warrants shall have  "piggy-back"
and  demand  registration  rights and shall  survive  for two (2) years from the
closing date.

      On April 14, 2004,  United  issued  500,000  shares to Earl  Ingarfield in
connection with a consulting agreement dated January 15, 2004.

      On July 23,  2004,  we issued a Secured  Convertible  Debenture to Cornell
Capital  Partners in the  principal  amount of $125,000  upon the same terms and
conditions  as the Secured  Convertible  Debenture  in the  principal  amount of
$250,000 issued to Cornell Capital Partners on April 2, 2004 as described above.

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

      (d)   None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

      None.

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

      None.

ITEM 5. OTHER INFORMATION

      Not applicable.




                                       27
<PAGE>

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

      (A)   EXHIBITS.

<TABLE>
<CAPTION>
EXHIBIT NO.             DESCRIPTION                                        LOCATION
----------------------  -------------------------------------------------  ----------------------------------------------
<C>                     <C>                                                <C>
2.2                     Merger Agreement, dated June 18, 2002 by and       Incorporated by reference to Exhibit 2.02 to
                        among United Companies Corporation, Merger Co.,    Avid Sportswear & Golf Corp.'s Amendment No. 1
                        Inc. and Avid Sportswear & Golf Corp.              to Form S-4 filed June 24, 2002

2.3                     Articles of Merger of Avid Sportswear & Golf       Incorporated by reference to Exhibit 2.03 to
                        Corp. with and into Merger Co., Inc.               Avid Sportswear & Golf Corp.'s Amendment No. 1
                                                                           to Form S-4 filed June 24, 2002

3.1                     Articles of Incorporation                          Incorporated by reference to Exhibit 3.05 to
                                                                           United Companies Corporation's Amendment No. 1
                                                                           to Form S-4 filed June 24, 2002

3.2                     Bylaws                                             Incorporated by reference to Exhibit 3.07 to
                                                                           United Companies Corporation's Amendment No. 1
                                                                           to Form S-4 filed June 24, 2002

10.1                    Share Exchange Agreement, dated March 23, 2004     Incorporated by reference to Exhibit 16.1 to
                        by and among United, Trebor Industries, Inc. and   Current Report on From 8-K filed April 9, 2004
                        Robert Carmichael

10.2                    Securities Purchase Agreement, dated April 2,      Incorporated by reference to Exhibit 10.2 to
                        2004 by and between United and Cornell Capital     United Companies Corporation's Registration
                        Partners, L.P.                                     Statement on Form SB-2 filed July 16, 2004

10.3                    Investor Registration Rights Agreement, dated      Incorporated by reference to Exhibit 10.3 to
                        April 2, 2004 by and between United and Cornell    United Companies Corporation's Registration
                        Capital Partners, L.P.                             Statement on Form SB filed July 16, 2004

10.4                    Security Agreement, dated April 2, 2004 by and     Incorporated by reference to Exhibit 10.4 to
                        between United and Cornell Capital Partners, L.P.  United Companies Corporation's Registration
                                                                           Statement on Form SB filed July 16, 2004

10.5                    Irrevocable Transfer Agent Instructions, dated     Incorporated by reference to Exhibit 10.5 to
                        April 2, 2004, by and among United, Cornell        United Companies Corporation's Registration
                        Capital Partners, L.P. and First American Stock    Statement on Form SB filed July 16, 2004
                        Transfer

10.6                    Escrow Agreement, dated April 2, 2004 by and       Incorporated by reference to Exhibit 10.6 to
                        among United, Cornell Capital Partners, L.P. and   United Companies Corporation's Registration
                        Butler Gonzalez, LP                                Statement on Form SB filed July 16, 2004

10.7                    Form of Secured Convertible Debenture              Incorporated by reference to Exhibit 10.7 to
                                                                           United Companies Corporation's Registration
                                                                           Statement on Form SB filed July 16, 2004

10.8                    Form of Warrant                                    Incorporated by reference to Exhibit 10.8 to
                                                                           United Companies Corporation's Registration
                                                                           Statement on Form SB filed July 16, 2004

10.9                    Standby Equity Distribution Agreement, dated       Incorporated by reference to Exhibit 10.9 to
                        April 2, 2004 by and between United and Cornell    United Companies Corporation's Registration
                        Capital Partners, L.P.                             Statement on Form SB filed July 16, 2004

10.10                   Registration Rights Agreement, dated April 2,      Incorporated by reference to Exhibit 10.10 to
                        2004 by and between United and Cornell Capital     United Companies Corporation's Registration
                        Partners, L.P.                                     Statement on Form SB filed July 16, 2004

10.11                   Escrow Agreement, dated April 2, 2004 by and       Incorporated by reference to Exhibit 10.11 to
                        among United, Cornell Capital Partners, L.P. and   United Companies Corporation's Registration
                        Butler Gonzalez, LP                                Statement on Form SB filed July 16, 2004
</TABLE>


                                       28
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO.             DESCRIPTION                                        LOCATION
----------------------  -------------------------------------------------  ----------------------------------------------
<C>                     <C>                                                <C>
10.12                   Placement Agent Agreement, dated April 2, 2004,    Incorporated by reference to Exhibit 10.12 to
                        by and among United, Cornell Capital Partners,     United Companies Corporation's Registration
                        L.P. and Newbridge Securities Corporation          Statement on Form SB filed July 16, 2004

10.13                   Irrevocable Transfer Agent Instructions, dated     Incorporated by reference to Exhibit 10.13 to
                        April 2, 2004 by and among United, Cornell         United Companies Corporation's Registration
                        Capital Partners, L.P. and First American Stock    Statement on Form SB filed July 16, 2004
                        Transfer
</TABLE>

      (B)   REPORTS ON FORM 8-K.

      We filed a Current  Report on Form 8-K on April 9,  2004 with  respect  to
Item 2 - Acquisition or Disposition of Assets and Item 7 - Financial  Statements
and Exhibits.

      We filed a Current  Report on Form 8-K on May 3, 2004 with respect to Item
4 - Change in Registrant's Certifying Accountant.

      We filed an amendment to a Current Report on June 23, 2004 with respect to
Item 2 - Acquisition or Disposition of Assets and Item 7 - Financial  Statements
and  Exhibits,  which  amended our current  Report on Form 8-K filed on April 9,
2004.





                                       29
<PAGE>

                                   SIGNATURES

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

Date:    August 11, 2004                UNITED COMPANIES CORPORATION

                                        By: /s/ Robert M. Carmichael
                                           -------------------------------------
                                            Robert M. Carmichael
                                            President, Chief Executive Officer,
                                            Chief Financial Officer and
                                            Principal Accounting Officer






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