UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark  One)

 [X]  QUARTERLY REPORT  UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT
      OF  1934  FOR  THE  QUARTERLY  PERIOD  ENDED  SEPTEMBER  30,  2006.

 [ ]  TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT
      OF  1934  FOR  THE  TRANSITION  PERIOD  FROM  ______  TO  ______

                         COMMISSION FILE NO. 000-30914

                             XTREME COMPANIES, INC.
               (Exact name of issuer as specified in its charter)

              NEVADA                                              88-0394012
  (State or other jurisdiction                                (I.R.S. Employer
of incorporation or organization)                            Identification No.)

                300  WESTLINK  DR.,  WASHINGTON,  MO         63090
              (Address of principal executive offices)     (Zip Code)

         Issuer's telephone number, including area code: (636) 390-9000

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 twelve months (or such shorter
period  that the registrant was required to file such reports), and (2) has been
subject  to  such  filing  requirements  for  the  past  90  days.

                                  [X]Yes  [ ]No

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

                                  [ ]Yes  [X]No

Number  of  shares  of  the  issuer's common stock outstanding as of November 9,
2006:  51,500,246

Transitional  Small  Business  Disclosure  Format  (Check  one):

                                  [ ]Yes  [X]No

                                     -1-
<PAGE>

                             XTREME COMPANIES, INC.

                               Table of Contents

                                                                            Page
                                                                            ----
Part  I  -  Financial  Information

     Item  1  -  Financial  Statements.

          Report  on  Review  by  Independent  Public  Accountant             3
          Consolidated  Balance  Sheet  as  of  September  30,  2006          4
          Consolidated  Statement  of  Operations  for  the  Three  and
               Nine  Months  Ended  September  30,  2006
               and September 30, 2005                                         5
          Statement  of  Cash  Flows  for  the  Three  amd  Nine  Months
               Ended  September  30,  2006  and  September  30,  2005         6
          Statements  of  Changes  in  Stockholders  Equity  as  of
                September  30,  2006                                          7
          Notes  to  Financial  Statements                                    8

     Item  2  -  Management's  Discussion  and  Analysis  or
                    Plan of Operation.                                       18
     Item  3  -  Controls  and  Procedures.                                  25

Part  II  -  Other  Information

     Item  1  -  Legal  Proceedings.                                         26
     Item  2  -  Unregistered  Sales  of  Equity Securities and
                    Use of Proceeds.                                         27
     Item  3  -  Defaults  Upon  Senior  Securities.                         27
     Item  4  -  Submission of Matters to a Vote of Security Holders.        27
     Item  5  -  Other  Information.                                         27
     Item  6  -  Exhibits  and  Reports  on  Form  8-K.                      28

                                     -2-
<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM  1.  FINANCIAL  STATEMENTS.

                             XTREME COMPANIES, INC.
                          (A Development Stage Company)

                              Financial Statements
                  For the Nine Months Ended September 30, 2006

                                   (Unaudited)

                               JASPERS + HALL, PC
                          CERTIFIED PUBLIC ACCOUNTANTS
                          ----------------------------
                          9175 Kenyon Avenue, Suite 100
                                Denver, CO 80237
                                  303-796-0099

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To  the  Board  of  Directors
Xtreme  Companies,  Inc.

We  have  reviewed the accompanying balance sheet of Xtreme Companies, Inc. (the
"Company") as of September 30, 2006 and the related statements of operations for
the  three  and nine months ended September 30, 2006 and cash flows for the nine
months  ended  September  30,  2006, included in the accompanying Securities and
Exchange  Commission  Form 10-QSB for the period ended September 30, 2006. These
financial  statements  are  the  responsibility  of  the  Company's  management.

We  conducted  our review in accordance with standards established by the Public
Company  Accounting  Oversight  Board  (United  States).  A  review  of  interim
financial  information consists principally of applying analytical procedures to
financial  data  and  making  inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance  with  the standards of the Public Company Accounting Oversight Board
(United  States),  the  objective  of  which  is  the  expression  of an opinion
regarding  the  financial  statements as a whole. Accordingly, we do not express
such  an  opinion.

Based  on our review, we are not aware of any material modifications that should
be  made  to  the accompanying financial statements for them to be in conformity
with  accounting  principles  generally  accepted  in  the  United  States.

The  accompanying  financial  statements  have  been  prepared assuming that the
Company  will  continue  as  a going concern. As discussed in Note 1, conditions
exist which raise substantial doubt about the Company's ability to continue as a
going  concern.  The  financial  statements  do not include any adjustments that
might  result  from  the  outcome  of  this  uncertainty.


/s/Jaspers  and  Hall
---------------------
Jaspers  +  Hall,  PC
Denver,  Colorado
November  10,  2006

                                     -3-
<PAGE>
<TABLE>
                                      XTREME COMPANIES, INC.
                                    CONSOLIDATED BALANCE SHEET

<CAPTION>
<S>                                                      <C>               <C>

                                                         September 30,     December 31,
                                                             2006              2005
ASSETS                                                    (Unaudited)
                                                         -------------     ------------
CURRENT ASSETS
Cash . . . . . . . . . . . . . . . . . . . . . . . . .   $     131,382     $    331,386
Accounts Receivable - Trade. . . . . . . . . . . . . .          60,000           72,530
Inventory - Boats in Progress. . . . . . . . . . . . .         752,321                0
Inventory - Parts. . . . . . . . . . . . . . . . . . .         312,465                0
Inventory - Trailers and trade-ins . . . . . . . . . .         114,363                0
Inventory - Complete Boats . . . . . . . . . . . . . .       1,677,787          375,000
Other Current Assets . . . . . . . . . . . . . . . . .           8,875                0
                                                         -------------     ------------

   TOTAL CURRENT ASSETS. . . . . . . . . . . . . . . .       3,057,193          778,916
                                                         -------------     ------------
PROPERTY AND EQUIPMENT
Building and Land. . . . . . . . . . . . . . . . . . .         936,542                0
Boats molds and plugs. . . . . . . . . . . . . . . . .         557,955                0
Machinery and equipment. . . . . . . . . . . . . . . .         166,656            7,606
Furniture and fixtures . . . . . . . . . . . . . . . .          11,070                0
Leasehold improvements . . . . . . . . . . . . . . . .         135,598           25,395
Autos and trucks . . . . . . . . . . . . . . . . . . .          69,000                0
Trailers . . . . . . . . . . . . . . . . . . . . . . .          24,929                0
Demo boat. . . . . . . . . . . . . . . . . . . . . . .               0           30,452
Accumulated depreciation and amortization. . . . . . .        (430,394)          (2,168)
                                                          ------------     ------------

NET PROPERTY & EQUIPMENT . . . . . . . . . . . . . . .       1,471,356           61,285

OTHER ASSETS
Advances to Marine Holdings, Inc . . . . . . . . . . .               0        2,311,891
Certificate of Deposit . . . . . . . . . . . . . . . .       1,000,000                0
                                                          ------------     ------------

     TOTAL OTHER ASSETS. . . . . . . . . . . . . . . .       1,000,000        2,311,891

                                                          ------------     ------------

 TOTAL ASSETS. . . . . . . . . . . . . . . . . . . . .    $  5,528,549     $  3,152,092
                                                          ============     ============

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
Accounts payable . . . . . . . . . . . . . . . . . . .    $    405,274     $    239,731
Accrued expenses . . . . . . . . . . . . . . . . . . .           2,000          131,000
Accrued interest . . . . . . . . . . . . . . . . . . .         809,131          186,719
Payroll tax liabilities. . . . . . . . . . . . . . . .         102,372           95,831
Deferred revenues. . . . . . . . . . . . . . . . . . .          65,250           22,098
Private promissory notes . . . . . . . . . . . . . . .         212,000          332,000
Notes payable. . . . . . . . . . . . . . . . . . . . .               0          181,718
Work-in-process loans. . . . . . . . . . . . . . . . .       1,080,855                0
Note payable to Sun Security - current portion . . . .         169,224                0
Promissory notes - related party (net of discount) . .       2,275,887        2,014,708
Receivable factoring agreement - related party . . . .         695,000                0
                                                          ------------     ------------
     TOTAL CURRENT LIABILITIES . . . . . . . . . . . .       5,816,993        3,203,805
                                                          ------------     ------------

LONG TERM LIABILITIES
Truck loan . . . . . . . . . . . . . . . . . . . . . .          13,699                0
Note payable to Sun Security, less current portion . .       2,707,593                0
Long-term debt . . . . . . . . . . . . . . . . . . . .       8,162,491        1,642,295
                                                          ------------     ------------
     TOTAL LONG TERM LIABILITIES . . . . . . . . . . .      10,883,783        1,642,295
                                                          ------------     ------------

  TOTAL LIABILITIES. . . . . . . . . . . . . . . . . .      16,700,776        4,846,100
                                                          ------------     ------------

SHAREHOLDERS' EQUITY (DEFICIT)
Common stock, 100,000,000 shares authorized
  at $.001 par value, 51,557,521 shares issued
  and outstanding at September 30, 2006 and 19,551,376
  issued and outstanding at December 31, 2005. . . . .          51,557           19,551
Additional paid-in capital . . . . . . . . . . . . . .      15,704,588       18,438,245
Subscriptions receivable . . . . . . . . . . . . . . .         (40,324)         (77,766)
Accumulated deficit. . . . . . . . . . . . . . . . . .     (26,888,049)     (20,074,038)
                                                          ------------     ------------

      TOTAL SHAREHOLDERS' EQUITY (DEFICIT) . . . . . .     (11,172,227)      (1,694,009)
                                                          ------------     ------------

TOTAL LIABILITIES AND SHAREHOLDERS'
  EQUITY (DEFICIT) . . . . . . . . . . . . . . . . . .    $  5,528,549     $  3,152,092
                                                          ============     ============
<FN>
See accountant's review report
</TABLE>

                                     -4-
<PAGE>
<TABLE>
                                             XTREME COMPANIES, INC.
                                         CONSOLIDATED INCOME STATEMENT
                          FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005
<CAPTION>
<S>                                       <C>              <C>                 <C>             <C>
                                                 Three months ended                  Nine months ended
                                                     September 30,                     September 30,
                                          ------------------------------       ----------------------------
                                                2006            2005                2006            2005
                                            (Unaudited)                         (Unaudited)
                                          --------------   -------------       -------------   ------------

REVENUE
Fire and Patrol Boats . . . . . . . .     $            0   $       8,206       $           0   $    199,206
Performance and Sport Boats . . . . .                  0         326,465             829,059        755,765
Sales returns and allowances. . . . .             (8,481)              -            (871,845)             -
                                          --------------   -------------       -------------   ------------
   TOTAL REVENUE. . . . . . . . . . .             (8,481)        334,671             (42,786)       954,971

COST OF GOODS SOLD
Cost of Goods Sold - Fire & Patrol Boats           1,853           (270)              15,855        176,321
Cost of Goods Sold - Performance and
                     Sport Boats. . .                            307,834             530,309        657,435
                                          --------------   -------------       -------------   ------------
   TOTAL COST OF GOODS SOLD . . . . .              1,853         307,564             546,164        833,756
                                          --------------   -------------       -------------   ------------
   GROSS PROFIT /(LOSS) . . . . . . .            (10,334)         27,107            (588,950)       121,215


OPERATING EXPENSES:
Consulting fees . . . . . . . . . . .             76,458         152,065             181,038        525,430
Advertising . . . . . . . . . . . . .             15,369           2,843              18,151          3,760
Documentation fees for funding. . . .             65,000               -             345,000              -
Officer compensation. . . . . . . . .             42,750          84,000              49,090        114,000
Investor relations. . . . . . . . . .             68,350          39,917             610,005        202,922
Marketing . . . . . . . . . . . . . .             12,000          12,100              37,917        129,541
Sales consulting and commissions. . .              5,250          20,000              31,088         37,800
Professional fees . . . . . . . . . .             81,271          98,022             119,117        166,657
Payroll and taxes . . . . . . . . . .            215,594             341             612,026         15,089
Employee benefits . . . . . . . . . .             23,294               -              62,024              -
Depreciation and amortization . . . .             40,725             297              88,678            821
Writedown of assets . . . . . . . . .                  -               -             130,000              -
Sales adjustments and allowances. . .              3,000               -              45,706              -
Travel. . . . . . . . . . . . . . . .             27,380          10,778              45,334         26,464
Tradeshows. . . . . . . . . . . . . .             83,435               0              83,960              0
Business insurance. . . . . . . . . .             24,560           3,128             194,587          3,882
Other Operating Expenses. . . . . . .            181,449          28,800             292,400        129,798
                                          --------------   -------------       -------------   ------------
  TOTAL OPERATING EXPENSES. . . . . .            965,885         452,291           2,946,121      1,356,164
                                          --------------   -------------       -------------   ------------
  LOSS FROM OPERATIONS. . . . . . . .           (976,219)       (425,184)         (3,535,071)    (1,234,949)

OTHER INCOME (EXPENSES)
Interest expense. . . . . . . . . . .           (700,532)       (163,527)         (3,281,492)      (837,189)
Loss/(gain) on sale of assets . . . .              6,156              -                1,156             -
                                          --------------   -------------       -------------   ------------
   TOTAL OTHER INCOME (EXPENSES)                (694,376)       (163,527)         (3,280,336)      (837,189)
                                          --------------   -------------       -------------   ------------

   LOSS BEFORE INCOME TAXES . . . . .         (1,670,595)       (588,711)         (6,815,407)    (2,072,138)
                                          --------------   -------------       -------------   ------------

Provision for income taxes. . . . . .                  -               -                   -              -
                                          --------------   -------------       -------------   ------------

   NET LOSS . . . . . . . . . . . . .     $   (1,670,595)  $    (588,711)      $  (6,815,407)  $ (2,072,138)
                                          ==============   =============       =============   ============

BASIC AND DILUTED NET LOSS PER SHARE      $        (0.04)  $       (0.03)      $       (0.21)  $      (0.13)
                                          ==============   =============       =============   ============

BASIC AND DILUTED WEIGHTED AVERAGE
   SHARES OUTSTANDING . . . . . . . .         47,661,325      18,137,217          33,275,001     16,121,079
                                          ==============   =============       =============   ============
<FN>
See accountant's review report
</TABLE>

                                     -5-
<PAGE>
<TABLE>
                                          XTREME COMPANIES, INC.
                                    CONSOLIDATED STATEMENT OF CASH FLOWS
                            FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005
<CAPTION>
<S>                                                 <C>             <C>
                                                          Nine months ended
                                                            September 30,
                                                    -----------------------------
                                                         2006            2005
                                                     (Unaudited)
                                                    -------------   -------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss. . . . . . . . . . . . . . . .             $ (6,815,407)   $ (2,072,138)
Adjustment to reconcile net loss to
   net cash provided by (used in)
   operating activities:

Depreciation and amortization . . . . .                   88,678             821
Issuance of stock for debt inducement .                1,699,422         250,774
Debt conversion feature expense . . . .                        0         187,271
Issuance of stock for consulting svcs .                        -         334,365
Issuance of stock for marketing svcs. .                        -          83,591
Issuance of stock for other services. .                  215,500               -
Loan payoffs for Marine Holdings
   closing transaction. . . . . . . . .                  (78,251)              -

(Increase) decrease in current assets net
    Of effects of acquisition:
Accounts receivable . . . . . . . . . .                   12,530          (3,908)
Inventory . . . . . . . . . . . . . . .               (1,561,787)              -
Advances to Marine Holdings, Inc. . . .                 (529,700)     (1,993,357)

(Increase) decrease in current liabilities
     Net of effects of acquisition:
Accrued expenses and accounts payable .                 (303,915)        (33,623)
Accrued interest. . . . . . . . . . . .                  622,412         103,806
Sun Security WIP loans. . . . . . . . .                  (73,416)              -
Payroll tax liabilities payable . . . .                    7,170         (23,785)
Deferred compensation . . . . . . . . .                        -         110,000
Deferred revenues . . . . . . . . . . .                   43,152          46,454
                                                    -------------   -------------
NET CASH USED IN OPERATING ACTIVITIES                 (6,673,612)     (3,009,729)
                                                    -------------   -------------

NET CASH FLOWS PROVIDED (USED) BY
   INVESTING ACTIVITIES:
Purchase of fixed assets. . . . . . . .                 (165,218)         (2,116)
Purchase of certificate of deposit. . .               (1,000,000)              -
                                                    -------------   -------------
NET CASH FLOWS PROVIDED (USED) BY
    INVESTING ACTIVITIES                              (1,165,218)         (2,116)
                                                    -------------   -------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Notes payable . . . . . . . . . . . . .                 (332,629)        206,000
Proceeds from related party convertible
   Debts - net. . . . . . . . . . . . .                7,934,013       1,396,479
Proceeds from line of credit. . . . . .                   37,442               -
                                                    -------------   -------------
NET CASH PROVIDED BY FINANCING ACTIVITIES              7,638,826       1,562,479
                                                    -------------   -------------

NET INCREASE IN CASH. . . . . . . . . .                 (200,004)         93,309

CASH AT BEGINNING OF PERIOD . . . . . .             $    331,386    $    110,673
                                                    =============   =============

CASH AT END OF PERIOD . . . . . . . . .             $    131,382    $    203,982
                                                    =============   =============

SUPPLEMENTAL DISCLOSURE OF CASHFLOWS
Cash paid for interest. . . . . . . . .                  332,996    $          -
Income taxes paid . . . . . . . . . . .                        -               -
<FN>
See See accountant's review report
</TABLE>

                                     -6-
<PAGE>

<TABLE>
                                                Xtreme Companies, Inc.
                                      Statements of Changes in Stockholders Equity
<CAPTION>
<S>                      <C>         <C>       <C>              <C>      <C>            <C>         <C>             <C>
                                                Additional      Shares                                                   Total
                             Common Stock         Paid In       To Be      Deferred     Stock Sub    Accumulated    Stockholder
                           Shares    Par .001     Capital       Issued   Compensation   Receivable      Deficit         Equity

BALANCE,
December 31, 2003        7,118,152    7,118    15,555,172          -       (110,000)         -       (16,191,539)     (739,249)

Recapitalization
Upon reverse
merger acquisition        (357,577)    (358)       35,780          -            -            -              -            35,422

Issuance of
common stock
for officer
compensation               450,000      450       111,479          -            -            -              -           111,929

Issuance of
common stock
for consulting
Services                 1,930,000    1,930       328,342          -            -            -              -           330,272

Issuance of
common stock
for director's
Compensation               600,000      600       148,640          -            -            -              -           149,240

Beneficial
conversion feature
on convertible
Debentures                    -          -        185,200          -            -            -              -           185,200

Conversion
of debts                 1,294,581    1,295       340,682          -            -            -              -           341,977

Issuance of
stock and stock
Warrants for
debt inducement               -          -        155,888          -            -            -              -           155,888

Net loss                      -          -           -             -            -            -         (1,465,532)   (1,465,532)

BALANCE,
December 31, 2004      11,035,156     11,035    16,859,783       1,400    (110,000)          -        (17,657,071)     (894,854)


Issuance of
common stock
for officer
compensation              300,000        300        53,700          -          -             -              -            54,000

Issuance of
common stock
for consulting
services                2,229,101      2,229       332,136          -      110,000           -              -           444,365

Issuance of
common stock
for marketing
services                  557,275        557        83,034          -          -            -               -            83,591

Beneficial
conversion feature
on convertible
debentures                   -            -        329,771          -          -            -               -           329,771

Issuance of
Stock for
Equity line               500,000        500        94,500          -          -         (77,766)           -            17,234

Issuance of
Stock warrants
For debt inducement
On debentures                -            -        218,150          -          -            -               -           218,150

Conversion
of debts                1,858,018      1,858       218,069          -          -            -               -           219,928

Issuance of
stock for debt
inducement              3,071,826      3,072       249,102      (1,400)        -            -               -           250,774

Net loss                     -            -           -             -          -            -         (2,416,967)    (2,416,967)

BALANCE,
December 31, 2005      19,551,376  $  19,551  $ 18,438,244   $      -    $     -      $  (77,766)  $ (20,074,037)   $(1,694,008)

Issuance of
Stock for
Equity line             6,600,000      6,600       439,415          -          -          37,442            -           483,457

Issuance of
Stock for
Inv Rel Svcs            2,250,000      2,250       210,250          -          -             -              -           212,500

Issuance of
Stock for
Debt inducement        21,980,271     21,980     1,677,442          -          -             -              -         1,699,422

Conversion of
Debts                   1,115,874      1,116        51,630          -          -             -              -            52,746

Issuance of
Stock for
Employee comp              60,000         60         2,940          -          -             -              -             3,000

Merger
Accounting                                      (5,115,333)                                                          (5,115,333)

Net Loss                     -            -           -             -          -             -        (6,814,011)    (6,814,011)

                      -----------  ---------  ------------   ---------   ----------   ----------   -------------    -----------
BALANCE,
Sept 30, 2006          51,557,521  $  51,557  $ 15,704,588   $      -    $     -      $  (40,324)  $ (26,888,049)  $(11,172,227)
                      ===========  =========  ============   =========   ==========   ==========   =============    ===========
<FN>
See accompanying notes to financial statements
</TABLE>

                                     -7-
<PAGE>
                             XTREME COMPANIES, INC.

                          NOTES TO FINANCIAL STATEMENTS

         FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005

NOTE  1.  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

BUSINESS  AND  BASIS  OF  PRESENTATION

Xtreme  Companies,  Inc. (the "Company") was organized August 14, 1994 under the
laws  of  the State of Nevada, under the name of Shogun Advertising, Inc. On May
10,  1998,  the Company changed its name to Xtreme Webworks. The Company offered
services  to  Internet companies, assisting in higher recognition placement with
search  engines. It also designed and hosted Internet web sites and designed and
published online and printed newsletters. On April 24, 2002, the Company changes
its  name  to  Xtreme  Companies,  Inc. Effective November 30, 2002, the Company
discontinued  its  operations  of  Xtreme  Webworks.

In  October  2003, Xtreme Companies, Inc. entered into an "Agreement and Plan of
Reorganization"  with  Rockwell Power Systems, Inc. Under this Agreement, Xtreme
Companies,  Inc.  purchased  substantially  all of the capital stock of Rockwell
Power  Systems,  Inc.  for  approximately  $175,000  in  exchange for 60,000,000
million  shares  of  its common stock. This acquisition was accounted for by the
purchase  method  of  accounting.  Under  the purchase method of accounting, the
total  purchase  price  was  allocated to the tangible and intangible assets and
liabilities  of  Xtreme  based  upon their respective estimated fair value as of
October  1,  2003,  the  effective date of this acquisition. In addition, Shogun
Investment  Group, one of the major shareholders of the Company, retained 50,000
free  trading  shares  of  the Company's common stock after giving effect to the
reverse  stock split. Shogun received $25,000 in cash on the date of the closing
and  $25,000 upon acceptance of a payment plan with the Internal Revenue Service
for  the  outstanding  tax  liabilities.

On  February 28, 2006, the Company finalized the purchase transaction to acquire
one-hundred  percent of the total outstanding shares of Marine Holdings, Inc., a
Missouri  corporation  d/b/a  Challenger Offshore, pursuant to the Marketing and
Distribution  Agreement  of  March 1, 2005 and upon the terms and conditions set
forth  in  the  Marketing  and  Distribution Agreement.  In connection with this
transaction,  existing  loans of Marine Holdings, Inc. at Sun Security Bank were
paid  in  full by Xtreme Companies, Inc.  Funding for payment of these loans was
generated  through new loans executed by Xtreme Companies, Inc. in the amount of
$4,123,627.

The accompanying unaudited financial statements have been prepared in accordance
with the rules and regulations of the Securities and Exchange Commission for the
presentation  of  interim  financial  information,  but  do  not include all the
information  and  footnotes required by generally accepted accounting principles
for  complete  financial  statements. The 2005 audited financial statements were
filed  in  the  Company's Form 10-KSB on April 14, 2006, with the Securities and
Exchange Commission and are hereby referenced. In the opinion of management, all
adjustments  considered  necessary  for  a fair presentation have been included.

                                     -8-
<PAGE>

GOING  CONCERN

The  accompanying  financial  statements  have  been prepared in conformity with
accounting  principles  generally  accepted  in  the  United  States,  which
contemplates  continuation  of  the  Company  as  a going concern. The Company's
current  liabilities exceed the current assets by $2,759,800 as of September 30,
2006.  The  Company  had operating losses of ($1,670,595) and ($588,711) for the
three  months  ended  September  30,  2006  and  2005,  respectively.

The  Company's  management is currently pursuing equity and/or debt financing in
an  effort  to  continue operations. The future success of the Company is likely
dependent  on  its  ability to attain additional capital to develop its proposed
products  and manufacturing processes and ultimately, upon its ability to attain
future profitable operations. There can be no assurance that the Company will be
successful  in  obtaining  such  financing, or that it will attain positive cash
flows  from operations.  The financial statements do not include any adjustments
that  might  be  necessary  should  the Company be unable to continue as a going
concern.

PRINCIPLES  OF  CONSOLIDATION

The  consolidated financial statements include the accounts of Xtreme Companies,
Inc and its wholly owned subsidiaries - Marine Holdings, Inc. (d/b/a  Challenger
Offshore)  as  of  September 30, 2006 and First Responders, Inc. (Rockwell Power
Systems,  Inc.  until  a  name change in June 2005) as of September 30, 2006 and
2005.  All  significant intercompany accounts and transactions are eliminated in
consolidation.  For  consolidation  purposes,  Marine  Holdings, Inc. operations
have  been  consolidated  from  March  1,  2006  forward, in accordance with the
closing  transaction.

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 amounts reported in the accompanying
financial  statements.  Significant  estimates made in preparing these financial
statements  include  the  allowance  for  doubtful  accounts, deferred tax asset
valuation  allowance  and  useful  lives for depreciable and amortizable assets.
Actual  results  could  differ  from  those  estimates.

CASH  AND  CASH  EQUIVALENTS

The  Company  considers all highly liquid investments purchased with an original
maturity  at  date  of  purchase of three months or less to be cash equivalents.
Cash  and cash equivalents are carried at cost, which approximates market value.

OTHER  ASSETS

In conjunction with the purchase of Marine Holdings, Inc. and the loan financing
through  Sun Security Bank, a certificate of deposit in the amount of $1,000,000
was  required by Sun Security Bank.  These funds were acquired by Xtreme through
a convertible debenture with Dutchess Private Equities Fund, II, LP, on February
24,  2006.  Because this certificate of deposit has a maturity date of more than
three  months,  it  is  carried  on the Company balance sheet as an Other Asset.

ADVANCES  TO  MARINE  HOLDINGS,  INC.

During  2004,  2005 and the two months of January and February 2006, the Company
provided  financing  to  Marine  Holdings,  Inc.,  d/b/a  Challenger Offshore, a
Missouri  boat  manufacturer  totaling  $144,605,  $2,311,891,  and  $1,254,398
respectively.  These advances have been eliminated in the consolidated financial
statements. The Company provided this financing in the form of advances pursuant
to  the  Marketing and Distribution Agreement executed between the two companies
on  March  1,  2005.  Pursuant  to the Marketing and Distribution Agreement, the
Company  administered  all  marketing  and  sales  efforts and was the exclusive
distributor  of  leisure,  fishing and performance boats manufactured by Marine,
under  the  Challenger  Offshore  name.

On  February 28, 2006, the Company finalized the purchase transaction to acquire
one-hundred  percent of the total outstanding shares of Marine Holdings, Inc., a
Missouri  corporation  d/b/a  Challenger Offshore, pursuant to the Marketing and
Distribution  Agreement  of  March 1, 2005 and upon the terms and conditions set
forth  in  the  Marketing  and  Distribution Agreement.  In connection with this
transaction,  existing  loans of Marine Holdings, Inc. at Sun Security Bank were
paid  in  full by Xtreme Companies, Inc.  Funding for payment of these loans was
generated  through new loans executed by Xtreme Companies, Inc. in the amount of
$4,123,627.

                                     -9-
<PAGE>

ACCOUNTS  RECEIVABLE

The  Company  maintains  an allowance for doubtful accounts for estimated losses
that  may  arise  if  any of its customers are unable to make required payments.
Management  specifically  analyzes  the age of customer balances, historical bad
debt  experience,  customer  credit-worthiness, and changes in customer payments
terms  when  making  estimates  of  the  uncollectibility of the Company's trade
accounts  receivable  balances.  If  the  Company  determines that the financial
conditions  of  any  of  its customers has deteriorated, whether due to customer
specific  or  general economic issues, an increase in the allowance may be made.
Accounts  receivable  are  written off when all collection attempts have failed.
Due  to  the  cash  in  advance  payment  terms  provided to most customers, the
likelihood  of  an  uncollectible  account  is  relatively  low.

INVENTORY

The  finished  boat inventory of $1,677,787 consists of eighteen performance and
sport  boats manufactured by Marine Holdings for Wayton Marine International and
Life  Line  Marine  to  fulfill  sales  orders.  The distribution agreement with
Wayton  Marine  International  was  terminated in June 2006 and the distribution
agreement  with  Life Line Marine was terminated in July 2006.  The terminations
were  in part, due to a lack of performance under the contracts and as a result,
the Company had to book sales returns from Wayton Marine International.  Per the
terms  of  the  distribution  agreement signed with Life Line Marine on April 4,
2006, Life Line was to purchase fifteen boats in the three months ended June 30,
2006,  however,  only  one  boat was purchased in the time period.   The Company
built  product  to  fulfill  the  sales  orders with Wayton Marine and Life Line
Marine,  however, the Company was not able to ship the boats to the customers as
a  result  of  non-payment.  The  Company  is  actively  working  to establish a
national  dealer  network  through  which  their  product  will  be  sold.

Finished  boat  inventory also includes a fire rescue boat built for the Town of
New  Fairfield,  CT,  which  has  not  been  shipped  or  billed.

The  inventory  also  consists  of  a  SV-42 sport boat purchased through Marine
Holdings,  Inc.  in  2005 for $250,000.  This item is intended for resale and is
carried  on the financial statements at $125,000, after a write-down of $125,000
in  March  2006.  After an evaluation by the Company, it was determined that the
value of the boat is $125,000 and a strong effort is being made to sell the boat
at  this  time.

The  boats  in  process  inventory of $752,321 at September 30, 2006 consists of
Challenger  boats  in  various stages of the manufacturing process.  These boats
were  built  to fulfill customer orders for Wayton Marine and Life Line, and are
ready  for  shipment  upon  completion.

The  $312,465  at  September  30,  2006 of parts inventory consists primarily of
small  parts,  stereos,  windows,  steering  systems, and engines for use in the
Challenger  manufactured  boats.   The  inventory  is  routinely  analyzed  and
reviewed  to  determine if there is excess or obsolete inventory.  Any inventory
determined  to  be  excess  or  obsolete is returned to vendors or sold.  In the
event  there  is  any  remaining  inventory,  it is expensed and written-off the
balance  sheet.

PROPERTY  &  EQUIPMENT

Property  and  equipment  are stated at cost. Depreciation is provided using the
straight-line method over the estimated useful lives of the related assets, e.g.
real  estate  (30  years),  computers  (5  years),  software  (3  years), office
equipment  and  furniture  (3-7  years),  building  improvements  (5  years).

LONG-LIVED  ASSETS

SFAS  No.  121,  "Accounting  for  the  Impairment  of Long-Lived Assets and for
Long-Lived  Assets  to  Disposed of" requires that long-lived assets be reviewed
for  impairment  whenever  events  or changes in circumstances indicate that the
carrying  amount  of  an  asset  may  not  be  recoverable.

STOCK  BASED  COMPENSATION

SFAS  No.123,  "Accounting for Stock-Based Compensation" ("SFAS No. 123') allows
an  entity  to  elect  to continue to measure compensation cost under Accounting
Principles  Board  Opinion  No.  25,  "Accounting for Stock Issued to Employees"
("APB  No.  25"),  but  requires  pro forma disclosures of net loss and loss per
share  as  if  the  fair-valued-based  method of accounting had been applied. In
accordance  with  SFAS  123,  the  Company  elected  to  continue  to  measure
compensation  cost  under  APB  No. 25, and comply with the pro forma disclosure
requirements.

                                      -10-
<PAGE>

The  Company  has adopted, for footnote disclosure purposes, SFAS No. 123, which
requires  that  companies disclose the cost of stock-based employee compensation
at  the  grant  date based on the value of the award (the fair value method) and
disclose  this  cost over the service period. The value of the stock-based award
is  determined  using a pricing model whereby compensation cost is the excess of
the  fair  value  of the award as determined by the model at grant date or other
measurement  date  over  the  amount  an employee must pay to acquire the stock.

Transactions  in which goods or services are received from non-employees for the
issuance  of  equity securities or stock-based awards are accounted for based on
the  fair  value  of  the  consideration  received.

FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS

The  Company's  financial  instruments,  including  cash  and  cash equivalents,
accounts  receivable,  accounts  payable  and accrued liabilities are carried at
cost,  which approximates their fair value, due to the relatively short maturity
of  these  instruments.  As  of  September 30, 2006, and September 30, 2005, the
Company's  notes  payable  have  stated borrowing rates that are consistent with
those  currently available to the Company and, accordingly, the Company believes
the  carrying  value  of  these  debt instruments approximates their fair value.

REVENUE  RECOGNITION

The  Company recognizes income when the products are completed for delivery, and
when the service is provided, and the customer is invoiced.  The Company applies
the  provisions  of  the  SEC  Staff  Accounting  Bulletin  No.  104,  "Revenue
Recognition in Financial Statements" which provides guidance on the recognition,
presentation  and  disclosure  of revenue in financial statements. The Company's
revenues  earned from boat sales and related services are recorded when the boat
is  completed  at  the  manufacturing  plant  and the customer is invoiced.  The
customers  are  responsible  for  shipment  and  delivery  of the boats from the
manufacturing  plant.

Xtreme  fire  rescue  and patrol boats are customarily sold with terms of 50% of
the  invoiced  boat  amount due and payable prior to work beginning on the boat,
with the balance due upon delivery.  The manufacturer's certificate of origin is
not  provided  to  the customer until the boat has been paid in full. Challenger
Offshore  product  is recorded when the service is provided, or when the boat is
completed  at  the  manufacturing plant and the customer is invoiced.  All boats
are  sold  FOB  Washington, Missouri plant.  Bulletin No. 104 outlines the basic
criteria  that  must  be  met to recognize revenue and provides guidance for the
disclosure  of  revenue  recognition policies. The Company's revenue recognition
policy for sale of products is in compliance with Bulletin No. 104. Revenue from
the  sale  of products is recognized when a formal arrangement exists, the price
is  fixed,  or  determinable,  the  delivery  is completed and collectibility is
reasonably assured.  As a result of the Company's sales terms, the likelihood of
uncollectible  accounts  receivable  remains  low.

NET  LOSS  PER  SHARE

SFAS No. 128, "Earnings Per Share" requires presentation of basic loss per share
and  diluted loss per share. The computation of basic loss per share is computed
by dividing loss available to common stockholders by the weighted-average number
of  outstanding  common  shares  during the period. Diluted loss per share gives
effect  to  all dilutive potential common shares outstanding and all shares held
in  treasury  during  the period. The computation of diluted loss per share does
not  assume conversion, exercise or contingent exercise of securities that would
have  an  anti-dilutive  effect  on  losses.

Net  loss  per  common  share  is  computed using the weighted average number of
common  shares  outstanding during the periods presented. Convertible debentures
and  warrants  may have a dilutive effect on the Company's earnings per share in
the  future  but are not included in the calculation.  As of September 30, 2006,
convertible  debentures  could convert to 321,473,700 shares of common stock and
1,734,000  shares  of  common  stock could be issued pursuant to the exercise of
warrants.

ADVERTISING  COSTS

Advertising  and  promotional  activities  are  expensed  when  incurred.  Total
advertising  costs  were $15,369 and $2,843 for the three months ended September
30,  2006  and  2005,  respectively.

                                      -11-
<PAGE>

SHIPPING  AND  HANDLING  COSTS

Shipping  and handling costs are expensed when incurred.  All sales are recorded
when  the  products  are  invoiced  to  the  customer  upon  completion  at  the
manufacturing  plant.  The  Company  bills its customers on a separate basis for
shipping  and  handling  costs.  Amounts  billed  to  customers for shipping and
handling  are  recorded  as  revenues, and more specifically within the "product
sales"  revenue  subcategory.  Amounts  incurred by the Company for shipping and
handling  costs  related  to the sale and delivery of goods to its customers are
included  in  other  operating  expenses  in  the statement of operations. Total
shipping  and handling costs were $0 and $0 for the three months ended September
30,  2006  and  2005,  respectively.

INCOME  TAXES

There has been no provision for U.S. federal, state, or foreign income taxes for
any  period  because  the Company has incurred losses in all periods and for all
jurisdictions.  Deferred  income  taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for financial
reporting  purposes  and  the  amounts used for income tax purposes. Significant
components  of  deferred  tax  assets  are  as  follows:


                                                                     2006
                                                             -------------------
Deferred  tax  assets:
    Net  operating  loss  carryforwards                            $ 26,888,049
    Valuation  allowance  for  deferred  tax  assets                (26,888,049)
                                                             -------------------
    Net  deferred tax assets                                       $          -
                                                             ===================

Realization  of  deferred  tax assets is dependent upon future earnings, if any,
the  timing and amount of which are uncertain. Accordingly, the net deferred tax
assets  have  been  fully  offset  by a valuation allowance. As of September 30,
2006,  the  Company  had  net  operating  loss  carryforwards  of  approximately
$26,888,049  or  federal  income  tax purposes. Utilization of the net operating
loss  may  be  subject  to  substantial  annual limitations due to the ownership
change  limitations  provided  by  the  Internal  Revenue Code and similar state
provisions.  The  annual  limitation  could  result in the expiration of the net
operating  loss  before  utilization.

NOTE  2.  ACCOUNTS  RECEIVABLE

As  of  September  30,  2006,  accounts  receivable  consists  of the following:

Accounts  Receivable  -  Trade
                                             City of Philadelphia, PA     60,000
                                                                         -------
                                                                TOTAL    $60,000
                                                                         -------

NOTE  3.  INVENTORY

As  of  September  30,  2006,  inventory  consists  of  the  following:


                                     SV-42 Pleasure Boat                $125,000
                                     Fire Rescue Boat                     31,750
                                     New Performance & Sport Boats     1,521,037
                                     Boats In Process (WIP)              752,321
                                     Parts Inventory                     312,465
                                     Trailers                            114,363
                                                                      ----------
                                                            TOTAL     $2,856,936

NOTE  4.  PROPERTY  AND  EQUIPMENT

Property  and  equipment  at  September  30,  2006,  consists  of the following:


                                                   2006
                                               -----------
Building  &  Land                              $   936,542
Molds  and  plugs                                  557,955
Machinery  and  equipment                          166,656
Autos  and  trucks                                  69,000
Furniture  and  fixtures                            11,070
Trailers  for  plant  use                           24,929
Building  improvements  &  capital  additions      135,598
                                               -----------
                                                 1,901,750
Less  accumulated  depreciation
 and  amortization                                (430,394)
                                               -----------
                                               $ 1,471,356
                                               ===========


NOTE  5.  ADVANCES  TO  MARINE  HOLDINGS,  INC.

During  2004, 2005, and the two months of January and February 2006, the Company
provided  financing  to  Marine  Holdings,  Inc.  d/b/a  Challenger  Offshore, a
Missouri  boat  manufacturer,  totaling  $144,605,  $2,311,891,  and  $1,254,398
respectively.  These advances have been eliminated in the consolidated financial
statements  subsequent  to  the  purchase  and  merge  with  Xtreme. The Company
provided  this  financing  in the form of advances pursuant to the Marketing and
Distribution  Agreement  executed  between  the  two companies on March 1, 2005.
Pursuant  to  the Marketing and Distribution Agreement, the Company administered
all  marketing  and  sales efforts and was the exclusive distributor of leisure,
fishing  and  performance  boats  manufactured  by  Marine, under the Challenger
Offshore  name.

On  February 28, 2006, the Company finalized the purchase transaction to acquire
one-hundred  percent  of  the  total outstanding shares of Marine Holdings, Inc.
pursuant  to  the Marketing and Distribution Agreement of March 1, 2005 and upon
the  terms and conditions set forth in the Marketing and Distribution Agreement.
In  connection with this transaction, existing loans of Marine Holdings, Inc. at
Sun  Security  Bank  were  paid  in  full by Xtreme Companies, Inc.  Funding for
payment  of  these  loans  was  generated  through  new loans executed by Xtreme
Companies,  Inc.  in  the  amount  of  $4,123,627.

NOTE  6.  ACCOUNTS  PAYABLE  AND  ACCRUED  EXPENSES

Accounts  payable  and accrued expenses as of September 30, 2006 consists of the
following:

                               2006
                           -----------
Accounts  payable          $   405,274
Accrued  expenses                2,000
Accrued  interest              809,131
Accrued  payroll  taxes        102,372
                           -----------
Total                      $ 1,318,777
                           ===========

NOTE  7.  CONVERTIBLE  DEBENTURES

On July 5, 2006, the Company entered into a Convertible Debenture Agreement with
Dutchess Private Equities Fund, II, LP, in the amount of $312,000, at a discount
of  $52,000.  The  debenture has a 10% interest rate and is due and payable July
5, 2011.  The purchaser of the convertible debentures is entitled to convert the
face  amount  of  the debentures plus accrued interest into the Company's common
stock  at  the  lesser  of  (i)  75%  of the lowest closing bid price during the
fifteen  trading days prior to the Conversion Date or (ii) at a Fixed Conversion
Price  of  five  cents  ($0.05).

On  July  20,  2006,  the Company entered into a Convertible Debenture Agreement
with  Dutchess  Private  Equities  Fund,  LP,  in  the  amount of $186,000, at a
discount  of  $31,000.  The  debenture  has  a  10% interest rate and is due and
payable  July 20, 2011.  The purchaser of the convertible debentures is entitled
to  convert  the  face  amount  of the debentures plus accrued interest into the
Company's  common stock at the lesser of (i) 75% of the lowest closing bid price
during  the fifteen trading days prior to the Conversion Date or (ii) at a Fixed
Conversion  Price  of  five  cents  ($0.05).

On  July  21,  2006,  the Company entered into a Convertible Debenture Agreement
with Dutchess Private Equities Fund, LP, in the amount of $66,000, at a discount
of  $11,000.  The  debenture has a 10% interest rate and is due and payable July
21,  2011.  The  purchaser  of the convertible debentures is entitled to convert
the  face  amount  of  the  debentures  plus accrued interest into the Company's
common stock at the lesser of (i) 75% of the lowest closing bid price during the
fifteen  trading days prior to the Conversion Date or (ii) at a Fixed Conversion
Price  of  five  cents  ($0.05).

On  August  1,  2006, the Company entered into a Convertible Debenture Agreement
with  Dutchess  Private  Equities  Fund,  LP,  in  the  amount of $282,000, at a
discount  of  $47,000.  The  debenture  has  a  10% interest rate and is due and
payable August 1, 2011.  The purchaser of the convertible debentures is entitled
to  convert  the  face  amount  of the debentures plus accrued interest into the
Company's  common stock at the lesser of (i) 75% of the lowest closing bid price
during the fifteen trading days prior to the Conversion Date or (ii) at a "Fixed
Conversion  Price"  of  four  cents  ($0.04).

On  August  17, 2006, the Company entered into a Convertible Debenture Agreement
with  Dutchess  Private  Equities  Fund,  LP,  in  the  amount of $312,000, at a
discount  of  $52,000.  The  debenture  has  a  10% interest rate and is due and
payable  August  17,  2011.  The  purchaser  of  the  convertible  debentures is
entitled to convert the face amount of the debentures plus accrued interest into
the  Company's  common  stock at the lesser of (i) 75% of the lowest closing bid
price  during the fifteen trading days prior to the Conversion Date or (ii) at a
"Fixed  Conversion  Price"  of  three  cents  ($0.03).

On  August  30, 2006, the Company entered into a Convertible Debenture Agreement
with  Dutchess  Private  Equities  Fund,  LP,  in  the  amount of $315,600, at a
discount  of  $52,600.  The  debenture  has  a  10% interest rate and is due and
payable  August  30,  2011.  The  purchaser  of  the  convertible  debentures is
entitled to convert the face amount of the debentures plus accrued interest into
the  Company's  common  stock at the lesser of (i) 75% of the lowest closing bid
price  during the fifteen trading days prior to the Conversion Date or (ii) at a
"Fixed  Conversion  Price"  of  three  cents  ($0.03).

On  September  12,  2006,  the  Company  entered  into  a  Convertible Debenture
Agreement  with  Dutchess  Private  Equities  Fund,  II,  LP,  in  the amount of
$324,000,  at  a discount of $54,000.  The debenture has a 10% interest rate and
is  due  and  payable  September  12,  2011.  The  purchaser  of the convertible
debentures is entitled to convert the face amount of the debentures plus accrued
interest  into the Company's common stock at the lesser of (i) 75% of the lowest
closing  bid  price during the fifteen trading days prior to the Conversion Date
or  (ii)  at  a  "Fixed  Conversion  Price"  of  three  cents  ($0.03).

On  September  26,  2006,  the  Company  entered  into  a  Convertible Debenture
Agreement with Dutchess Private Equities Fund, LP, in the amount of $336,000, at
a  discount  of  $56,000.  The  debenture has a 10% interest rate and is due and
payable  September  26,  2011.  The  purchaser  of the convertible debentures is
entitled to convert the face amount of the debentures plus accrued interest into
the  Company's  common  stock at the lesser of (i) 75% of the lowest closing bid
price  during the fifteen trading days prior to the Conversion Date or (ii) at a
"Fixed  Conversion  Price"  of  three  cents  ($0.03).

On  September  26,  2006,  the  Company  entered  into  a  Convertible Debenture
Agreement  with  Dutchess  Private  Equities  Fund,  II,  LP,  in  the amount of
$446,400,  at  a discount of $74,4000. The debenture has a 10% interest rate and
is  due  and  payable  September  26,  2011.  The  purchaser  of the convertible
debentures is entitled to convert the face amount of the debentures plus accrued
interest  into the Company's common stock at the lesser of (i) 75% of the lowest
closing  bid  price during the fifteen trading days prior to the Conversion Date
or  (ii)  at  a  "Fixed  Conversion  Price"  of  three  cents  ($0.03).

                                      -12-
<PAGE>

NOTE  8.  NOTES  PAYABLE

At  September  30,  2006,  the  Company  had various short term Notes Payable as
follows:

On September 27, 2006, the Company paid $488,861.39 to Happy Apple Company for a
matured  note  payable  in  the  amount  of  $481,373.36 principal and $7,488.03
accrued  interest.

The  Company  has a short term Note with Bank of Washington for $13,699, secured
by  a  2002  GMC3500  truck,  that  bears interest at a rate of 9.25%, and has a
maturity  date  of  March  22,  2009.

The  Company  has  short  term  Notes  with  Sun  Security  Bank  for a total of
$1,080,855,  secured  by  certain  Challenger  Offshore  WIP  boats,  that bears
interest  at a rate of US Bank Prime Rate plus 2.0%.  These are 90 day notes and
are  renewable.

On  July  21,  2005,  the  Company  issued  a  non-interest  bearing Convertible
Promissory Note to Dutchess Private Equities Fund, LP in the amount of $120,000.
The  Note  carries  an  interest  rate  of  0% per year and was initially due on
December  21, 2005. The Note was extended and is now due and payable with thirty
days  notice  from  Dutchess  Private  Equities  Fund,  LP.  The  Note carries a
discounted amount of $10,000.   As of September 30, 2006, $0.00 of this Note was
repaid,  and  the  balance  at  September  30,  2006  is  $120,000.

On  August  5,  2005,  the  Company  issued  a  non-interest bearing Convertible
Promissory Note to Dutchess Private Equities Fund, LP in the amount of $144,000.
The  Note  carries  an  interest  rate  of  0% per year and was initially due on
January  5, 2006.   The Note was extended and is now due and payable with thirty
days  notice  from  Dutchess  Private  Equities  Fund,  LP.  The  Note carries a
discounted  amount of $24,000.  As of September 30, 2006, $0.00 of this Note was
repaid,  and  the  balance  at  September  30,  2006  is  $144,000.

On  August  22,  2005,  the  Company  issued  a non-interest bearing Convertible
Promissory Note to Dutchess Private Equities Fund, LP in the amount of $180,000.
The Note carries an interest rate of 0% per year and was initially due on August
22,  2006.  The  Note  was  extended and is now due and payable with thirty days
notice  from  Dutchess Private Equities Fund, LP.  The Note carries a discounted
amount of $30,000.  As of September 30, 2006, $0.00 of this Note was repaid, and
the  balance  at  September  30,  2006  is  $180,000.

 On  September  1,  2005,  the Company issued a non-interest bearing Convertible
Promissory  Note  promissory  note  to Dutchess Private Equities Fund, LP in the
amount  of  $72,000.  The  Note  carries an interest rate of 0% per year and was
initially  due  on September 1, 2006.   The Note was extended and is now due and
payable  with  thirty  days  notice from Dutchess Private Equities Fund, LP. The
Note carries a discounted amount of $12,000.  As of September 30, 2006, $0.00 of
this  Note  was  repaid,  and  the  balance  at  September  30, 2006 is $72,000.

On  September  7,  2005,  the  Company issued a non-interest bearing Convertible
Promissory Note to Dutchess Private Equities Fund, LP in the amount of $108,000.
The  Note  carries  an  interest  rate  of  0%  per year and was intially due on
September 7, 2006.  The Note was extended and is now due and payable with thirty
days  notice  from  Dutchess  Private  Equities  Fund,  LP.  The  Note carries a
discounted  amount of $18,000.  As of September 30, 2006, $0.00 of this Note was
repaid,  and  the  balance  at  September  30,  2006  is  $108,000.

On  September  15,  2005,  the Company issued a non-interest bearing Convertible
Promissory Note to Dutchess Private Equities Fund, LP in the amount of $201,000.
The  Note  carries  an  interest  rate  of  0% per year and was initially due on
September 15, 2006. The Note was extended and is now due and payable with thirty
days  notice  from  Dutchess  Private  Equities  Fund,  LP.  The  Note carries a
discounted  amount of $33,500.  As of September 30, 2006, $0.00 of this Note was
repaid,  and  the  balance  at  September  30,  2006  is  $201,000.

On  September  22,  2005,  the Company issued a non-interest bearing Convertible
Promissory Note to Dutchess Private Equities Fund, LP in the amount of $158,400.
The  Note  carries  an  interest  rate  of  0% per year and was initially due on
September 22, 2006. The Note was extended and is now due and payable with thirty
days  notice  from  Dutchess  Private  Equities  Fund,  LP.  The  Note carries a
discounted  amount  of $26,400. As of September 30, 2006, $0.00 of this Note was
repaid,  and  the  balance  at  September  30,  2006  is  $158,400.

                                      -13-
<PAGE>

On  September  30,  2005,  the Company issued a non-interest bearing Convertible
Promissory Note to Dutchess Private Equities Fund, LP in the amount of $236,400.
The  Note  carries  an  interest  rate  of 0% per year and was initially  due on
September 30, 2006. The Note was extended and is now due and payable with thirty
days  notice  from  Dutchess  Private  Equities  Fund,  LP.  The  Note carries a
discounted  amount of $39,400.  As of September 30, 2006, $0.00 of this Note was
repaid,  and  the  balance  at  September  30,  2006  is  $236,400.

On  October  7,  2005,  the  Company  issued  a non-interest bearing Convertible
Promissory Note to Dutchess Private Equities Fund, LP in the amount of $222,000.
The  Note  carries  an  interest  rate  of  0% per year and was initially due on
October  7,  2006.  The Note was extended and is now due and payable with thirty
days  notice  from  Dutchess  Private  Equities  Fund,  LP.  The  Note carries a
discounted  amount  of $37,000. As of September 30, 2006, $0.00 of this Note was
repaid,  and  the  balance  at  September  30,  2006  is  $222,000.

On  October  14,  2005,  the  Company  issued a non-interest bearing Convertible
Promissory Note to Dutchess Private Equities Fund, LP in the amount of $192,000.
The  Note  carries  an  interest  rate  of  0% per year and was initially due on
October  14,  2006. The Note was extended and is now due and payable with thirty
days  notice  from  Dutchess  Private  Equities  Fund,  LP.  The  Note carries a
discounted  amount of $32,000.  As of September 30, 2006, $0.00 of this Note was
repaid,  and  the  balance  at  September  30,  2006  is  $192,000.

On  November  1,  2005,  the  Company  issued a non-interest bearing Convertible
Promissory  Note  to  Dutchess  Private  Equities  Fund, II, LP in the amount of
$156,000.  The  Note  carries  an interest rate of 0% per year and was initially
due  on  November 1, 2006. The Note was extended and is now due and payable with
thirty  days notice from Dutchess Private Equities Fund, LP.  The Note carries a
discounted  amount of $26,000.  As of September 30, 2006, $0.00 of this Note was
repaid,  and  the  balance  at  September  30,  2006  is  $156,000.

On  November  9,  2005,  the  Company  issued a non-interest bearing Convertible
Promissory  Note  to  Dutchess  Private  Equities  Fund, II, LP in the amount of
$216,000.  The  Note  carries  an interest rate of 0% per year and was initially
due  on  November 9, 2006. The Note was extended and is now due and payable with
thirty  days  notice from Dutchess Private Equities Fund, LP. The Note carries a
discounted  amount of $36,000.  As of September 30, 2006, $0.00 of this Note was
repaid,  and  the  balance  at  September  30,  2006  is  $216,000.

On  December  6,  2005,  the  Company  issued a non-interest bearing Convertible
Promissory  Note  to  Dutchess  Private  Equities  Fund, II, LP in the amount of
$216,000.  The  Note  carries  an  interest  rate  of  0% per year and is due on
December  6,  2006.  The  Note  carries  a  discounted amount of $36,000.  As of
September  30, 2006, $0.00 of this Note was repaid, and the balance at September
30,  2006  is  $216,000.

On  January  3,  2006,  the  Company  issued  a non-interest bearing Convertible
Promissory  Note  to  Dutchess  Private  Equities  Fund, II, LP in the amount of
$302,400.  The  Note  carries  an  interest  rate  of  0% per year and is due on
January  3,  2011.  The  Nnote  carries  a  discounted  amount  of  $50,400.

On  January  27,  2006,  the  Company  issued a non-interest bearing Convertible
Promissory  Note  to  Dutchess  Private  Equities  Fund, II, LP in the amount of
$59,253.82.  The Nnote carries an interest rate of 0% per year and was initially
due  on  July  27,  2006.  The Note was extended and is now due and payable with
thirty  days  notice from Dutchess Private Equities Fund, LP. The Note carries a
discounted amount of $9,875.63. As of September 30, 2006, $0.00x.xx of this Note
was  repaid,  and  the  balance  at  September  30,  2006  is  $xx,xxx59,253.82.

On February 28, 2006, the Company entered into a long-term Note Payable with Sun
Security  Bank  of  $2,961,429,  secured  by  the  manufacturing  facility  in
Washington,  Missouri,  and  all  fixed  assets  of the Company. The Nnote bears
interest  at a rate of US Bank Prime Rate plus 1.0% and a maturity date of March
1,  2009.  It  is  also  secured  by  a  certificate of deposit in the amount of
$1,000,000  on  deposit at Sun Security Bank. As of September 30, 2006, the Note
Payable  carries  a  principal  balance  of  $2,876,817.

On  May  17,  2006,  the  Company  entered into an Accounts Receivable Factoring
Agreement  with  Dutchess  Private  Equities  Fund,  II,  LP,  in  the amount of
$695,000.  The  factoring  agreement  has  a  3.5% monthly interest rate and was
initially due and payable July 17, 2006, with one month minimum interest due and
payable  on  the  funds.  The  Agreement was extended and is now due and payable
within  thirty days notice from Dutchess Private Equities Fund, II, LP. As funds
become  available  through  the  collection  of  receivables on certain boats as
described in the factoring agreement, all funds, and any interest and penalties,
must  be  forwarded  to the Holder within one business day. In the event that on
the  maturity  date,  there  is a balance due on the face amount, the Holder can
increase  the  face amount by ten percent 10% per month, for each month that the
agreement  remains unpaid. As September 30, 2006, $0.00 of this Note was repaid,
and  the  balance  at  September  30,  2006  is  $695,000.

                                      -14-
<PAGE>

On  June  7, 2006, the Company entered into an agreement relating to convertible
promissory  notes  held by individual investors whereby the promissory notes are
extended  for  a  period  of  one  year.  In consideration of the extension, the
investors  retain  all  rights  and  warrants  from the prior notes and gain the
additional  right of a 50% conversion option, which may be exercised at any time
during  the  second  terms,  including  the maturity date.  The 50% conversation
would  be at a discount to the public selling price of the stock on the date the
Company  is  notified  of the investor's intention.  The Company agrees to repay
the  principal  and 40% simple interest at the maturity date or convert the note
into  common  stock  at  $0.10  per  share  at anytime during the extended term,
regardless  of  the  public  selling  price.

NOTE  9.  COMMITMENTS  AND  CONTINGENCIES

Legal  Matters

On  August  18,  2006,  Mike  Thomas, a former employee of the Company,  filed a
petition in the 20th Judicial Court of Franklin County, Missouri, against Marine
Holdings,  Inc. doing business as Challenger Offshore and Xtreme Companies, Inc.
for  alleged  breach of employment contract and wrongful discharge in the amount
of $74,375.07, representing the unpaid portion of his annual salary, $12,000 for
a bonus Mr. Thomas believes he would have received, reasonable attorney fees and
other  costs.   The  Company believes the plaintiff's entire claim is frivolous.
Together  with  Marine,  the Company filed an Answer in the Circuit Court of the
County  of Franklin on October 24, 2006 stating that Mr. Thomas' did not fulfill
his  obligations  to  the  Company  and Marine.  The Company also counterclaimed
stating  that  Mr.  Thomas  breached  the  alleged  agreement  and  is  seeking
compensation  and  punitive  damages  against him for the harm he has caused the
Company  and  its employees in an amount of $25,000 for actual damages, punitive
damages,  treble damages, an accounting of all securities in Xtreme owned by Mr.
Thomas,  an  order  requiring  the  forfeiture and disgorgement to Xtreme of all
shares  and  warrants  held by Mr. Thomas, attorney's fees and costs.  It is too
early to determine the outcome of such allegations; however, the Company intends
to  continue  to  vigorously  defend  against  the  plaintiff's  claim.

The  Company  believes  that  there  are  no  other claims or litigation pending
against  the  Company  or its officers and directors in their roles as such, the
outcome of which could have a material adverse effect on the Company's financial
condition  or  operating  results.

NOTE  10.  CAPITAL  STOCK  TRANSACTIONS

The  authorized  common stock of the Company consists of 100,000,000 shares with
par value of $0.001. On September 26, 2003, Xtreme's Board of Directors declared
a  100-for-one  reverse  stock  split  of  outstanding  common  stock payable at
September  26,  2003  and  amended the Articles of Incorporation to increase the
authorized capital shares to 100,000,000. On January 30, 2004, Xtreme's Board of
Directors  declared  a  10-for-1  reverse  split of the outstanding common stock
payable  at  January  30,  2004.

All  share and per share amounts in the accompanying financial statements of the
Company and notes thereto have been retroactively adjusted to give effect to the
stock  splits.

During the year ended December 31, 2005, the following common stock transactions
were  made:

The  Company  issued  557,275  shares  of  the  Company's common stock valued at
$83,591  to  Ron  DiBartolo  of  Marine  Holdings,  Inc. in conjunction with the
Marketing  and  Distribution  Agreement  dated  March  1, 2005.  The shares were
accounted  for  as  marketing  expenses.

The  Company  issued  1,400,000 shares of the Company's common stock to Dutchess
Private  Equities  Fund,  II,  LP,  as  an inducement to provide financing.  The
expense  for  the  stock,  valued at $154,000, was booked to interest expense in
2004.

The  Company  issued  1,671,826  shares  of the Company's common stock valued at
$250,774  to eFund Capital Partners, LLC, as an inducement to provide financing.
The  shares  were  accounted  for  as  interest  expense.

The  Company  issued  2,229,101  shares  of the Company's common stock valued at
$334,365  to  Dutchess  Advisors,  LLC  for  consulting  work.  The  shares were
accounted  for  as  consulting  expense.

                                      -15-
<PAGE>

The Company issued 300,000 shares of the Company's common stock to an officer of
the  Company  as  compensation  valued  at  $54,000.

The  Company  issued  500,000  shares  of  the  Company's common stock valued at
$95,000 to Preston Capital Partners in connection with the Equity Line Agreement
dated  September 24, 2005.  As of December 31, 2005, proceeds for 167,399 shares
were  applied  as payment to the November 22, 2005 promissory note with Dutchess
Private  Equities  Fund,  II,  LP.  The remaining 332,601 shares were applied as
payment  against  the  same  promissory  note  on  January  19,  2006.

The  Company  issued  1,858,018  shares  of  the  Company's common stock for the
conversion  of  $219,928  in  debts  incurred  in  previous  years.

During the year ended December 31, 2006, the following common stock transactions
were  made:

On January 20, 2006, the Company issued 1,000,000 shares of the Company's common
stock  valued  at  $120,000  to  Preston Capital Partners in connection with the
Equity  Line  Agreement  dated  September  24,  2005.  Proceeds  for shares were
applied as payment to the February 3, 2006 promissory note with Dutchess Private
Equities  Fund,  LP.

On February 1, 2006, the Company issued 1,000,000 shares of the Company's common
stock  valued  at  $110,000  to  Market  Pulse for investor relations work.  The
shares  were  accounted  for  as  investor  relations  expense.

On  February  1, 2006, the Company issued 750,000 shares of the Company's common
stock valued at $82,500 to Sea Coast Financial for investor relations work.  The
shares  were  accounted  for  as  investor  relations  expense.

On  February 27, 2006, the Company issued 500,000 shares of the Company's common
stock  valued  at  $55,000  to  Preston  Capital Partners in connection with the
Equity  Line  Agreement  dated  September  24,  2005.  Proceeds  for shares were
applied as payment to the February 3, 2006 promissory note with Dutchess Private
Equities  Fund,  LP.

On  March  3,  2006, the Company issued 1,000,000 shares of the Company's common
stock  valued  at  $150,000  to  Preston Capital Partners in connection with the
Equity  Line  Agreement  dated  September  24,  2005.  Proceeds  for shares were
applied as payment to the February 3, 2006 promissory note with Dutchess Private
Equities  Fund,  LP,  a  payment  to  the February 10, 2006 promissory note with
Dutchess  Private  Equities Fund, II, LP, and a payment to the February 28, 2006
promissory  note  with  Dutchess  Private  Equities  Fund,  II,  LP.

On  April  10,  2006,  the Company issued 500,000 shares of the Company's common
stock  valued  at  $60,000  to  Preston  Capital Partners in connection with the
Equity  Line  Agreement  dated  September  24,  2005.  Proceeds  for shares were
applied  as  payment  to  the  February  28,  2006 promissory note with Dutchess
Private  Equities  Fund,  II,  LP, a payment to the November 22, 2005 promissory
note  with  Dutchess Private Equities Fund, II, LP, and a payment to the June 7,
2006  promissory  note  with  Dutchess  Private  Equities  Fund,  II,  LP.

On  April  26,  2006,  the Company issued 115,874 shares of the Company's common
stock  valued  at  $12,746  to  William  Hoops  for  debt  conversion.

On  June  7,  2006,  the Company issued 8,037,911 shares of the Company's common
stock valued at $643,033 to Dutchess Private Equities Fund, LP, as an inducement
to  provide  financing.  The  shares  were  accounted  for  as interest expense.

On  June  7,  2006, the Company issued 12,592,360 shares of the Company's common
stock  valued  at  $1,007,389  to  Dutchess Private Equities Fund, II, LP, as an
inducement  to  provide  financing.  The  shares  were accounted for as interest
expense.

On  June  20,  2006, the Company issued 1,000,000 shares of the Company's common
stock  valued  at  $50,000  to  Preston  Capital Partners in connection with the
Equity  Line  Agreement  dated  September  24,  2005.  Proceeds  for shares were
applied  as  payment  to  the  February  28,  2006 promissory note with Dutchess
Private Equities Fund, II, LP, and a payment to the June 7, 2006 promissory note
with  Dutchess  Private  Equities  Fund,  II,  LP.

                                      -16-
<PAGE>

On June 20, 2006, the Company issued 30,000 shares of the Company's common stock
to  an  employee  of  the  Company  as  compensation valued at $1,500 at date of
issuance.

On June 20, 2006, the Company issued 30,000 shares of the Company's common stock
to  another  employee of the Company as compensation valued at $1,500 at date of
issuance.

On  August 17, 2006, the Company issued 1,000,000 shares of the Company's common
stock  valued  at  $40,000  to  Dennis  Gerber  for  debt  conversion.

On  August  18,  2006, the Company issued 250,000 shares of the Company's common
stock  valued at $10,000 to Dutchess Private Equities Fund, LP, as an inducement
to  provide  financing.  The  shares  were  accounted  for  as interest expense.

On  August  30,  2006, the Company issued 250,000 shares of the Company's common
stock  valued  at $7,500 to Dutchess Private Equities Fund, LP, as an inducement
to  provide  financing.  The  shares  were  accounted  for  as interest expense.

On  September 5, 2006, the Company issued 500,000 shares of the Company's common
stock  valued  at  $15,000  to  Preston  Capital Partners in connection with the
Equity  Line  Agreement  dated  September  24,  2005.  Proceeds  for shares were
applied  as  payment  to  the June 7, 2006 promissory note with Dutchess Private
Equities  Fund,  II,  LP.

On  September  6,  2006,  the  Company  issued 1,000,000 shares of the Company's
common  stock  valued  at $50,000 to Preston Capital Partners in connection with
the  Equity  Line  Agreement dated September 24, 2005.  Proceeds for shares were
applied  as  payment  to  the June 7, 2006 promissory note with Dutchess Private
Equities  Fund,  II,  LP.

On  September 8, 2006, the Company issued 500,000 shares of the Company's common
stock valued at $20,000 to Market Pulse for investor relations work.  The shares
were  accounted  for  as  investor  relations  expense.

On  September  8,  2006,  the  Company  issued 1,100,000 shares of the Company's
common  stock  valued  at $44,000 to Preston Capital Partners in connection with
the  Equity Line Agreement dated September 24, 2005.  Proceeds for 91,901 shares
were  applied  as  payment  to  the  June  7, 2006 promissory note with Dutchess
Private  Equities  Fund,  II,  LP.

On September 18, 2006, the Company issued 250,000 shares of the Company's common
stock  valued  at  $7,500  to  Dutchess  Private  Equities  Fund,  II, LP, as an
inducement  to  provide  financing.  The  shares  were accounted for as interest
expense.

On September 29, 2006, the Company issued 300,000 shares of the Company's common
stock  valued  at  $12,000  to  Dutchess  Private  Equities  Fund, II, LP, as an
inducement  to  provide  financing.  The  shares  were accounted for as interest
expense.

On September 29, 2006, the Company issued 300,000 shares of the Company's common
stock  valued at $12,000 to Dutchess Private Equities Fund, LP, as an inducement
to  provide  financing.  The  shares  were  accounted  for  as interest expense.

As  of  September  30,  2006,  the  Company  had  issued 7,100,000 shares of the
Company's common stock to Preston Capital Partners in connection with the Equity
Line  Agreement  dated  September 24, 2005. The pProceeds received for 6,091,901
shares  were  applied  as  payment  to  promissory  notes  with Dutchess Private
Equities  Fund,  LP,  and  Dutchess Private Equities Fund, II, LP. The remaining
1,008,099  shares had not been returned to the company as of September 30, 2006.

NOTE  11.  RENTS

The  Company  has  building  rental expense of $4,500 for the three months ended
September  30,  2006  for  the  rental  of  additional  warehouse space to store
completed  boats.

NOTE  12.  SUBSEQUENT  EVENTS

On  October 11, 2006, the Company entered into a Convertible Debenture Agreement
with  Dutchess  Private  Equities  Fund,  LP,  in  the  amount of $255,600, at a
discount  of  $42,600.  The  debenture  has  a  10% interest rate and is due and
payable  October  11,  2011.  The  purchaser  of  the  convertible debentures is
entitled to convert the face amount of the debentures plus accrued interest into
the  Company's  common  stock at the lesser of (i) 75% of the lowest closing bid
price  during the fifteen trading days prior to the Conversion Date or (ii) at a
Fixed  Conversion  Price  of  three  cents  ($0.03).

                                      -17-
<PAGE>

On  October  12, 2006, the Company issued 250,000 shares of the Company's common
stock  valued  at $7,500 to Dutchess Private Equities Fund, LP, as an inducement
to  provide  financing.  The  shares  were  accounted  for  as interest expense.

On  October 24, 2006, the Company entered into a Convertible Debenture Agreement
with  Dutchess  Private  Equities  Fund,  LP,  in  the  amount of $195,600, at a
discount  of  $32,600.  The  debenture  has  a  10% interest rate and is due and
payable  October  24,  2011.  The  purchaser  of  the  convertible debentures is
entitled to convert the face amount of the debentures plus accrued interest into
the  Company's  common  stock at the lesser of (i) 75% of the lowest closing bid
price  during the fifteen trading days prior to the Conversion Date or (ii) at a
Fixed  Conversion  Price  of  three  cents  ($0.03).

On  October  25, 2006, the Company issued 250,000 shares of the Company's common
stock  valued  at $7,500 to Dutchess Private Equities Fund, LP, as an inducement
to  provide  financing.  The  shares  were  accounted  for  as interest expense.

On November 2, 2006, the Company bought back 557,275 shares of common stock that
were  issued  to Ronald DiBartolo in March 2005 in connection with the Company's
Marketing  and  Distribution  Agreement  with  Marine Holdings, Inc. The Company
agreed  to  buy  back  Mr.  DiBartolo's  shares at a price of $0.02 per share as
partial  payment  for  a  boat  Mr.  DiBartolo  purchased from the Company.  The
original  value  of  the stock when issued was $83,591.  The value of the shares
received  as  payment  for  the  boat  was  $11,145.50


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

 This section should be read together with our consolidated financial statements
and  related  notes  included  elsewhere  in  this  report.

CAUTIONARY  STATEMENT  REGARDING  FORWARD-LOOKING  STATEMENTS

In addition to the historical information contained herein, this report contains
forward-looking statements that involve risks and uncertainties. Forward-looking
statements  are  not  based  on  historical  information  but  relate  to future
operations, strategies, financial results or other developments. Forward-looking
statements  are  necessarily  based  upon  estimates  and  assumptions  that are
inherently  subject  to  significant  business,  economic  and  competitive
uncertainties  and  contingencies, many of which are beyond our control and many
of  which,  with  respect  to  future business decisions, are subject to change.
Certain statements contained in this Form 10-QSB, including, without limitation,
statements  containing  the  words "believe", "anticipate, "estimate", "expect",
"are  of  the  opinion  that"  and  words  of  similar  import,  constitute
"forward-looking  statements."

You should not place any undue reliance on these forward-looking statements. You
should  be aware that our actual growth and results could differ materially from
those  contained  in  the  forward-looking statements due to a number of factors
including  those  factors  described  in  our  filings  with  the Securities and
Exchange  Commission  including  our  annual  report on Form 10-KSB. Although we
believe  the  expectations  reflected  in  the  forward-looking  statements  are
reasonable,  they relate  only  to events as of the date on which the statements
are  made,  and  our  future  results,  levels  of  activity,  performance  or
achievements  may  not  meet  these  expectations.  You  should  not place undue
reliance  on  these  forward-looking  statements. We do not intend to update any
forward-looking  statements  as  a  result  of new information, future events or
developments,  except  as  required  by  law.

CRITICAL  ACCOUNTING  POLICIES

We have identified the policies below as critical to our business operations and
the  understanding  of  our results of operations. The impact and any associated
risks  related  to  these  policies  on  our  business  operations are discussed
throughout  this  section  where  such policies affect our reported and expected
financial  results.  Our  preparation  of  our Consolidated Financial Statements
requires  us  to make estimates and assumptions that affect the reported amounts
of  assets  and  liabilities, disclosure of contingent assets and liabilities at
the  date  of  our financial statements, and the reported amounts of revenue and
expenses  during  the  reporting  period.  Actual  results may differ from those
estimates.

Our  accounting  policies  that  are  the most important to the portrayal of our
financial  condition  and  results,  and  which  require  the  highest degree of
management  judgment  relate  to revenue recognition, property and equipment and
issuance  of  shares  for  service.

                                      -18-
<PAGE>

GOING  CONCERN

The  accompanying  financial  statements  have  been prepared in conformity with
accounting  principles  generally  accepted  in  the  United  States,  which
contemplates our continuation as a going concern. Our current liabilities exceed
the  current  assets  by  $2,759,800  as of September 30, 2006. We had operating
losses  of  ($1,670,595) and ($588,711) for the three months ended September 30,
2006  and  2005,  respectively.

Our  management  is currently pursuing equity and/or debt financing in an effort
to continue operations. Our future success is likely dependent on our ability to
attain  additional  capital  to  develop its proposed products and manufacturing
processes  and  ultimately,  upon  its  ability  to  attain  future  profitable
operations.  There  can  be no assurance that we will be successful in obtaining
such financing, or that we will attain positive cash flows from operations.  The
financial  statements  do  not  include  any adjustments that might be necessary
should  we  be  unable  to  continue  as  a  going  concern.

PRINCIPLES  OF  CONSOLIDATION

The  consolidated  financial  statements  include  our accounts and those of our
wholly  owned  subsidiaries - Marine Holdings, Inc., d/b/a  Challenger Offshore,
as  of  September  30,  2006 and First Responders, Inc., known as Rockwell Power
Systems,  Inc.  until  a  name change in June 2005, as of September 30, 2006 and
2005.  All  significant intercompany accounts and transactions are eliminated in
consolidation.  For  consolidation  purposes,  Marine  Holdings, Inc. operations
have  been  consolidated  from  March  1,  2006  forward, in accordance with the
closing  transaction.

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 amounts reported in the accompanying
financial  statements.  Significant  estimates made in preparing these financial
statements  include  the  allowance  for  doubtful  accounts, deferred tax asset
valuation  allowance  and  useful  lives for depreciable and amortizable assets.
Actual  results  could  differ  from  those  estimates.

CASH  AND  CASH  EQUIVALENTS

We consider all highly liquid investments purchased with an original maturity at
date  of  purchase of three months or less to be cash equivalents. Cash and cash
equivalents  are  carried  at  cost,  which  approximates  market  value.

OTHER  ASSETS

In conjunction with the purchase of Marine Holdings, Inc. and the loan financing
through  Sun Security Bank, a certificate of deposit in the amount of $1,000,000
was  required  by  Sun  Security  Bank.  These  funds were acquired by Xtreme us
through  a convertible debenture with Dutchess Private Equities Fund, II, LP, on
February  24,  2006.  Because this certificate of deposit has a maturity date of
more  than  three  months,  it  is carried on the Companyour balance sheet as on
Other  Asset.

ADVANCES  TO  MARINE  HOLDINGS,  INC.

During  2004,  2005 and the two months of January and February 2006, we provided
financing  to  Marine Holdings, Inc., d/b/a Challenger Offshore, a Missouri boat
manufacturer, totaling $144,605, $2,311,891, and $1,254,398 respectively.  These
advances  have  been  eliminated  in  the  consolidated  financial  statements
subsequent  to the merger with Xtreme. We provided this financing in the form of
advances  pursuant  to the Marketing and Distribution Agreement executed between
the  two  companies on March 1, 2005. Pursuant to the Marketing and Distribution
Agreement,  we  administered  all  marketing  and  sales  efforts  and  were the
exclusive  distributor of leisure, fishing and performance boats manufactured by
Marine,  under  the  Challenger  Offshore  name.

On  February  28,  2006,  we  finalized  the  purchase  transaction  to  acquire
one-hundred  percent of the total outstanding shares of Marine Holdings, Inc., a
Missouri  corporation  d/b/a  Challenger Offshore, pursuant to the Marketing and
Distribution  Agreement  of  March 1, 2005 and upon the terms and conditions set
forth  in  the  Marketing  and  Distribution Agreement.  In connection with this
transaction,  existing  loans of Marine Holdings, Inc. at Sun Security Bank were
paid  in  full  by us.  Funding for payment of these loans was generated through
new  loans  executed  by  us  in  the  amount  of  $4,123,627.

                                      -19-
<PAGE>

ACCOUNTS  RECEIVABLE

We  maintain  an  allowance  for doubtful accounts for estimated losses that may
arise  if any of our customers are unable to make required payments.  Management
specifically  analyzes  the  age  of  customer  balances,  historical  bad  debt
experience,  customer  credit-worthiness, and changes in customer payments terms
when  making  estimates of the uncollectibility of our trade accounts receivable
balances.  If we determine that the financial conditions of any of our customers
deteriorated,  whether  due  to  customer  specific  or general economic issues,
increase  in the allowance may be made. Accounts receivable are written off when
all  collection  attempts have failed.  Due to the cash in advance payment terms
provided  to  most  customers,  the  likelihood  of  an uncollectible account is
relatively  low.

INVENTORY

Our  finished  boat inventory of $1,677,787 consists of eighteen performance and
sport  boats manufactured by Marine Holdings for Wayton Marine International and
Life  Line  Marine  to  fulfill  sales  orders.  The distribution agreement with
Wayton  Marine  International  was  terminated in June 2006 and the distribution
agreement  with  Life Line Marine was terminated in July 2006.  The terminations
were  in part, due to a lack of performance under the contracts and as a result,
we had to book sales returns from Wayton Marine International.  Per the terms of
the  distribution  agreement signed with Life Line Marine on April 4, 2006, Life
Line  was  to  purchase  fifteen  boats in the three months ended June 30, 2006,
however,  only one boat was purchased in the time period.   We  built product to
fulfill  the  sales  orders with Wayton Marine and Life Line Marine, however, we
were not able to ship the boats to the customers as a result of non-payment.  We
are  actively establishing a national dealer network through which their product
will  be  sold.

Finished  boat  inventory also includes a fire rescue boat built for the Town of
New  Fairfield,  CT,  that  has  not  been  shipped  or  billed.

Our  inventory  also  consists  of  a  SV-42 sport boat purchased through Marine
Holdings,  Inc.  in  2005 for $250,000.  This item is intended for resale and is
carried  on the financial statements at $125,000, after a write-down of $125,000
in March 2006.  After an evaluation, we determined that the value of the boat is
$125,000  and  a  strong  effort  is  being  made to sell the boat at this time.

The  boats  in-process  inventory  of  $752,321  consists of Challenger boats in
various  stages  of the manufacturing process.  These boats are built to fulfill
customer  orders  and  are  ready  for  shipment  upon  completion.

The  $312,465  of  parts  inventory  consists primarily of small parts, stereos,
windows,  steering  systems,  and engines for use in the Challenger manufactured
boats.   The  inventory is routinely analyzed and reviewed to determine if there
is  excess  or  obsolete  inventory.  Any  inventory  determined to be excess or
obsolete  is  returned  to vendors or sold.  In the event there is any remaining
inventory,  it  is  expensed  and  written-off  the  balance  sheet.

PROPERTY  &  EQUIPMENT

Property  and  equipment  are stated at cost. Depreciation is provided using the
straight-line method over the estimated useful lives of the related assets, e.g.
real  estate  (30  years),  computers  (5  years),  software  (3  years), office
equipment  and  furniture  (3-7  years),  building  improvements  (5  years).

LONG-LIVED  ASSETS

SFAS  No.  121,  "Accounting  for  the  Impairment  of Long-Lived Assets and for
Long-Lived  Assets  to  Disposed of" requires that long-lived assets be reviewed
for  impairment  whenever  events  or changes in circumstances indicate that the
carrying  amount  of  an  asset  may  not  be  recoverable.

STOCK  BASED  COMPENSATION

SFAS  No.123,  "Accounting for Stock-Based Compensation" ("SFAS No. 123') allows
an  entity  to  elect  to continue to measure compensation cost under Accounting
Principles  Board  Opinion  No.  25,  "Accounting for Stock Issued to Employees"
("APB  No.  25"),  but  requires  pro forma disclosures of net loss and loss per
share  as  if  the  fair-valued-based  method of accounting had been applied. In
accordance  with  SFAS  123, we elected to continue to measure compensation cost
under  APB  No.  25,  and  comply  with  the  pro forma disclosure requirements.

                                      -20-
<PAGE>

We  have adopted, for footnote disclosure purposes, SFAS No. 123, which requires
that  companies  disclose  the  cost of stock-based employee compensation at the
grant  date based on the value of the award (the fair value method) and disclose
this  cost  over  the  service  period.  The  value  of the stock-based award is
determined  using a pricing model whereby compensation cost is the excess of the
fair  value  of  the  award  as  determined  by the model at grant date or other
measurement  date  over  the  amount  an employee must pay to acquire the stock.

Transactions  in which goods or services are received from non-employees for the
issuance  of  equity securities or stock-based awards are accounted for based on
the  fair  value  of  the  consideration  received.

FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS

Our  financial  instruments,  including  cash  and  cash  equivalents,  accounts
receivable,  accounts payable and accrued liabilities are carried at cost, which
approximates  their  fair  value,  due to the relatively short maturity of these
instruments. As of September 30, 2006, and September 30, 2005, our notes payable
have  stated  borrowing rates that are consistent with those currently available
to  us and, accordingly, we believe the carrying value of these debt instruments
approximates  their  fair  value.

REVENUE  RECOGNITION

We  recognize  income when the products are completed for delivery, and when the
service  is  provided, and the customer is invoiced.  We apply the provisions of
the  SEC  Staff  Accounting  Bulletin No. 104, "Revenue Recognition in Financial
Statements"  which  provides  guidance  on  the  recognition,  presentation  and
disclosure  of  revenue  in  financial statements. Our revenues earned from boat
sales  and  related  services  are  recorded  when  the boat is completed at the
manufacturing plant and the customer is invoiced.  The customers are responsible
for  shipment  and  delivery  of  the  boats  from  the  manufacturing  plant.

Xtreme  fire  rescue  and patrol boats are customarily sold with terms of 50% of
the  invoiced  boat  amount due and payable prior to work beginning on the boat,
with the balance due upon delivery.  The manufacturer's certificate of origin is
not  provided  to  the customer until the boat has been paid in full. Challenger
Offshore  product  is recorded when the service is provided, or when the boat is
completed  at  the  manufacturing plant and the customer is invoiced.  All boats
are  sold  FOB  Washington, Missouri plant.  Bulletin No. 104 outlines the basic
criteria  that  must  be  met to recognize revenue and provides guidance for the
disclosure  of  revenue recognition policies. Our revenue recognition policy for
sale  of  products is in compliance with Bulletin No. 104. Revenue from the sale
of  products is recognized when a formal arrangement exists, the price is fixed,
or  determinable,  the  delivery  is  completed and collectibility is reasonably
assured.  As  a  result  of  our  sales  terms,  the likelihood of uncollectible
accounts  receivable  remains  low.

NET  LOSS  PER  SHARE

SFAS No. 128, "Earnings Per Share" requires presentation of basic loss per share
and  diluted loss per share. The computation of basic loss per share is computed
by dividing loss available to common stockholders by the weighted-average number
of  outstanding  common  shares  during the period. Diluted loss per share gives
effect  to  all dilutive potential common shares outstanding and all shares held
in  treasury  during  the period. The computation of diluted loss per share does
not  assume conversion, exercise or contingent exercise of securities that would
have  an  anti-dilutive  effect  on  losses.

Net  loss  per  common  share  is  computed using the weighted average number of
common  shares  outstanding during the periods presented. Convertible debentures
and  warrants may have a dilutive effect on our earnings per share in the future
but  are not included in the calculation.  As of September 30, 2006, convertible
debentures  could  convert  to  321,473,700 shares and 1,734,000 shares could be
issued  pursuant  to  the  exercise  of  warrants.

ADVERTISING  COSTS

Advertising  and  promotional  activities  are  expensed  when  incurred.  Total
advertising  costs  were $15,369 and $2,843 for the three months ended September
30,  2006  and  2005,  respectively.

SHIPPING  AND  HANDLING  COSTS

Shipping  and  handling costs are expensed when incurred. All sales are recorded
when  the  products  are  invoiced  to  the  customer  upon  completion  at  the
manufacturing  plant. We bill our customers on a separate basis for shipping and
handling  costs.  Amounts  billed  to  customers  for  shipping and handling are
recorded  as  revenues, and more specifically within the "product sales" revenue
subcategory.  Amounts  incurred by us for shipping and handling costs related to
the sale and delivery of goods to our customers, are included in other operating
expenses  in the statement of operations. Total shipping and handling costs were
$0  and $0 for the three months ended September 30, 2006 and 2005, respectively.

                                      -21-
<PAGE>

INCOME  TAXES

There has been no provision for U.S. federal, state, or foreign income taxes for
any  period  because  we  have  incurred  losses  in  all  periods  and  for all
jurisdictions.  Deferred  income  taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for financial
reporting  purposes  and  the  amounts used for income tax purposes. Significant
components  of  deferred  tax  assets  are  as  follows:

                                                                        2006
                                                                   -------------
Deferred  tax  assets:
    Net  operating  loss  carryforwards                            $ 26,888,049
    Valuation  allowance  for  deferred  tax  assets                (26,888,049)
                                                                   -------------
    Net  deferred tax assets                                       $          -
                                                                   =============

Realization  of  deferred  tax assets is dependent upon future earnings, if any,
the  timing and amount of which are uncertain. Accordingly, the net deferred tax
assets  have  been  fully  offset  by a valuation allowance. As of September 30,
2006,  we  had net operating loss carryforwards of approximately $26,888,049 for
federal  income  tax  purposes.  Utilization  of  the  net operating loss may be
subject  to  substantial  annual  limitations  due  to  the  ownership  change
limitations  provided by the Internal Revenue Code and similar state provisions.
The  annual  limitation could result in the expiration of the net operating loss
before  utilization.

OVERVIEW

We  manufacture  fiberglass leisure and performance boats through our subsidiary
Marine  Holdings,  Inc.,  a Missouri corporation, distributed and sold under the
Challenger  Offshore name.  The Challenger boats range in size from 19 ft. to 42
ft., with prices ranging from $31,495 to $300,000.  Marine Holdings manufactures
many  of  their  boats using hulls structurally designed by world-renowned naval
architects,  as  well  as  the  patented  D-DC  hulls.  The Challenger boats are
distributed  through  a  dealer  network.

We  previously  designed and manufactured high-performance commercial boats used
by  fire,  police,  and military personnel for fire, rescue and patrol.  In July
2006,  after  thorough  analysis  of  this  product  line,  we  determined  our
manufacturing  efforts should focus on the higher volume Challenger boats and we
discontinued  pursuing  sales  for the fire and rescue patrol boats.  All molds,
plugs  and  parts  associated  with these boats were sold to an outside party in
July  2006  for  $11,000.

We  are  a  publicly  traded  company  and  our  common  stock  trades  on  the
Over-the-Counter  bulletin  Board  of  the  National Quotation Service under the
ticker  symbol  "XTME.OB."

The address of our principal executive office is 300 Westlink Drive, Washington,
MO  63090.  Our  telephone  number  is  (636)  390-9000.  Our website address is
www.xtremecos.com. Information contained on our website does not constitute part
of this report and our address should not be used as a hyperlink to our website.


GOING  CONCERN

Our  financial  statements  for the three month period ended September 30, 2006,
reflect  a  net  loss  of  ($1,670,595) and net cash flows used by operations of
($1,594,111).  We  are  pursuing  equity  and/or  debt financing in an effort to
continue  operations.  Our  future success is likely dependent on our ability to
attain  additional  capital  to  develop  our  products and ultimately, upon our
ability  to  attain  future  profitable  operations. We may not be successful in
obtaining  such  financing  or  attaining  positive  cash flows from operations.

                                      -22-
<PAGE>

RESULTS  OF  OPERATIONS

THREE  AND  NINE MONTHS ENDED SEPTEMBER 30, 2006 AS COMPARED WITH THREE AND NINE
MONTHS  ENDED  SEPTEMBER  30,  2005

NET  REVENUES

For  the  three  and  nine  months  ended  September  30, 2006, we generated net
revenues of ($8,481) and ($42,786), respectively, as compared to net revenues of
$334,671  and  $954,971  for the three and nine months ended September 30, 2005.
The  major  change in our business that impacted revenues for the three and nine
months ended September 30, 2006 is the termination of our distribution agreement
with  Wayton  Marine  International  and  the return of product to Xtreme in the
three months ended June 30, 2006, which resulted in negative sales for the year.
At  the  time  of  our  termination  of  our  agreements  with  Wayton  Marine,
we  had  completed  work  on nine boats pursuant to purchase orders provided  by
Wayton  Marine.  Four boats were shipped to Wayton Marine, however Wayton Marine
did  not  take  delivery  of the remaining five boats or provide payment for the
boats  as  required  by  the  Agreement. This default was the main factor in the
termination  of  our Agreements with Wayton Marine. Additionally, as a result of
the  default  we  had  to  reverse  revenues  already  recorded  on  our  books.

In  addition,  under  the  terms of our distribution agreement entered into with
Life  Line  Marine  on  April 4, 2006, Life Line was to purchase 15 boats in the
three  months  ended  June 30, 2006, however, only one boat was purchased in the
time  period.   On  July  12,  2006, we terminated the exclusive distributorship
agreement  with Life Line Marine.  Since the execution of the agreement on April
4,  2006,  Life  Line  Marine  purchased  one  boat  in  the three month period.

We  hired  a  national  sales manager and we are actively working to establish a
national  dealer  network  through  which  we intend to distribute our products.

Effective  March  1,  2005,  Xtreme  became  the sole distributor for Challenger
Offshore  boats manufactured by Marine Holdings, Inc., therefore, until March 1,
2006,  we recognized revenue on boats purchased from Marine Holdings and sold to
the  customer.

COST  OF  GOODS  SOLD

We  incurred  costs  of sales of $1,853 and $546,164, respectively for the three
and  nine  months ended September 30, 2006, as compared to $307,564 and $833,756
for  the  three  and  nine  months ended September 30, 2005.  Cost of goods sold
decreased  due  to the decreased sales of boats during the three and nine months
ended  September  30,  2006,  with  some boats still in process at September 30,
2006.  The  costs  associated with these boats were $752,321 as of September 30,
2006.   We increased production during the six month period ended June 30, 2006,
because  we  had  signed  sales orders from Wayton Marine International and Life
Line  Marine,  however, these boats have not been sold.  All costs of sales will
be  recorded  at  the  time  the  product  is  sold.

OPERATING  EXPENSES

Operating  expenses  increased to $965,885 and $2,946,121, respectively, for the
three  and  nine  months  ended  September  30, 2006 as compared to $452,291 and
$1,356,164  for the three and nine months ended September 30, 2005. The increase
in  operating  expenses  for  the three month period ended September 30, 2006 as
compared  to  September 30, 2005 occurred primarily as a result of documentation
fees  for  funding  of $65,000, payroll and taxes of $215,594 and trade shows of
$83,435.

INTEREST  EXPENSE

Interest  expense  increased  to  $700,532  for  the  three  month  period ended
September  30, 2006 from $163,527 for the three month period ended September 30,
2005.  The  increase is a result of interest expense recorded in connection with
the  issuance of convertible debentures and promissory notes by Dutchess Private
Equities,  LP,  and  Dutchess  Private  Equities  II,  LP. Each of our notes and
debentures were issued at a discount, which is amortized and charged to interest
expense  over  the  life of the promissory note, debenture or warrant. Also, our
debentures  are  issued  with  a  conversion  preference  to  the  holder of the
debenture in the event of default, which are included in interest expense on the
financial  statements.

                                      -23-
<PAGE>

Interest  expense  has  also increased as the result of WIP loans carried by Sun
Security  Bank, which fund the building of the product until it is sold, and the
interest  on  the Sun Security Bank loan, which funded the acquisition of Marine
Holdings,  Inc.

NET  LOSS

We had a net loss of ($1,670,595) and ($6,815,407) for the three and nine months
ended  September  30,  2006,  respectively,  as  compared  to  ($588,711)  and
($2,072,138)  for  the three and nine months ended September 30, 2005.   The Net
Loss  increased due to our decrease in revenues, increase in operating expenses,
and  increased documentation fees and interest expense associated with financing
transactions.  The  Net Loss also increased due to the sales returns from Wayton
Marine International and the lack of purchases by Life Line Marine per the terms
of  the  distribution  agreement.

LIQUIDITY  AND  CAPITAL  RESOURCES

We must continue to raise capital to fulfill our plan of acquiring companies and
assisting  in the development of those companies internally. As of September 30,
2006,  we  had  Total  Current  Assets  of $3,057,193 compared to $778,916 as of
December  31,  2005.  This  was  due  primarily  to  the  following:

-    $2,481,936  increase  in  inventory,  including  boats  in  process, parts,
     finished  boats,  and  trailers.

As  of  September  30,  2006,  we  had  Total Current Liabilities of $5,816,993,
compared  to  $3,203,805, as of December 31, 2005. This was due primarily to the
following:

-    $622,412  increase  in  Accrued  Interest

-    $1,080,855  increase  in  Work-In-Process  Loans

-    $169,224  increase  for  the  current  portion  of the Sun Security Loan to
     finance  the  purchase  of the Marine Holdings, Inc. manufacturing facility

-    $261,179  increase  in  Dutchess  Convertible  Promissory  Notes

-    $695,000  increase  for  a  receivable  factoring  agreement  with Dutchess
     Private  Equities  Fund,  II

Cash  and cash equivalents were $131,382 as of September 30, 2006 as compared to
$331,386 as of December 31, 2005. Our Stockholders' Equity at September 30, 2006
was  a  deficit  of  ($11,172,227).

As  of  September  30,  2006,  we had debt of $16,700,776, including convertible
debentures  and  promissory  notes  which  total  $8,162,491.  We accrue monthly
interest  expense on the debt under our convertible debentures, which are due in
2009,  2010  and  2011.  Our  debt  could limit our ability to obtain additional
financing  for working capital, capital expenditures, debt service requirements,
or  other  purposes  in  the  future,  as  needed.

We continue to require additional funding.  We believe we will be able to secure
funding from our current investors, but there is no assurance we will be able to
do  so.  If  we  are unable to generate sufficient cash flow or obtain funds for
required  payments,  or  if we fail to comply with the covenants in our debt, we
will  be  in  default.  We  may  not  be  able  to able to meet our debt service
obligations.  If  we default on our existing debt, we may have to pay additional
penalties  or  issue  additional  equity.  If  we  issue  equity,  our  existing
shareholders' interests will be diluted.  If we can't raise sufficient funds, we
may  have  to  curtail  or  cease  operations.

FINANCING  ACTIVITIES

On July 5, 2006, we entered into a Convertible Debenture Agreement with Dutchess
Private  Equities  Fund,  II,  LP,  in  the amount of $312,000, at a discount of
$52,000.  The  debenture  has a 10% interest rate and is due and payable July 5,
2011.  The  purchaser  of  the convertible debentures is entitled to convert the
face amount of the debentures plus accrued interest into our common stock at the
lesser  of  (i)  75%  of the lowest closing bid price during the fifteen trading
days  prior to the Conversion Date or (ii) at a Fixed Conversion Price of $0.05.

On  July  20,  2006,  we  entered  into  a  Convertible Debenture Agreement with
Dutchess  Private Equities Fund, LP, in the amount of $186,000, at a discount of
$31,000.  The  debenture has a 10% interest rate and is due and payable July 20,
2011.  The  purchaser  of  the convertible debentures is entitled to convert the
face amount of the debentures plus accrued interest into our common stock at the
lesser  of  (i)  75%  of the lowest closing bid price during the fifteen trading
days  prior to the Conversion Date or (ii) at a Fixed Conversion Price of $0.05.

                                      -24-
<PAGE>

On  July  21,  2006,  we  entered  into  a  Convertible Debenture Agreement with
Dutchess  Private  Equities Fund, LP, in the amount of $66,000, at a discount of
$11,000.  The  debenture has a 10% interest rate and is due and payable July 21,
2011.  The  purchaser  of  the convertible debentures is entitled to convert the
face amount of the debentures plus accrued interest into our common stock at the
lesser  of  (i)  75%  of the lowest closing bid price during the fifteen trading
days  prior to the Conversion Date or (ii) at a Fixed Conversion Price of $0.05.

On  August  1,  2006,  we  entered  into  a Convertible Debenture Agreement with
Dutchess  Private Equities Fund, LP, in the amount of $282,000, at a discount of
$47,000.  The debenture has a 10% interest rate and is due and payable August 1,
2011.  The  purchaser  of  the convertible debentures is entitled to convert the
face amount of the debentures plus accrued interest into our common stock at the
lesser  of  (i)  75%  of the lowest closing bid price during the fifteen trading
days  prior  to  the  Conversion  Date  or (ii) at a "Fixed Conversion Price" of
$0.04.

On  August  17,  2006,  we  entered  into a Convertible Debenture Agreement with
Dutchess  Private Equities Fund, LP, in the amount of $312,000, at a discount of
$52,000.  The  debenture  has  a 10% interest rate and is due and payable August
17,  2011.  The  purchaser  of the convertible debentures is entitled to convert
the face amount of the debentures plus accrued interest into our common stock at
the lesser of (i) 75% of the lowest closing bid price during the fifteen trading
days  prior  to  the  Conversion  Date  or (ii) at a "Fixed Conversion Price" of
$0.03.

On  August  30,  2006,  we  entered  into a Convertible Debenture Agreement with
Dutchess  Private Equities Fund, LP, in the amount of $315,600, at a discount of
$52,600.  The  debenture  has  a 10% interest rate and is due and payable August
30,  2011.  The  purchaser  of the convertible debentures is entitled to convert
the face amount of the debentures plus accrued interest into our common stock at
the lesser of (i) 75% of the lowest closing bid price during the fifteen trading
days  prior  to  the  Conversion  Date  or (ii) at a "Fixed Conversion Price" of
$0.03.

On  September  12,  2006, we entered into a Convertible Debenture Agreement with
Dutchess Private Equities Fund, II, LP, in the amount of $324,000, at a discount
of  $54,000.  The  debenture  has  a  10%  interest  rate and is due and payable
September  12, 2011.  The purchaser of the convertible debentures is entitled to
convert  the face amount of the debentures plus accrued interest into our common
stock  at  the  lesser  of  (i)  75%  of the lowest closing bid price during the
fifteen trading days prior to the Conversion Date or (ii) at a "Fixed Conversion
Price"  of  $0.03.

On  September  26,  2006, we entered into a Convertible Debenture Agreement with
Dutchess  Private Equities Fund, LP, in the amount of $336,000, at a discount of
$56,000.  The debenture has a 10% interest rate and is due and payable September
26,  2011.  The  purchaser  of the convertible debentures is entitled to convert
the face amount of the debentures plus accrued interest into our common stock at
the lesser of (i) 75% of the lowest closing bid price during the fifteen trading
days  prior  to  the  Conversion  Date  or (ii) at a "Fixed Conversion Price" of
$0.03.

On  September  26,  2006, we entered into a Convertible Debenture Agreement with
Dutchess Private Equities Fund, II, LP, in the amount of $446,400, at a discount
of  $74,400.  The  debenture  has  a  10%  interest  rate and is due and payable
September  26, 2011.  The purchaser of the convertible debentures is entitled to
convert  the face amount of the debentures plus accrued interest into our common
stock  at  the  lesser  of  (i)  75%  of the lowest closing bid price during the
fifteen trading days prior to the Conversion Date or (ii) at a "Fixed Conversion
Price"  of  $0.03.

INFLATION

We  do  not  believe that inflation has had or is likely to have any significant
impact  on  operations.

SUBSIDIARIES

As  of  September  30,  2006,  we  had  two  subsidiaries:

Marine  Holdings,  Inc.   (d/b/a  Challenger  Offshore)
First  Responders,  Inc.

ITEM  3.  CONTROLS  AND  PROCEDURES.

As  of the end of the period covered by this Quarterly Report on Form 10-QSB, an
evaluation was performed under the supervision and with the participation of our
management,  including  the Chief Executive Officer and Chief Financial Officer,
of  the effectiveness of the design and operation of our disclosure controls and
procedures (as defined in Rules 13a-14 and 15d-14 of the Securities Exchange Act
of  1934).  Based  on  that  evaluation,  our  Chief Executive Officer and Chief
Financial  Officer  concluded  that  our  disclosure controls and procedures are
effective to ensure that information we are required to disclose in reports that
we  file  or  submit  under the Securities Exchange Act of 1934 (i) is recorded,
processed,  summarized  and  reported  within  the  time  periods  specified  in
Securities  and Exchange Commission rules and forms, and (ii) is accumulated and
communicated  to our management, including our Chief Executive Officer and Chief
Financial  Officer, as appropriate, to allow timely decisions regarding required
reasonable  assurance  that  such information is accumulated and communicated to
our  management.  Our disclosure controls and procedures are designed to provide
reasonable  assurance  that  such information is accumulated and communicated to
our  management.  Our  disclosure  controls and procedures include components of
our  internal  control over financial reporting.  Management's assessment of the
effectiveness  of  our internal control over financial reporting is expressed at
the  level  of  reasonable assurance that the control system, no matter how well
designed  and operated, can provide only reasonable, but not absolute, assurance
that  the  control  system's  objectives  will  be  met.

CHANGES  IN  INTERNAL  CONTROLS

There  was  no  change  in  our  internal  control over financial reporting that
occurred  during  the  third quarter of 2006 covered by this Quarterly Report on
Form  10-QSB  that  materially  affected,  or is reasonably likely to materially
affect,  our  internal  control  over  financial  reporting.

                                      -25-
<PAGE>

                           PART II - OTHER INFORMATION

ITEM  1.  LEGAL  PROCEEDINGS.

On August 18, 2006, Mike Thomas, a former employee, filed a petition in the 20th
Judicial Court of Franklin County, Missouri, against Marine Holdings, Inc. doing
business as Challenger Offshore and Xtreme Companies, Inc. for alleged breach of
employment  contract  and  wrongful  discharge  in  the  amount  of  $74,375.07,
representing  the  unpaid  portion of his annual salary, $12,000 for a bonus Mr.
Thomas  believes  he  would  have  received,  reasonable attorney fees and other
costs.   We  believe  the  plaintiff's entire claim is frivolous.  Together with
Marine,  we  filed  an  Answer in the Circuit Court of the County of Franklin on
October  24, 2006 stating that Mr. Thomas' did not fulfill his obligations to us
and Marine.  We also counterclaimed stating that Mr. Thomas breached the alleged
agreement  and  we  sought compensation and punitive damages against him for the
harm  he  has  caused  us  and  our employees in an amount of $25,000 for actual
damages,  punitive  damages,  treble damages, an accounting of all securities in
Xtreme  owned  by Mr. Thomas, an order requiring the forfeiture and disgorgement
to  Xtreme  of  all  shares and warrants held by Mr. Thomas, attorney's fees and
costs.  It  is  too early to determine the outcome of such allegations; however,
we  intend  to  continue  to  vigorously  defend  against the plaintiff's claim.

We  may  be  involved  from time to time in ordinary litigation, negotiation and
settlement  matters  that  will  not have a material effect on our operations or
finances.  Other  than  the  litigation described above, we are not aware of any
pending  or  threatened  litigation  against us or our officers and directors in
their  capacity  as  such that could have a material impact on our operations or
finances.

                                      -26-
<PAGE>

ITEM  2.  UNREGISTERED  SALES  OF  EQUITY  SECURITIES  AND  USE  OF  PROCEEDS.

On July 5, 2006, we entered into a Convertible Debenture Agreement with Dutchess
Private  Equities  Fund,  II,  LP,  in  the amount of $312,000, at a discount of
$52,000.  The  debenture  has a 10% interest rate and is due and payable July 5,
2011.  The  purchaser  of  the convertible debentures is entitled to convert the
face amount of the debentures plus accrued interest into our common stock at the
lesser  of  (i)  75%  of the lowest closing bid price during the fifteen trading
days  prior to the Conversion Date or (ii) at a Fixed Conversion Price of $0.05.

On  July  20,  2006,  we  entered  into  a  Convertible Debenture Agreement with
Dutchess  Private Equities Fund, LP, in the amount of $186,000, at a discount of
$31,000.  The  debenture has a 10% interest rate and is due and payable July 20,
2011.  The  purchaser  of  the convertible debentures is entitled to convert the
face amount of the debentures plus accrued interest into our common stock at the
lesser  of  (i)  75%  of the lowest closing bid price during the fifteen trading
days  prior to the Conversion Date or (ii) at a Fixed Conversion Price of $0.05.

On  July  21,  2006,  we  entered  into  a  Convertible Debenture Agreement with
Dutchess  Private  Equities Fund, LP, in the amount of $66,000, at a discount of
$11,000.  The  debenture has a 10% interest rate and is due and payable July 21,
2011.  The  purchaser  of  the convertible debentures is entitled to convert the
face amount of the debentures plus accrued interest into our common stock at the
lesser  of  (i)  75%  of the lowest closing bid price during the fifteen trading
days  prior to the Conversion Date or (ii) at a Fixed Conversion Price of $0.05.

On  August  1,  2006,  we  entered  into  a Convertible Debenture Agreement with
Dutchess  Private Equities Fund, LP, in the amount of $282,000, at a discount of
$47,000.  The debenture has a 10% interest rate and is due and payable August 1,
2011.  The  purchaser  of  the convertible debentures is entitled to convert the
face amount of the debentures plus accrued interest into our common stock at the
lesser  of  (i)  75%  of the lowest closing bid price during the fifteen trading
days  prior  to  the  Conversion  Date  or (ii) at a "Fixed Conversion Price" of
$0.04.

On  August  17,  2006,  we  entered  into a Convertible Debenture Agreement with
Dutchess  Private Equities Fund, LP, in the amount of $312,000, at a discount of
$52,000.  The  debenture  has  a 10% interest rate and is due and payable August
17,  2011.  The  purchaser  of the convertible debentures is entitled to convert
the face amount of the debentures plus accrued interest into our common stock at
the lesser of (i) 75% of the lowest closing bid price during the fifteen trading
days  prior  to  the  Conversion  Date  or (ii) at a "Fixed Conversion Price" of
$0.03.

On  August  30,  2006,  we  entered  into a Convertible Debenture Agreement with
Dutchess  Private Equities Fund, LP, in the amount of $315,600, at a discount of
$52,600.  The  debenture  has  a 10% interest rate and is due and payable August
30,  2011.  The  purchaser  of the convertible debentures is entitled to convert
the face amount of the debentures plus accrued interest into our common stock at
the lesser of (i) 75% of the lowest closing bid price during the fifteen trading
days  prior  to  the  Conversion  Date  or (ii) at a "Fixed Conversion Price" of
$0.03.

On  September  12,  2006, we entered into a Convertible Debenture Agreement with
Dutchess Private Equities Fund, II, LP, in the amount of $324,000, at a discount
of  $54,000.  The  debenture  has  a  10%  interest  rate and is due and payable
September  12, 2011.  The purchaser of the convertible debentures is entitled to
convert  the face amount of the debentures plus accrued interest into our common
stock  at  the  lesser  of  (i)  75%  of the lowest closing bid price during the
fifteen trading days prior to the Conversion Date or (ii) at a "Fixed Conversion
Price"  of  $0.03.

On  September  26,  2006, we entered into a Convertible Debenture Agreement with
Dutchess  Private Equities Fund, LP, in the amount of $336,000, at a discount of
$56,000.  The debenture has a 10% interest rate and is due and payable September
26,  2011.  The  purchaser  of the convertible debentures is entitled to convert
the face amount of the debentures plus accrued interest into our common stock at
the lesser of (i) 75% of the lowest closing bid price during the fifteen trading
days  prior  to  the  Conversion  Date  or (ii) at a "Fixed Conversion Price" of
$0.03.

On  September  26,  2006, we entered into a Convertible Debenture Agreement with
Dutchess Private Equities Fund, II, LP, in the amount of $446,400, at a discount
of  $74,400.  The  debenture  has  a  10%  interest  rate and is due and payable
September  26, 2011.  The purchaser of the convertible debentures is entitled to
convert  the face amount of the debentures plus accrued interest into our common
stock  at  the  lesser  of  (i)  75%  of the lowest closing bid price during the
fifteen trading days prior to the Conversion Date or (ii) at a "Fixed Conversion
Price"  of  $0.03.

On  August  18,  2006,  we  issued  250,000 shares of our common stock valued at
$10,000  to  Dutchess  Private  Equities  Fund,  LP, as an inducement to provide
financing.  The  shares  were  accounted  for  as  interest  expense.

On  August  30,  2006,  we  issued  250,000 shares of our common stock valued at
$7,500  to  Dutchess  Private  Equities  Fund,  LP,  as an inducement to provide
financing.  The  shares  were  accounted  for  as  interest  expense.

On  September  5,  2006,  we issued 500,000 shares of our common stock valued at
$15,000 to Preston Capital Partners in connection with the Equity Line Agreement
dated  September  24,  2005.

On  September  6, 2006, we issued 1,000,000 shares of our common stock valued at
$50,000 to Preston Capital Partners in connection with the Equity Line Agreement
dated  September  24,  2005.

On  September  8,  2006,  we issued 500,000 shares of our common stock valued at
$20,000  to Market Pulse for investor relations work.  The shares were accounted
for  as  investor  relations  expense.

On  September  8, 2006, we issued 1,100,000 shares of our common stock valued at
$44,000 to Preston Capital Partners in connection with the Equity Line Agreement
dated  September  24,  2005.

On  September  18,  2006, we issued 250,000 shares of our common stock valued at
$7,500  to  Dutchess  Private Equities Fund, II, LP, as an inducement to provide
financing.  The  shares  were  accounted  for  as  interest  expense.

On  September  29,  2006, we issued 300,000 shares of our common stock valued at
$12,000  to  Dutchess Private Equities Fund, II, LP, as an inducement to provide
financing.  The  shares  were  accounted  for  as  interest  expense.

On  September  29,  2006, we issued 300,000 shares of the Company's common stock
valued  at  $12,000  to  Dutchess Private Equities Fund, LP, as an inducement to
provide  financing.  The  shares  were  accounted  for  as  interest  expense.

On  October  11,  2006,  we  entered into a Convertible Debenture Agreement with
Dutchess  Private Equities Fund, LP, in the amount of $255,600, at a discount of
$42,600.  The  debenture  has a 10% interest rate and is due and payable October
11,  2011.  The  purchaser  of the convertible debentures is entitled to convert
the  face  amount  of  the  debentures  plus accrued interest into the Company's
common stock at the lesser of (i) 75% of the lowest closing bid price during the
fifteen  trading days prior to the Conversion Date or (ii) at a Fixed Conversion
Price  of  $0.03.

On  October  12, 2006, we issued 250,000 shares of common stock valued at $7,500
to  Dutchess  Private  Equities Fund, LP, as an inducement to provide financing.
The  shares  were  accounted  for  as  interest  expense.

On  October  24,  2006,  we  entered into a Convertible Debenture Agreement with
Dutchess  Private Equities Fund, LP, in the amount of $195,600, at a discount of
$32,600.  The  debenture  has a 10% interest rate and is due and payable October
24,  2011.  The  purchaser  of the convertible debentures is entitled to convert
the face amount of the debentures plus accrued interest into our common stock at
the lesser of (i) 75% of the lowest closing bid price during the fifteen trading
days  prior to the Conversion Date or (ii) at a Fixed Conversion Price of $0.03.

On  October  25,  2006,  we  issued 250,000 shares of our common stock valued at
$7,500  to  Dutchess  Private  Equities  Fund,  LP,  as an inducement to provide
financing.  The  shares  were  accounted  for  as  interest  expense.

The  securities  issued  in  the foregoing transactions were offered and sold in
reliance  upon  exemptions  from  the  Securities Act of 1933, "Securities Act",
registration  requirements set forth in Sections 3(b) and 4(2) of the Securities
Act, and any regulations promulgated there under, relating to sales by an issuer
not  involving  any  public  offering.  No  underwriters  were  involved  in the
foregoing  sales  of  securities.

ITEM  3.  DEFAULTS  UPON  SENIOR  SECURITIES.

None.

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

None.

ITEM  5.  OTHER  INFORMATION.

None.

                                      -27-
<PAGE>

ITEM  6.  EXHIBITS  AND  REPORTS  ON  FORM  8-K.

NUMBER                        DESCRIPTION  OF  EXHIBIT
------                        ------------------------

2.1  Acquisition  Agreement between the Company and Waste Renewal Systems, Inc.,
     dated  April  26,  2002 (included as Exhibit 2 to the Form 8-K filed May 8,
     2002,  and  incorporated  herein  by  reference).

2.2  Agreement and Plan of Reorganization between the Company and Rockwell Power
     Systems,  dated  October  1,  2003 (included as Exhibit 2.1 to the Form 8-K
     filed  October  9,  2003,  and  incorporated  herein  by  reference).

3.1  Articles  of  Incorporation (included as Exhibit 3.1 to the Form 10-SB12G/A
     filed  November  7,  2000,  and  incorporated  herein  by  reference).

3.2  By-laws  (included as Exhibit 3.2 to the Form 10-SB filed November 7, 2000,
     and  incorporated  herein  by  reference).

3.3  Amendment to Articles of Incorporation (included as Exhibit 3.3 to the Form
     SB-2/A  filed  July  21,  2005,  and  incorporated  herein  by  reference).

4.1  Debenture Agreement between the Company and Dutchess Private Equities Fund,
     L.P.,  dated  October  1,  2003 (included as Exhibit 4.1 to the Form 10-KSB
     filed  April  14,  2004,  and  incorporated  herein  by  reference).

4.2  Debenture  Agreement  between  the  Company and eFund Small-Cap Fund, L.P.,
     dated  October  1,  2003  (included as Exhibit 4.2 to the Form 10-KSB filed
     April  14,  2004,  and  incorporated  herein  by  reference).

4.3  Subscription  Agreement  between  the Company and Dutchess Private Equities
     Fund,  L.P.,  dated  October  1, 2003 (included as Exhibit 10.4 to the Form
     10-KSB  filed  April  14,  2004,  and  incorporated  herein  by reference).

4.4  Subscription  Agreement  between  the  Company  and eFund Capital Partners,
     dated  October  1,  2003 (included as Exhibit 10.5 to the Form 10-KSB filed
     April  14,  2004,  and  incorporated  herein  by  reference).

4.5  Registration  Rights  Agreement  between  the  Company and Dutchess Private
     Equities Fund, L.P., dated October 1, 2003 (included as Exhibit 10.6 to the
     Form  10-KSB  filed  April 14, 2004, and incorporated herein by reference).

4.6  Registration Rights Agreement between the Company and eFund Small-Cap Fund,
     L.P.,  dated  October  1, 2003 (included as Exhibit 10.7 to the Form 10-KSB
     filed  April  14,  2004,  and  incorporated  herein  by  reference).

4.7  Debenture Agreement between the Company and Preston Capital Partners, L.P.,
     dated  February  3,  2004 (included as Exhibit 4.1 to the Form 10-QSB filed
     May  24,  2004,  and  incorporated  herein  by  reference).

4.8  Debenture  Agreement  between  the Company and eFund Capital Partners, LLC,
     dated  February  18, 2004 (included as Exhibit 4.2 to the Form 10-QSB filed
     May  24,  2004,  and  incorporated  herein  by  reference).

4.9  Registration  Rights  Agreement  between  the  Company  and Preston Capital
     Partners,  L.P.,  dated  February  3, 2004 (included as Exhibit 10.1 to the
     Form  10-QSB  filed  May  24,  2004, and incorporated herein by reference).

4.10 Registration  Rights  Agreement  between  the  Company  and  eFund  Capital
     Partners,  LLC,  dated  February  18, 2004 (included as Exhibit 10.2 to the
     Form  10-QSB  filed  May  24,  2004, and incorporated herein by reference).

4.11 Subordinated  Convertible  Promissory  Note between the Company and Lenders
     (included  as Exhibit 10.24 to the Form 10-QSB filed November 23, 2004, and
     incorporated  herein  by  reference).

4.12 Debenture  Agreement between the Company and Dutchess Private Equities Fund
     L.P.,  dated  October  18, 2004 (included as Exhibit 4.3 to the Form 10-KSB
     filed  April  15,  2005,  and  incorporated  herein  by  reference).

4.13 Debenture  Agreement  between  the Company and eFund Capital Partners, LLC,
     dated  October  18,  2004 (included as Exhibit 4.4 to the Form 10-KSB filed
     April  15,  2005,  and  incorporated  herein  by  reference).

4.14 Debenture  Agreement between the Company and Dutchess Private Equities Fund
     L.P.,  dated  December 23, 2004 (included as Exhibit 4.5 to the Form 10-KSB
     filed  April  15,  2005,  and  incorporated  herein  by  reference).

4.15 Debenture Agreement between the Company and Dutchess Private Equities Fund,
     II,  LP,  dated January 3, 2005 (included as Exhibit 4.6 to the Form 10-QSB
     filed  May  16,  2005,  and  incorporated  herein  by  reference).

4.16 Warrant  Agreement  between  the Company and Dutchess Private Equities, II,
     LP, dated January 3, 2005 (included as Exhibit 4.7 to the Form 10-QSB filed
     May  16,  2005,  and  incorporated  herein  by  reference).

4.17 Debenture Agreement between the Company and Dutchess Private Equities Fund,
     LP,  dated  March 8, 2005 (included as Exhibit 4.8 to the Form 10-QSB filed
     May  16,  2005,  and  incorporated  herein  by  reference).

4.18 Warrant  Agreement  between  the Company and Dutchess Private Equities, LP,
     dated  March  8, 2005 (included as Exhibit 4.9 to the Form 10-QSB filed May
     16,  2005,  and  incorporated  herein  by  reference).

4.19 Debenture  Agreement  between  the Company and eFund Capital Partners, LLC,
     dated March 10, 2005 (included as Exhibit 4.10 to the Form 10-QSB filed May
     16,  2005,  and  incorporated  herein  by  reference).

4.20 Warrant  Agreement  between  the  Company  and eFund Capital Partners, LLC,
     dated March 10, 2005 (included as Exhibit 4.11 to the Form 10-QSB filed May
     16,  2005,  and  incorporated  herein  by  reference).

4.21 Debenture  Agreement  between  the Company and eFund Capital Partners, LLC,
     dated March 18, 2005 (included as Exhibit 4.12 to the Form 10-QSB filed May
     16,  2005,  and  incorporated  herein  by  reference).

4.22 Warrant  Agreement  between  the  Company  and eFund Capital Partners, LLC,
     dated March 10, 2005 (included as Exhibit 4.13 to the Form 10-QSB filed May
     16,  2005,  and  incorporated  herein  by  reference).

4.23 Promissory Note between the Company and Dutchess Private Equities Fund, II,
     L.P.,  dated  March  11,  2005 (included as Exhibit 4.14 to the Form 10-QSB
     filed  May  16,  2005,  and  incorporated  herein  by  reference).

4.24 Debenture Agreement between the Company and Dutchess Private Equities Fund,
     dated  April 18, 2005 (included as Exhibit 4.24 to the Form SB-2 filed June
     9,  2005,  and  incorporated  herein  by  reference).

4.25 Warrant  Agreement  between the Company and Dutchess Private Equities Fund,
     dated  April 18, 2005 (included as Exhibit 4.25 to the Form SB-2 filed June
     9,  2005,  and  incorporated  herein  by  reference).

4.26 Debenture Agreement between the Company and Dutchess Private Equities Fund,
     II, dated May 5, 2005 (included as Exhibit 4.26 to the Form SB-2 filed June
     9,  2005,  and  incorporated  herein  by  reference).

4.27 Warrant  Agreement  between the Company and Dutchess Private Equities Fund,
     II, dated May 5, 2005 (included as Exhibit 4.27 to the Form SB-2 filed June
     9,  2005,  and  incorporated  herein  by  reference).

4.28 Debenture Agreement between the Company and Dutchess Private Equities Fund,
     II,  dated  May  13,  2005 (included as Exhibit 4.28 to the Form SB-2 filed
     June  9,  2005,  and  incorporated  herein  by  reference).

4.29 Warrant  Agreement  between the Company and Dutchess Private Equities Fund,
     II,  dated  May  13,  2005 (included as Exhibit 4.29 to the Form SB-2 filed
     June  9,  2005,  and  incorporated  herein  by  reference).

4.30 Debenture  Exchange  Agreement  between  the  Company  and Dutchess Private
     Equities Fund, II, dated May 18, 2005 (included as Exhibit 4.30 to the Form
     SB-2  filed  June  9,  2005,  and  incorporated  herein  by  reference).

4.31 Warrant  Agreement  between the Company and Dutchess Private Equities Fund,
     II,  dated  May  18,  2005 (included as Exhibit 4.31 to the Form SB-2 filed
     June  9,  2005,  and  incorporated  herein  by  reference).

4.32 Debenture  Agreement  between  the  Company and eFund Capital Partners, LLC
     dated,  May  20, 2005 (included as Exhibit 4.32 to the Form SB-2 filed June
     9,  2005,  and  incorporated  herein  by  reference).

4.33 Warrant Agreement between the Company and eFund Capital Partners, dated May
     20, 2005 (included as Exhibit 4.33 to the Form SB-2 filed June 9, 2005, and
     incorporated  herein  by  reference).

4.34 Debenture  Conversion  Amendment  between  the  Company,  Dutchess  Private
     Equities  Fund,  Dutchess  Private  Equities  Fund  II  and  eFund  Capital
     Partners,  dated  May  23,  2005 (included as Exhibit 4.34 to the Form SB-2
     filed  June  9,  2005,  and  incorporated  herein  by  reference).

4.35 Debenture Agreement between the Company and Dutchess Private Equities Fund,
     II,  L.P., dated June 16, 2005 (included as Exhibit 4.36 to the Form 10-QSB
     filed  August  15,  2005,  and  incorporated  herein  by  reference).

4.36 Warrant  Agreement  between the Company and Dutchess Private Equities Fund,
     II,  LP,  dated  June  16, 2005(included as Exhibit 4.37 to the Form 10-QSB
     filed  August  15,  2005,  and  incorporated  herein  by  reference).

4.37 Registration  Rights  Agreement  between  the  Company  and Preston Capital
     Partners,  LLC, dated August 24, 2005 (included as Exhibit 4.35 to the Form
     SB-2  filed  August  24,  2005,  and  incorporated  herein  by  reference).

4.38 Warrant  Agreement  between the Company and Dutchess Private Equities Fund,
     II,  LP,  dated  July  7,  2005(included as Exhibit 4.38 to the Form 10-QSB
     filed  November  14,  2005,  and  incorporated  herein  by  reference).

4.39 Debenture Agreement between the Company and Dutchess Private Equities Fund,
     II,  LP  dated  July  7,  2005 (included as Exhibit 4.39 to the Form 10-QSB
     filed  November  14,  2005,  and  incorporated  herein  by  reference).

4.40 Warrant  Agreement  between  the  Company and eFund Capital Partners, dated
     July  7,  2005  (included as Exhibit 4.40 to the Form 10-QSB filed November
     14,  2005,  and  incorporated  herein  by  reference).

4.41 Debenture  Agreement  between the Company and eFund Capital Partners, dated
     July  7,  2005  (included as Exhibit 4.41 to the Form 10-QSB filed November
     14,  2005,  and  incorporated  herein  by  reference).

4.42 Promissory Note between the Company and Dutchess Private Equities Fund, II,
     L.P.,  dated  July  21,  2005  (included as Exhibit 4.42 to the Form 10-QSB
     filed  November  14,  2005,  and  incorporated  herein  by  reference).

4.43 Promissory Note between the Company and Dutchess Private Equities Fund, II,
     L.P.,  dated  August  5,  2005 (included as Exhibit 4.43 to the Form 10-QSB
     filed  November  14,  2005,  and  incorporated  herein  by  reference).

4.44 Promissory Note between the Company and Dutchess Private Equities Fund, II,
     L.P.,  dated  August  19, 2005 (included as Exhibit 4.44 to the Form 10-QSB
     filed  November  14,  2005,  and  incorporated  herein  by  reference).

4.45 Promissory  Note  between  the  Company and Dutchess Private Equities Fund,
     L.P.,  dated September 1, 2005 (included as Exhibit 4.45 to the Form 10-QSB
     filed  November  14,  2005,  and  incorporated  herein  by  reference).

4.46 Promissory  Note  between  the  Company and Dutchess Private Equities Fund,
     L.P.,  dated September 7, 2005 (included as Exhibit 4.46 to the Form 10-QSB
     filed  November  14,  2005,  and  incorporated  herein  by  reference).

4.47 Promissory  Note  between  the  Company and Dutchess Private Equities Fund,
     L.P., dated September 15, 2005 (included as Exhibit 4.47 to the Form 10-QSB
     filed  on  November  14,  2005,  and  incorporated  herein  by  reference).

4.48 Promissory  Note  between  the  Company and Dutchess Private Equities Fund,
     L.P., dated September 22, 2005 (included as Exhibit 4.48 to the Form 10-QSB
     filed  November  14,  2005,  and  incorporated  herein  by  reference).

4.49 Promissory  Note  between  the  Company and Dutchess Private Equities Fund,
     L.P., dated September 30, 2005 (included as Exhibit 4.49 to the Form 10-QSB
     filed  November  14,  2005,  and  incorporated  herein  by  reference).

4.50 Promissory  Note  between  the  Company and Dutchess Private Equities Fund,
     L.P.,  dated  October  7, 2005 (included as Exhibit 4.50 to the Form 10-KSB
     filed  April  14,  2006,  and  incorporated  herein  by  reference).

4.51 Promissory  Note  between  the  Company and Dutchess Private Equities Fund,
     L.P.,  dated  October 14, 2005 (included as Exhibit 4.51 to the Form 10-KSB
     filed  April  14,  2006,  and  incorporated  herein  by  reference).

4.52 Promissory Note between the Company and Dutchess Private Equities Fund, II,
     L.P.,  dated  November 1, 2005 (included as Exhibit 4.52 to the Form 10-KSB
     filed  April  14,  2006,  and  incorporated  herein  by  reference).

4.53 Promissory Note between the Company and Dutchess Private Equities Fund, II,
     L.P.,  dated  November 9, 2005 (included as Exhibit 4.53 to the Form 10-KSB
     filed  April  14,  2006,  and  incorporated  herein  by  reference).

4.54 Promissory Note between the Company and Dutchess Private Equities Fund, II,
     L.P.,  dated November 22, 2005 (included as Exhibit 4.54 to the Form 10-KSB
     filed  April  14,  2006,  and  incorporated  herein  by  reference).

4.55 Promissory Note between the Company and Dutchess Private Equities Fund, II,
     L.P.,  dated  December 7, 2005 (included as Exhibit 4.55 to the Form 10-KSB
     filed  April  14,  2006,  and  incorporated  herein  by  reference).

4.56 Promissory Note between the Company and Dutchess Private Equities Fund, II,
     L.P.,  dated  January  3, 2006 (included as Exhibit 4.56 to the form 10-QSB
     filed  June  5,  2006,  and  incorporated  herein  by  reference).

4.57 Promissory Note between the Company and Dutchess Private Equities Fund, II,
     L.P.,  dated  January 27, 2006 (included as Exhibit 4.57 to the form 10-QSB
     filed  June  5,  2006,  and  incorporated  herein  by  reference).

4.58 Debenture Agreement between the Company and Dutchess Private Equities Fund,
     L.P.,  dated  February 1, 2006 (included as Exhibit 4.58 to the form 10-QSB
     filed  June  5,  2006,  and  incorporated  herein  by  reference).

4.59 Debenture Agreement between the Company and Dutchess Private Equities Fund,
     L.P.,  dated  February 3, 2006 (included as Exhibit 4.59 to the form 10-QSB
     filed  June  5,  2006,  and  incorporated  herein  by  reference).

4.60 Debenture Agreement between the Company and Dutchess Private Equities Fund,
     II,  L.P.,  dated  February  10, 2006 (included as Exhibit 4.60 to the form
     10-QSB  filed  June  5,  2006,  and  incorporated  herein  by  reference).

4.61 Debenture Agreement between the Company and Dutchess Private Equities Fund,
     II,  L.P.,  dated  February  14, 2006 (included as Exhibit 4.61 to the form
     10-QSB  filed  June  5,  2006,  and  incorporated  herein  by  reference).

4.62 Debenture Agreement between the Company and Dutchess Private Equities Fund,
     II,  L.P.,  dated  February  24, 2006 (included as Exhibit 4.62 to the form
     10-QSB  filed  June  5,  2006,  and  incorporated  herein  by  reference).

4.63 Debenture Agreement between the Company and Dutchess Private Equities Fund,
     II,  L.P.,  dated  February  28, 2006 (included as Exhibit 4.63 to the form
     10-QSB  filed  June  5,  2006,  and  incorporated  herein  by  reference).

4.64 Debenture Agreement between the Company and Dutchess Private Equities Fund,
     L.P.,  dated February 28, 2006 (included as Exhibit 4.64 to the form 10-QSB
     filed  June  5,  2006,  and  incorporated  herein  by  reference).

4.65 Debenture Agreement between the Company and Dutchess Private Equities Fund,
     L.P.,  dated  March  2,  2006  (included as Exhibit 4.65 to the form 10-QSB
     filed  June  5,  2006,  and  incorporated  herein  by  reference).

4.66 Debenture Agreement between the Company and Dutchess Private Equities Fund,
     L.P.,  dated  April  3,  2006  (included as Exhibit 4.66 to the form 10-QSB
     filed  June  5,  2006,  and  incorporated  herein  by  reference).

4.67 Debenture Agreement between the Company and Dutchess Private Equities Fund,
     L.P.,  dated  April  26,  2006 (included as Exhibit 4.67 to the form 10-QSB
     filed  August  14,  2006,  and  incorporated  herein  by  reference).

4.68 Debenture Agreement between the Company and Dutchess Private Equities Fund,
     L.P.,  dated May 3, 2006 (included as Exhibit 4.68 to the form 10-QSB filed
     August  14,  2006,  and  incorporated  herein  by  reference).

4.69 Debenture Agreement between the Company and Dutchess Private Equities Fund,
     L.P., dated May 17, 2006 (included as Exhibit 4.69 to the form 10-QSB filed
     August  14,  2006,  and  incorporated  herein  by  reference).

4.70 Debenture Agreement between the Company and Dutchess Private Equities Fund,
     L.P., dated May 24, 2006 (included as Exhibit 4.70 to the form 10-QSB filed
     August  14,  2006,  and  incorporated  herein  by  reference).

4.71 Debenture Agreement between the Company and Dutchess Private Equities Fund,
     L.P., dated June 7, 2006 (included as Exhibit 4.71 to the form 10-QSB filed
     August  14,  2006,  and  incorporated  herein  by  reference).

4.72 Debenture Agreement between the Company and Dutchess Private Equities Fund,
     L.P.,  dated  June  15,  2006  (included as Exhibit 4.72 to the form 10-QSB
     filed  August  14,  2006,  and  incorporated  herein  by  reference).

4.73 Debenture Agreement between the Company and Dutchess Private Equities Fund,
     L.P.,  dated  June  22,  2006  (included as Exhibit 4.73 to the form 10-QSB
     filed  August  14,  2006,  and  incorporated  herein  by  reference).

4.74 Debenture Agreement between the Company and Dutchess Private Equities Fund,
     L.P.,  dated  June  23,  2006  (included as Exhibit 4.74 to the form 10-QSB
     filed  August  14,  2006,  and  incorporated  herein  by  reference).

4.75 Debenture Agreement between the Company and Dutchess Private Equities Fund,
     II,  L.P.,  dated  July  5,  2006  (filed  herewith).

4.76 Debenture Agreement between the Company and Dutchess Private Equities Fund,
     II,  L.P.,  dated  July  20,  2006  (filed  herewith).

4.77 Debenture Agreement between the Company and Dutchess Private Equities Fund,
     L.P.,  dated  July  21,  2006  (filed  herewith).

4.78 Debenture Agreement between the Company and Dutchess Private Equities Fund,
     L.P.,  dated  August  1,  2006  (filed  herewith).

4.79 Debenture Agreement between the Company and Dutchess Private Equities Fund,
     L.P.,  dated  August  17,  2006  (filed  herewith).

4.80 Debenture Agreement between the Company and Dutchess Private Equities Fund,
     L.P.,  dated  August  30,  2006  (filed  herewith).

4.81 Debenture Agreement between the Company and Dutchess Private Equities Fund,
     II,  L.P.,  dated  September  12,  2006  (filed  herewith).

4.82 Debenture Agreement between the Company and Dutchess Private Equities Fund,
     L.P.,  dated  September  26,  2006  (filed  herewith).

4.83 Debenture Agreement between the Company and Dutchess Private Equities Fund,
     II,  L.P.,  dated  September  26,  2006  (filed  herewith).

10.1 Employment  Agreement between the Company and Kevin Ryan, dated October 30,
     2003 (included as Exhibit 10.2 to the Form 10-KSB filed April 14, 2004, and
     incorporated  herein  by  reference).

10.2 Consulting  Agreement  between  the  Company and Calicorp, dated October 1,
     2003 (included as Exhibit 10.3 to the Form 10-KSB filed April 14, 2004, and
     incorporated  herein  by  reference).

10.3 Lease Agreement  between  the  Company and Corning Garden Grove, LLC, dated
     November  5,  2003 (included as Exhibit 10.8 to the Form 10-KSB filed April
     14,  2004,  and  incorporated  herein  by  reference).

10.4 Lease Agreement  between  the Company and Marlborough Square Equities, LLC,
     dated  December  1, 2003 (included as Exhibit 10.9 to the Form 10-KSB filed
     April  14,  2004,  and  incorporated  herein  by  reference).

10.5 Consulting  Agreement  between  the  Company  and  Dutchess Advisors, dated
     October  1,  2003 (included as Exhibit 10.10 to the Form 10-KSB filed April
     14,  2004,  and  incorporated  herein  by  reference).

10.6 Consulting  Agreement between the Company and Lane Longhurst, dated October
     28,  2003  (included  as  Exhibit  10.11 to the Form 10-KSB filed April 14,
     2004,  and  incorporated  herein  by  reference).

10.7 Consulting Agreement between the Company and Gordon McGilton, dated October
     28,  2003  (included  as  Exhibit  10.12 to the Form 10-KSB filed April 14,
     2004,  and  incorporated  herein  by  reference).

10.8 Consulting  Agreement  between  the  Company  and  Douglas  Leighton, dated
     January  15,  2004 (included as Exhibit 10.1 to the Form S-8 filed February
     4,  2004,  and  incorporated  herein  by  reference).

10.9 Consulting  Agreement  between  the  Company  and  Michael  Novielli, dated
     January  15,  2004 (included as Exhibit 10.2 to the Form S-8 filed February
     4,  2004,  and  incorporated  herein  by  reference).

10.10 Consulting  Agreement  between  the  Company  and Theodore J. Smith, dated
     February  6,  2004 (included as Exhibit 10.1 to the Form S-8 filed February
     13,  2004,  and  incorporated  herein  by  reference).

10.11 Consulting  Agreement  between  the  Company  and  Jeffrey  Conrad,  dated
     February  6,  2004 (included as Exhibit 10.2 to the Form S-8 filed February
     13,  2004,  and  incorporated  herein  by  reference).

10.12 Letter  of Agreement between the Company and Roean Industries, Inc., dated
     February  26, 2004 (included as Exhibit 10.1 to the Form S-8 filed February
     27,  2004,  and  incorporated  herein  by  reference).

10.13 Non-Employee  Directors and Consultants Retainer Stock Plan, dated October
     2,  2003 (included as Exhibit 4 to the Form S-8 filed October 17, 2003, and
     incorporated  herein  by  reference).

10.14 Fire rescue  jet  sale  agreement between the Company and Barb Weir, dated
     July  1,  2004 (included as Exhibit 10.20 to the Form 10-QSB filed November
     23,  2004,  and  incorporated  herein  by  reference).

10.15 License  Agreement between the Company and Albert Mardikian, dated June 2,
     2004  (included  as Exhibit 10.23 to the Form 10-QSB filed August 25, 2004,
     and  incorporated  herein  by  reference).

10.16 Sales  Agreement  between  the  Company  and Barb Weir, dated July 1, 2004
     (included  as Exhibit 10.20 to the Form 10-QSB filed November 23, 2004, and
     incorporated  herein  by  reference).

10.17 Consulting Agreement between the Company and TGR Group, LLC, dated January
     27,  2004  (included as Exhibit 10.22 to the Form 10-QSB filed November 23,
     2004,  and  incorporated  herein  by  reference).

10.18 Sales  Agreement  between  the Company and Jackson County Fire Department,
     dated  July  7,  2004  (included  as Exhibit 10.23 to the Form 10-QSB filed
     November  23,  2004,  and  incorporated  herein  by  reference).

10.19 Marketing  and  Distribution  Agreement  between  the  Company  and Marine
     Holdings,  Inc.,  dated  March 1, 2005 (included as Exhibit 10.1 to the 8-K
     filed  March  4,  2005,  and  incorporated  herein  by  reference).

10.20 Business  Services  Agreement  between  the Company and Dutchess Advisors,
     LLC,  dated  March  1,  2005  (included as Exhibit 10.26 to the Form 10-QSB
     filed  May  16,  2005,  and  incorporated  herein  by  reference).

10.21 Investment  Agreement  between  the  Company and Preston Capital Partners,
     dated  August  24,  2005  (included as Exhibit 10.21 to the Form SB-2 filed
     August  24,  2005,  and  incorporated  herein  by  reference).

10.22 Placement  Agent  Agreement between the Company, Preston Capital Partners,
     and  U.S. Euro Securities, dated August 24, 2005 (included as Exhibit 10.22
     to  the  Form  SB-2  filed  August  24,  2005,  and  incorporated herein by
     reference).

10.23 Employment  Agreement  between  the Company and Laurie Phillips, dated May
     16,  2005 (included as Exhibit 10.1 to the Form 8-K filed June 8, 2005, and
     incorporated  herein  by  reference).

10.24 Corporate  Consulting  Agreement between the Company and Dutchess Advisors
     LLC,  dated  November 1, 2005 (included as Exhibit 10.24 to the Form 10-KSB
     filed  April  14,  2006,  and  incorporated  herein  by  reference).

10.25 Receivable  Factoring  Agreement  between the Company and Dutchess Private
     Equities Fund, II, LP, dated May 17, 2006 (included as Exhibit 10.25 to the
     form  10-QSB  filed August 14, 2006, and incorporated herein by reference).

10.26 Employment  Agreement  between the Company and Jack Clark, dated September
     6, 2006 (included as Exhibit 10.1 to the Form 8-K filed September 12, 2006,
     and  incorporated  herein  by  reference).

14.1 Corporate  Code of Conduct and Ethics (included as Exhibit 14.1 to the Form
     10-KSB  filed  April  14,  2004,  and  incorporated  herein  by reference).

21.1 List of  Subsidiaries  (included  as  Exhibit 21.1 to the Form 10-KSB filed
     April  14,  2004,  and  incorporated  herein  by  reference).

31.1 Certification  pursuant  to  Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 Certification  of  Officers  pursuant to 18 U.S.C. Section 1350, as adopted
     pursuant  to  Section  906  of  the  Sarbanes-Oxley  Act  of  2002.

                                      -28-
<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.

                             XTREME COMPANIES, INC.
                             ----------------------
                                  (Registrant)


/s/  Laurie  A.  Phillips
-----------------------                                      November  14,  2006
Laurie  A.  Phillips
Chief  Executive  Officer,
Chief  Financial Officer,
Principal Accounting Officer

                                      -29-
<PAGE>